RYDER SYSTEM INC - Quarter Report: 2022 June (Form 10-Q)

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 JUNE 30, 2022


☐			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)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ryder System, Inc. Common Stock ($0.50 par value)	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, a 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 outstanding at June 30, 2022 was 51,194,660.

RYDER SYSTEM, INC.

FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS



		Page No.

PART I . FINANCIAL INFORMATION

ITEM 1.	Financial Statements (unaudited)	1

	Condensed Consolidated Statements of Earnings	1

	Condensed Consolidated Statements of Comprehensive Income	2

	Condensed Consolidated Balance Sheets	3

	Condensed Consolidated Statements of Cash Flows	4

	Condensed Consolidated Statements of Shareholders' Equity	5

	Notes to Condensed Consolidated Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	47

ITEM 4.	Controls and Procedures	47

PART II . OTHER INFORMATION

ITEM 1.	Legal Proceedings	48

ITEM 1A.	Risk Factors	48

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48







ITEM 6.	Exhibits	49

SIGNATURE		50

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RYDER SYSTEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(unaudited)


	Three months ended June 30,				Six months ended June 30,
(In thousands, except per share amounts)	2022		2021		2022		2021

Lease & related maintenance and rental revenues	$	1,049,604	$	986,694	$	2,074,589	$	1,927,116
Services revenue	1,777,586		1,276,140		3,447,124		2,441,628
Fuel services revenue	206,472		119,403		365,811		235,115
Total revenues	3,033,662		2,382,237		5,887,524		4,603,859

Cost of lease & related maintenance and rental	687,894		702,444		1,386,735		1,432,588
Cost of services	1,520,121		1,090,015		2,966,830		2,089,807
Cost of fuel services	202,524		117,453		360,171		232,159

Selling, general and administrative expenses	360,687		302,749		702,696		578,391
Non-operating pension costs	2,581		(373)		5,368		(382)
Used vehicle sales, net	(129,566)		(51,634)		(242,560)		(80,485)
Interest expense	55,324		54,155		107,688		108,861
Miscellaneous income, net	(14,576)		(43,812)		(14,202)		(49,246)
Restructuring and other items, net	10,302		7,667		24,556		18,326
	2,695,291		2,178,664		5,297,282		4,330,019

Earnings from continuing operations before income taxes	338,371		203,573		590,242		273,840
Provision for income taxes	98,029		54,005		174,078		72,688
Earnings from continuing operations	240,342		149,568		416,164		201,152
Loss from discontinued operations, net of tax	(942)		(463)		(1,177)		(1,222)
Net earnings	$	239,400	$	149,105	$	414,987	$	199,930

Earnings (loss) per common share — Basic
Continuing operations	$	4.80	$	2.84	$	8.20	$	3.83
Discontinued operations	(0.02)		(0.01)		(0.02)		(0.02)
Net earnings	$	4.78	$	2.83	$	8.18	$	3.80

Earnings (loss) per common share — Diluted
Continuing operations	$	4.72	$	2.78	$	8.05	$	3.75
Discontinued operations	(0.02)		(0.01)		(0.02)		(0.02)
Net earnings	$	4.70	$	2.77	$	8.03	$	3.73

See accompanying notes to condensed consolidated financial statements.

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

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RYDER SYSTEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


	Three months ended June 30,				Six months ended June 30,
(In thousands)	2022		2021		2022		2021

Net earnings	$	239,400	$	149,105	$	414,987	$	199,930

Other comprehensive (loss) income:








Changes in cumulative translation adjustment and unrealized losses from cash flow hedges	(44,694)		9,551		(42,070)		18,491

Amortization of pension and postretirement items	4,864		6,951		10,708		13,967

Income tax expense related to amortization of pension and postretirement items	(1,179)		(1,453)		(2,401)		(2,971)
Amortization of pension and postretirement items, net of taxes	3,685		5,498		8,307		10,996


Change in net actuarial loss and prior service cost	1,805		116		1,805		116
Income tax expense related to change in net actuarial loss and prior service cost	(473)		(80)		(473)		(80)
Change in net actuarial loss and prior service cost, net of taxes	1,332		36		1,332		36

Other comprehensive (loss) income, net of taxes	(39,677)		15,085		(32,431)		29,523

Comprehensive income	$	199,723	$	164,190	$	382,556	$	229,453

See accompanying Notes to Condensed Consolidated Financial Statements.

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RYDER SYSTEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


(In thousands, except share amounts)	June 30, 2022		December 31, 2021

Assets:
Current assets:
Cash and cash equivalents	$	447,737	$	233,961
Receivables, net	1,692,911		1,464,737
Inventories	82,097		68,677
Prepaid expenses and other current assets	194,570		693,239
Total current assets	2,417,315		2,460,614
Revenue earning equipment, net	8,319,137		8,323,039
Operating property and equipment, net of accumulated depreciation of $1,310,627 and $1,273,637	1,070,030		984,978
Goodwill	854,202		570,905
Intangible assets, net	310,745		170,205
Sales-type leases and other assets	1,504,453		1,324,582
Total assets	$	14,475,882	$	13,834,323

Liabilities and shareholders’ equity:
Current liabilities:
Short-term debt and current portion of long-term debt	$	1,414,684	$	1,333,363
Accounts payable	966,555		747,898
Accrued expenses and other current liabilities	1,206,580		1,119,602
Total current liabilities	3,587,819		3,200,863
Long-term debt	5,178,550		5,246,306
Other non-current liabilities	1,437,446		1,314,404
Deferred income taxes	1,439,507		1,274,804
Total liabilities	11,643,322		11,036,377

Commitments and contingencies (Note 15)
Shareholders’ equity:
Preferred stock, no par value per share — authorized, 3,800,917; none outstanding, June 30, 2022 and December 31, 2021	—		—
Common stock, $0.50 par value per share — authorized, 400,000,000; outstanding, June 30, 2022 — 51,194,660 and December 31, 2021 — 53,789,036	25,597		26,896
Additional paid-in capital	1,148,835		1,194,334
Retained earnings	2,379,800		2,265,957
Accumulated other comprehensive loss	(721,672)		(689,241)
Total shareholders’ equity	2,832,560		2,797,946
Total liabilities and shareholders’ equity	$	14,475,882	$	13,834,323

See accompanying Notes to Condensed Consolidated Financial Statements.

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RYDER SYSTEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Six months ended June 30,
(In thousands)	2022		2021

Cash flows from operating activities from continuing operations:
Net earnings	$	414,987	$	199,930
Less: Loss from discontinued operations, net of tax	(1,177)		(1,222)
Earnings from continuing operations	416,164		201,152
Depreciation expense	854,229		905,420

Used vehicle sales, net	(242,560)		(80,485)
Amortization expense and other non-cash charges, net	50,427		26
Non-cash lease expense	92,728		46,599
Non-operating pension costs, net and share-based compensation expense	27,882		22,912
Deferred income tax expense	123,455		56,397
Collections on sales-type leases	64,404		62,778
Changes in operating assets and liabilities:
Receivables	(187,425)		(105,319)
Inventories	(13,478)		(1,422)
Prepaid expenses and other assets	(31,406)		945
Accounts payable	82,019		65,771
Accrued expenses and other non-current liabilities	(133,663)		(43,541)
Net cash provided by operating activities from continuing operations	1,102,776		1,131,233

Cash flows from investing activities from continuing operations:
Purchases of property and revenue earning equipment	(1,195,012)		(904,399)
Sales of revenue earning equipment	600,822		330,277
Sales of operating property and equipment	35,342		44,409
Acquisitions, net of cash acquired	(429,771)		—


Other investing activities	6,207		(3,695)
Net cash used in investing activities from continuing operations	(982,412)		(533,408)

Cash flows from financing activities from continuing operations:
Net borrowings (repayments) of commercial paper and other	208,023		(198,560)
Debt proceeds	951,008		—
Debt repayments	(1,111,379)		(189,699)
Dividends on common stock	(62,811)		(60,826)
Common stock issued	(9,027)		20,552
Common stock repurchased	(300,280)		(48,978)


Other financing activities	(5,560)		(1,460)
Net cash used in financing activities from continuing operations	(330,026)		(478,971)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(15,482)		(2,369)
(Decrease) increase in cash, cash equivalents and restricted cash from continuing operations	(225,144)		116,485
Net cash (used) provided by operating activities from discontinued operations	(444)		213
(Decrease) increase in cash, cash equivalents, and restricted cash	(225,588)		116,698
Cash, cash equivalents, and restricted cash at beginning of period	673,325		151,294
Cash, cash equivalents, and restricted cash at end of period	$	447,737	$	267,992

See accompanying Notes to Condensed Consolidated Financial Statements.

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RYDER SYSTEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited)


	Three months ended June 30, 2022
	Preferred Stock		Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss
(In thousands, except share amounts)	Amount		Shares	Par								Total

Balance as of April 1, 2022	$	—	51,136,680	$	25,568	$	1,134,143	$	2,170,625	$	(681,995)	$	2,648,341

Comprehensive income	—		—	—		—		239,400		(39,677)		199,723
Common stock dividends declared —$0.58 per share	—		—	—		—		(30,225)		—		(30,225)
Common stock issued under employee stock award and stock purchase plans and other (1) (2)	—		57,980	29		2,896		—		—		2,925

Common stock repurchases	—		—	—		—		—		—		—
Share-based compensation	—		—	—		11,796		—		—		11,796
Balance as of June 30, 2022	$	—	51,194,660	$	25,597	$	1,148,835	$	2,379,800	$	(721,672)	$	2,832,560


	Three months ended June 30, 2021
	Preferred Stock		Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss
(In thousands, except share amounts)	Amount		Shares	Par								Total

Balance as of April 1, 2021	$	—	53,870,387	$	26,935	$	1,135,644	$	1,919,875	$	(802,767)	$	2,279,687

Comprehensive income	—		—	—		—		149,105		15,085		164,190
Common stock dividends declared —$0.56 per share	—		—	—		—		(31,095)		—		(31,095)
Common stock issued under employee stock option and stock purchase plans and other (1) (2)	—		253,256	126		22,223		—		—		22,349

Common stock repurchases	—		(350,044)	(175)		(7,217)		(22,142)		—		(29,534)
Share-based compensation	—		—	—		12,617		—		—		12,617
Balance as of June 30, 2021	$	—	53,773,599	$	26,886	$	1,163,267	$	2,015,743	$	(787,682)	$	2,418,214

(1)Net of common shares delivered as payment for the exercise price or to satisfy the holders' withholding tax liability upon exercise of options

(2)Represents open-market transactions of common shares by the trustee of our deferred compensation plans

See accompanying Notes to Condensed Consolidated Financial Statements.

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RYDER SYSTEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited)


	Six months ended June 30, 2022
	Preferred Stock		Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss
(In thousands, except share amounts)	Amount		Shares	Par								Total

Balance as of January 1, 2022	$	—	53,789,036	$	26,896	$	1,194,334	$	2,265,957	$	(689,241)	$	2,797,946

Comprehensive income	—		—	—		—		414,987		(32,431)		382,556
Common stock dividends declared —$1.16 per share	—		—	—		—		(61,149)		—		(61,149)
Common stock purchased under employee stock option and stock purchase plans and other (1) (2)	—		457,894	229		(9,256)		—		—		(9,027)

Common stock repurchases	—		(3,052,270)	(1,528)		(58,757)		(239,995)		—		(300,280)
Share-based compensation	—		—	—		22,514		—		—		22,514
Balance as of June 30, 2022	$	—	51,194,660	$	25,597	$	1,148,835	$	2,379,800	$	(721,672)	$	2,832,560


	Six months ended June 30, 2021
	Preferred Stock		Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss
(In thousands, except share amounts)	Amount		Shares	Par								Total

Balance as of January 1, 2021	$	—	53,732,033	$	26,866	$	1,132,954	$	1,912,942	$	(817,205)	$	2,255,557
Comprehensive income	—		—	—		—		199,930		29,523		229,453
Common stock dividends declared —$1.12 per share	—		—	—		—		(61,664)		—		(61,664)
Common stock issued under employee stock option and stock purchase plans and other (1) (2)	—		679,567	339		20,213		—		—		20,552

Common stock repurchases	—		(638,001)	(319)		(13,194)		(35,465)		—		(48,978)
Share-based compensation	—		—	—		23,294		—		—		23,294

Balance as of June 30, 2021	$	—	53,773,599	$	26,886	$	1,163,267	$	2,015,743	$	(787,682)	$	2,418,214

(1)Net of common shares delivered as payment for the exercise price or to satisfy the holders' withholding tax liability upon exercise of options

(2)Represents open-market transactions of common shares by the trustee of our deferred compensation plans

See accompanying notes to condensed consolidated financial statements.

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RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. GENERAL

Interim Financial Statements

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Ryder System, Inc. (Ryder) and all entities in which Ryder has a controlling voting interest (subsidiaries) and variable interest entities (VIE) required to be consolidated in accordance with generally accepted accounting principles in the United States (GAAP). The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the accounting policies described in our 2021 Annual Report on Form 10-K and should be read in conjunction with the Consolidated Financial Statements and notes thereto. The year-end condensed balance sheet data was derived from our audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair statement have been included and the disclosures herein are adequate. The operating results for interim periods are not necessarily indicative of the results that can be expected for a full year. Certain prior period amounts have been reclassified to conform with the current period presentation. We included "Other operating expenses" together with "Selling, general and administrative expenses" in the unaudited Condensed Consolidated Statement of Earnings. In the second quarter and first half of 2022, we previously reported certain costs in "Cost of lease & related maintenance and rental" and "Cost of services" that should have been included in the "Cost of fuel services" within the unaudited Condensed Consolidated Statement of Earnings. These costs were not material to any financial statement line item and we elected to revise the presentation of these prior period costs to conform to the current year presentation in our financial statements.

We report our financial performance based on three business segments: (1) Fleet Management Solutions (FMS), which provides full service leasing and leasing with flexible maintenance options, commercial rental and maintenance services of trucks, tractors and trailers to customers principally in the United States (U.S.) and Canada; (2) Supply Chain Solutions (SCS), which provides integrated logistics solutions, including distribution management, dedicated transportation, transportation management, e-commerce, last mile and professional services in North America; and (3) Dedicated Transportation Solutions (DTS), which provides turnkey transportation solutions in the U.S. that includes dedicated vehicles, drivers, management, and administrative support. Dedicated transportation services provided as part of an operationally integrated, multi-service, supply chain solution to SCS customers are primarily reported in the SCS business segment. In February 2022, we announced our intentions to exit the FMS United Kingdom (U.K.) business. We expect to complete the exit of the FMS U.K. business by mid-2023.

2. RECENT ACCOUNTING PRONOUNCEMENTS

Reference Rate Reform

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848). This update provides optional expedients for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or other rates discontinued at the end of 2021 because of reference rate reform. The update is effective for all transactions from March 12, 2020 through December 31, 2022. We intend to apply this guidance if relevant contracts that include LIBOR or other discontinued rates are modified through December 31, 2022. We continuously evaluate the potential impact on our consolidated financial position, results of operations, and cash flows.

Leases

In July 2021, the FASB issued ASU No. 2021-05, Lessor - Certain Leases with Variable Lease Payments (Topic 842). This update requires lessors to classify leases as operating leases if they have variable lease payments that do not depend on an index or rate and would have selling losses if they were classified as sales-type or direct financing leases. The update is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Entities are permitted to apply this amendment using the retrospective or prospective approach. On January 1, 2022, we adopted the amendment on a prospective basis and it did not have a material impact on our consolidated financial position, results of operations, and cash flows.

3. SEGMENT REPORTING

Our primary measurement of segment financial performance, defined as segment “Earnings from continuing operations before income taxes” (EBT), includes an allocation of costs from Central Support Services (CSS) and excludes non-operating pension costs, net and certain other items as discussed in Note 14, “Other Items Impacting Comparability.” Segment results are not

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RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented.

The following table sets forth financial information for each of our segments and provides a reconciliation between segment EBT and earnings from continuing operations before income taxes:


	Three months ended June 30,				Six months ended June 30,
(In thousands)	2022		2021		2022		2021

Revenue:
Fleet Management Solutions:
ChoiceLease	$	802,577	$	802,832	$	1,604,919	$	1,599,920

Commercial rental	340,676		266,969		653,830		489,978
SelectCare and other	163,707		154,872		330,358		302,888
Fuel services and ChoiceLease liability insurance (1)	314,135		183,568		561,216		350,940

Fleet Management Solutions	1,621,095		1,408,241		3,150,323		2,743,726
Supply Chain Solutions	1,173,958		775,630		2,262,500		1,482,330
Dedicated Transportation Solutions	450,228		354,711		875,176		675,218
Eliminations (2)	(211,619)		(156,345)		(400,475)		(297,415)
Total revenue	$	3,033,662	$	2,382,237	$	5,887,524	$	4,603,859

Earnings from continuing operations before taxes:
Fleet Management Solutions	$	285,322	$	158,451	$	533,521	$	221,853
Supply Chain Solutions	52,640		41,041		86,859		73,998
Dedicated Transportation Solutions	23,156		13,162		43,367		26,144
Eliminations	(29,174)		(19,186)		(55,764)		(31,460)
	331,944		193,468		607,983		290,535
Unallocated Central Support Services	(23,768)		(17,864)		(39,772)		(36,296)
Non-operating pension costs, net (3)	(2,581)		373		(5,368)		382
Other items impacting comparability, net (4)	32,776		27,596		27,399		19,219
Earnings from continuing operations before income taxes	$	338,371	$	203,573	$	590,242	$	273,840

————————————

(1)In the first quarter of 2021, we completed the previously announced exit of the extension of our liability insurance coverage for ChoiceLease customers.

(2)Represents the elimination of intercompany revenues in our FMS business segment.

(3)Refer to Note 13, "Employee Benefit Plans," for a discussion on this item.

(4)Refer to Note 14, "Other Items Impacting Comparability," for a discussion of items excluded from our primary measure of segment performance.

The following table sets forth the capital expenditures paid for each of our segments:


	Three months ended June 30,				Six months ended June 30,
(In thousands)	2022		2021		2022		2021

Fleet Management Solutions	$	560,749	$	503,874	$	1,111,839	$	871,582
Supply Chain Solutions	39,625		14,450		65,575		22,980
Dedicated Transportation Solutions	1,115		256		1,454		562
Central Support Services	9,234		4,768		16,144		9,275
Purchases of property and revenue earning equipment	$	610,723	$	523,348	$	1,195,012	$	904,399

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RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

4. REVENUE

The following tables present our revenue recognized by primary geographical market by our reportable business segments and by industry for SCS. Refer to Note 3, "Segment Reporting," for the disaggregation of our revenue by major products/service lines.

Primary Geographical Markets


	Three months ended June 30, 2022
(In thousands)	FMS		SCS		DTS		Eliminations		Total

United States	$	1,484,539	$	1,040,218	$	450,228	$	(200,733)	$	2,774,252
Canada	81,593		69,083		—		(10,886)		139,790
Europe (1)	54,963		—		—		—		54,963
Mexico	—		64,657		—		—		64,657
Total revenues	$	1,621,095	$	1,173,958	$	450,228	$	(211,619)	$	3,033,662

(1)Refer to Note 14, "Other Items Impacting Comparability" for further information on the exit of the FMS U.K. business.


	Three months ended June 30, 2021
(In thousands)	FMS		SCS		DTS		Eliminations		Total

United States	$	1,263,250	$	661,715	$	354,711	$	(148,052)	$	2,131,624
Canada	76,849		58,735		—		(8,293)		127,291
Europe	68,142		—		—		—		68,142
Mexico	—		55,180		—		—		55,180

Total revenues	$	1,408,241	$	775,630	$	354,711	$	(156,345)	$	2,382,237


	Six months ended June 30, 2022
(In thousands)	FMS		SCS		DTS		Eliminations		Total

United States	$	2,872,582	$	2,011,418	$	875,176	$	(380,132)	$	5,379,044
Canada	159,122		128,711		—		(20,343)		267,490
Europe	118,619		—		—		—		118,619
Mexico	—		122,371		—		—		122,371
Total revenues	$	3,150,323	$	2,262,500	$	875,176	$	(400,475)	$	5,887,524


	Six months ended June 30, 2021
(In thousands)	FMS		SCS		DTS		Eliminations		Total

United States	$	2,461,234	$	1,263,013	$	675,218	$	(284,779)	$	4,114,686
Canada	147,262		114,823		—		(12,636)		249,449
Europe	135,230		—		—		—		135,230
Mexico	—		104,494		—		—		104,494
Total revenues	$	2,743,726	$	1,482,330	$	675,218	$	(297,415)	$	4,603,859

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

Industry

Our SCS business segment included revenue from the below industries:


	Three months ended June 30,				Six months ended June 30,
(In thousands)	2022		2021		2022		2021

Consumer packaged goods and retail	$	538,401	$	286,262	$	1,038,699	$	559,486
Automotive	388,493		307,499		742,730		579,054
Technology and healthcare	128,289		109,950		249,611		207,035
Industrial and other	118,775		71,919		231,460		136,755
Total SCS revenues	$	1,173,958	$	775,630	$	2,262,500	$	1,482,330

Lease & Related Maintenance and Rental Revenues

The non-lease revenue from maintenance services related to our FMS business is recognized in "Lease & related maintenance and rental revenues" in the Condensed Consolidated Statements of Earnings. For the three months ended June 30, 2022 and 2021, we recognized $262 million and $260 million, respectively. For the six months ended June 30, 2022 and 2021, we recognized $519 million and $510 million, respectively.

Deferred Revenue

The following table includes the changes in deferred revenue due to the collection and deferral of cash or the satisfaction of our performance obligation under the contract:


	Six months ended June 30,
(In thousands)	2022		2021

Balance as of beginning of period	$	593,442	$	629,739
Recognized as revenue during period from beginning balance	(163,168)		(109,558)
Consideration deferred during period, net	123,382		91,456
Foreign currency translation adjustment and other	9,968		1,499
Balance as of end of period	$	563,624	$	613,136

Contracted Not Recognized Revenue

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (contracted not recognized revenue). Contracted not recognized revenue primarily includes deferred revenue and amounts for full service ChoiceLease maintenance revenue that will be recognized as revenue in future periods as we provide maintenance services to our customers. Contracted not recognized revenue excludes (1) variable consideration as it is not included in the transaction price consideration allocated at contract inception; (2) revenues from our lease component of our ChoiceLease product and commercial rental product; (3) revenues from contracts with an original duration of one year or less, including SelectCare contracts; and (4) revenue from SCS, DTS and other contracts where there are remaining performance obligations when we have the right to invoice but the revenue to be recognized in the future corresponds directly with the value delivered to the customer. Contracted not recognized revenue was $2.3 billion as of June 30, 2022.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

5. RECEIVABLES, NET


(In thousands)	June 30, 2022		December 31, 2021

Trade	$	1,527,593	$	1,280,766
Sales-type leases	127,436		148,134
Other, primarily warranty and insurance	75,875		67,141
	1,730,904		1,496,041
Allowance for credit losses and other	(37,993)		(31,304)
Total	$	1,692,911	$	1,464,737

The following table provides a reconciliation of our allowance for credit losses and other:


	Six months ended June 30,
(In thousands)	2022		2021


Balance as of beginning of period	$	31,304	$	43,024
Changes to provisions for credit losses	18,409		(1,076)
Write-offs and other	(11,720)		(1,316)
Balance as of end of period	$	37,993	$	40,632

6. REVENUE EARNING EQUIPMENT, NET


	Estimated Useful Lives (In Years)	June 30, 2022						December 31, 2021
(Dollars in thousands)		Cost		Accumulated Depreciation		Net		Cost		Accumulated Depreciation		Net

Held for use:
Trucks	3 — 7	$	5,380,625	$	(2,167,247)	$	3,213,378	$	5,223,127	$	(2,055,135)	$	3,167,992
Tractors	4 — 7.5	7,264,179		(3,144,334)		4,119,845		7,256,002		(3,059,206)		4,196,796
Trailers and other	9.5 — 12	1,555,425		(663,521)		891,904		1,780,487		(868,820)		911,667
Held for sale		362,028		(268,018)		94,010		209,506		(162,922)		46,584
Total		$	14,562,257	$	(6,243,120)	$	8,319,137	$	14,469,122	$	(6,146,083)	$	8,323,039

Residual Value Estimate Changes

We periodically review and adjust, as appropriate, the estimated residual values and useful lives of existing revenue earning equipment for the purposes of recording depreciation expense. Reductions in estimated residual values or useful lives will increase depreciation expense over the remaining useful life of the vehicle. Conversely, an increase in estimated residual values or useful lives will decrease depreciation expense over the remaining useful life of the vehicle. Our review of the estimated residual values and useful lives of revenue earning equipment is based on vehicle class, (i.e., generally subcategories of trucks, tractors and trailers by weight and usage), historical and current market prices, third-party expected future market prices, expected lives of vehicles, and expected sales in the wholesale or retail markets, among other factors. A variety of factors, many of which are outside of our control, could cause residual value estimates to differ from actual used vehicle sales pricing, such as changes in supply and demand of used vehicles; volatility in market conditions; changes in vehicle technology; competitor pricing; regulatory requirements; driver shortages; customer requirements and preferences; and changes in underlying assumption factors. We have disciplines related to the management and maintenance of our vehicles designed to manage the risk associated with the residual values of our revenue earning equipment.

The following table provides a summary of incremental depreciation expense that has been recorded related to our previous residual value estimate changes as well as used vehicle sales results (rounded to the closest million):

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)


	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021

Depreciation expense related to estimate changes	$	49	$	75	$	97	$	163

Used vehicle sales, net (1)	(130)		(52)		(243)		(80)

————————————————

(1)Used vehicle sales, net for the second quarter and six months ended June 30, 2022, included $20 million and $28 million, respectively, of gains on sales of vehicles in the U.K. Refer to Note 14, "Other Items Impacting Comparability"

Used Vehicle Sales and Valuation Adjustments

Revenue earning equipment held for sale is stated at the lower of carrying amount or fair value less costs to sell. Losses on vehicles held for sale for which carrying values exceeded fair value, which we refer to as "valuation adjustments," are recognized at the time they are deemed to meet the held for sale criteria and are presented within “Used vehicle sales, net” in the Condensed Consolidated Statements of Earnings. For revenue earning equipment held for sale, we stratify our fleet by vehicle type (trucks, tractors and trailers), weight class, age and other relevant characteristics and create classes of similar assets for analysis purposes. For revenue earning equipment held for sale, fair value was determined based upon recent market prices obtained from our own sales experience for each class of similar assets and vehicle condition if available or third-party market pricing. In addition, we also consider expected declines in market prices when valuing the vehicles held for sale, as well as forecasted sales channel mix (retail/wholesale).

The following table presents revenue earning equipment held for sale that are measured at fair value on a nonrecurring basis and considered a Level 3 fair value measurement:


					Losses from Valuation Adjustments
					Three months ended June 30,				Six months ended June 30,
(In thousands)	June 30, 2022		December 31, 2021		2022		2021		2022		2021

Revenue earning equipment held for sale (1):

Trucks	$	383	$	931	$	461	$	684	$	987	$	1,574
Tractors	1,113		1,485		1,762		575		2,452		659
Trailers and other	332		1,309		205		1,828		485		3,875
Total assets at fair value	$	1,828	$	3,725	$	2,428	$	3,087	$	3,924	$	6,108

————————————

(1)Reflects only the portion where net book values exceeded fair values and valuation adjustments were recorded. The net book value of assets held for sale that were less than fair value was $92 million and $43 million as of June 30, 2022 and December 31, 2021, respectively.

The components of used vehicle sales, net were as follows:


	Three months ended June 30,				Six months ended June 30,
(In thousands)	2022		2021		2022		2021

Gains on vehicle sales, net	$	(131,994)	$	(54,721)	$	(246,484)	$	(86,593)
Losses from valuation adjustments	2,428		3,087		3,924		6,108
Used vehicle sales, net	$	(129,566)	$	(51,634)	$	(242,560)	$	(80,485)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

7. ACCRUED EXPENSES AND OTHER LIABILITIES


	June 30, 2022						December 31, 2021
(In thousands)	Accrued Expenses		Non-Current Liabilities		Total		Accrued Expenses		Non-Current Liabilities		Total

Salaries and wages	$	206,567	$	—	$	206,567	$	210,350	$	—	$	210,350




Insurance obligations (1)	194,401		313,864		508,265		186,449		311,209		497,658




Operating taxes	186,403		—		186,403		165,680		—		165,680


Deposits, mainly from customers	88,386		—		88,386		94,547		—		94,547
Operating lease liabilities	162,415		407,294		569,709		100,232		255,573		355,805
Deferred revenue (2)	182,573		381,051		563,624		182,785		410,657		593,442


Other	185,835		335,237		521,072		179,559		336,965		516,524
Total	$	1,206,580	$	1,437,446	$	2,644,026	$	1,119,602	$	1,314,404	$	2,434,006

————————————

(1)Insurance obligations primarily represent self-insured claim liabilities.

(2)Refer to Note 4, "Revenue," for additional information.

8. LEASES

Leases as Lessor

The components of lease income were as follows:


	Three months ended June 30,				Six months ended June 30,
(In thousands)	2022		2021		2022		2021

Operating leases
Lease income related to ChoiceLease	$	378,837	$	386,650	$	760,382	$	776,261
Lease income related to commercial rental (1)	325,134		255,098		623,269		465,382

Sales-type leases

Interest income related to net investment in leases	$	10,227	$	11,040	$	20,955	$	25,455




Variable lease income excluding commercial rental (1)	$	71,122	$	72,129	$	145,342	$	144,122

————————————

(1)Lease income related to commercial rental includes both fixed and variable lease income. Variable income is approximately 15% to 25% of total commercial rental income based on management's internal estimates.

The components of net investment in sales-type leases, which are included in "Receivables, net" and "Sales-type leases and other assets" in the Condensed Consolidated Balance Sheets, were as follows:


(In thousands)	June 30, 2022		December 31, 2021

Net investment in the lease — lease payment receivable	$	521,196	$	583,008
Net investment in the lease — unguaranteed residual value in assets	35,390		46,740

	556,586		629,748
Estimated loss allowance	(2,855)		(3,705)
Total	$	553,731	$	626,043

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

9. DEBT


	Weighted Average Interest Rate
(Dollars in thousands)	June 30, 2022	Maturities	June 30, 2022		December 31, 2021





Debt:
U.S. commercial paper	1.59%	2026	$	746,252	$	531,157
Canadian commercial paper	—%	2026	—		7,087
Trade receivables financing program	0.44%	2023	50,000		—
Global revolving credit facility	—%	2026	—		—
Unsecured U.S. obligations	3.41%	2024	200,000		200,000
Unsecured U.S. notes — Medium-term notes (1)	3.42%	2022-2027	5,019,000		5,149,893
Unsecured foreign obligations	2.72%	2022-2024	111,533		140,265
Asset-backed U.S. obligations (2)	2.67%	2022-2026	447,621		526,712
Finance lease obligations and other		2022-2030	40,796		44,595
			6,615,201		6,599,709
Debt issuance costs and original issue discounts			(21,967)		(20,040)
Total debt			6,593,234		6,579,669
Short-term debt and current portion of long-term debt			(1,414,684)		(1,333,363)
Long-term debt			$	5,178,550	$	5,246,306

————————————

(1)Includes the impact from the fair market values of hedging instruments on our notes, which was $31 million as of June 30, 2022, and not material as of December 31, 2021. The notional amount of the executed interest rate swaps designated as fair value hedges was $650 million and $450 million as of June 30, 2022 and December 31, 2021, respectively.

(2)Asset-backed U.S. obligations are related to financing transactions backed by a portion of our revenue earning equipment.

The fair value of total debt (excluding finance lease and asset-backed U.S. obligations) was approximately $6.2 billion for both periods as of June 30, 2022 and December 31, 2021. For publicly-traded debt, estimates of fair value were based on market prices. For other debt, fair value was estimated based on a model-driven approach using rates currently available to us for debt with similar terms and remaining maturities. The fair value measurements of our publicly-traded debt and our other debt were classified within Level 2 of the fair value hierarchy.

As of June 30, 2022, there was $654 million available under the global credit facility. In order to maintain availability of funding, we must maintain a ratio of debt to consolidated net worth of less than or equal to 300%, as defined in the credit facility agreement. As of June 30, 2022, the ratio was 172%. We had letters of credit and surety bonds outstanding of $465 million and $456 million as of June 30, 2022 and December 31, 2021, respectively, which primarily guarantee the payment of insurance claims.

As of June 30, 2022, the available proceeds under the trade receivables financing program were $250 million. In May 2022, we extended the maturity of the trade receivables financing program to expire in May 2023.

10. SHARE REPURCHASE PROGRAMS

In February 2022, our Board of Directors authorized a new accelerated share repurchase program to repurchase up to $300 million of common stock. During February 2022, we remitted $300 million to our agent for the accelerated share repurchase program. We received an initial share amount of approximately 3.1 million, representing approximately 80% of the total notional value of the accelerated share repurchase agreement. The remaining amount of shares purchased under the program will be delivered to Ryder when the program ends, no later than October 2022.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

We maintain two additional share repurchase programs. The first program grants management discretion to repurchase up to 2.0 million shares of common stock over a period of two years, commencing October 14, 2021 and expiring October 14, 2023 (the "2021 Discretionary Program"). The 2021 Discretionary Program is designed to provide management with capital structure flexibility while concurrently managing objectives related to balance sheet leverage, acquisition opportunities, and shareholder returns. The second program authorizes management to repurchase up to 2.5 million shares of common stock, issued to employees under the company's employee stock plans since September 1, 2021 (the "2021 Anti-Dilutive Program"). The 2021 Anti-Dilutive Program is designed to mitigate the dilutive impact of shares issued under the company's employee stock plans. The 2021 Anti-Dilutive Program commenced October 14, 2021 and expires October 14, 2023. Share repurchases under both programs can be made from time to time using the company's working capital and a variety of methods, including open-market transactions and trading plans established pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934. The timing and actual number of shares repurchased are subject to market conditions, legal requirements and other factors, including balance sheet leverage, availability of quality acquisitions and stock price. During the six months ended June 30, 2022, we did not repurchase any shares under these programs. During the six months ended June 30, 2021, we repurchased 638,001 shares for $49 million under the 2019 anti-dilutive program.

11. ACCUMULATED OTHER COMPREHENSIVE LOSS

Comprehensive (loss) income presents a measure of all changes in shareholders’ equity except for changes resulting from transactions with shareholders in their capacity as shareholders. The following summary sets forth the components of accumulated other comprehensive loss, net of tax:


	Six months ended June 30,
(In thousands)		2022		2021

Cumulative translation adjustments		$	(206,395)	$	(132,115)
Net actuarial loss and prior service cost		(519,043)		(644,008)
Unrealized gain (loss) from cash flow hedges		3,766		(11,559)

Accumulated other comprehensive loss		$	(721,672)	$	(787,682)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

12. EARNINGS PER SHARE

The following table presents the calculation of basic and diluted earnings per common share from continuing operations:


	Three months ended June 30,				Six months ended June 30,
(Dollars in thousands)	2022		2021		2022		2021


Earnings from continuing operations	$	240,342	$	149,568	$	416,164	$	201,152
Less: Distributed and undistributed earnings allocated to unvested stock	(1,271)		(703)		(2,143)		(940)
Earnings from continuing operations available to common shareholders	$	239,071	$	148,865	$	414,021	200,212










Weighted average common shares outstanding — Basic	49,852		52,378		50,474		52,333
Effect of dilutive equity awards	1,073		1,213		1,226		1,039
Weighted average common shares outstanding — Diluted	50,925		53,591		51,700		53,372

Earnings from continuing operations per common share — Basic	$	4.80	$	2.84	$	8.20	$	3.83
Earnings from continuing operations per common share — Diluted	$	4.72	$	2.78	$	8.05	$	3.75
Anti-dilutive equity awards not included in diluted EPS	1,068		417		765		958

————————————

Note: Amounts may not be additive due to rounding.

13. EMPLOYEE BENEFIT PLANS

Components of net pension expense for defined benefit pension plans were as follows:


	Three months ended June 30,				Six months ended June 30,
(In thousands)	2022		2021		2022		2021


Company-administered plans:
Service cost	$	198	$	180	$	438	$	548
Interest cost	15,785		14,483		31,609		29,018

Expected return on plan assets	(18,484)		(21,791)		(37,066)		(43,485)



Amortization of net actuarial loss and prior service cost	5,299		7,031		10,771		14,128



Net pension expense	$	2,798	$	(97)	$	5,752	$	209

Company-administered plans:
U.S.	$	3,324	$	2,090	$	6,647	$	4,453
Non-U.S.	(526)		(2,187)		(895)		(4,244)


Net pension expense	$	2,798	$	(97)	$	5,752	$	209

Non-operating pension costs, net include the amortization of net actuarial loss and prior service cost, interest cost and expected return on plan assets components of pension and postretirement benefit costs, as well as any significant charges for settlements or curtailments if recognized. During the six months ended June 30, 2022, we contributed $19 million to our pension plans. We do not expect additional contributions to our pension plans for the year 2022. We also maintain other postretirement benefit plans that are not reflected in the table above as the amount of postretirement benefit expense for such plans was not material for any period presented.

14. OTHER ITEMS IMPACTING COMPARABILITY

Our primary measure of segment performance as shown in Note 3, "Segment Reporting," excludes certain items we do not believe are representative of the ongoing operations of the segment. Excluding these items from our segment measure of performance allows for better year over year comparison:

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(unaudited)


	Three months ended June 30,				Six months ended June 30,
(In thousands)	2022		2021		2022		2021

Restructuring and other, net	$	10,302	$	2,577	$	24,556	$	5,605
ERP implementation costs	—		5,090		—		12,721

Restructuring and other items, net	10,302		7,667		24,556		18,326
Gains on sale of U.K. revenue earning equipment	(20,080)		—		(28,371)		—
Gains on sale of properties	(22,998)		(35,263)		(23,584)		(36,768)

ChoiceLease liability insurance revenue (1)	—		—		—		(777)
Other items impacting comparability, net	$	(32,776)	$	(27,596)	$	(27,399)	$	(19,219)

————————————

(1) Refer to Note 3, "Segment Reporting," for additional information.

Note: Amounts may not be additive due to rounding.

During the six months ended June 30, 2022 and 2021, other items impacting comparability included:

•Restructuring and other, net — For the second quarter of 2022, this item primarily included professional fees related to the pursuit of a discrete commercial claim of $5 million and U.K. severance costs as part of our plan to exit the FMS U.K. business of $4 million. For the six months ended June 30, 2022, this item primarily included professional fees related to the pursuit of a discrete commercial claim and transaction costs related to the acquisition of PLG Investments I, LLC. (Whiplash) of approximately $16 million and U.K. severance costs as part of our plan to exist the FMS U.K. business of $7 million. In February 2022, we announced our intention to exit the FMS U.K. business and we expect to complete the exit plan by mid-2023. For the three and six months ended June 30, 2021, this item primarily included professional fees related to the pursuit of a discrete commercial claim.

•Gains on sale of U.K. revenue earning equipment and properties — For the three and six months ended June 30, 2022, we recorded gains on the sale of U.K. revenue earning equipment and properties as part of our plan to exit the FMS U.K. business. We recorded gains on sale of properties for the six months ended June 30, 2021, primarily for certain FMS properties in the U.K. that were restructured as part of cost reduction activities in prior periods. The gains on sale of U.K. revenue earning equipment are reflected within "Used Vehicles Sales, net" and the gains on sale of properties are reflected within "Miscellaneous income, net" in our Condensed Consolidated Statements of Earnings.

The following table summarizes the activities within, and components of, restructuring liabilities for 2022:


(In thousands)	Six months ended June 30, 2022

Balance as of beginning of period	$	10,484
Workforce reduction charges	5,415
Utilization (1)	(3,730)
Balance as of end of period (2)	$	12,169

_________________

(1)Principally represents cash payments.

(2)Included in "Accrued expenses and other current liabilities" in the Condensed Consolidated Balance Sheets.

15. CONTINGENCIES AND OTHER MATTERS

We are a party to various claims, complaints and proceedings arising in the ordinary course of our continuing business operations including those relating to commercial and employment claims, environmental matters, risk management matters (e.g., vehicle liability, workers’ compensation, etc.), and administrative assessments primarily associated with operating taxes. We have established loss provisions for matters in which losses are probable and can be reasonably estimated. We believe that the resolution of these claims, complaints and legal proceedings will not have a material effect on our Condensed Consolidated Financial Statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

Our estimates regarding potential losses and materiality are based on our judgment and assessment of the claims utilizing currently available information. Although we will continue to reassess our estimated liability based on future developments, our objective assessment of the legal merits of such claims may not always be predictive of the outcome and actual results may vary from our current estimates.

Securities Litigation Relating to Residual Value Estimates

On May 20, 2020, a putative class action on behalf of purchasers of our securities who purchased or otherwise acquired their securities between July 23, 2015 and February 13, 2020, inclusive (Class Period), was commenced against Ryder and certain of our current and former officers in the U.S. District Court for the Southern District of Florida (the "Securities Class Action"). The complaint alleges, among other things, that the defendants misrepresented Ryder’s depreciation policy and residual value estimates for its vehicles during the Class Period in violation of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and seeks to recover, among other things, unspecified compensatory damages and attorneys' fees and costs. On August 3, 2020, the State of Alaska, Alaska Permanent Fund, the City of Fort Lauderdale General Employees’ Retirement System, and the City of Plantation Police Officers Pension Fund were appointed lead plaintiffs. On October 5, 2020, the lead plaintiffs filed an amended complaint. On December 4, 2020, Ryder and the other named defendants in the case filed a Motion to Dismiss the amended complaint. On May 12, 2022, the court denied the defendants' motion to dismiss. The court entered a case management schedule on June 27, 2022, which, among other things, provides that discovery shall be completed by October 2023 and the commencement of trial in June 2024.

As previously disclosed, between June 2020 and February 2, 2021, five shareholder derivative complaints were filed purportedly on behalf of Ryder against us as nominal defendant and certain of our current and former officers and our current directors. The complaints are generally based on allegations set forth in the Securities Class Action complaint and allege breach of fiduciary duties, unjust enrichment, and waste of corporate assets. The plaintiffs, on our behalf, are seeking an award of monetary damages and restitution to us, improvements in our corporate governance and internal procedures, and legal fees. Three of these derivative complaints were filed in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida, which were then consolidated into a single action (the "State Action"). Two of the complaints were filed in U.S. District Court for the Southern District of Florida (the "Federal Actions", and together with the State Action, the "Derivative Cases"). All of the Derivative Cases were stayed (stopped) pending the resolution of the motion to dismiss the Securities Class Action described in the paragraph above. On July 18, 2022 the Federal Actions were further stayed pending the final resolution of the State Action. On July 26, 2022, the State Action was further stayed until the conclusion of summary judgment proceedings in the Securities Class Action (except that certain discovery would be permitted).

We believe the claims asserted in the complaints are without merit and intend to defend against them vigorously.

16. SUPPLEMENTAL CASH FLOW INFORMATION


	Six months ended June 30,
(In thousands)	2022		2021

Interest paid	$	100,282	$	104,417
Income taxes paid	$	66,501	$	15,812



Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	86,251	$	46,482

Right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	5,096	$	5,622
Operating leases	$	118,351	$	30,274



Capital expenditures acquired but not yet paid	$	290,176	$	167,587

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

17. ACQUISITIONS

On January 1, 2022, we acquired all the outstanding equity of PLG Investments I, LLC (Whiplash), a leading national provider of omnichannel fulfillment and logistics services for an approximate purchase price of $483 million. The acquisition is included in our SCS business segment, and will expand our e-commerce and omnichannel fulfillment network.

The following table provides the preliminary purchase price allocation of the fair value of the assets and liabilities for Whiplash as of the acquisition date:


(In thousands)	January 1, 2022
Assets:
Receivables, net	$	78,765
Goodwill	280,081
Customer relationships and other intangible assets	157,400
Other assets, primarily operating lease right-of-use assets	241,646
Total assets	757,892

Liabilities:
Accrued expenses and other current liabilities	78,254
Other liabilities, primarily operating lease liabilities	196,869
Net assets acquired	$	482,769

The excess of the purchase consideration over the aggregate estimated fair values of identifiable assets acquired and liabilities assumed was recorded as goodwill. The goodwill recognized reflects anticipated supply chain services growth opportunities and expected cost synergies of combining Whiplash with our business. None of the goodwill is deductible for income tax purposes. Customer relationship intangible assets are expected to be amortized over 13 years. The purchase price included $439 million of restricted cash placed in escrow and the remaining amount classified as a deposit as of December 31, 2021. These amounts were recorded in "Prepaid expenses and other current assets" in the Condensed Consolidated Balance Sheet as of December 31, 2021. The cash paid from escrow during the first quarter of 2022 is reflected in "Acquisitions, net of cash acquired" in the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2022.

We believe that we have sufficient information to provide a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. The purchase price allocation excludes certain items to be resolved post-closing with the seller, which may result in additional adjustments to the final purchase price. Therefore, the provisional measurements of estimated fair values reflected are subject to change. We expect to finalize the valuation and complete the purchase consideration allocation no later than December 31, 2022.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included under Item 1, as well as our audited Consolidated Financial Statements and notes thereto and related MD&A included in the 2021 Annual Report on Form 10-K. Certain prior period amounts have been reclassified to conform with the current period presentation. We included "Other operating expenses" together with "Selling, general and administrative expenses" in the unaudited Condensed Consolidated Statement of Earnings. In the second quarter and first half of 2021, we previously reported certain costs in "Cost of lease & related maintenance and rental" and "Cost of services" that should have been included in the "Cost of fuel services" within the unaudited Condensed Consolidated Statement of Earnings. These costs were not material to any financial statement line item and we elected to revise the presentation of these prior period costs to conform to the current year presentation in our financial statements.

OVERVIEW

General

We operate in highly competitive markets. Our customers select us based on numerous factors including service quality, price, technology and service offerings. As an alternative to using our services, customers may choose to provide these services for themselves, or may choose to obtain similar or alternative services from other third-party vendors. Our customer base includes enterprises operating in a variety of industries including food and beverage service, transportation and logistics, retail and consumer goods, automotive, industrial, housing, technology, and business and personal services.

Business Trends

In the second quarter and first half of 2022, supply chain disruptions and labor shortage challenges continue to contribute to increased demand for our services as companies seek long-term outsourcing solutions. In addition, the limited supply of vehicles available in the market contributed to robust demand and pricing for our rental and used vehicles.

In our Fleet Management Solutions (FMS) business, the used vehicle sales and rental market have benefited from strong demand and pricing trends, resulting in higher year over year performance in both of these areas. Used vehicle market conditions remain strong despite a modest decline in sequential tractor pricing. We continue to anticipate that the historically strong used vehicle sales and rental market environment will moderate in the second half of the year, with slower freight growth partially offset by ongoing tight market capacity. We have benefited from market acceptance for higher lease pricing on new and renewing leases, resulting in improved portfolio returns. If the limited supply of vehicles continues for an extended period, we will likely continue to experience benefits in rental and used vehicle pricing and overall demand; however, we may experience limited rental and lease fleet growth from OEM delivery delays and lower vehicle sales volumes due to limited used vehicle inventory.

In our Supply Chain Solutions (SCS) business, we are seeing strong outsourcing trends in warehousing and distribution, as well as in e-commerce fulfillment and last mile delivery of big and bulky items. We continue to experience new contract wins in SCS and Dedicated Transportation Solutions (DTS), which combined with recent acquisitions, contributed to significant revenue growth. Our previously announced acquisitions are performing well and above expectations and provide us with enhanced capabilities in fast-growing e-commerce fulfillment and in multi-client warehousing. During the second quarter and first half of 2022, continued labor shortages, resulted in higher labor costs, impacting all of our business segments, particularly our DTS and SCS segments. In the second quarter, our DTS and SCS pricing adjustments more than covered the negative impact of increased labor costs. In the second half of 2022, we expect these pricing adjustments to help DTS and SCS return to their target earnings levels.

While we are experiencing positive momentum in our businesses, other unknown effects of the pandemic, extended higher fuel prices, inflationary cost pressures, prolonged labor shortages, extended disruptions in vehicle and vehicle part production and rising interest rates may negatively impact demand for our business, financial results, and significant judgments and estimates.

SELECTED OPERATING PERFORMANCE ITEMS

•Total revenue of $3.0 billion and operating revenue (a non-GAAP measure) of $2.3 billion for second quarter of 2022 increased 27% and 20%, respectively as compared to prior year, reflecting revenue growth across all business segments

•Diluted EPS from continuing operations of $4.72 in the second quarter of 2022 versus $2.78 in prior year, reflecting significantly improved results in FMS and higher results in DTS

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

•Comparable EPS (a non-GAAP measure) from continuing operations of $4.43 in the second quarter of 2022 versus $2.40 in prior year

•Adjusted Return on Equity (ROE) (a non-GAAP measure) of 28.0% in the second quarter of 2022

•Net cash provided by operating activities from continuing operations of $1.1 billion and free cash flow (a non-GAAP measure) of $551 million in the second quarter of 2022

The following discussion provides a summary of financial highlights that are discussed in more detail throughout our MD&A and within the Notes to Condensed Consolidated Financial Statements:


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands, except per share)	2022		2021		2022		2021		Three Months	Six Months

Total revenue	$	3,033,662	$	2,382,237	$	5,887,524	$	4,603,859	27%	28%
Operating revenue (1)	2,307,106		1,922,820		4,522,693		3,740,183		20%	21%

Earnings from continuing operations before income taxes (EBT)	$	338,371	$	203,573	$	590,242	$	273,840	66%	116%
Comparable EBT (1)	308,176		175,604		568,211		254,239		75%	123%
Earnings from continuing operations	240,342		149,568		416,164		201,152		61%	107%
Comparable earnings from continuing operations (1)	225,544		129,138		413,843		187,328		75%	121%
Net earnings	239,400		149,105		414,987		199,930		61%	108%
Comparable EBITDA (1)	688,107		624,055		1,335,159		1,191,470		10%	12%

Earnings per common share (EPS) — Diluted
Continuing operations	$	4.72	$	2.78	$	8.05	$	3.75	70%	115%
Comparable (1)	4.43		2.40		8.00		3.49		85%	129%
Net earnings	4.70		2.77		8.03		3.73		70%	115%

(1)Non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section of this MD&A for reconciliations of the most comparable GAAP measure to the non-GAAP financial measure and the reasons why management believes this measure is important to investors.

Total revenue increased 27% in the second quarter of 2022 and 28% for the six months ended June 30, 2022. Operating revenue (a non-GAAP measure excluding fuel, subcontracted transportation and ChoiceLease liability insurance revenues) increased 20% in the second quarter of 2022 and 21% in the six months ended June 30, 2022. The increases in total and operating revenue for both the second quarter and six months ended June 30, 2022, were primarily due to higher revenue across all of our business segments and the SCS acquisitions of PLG Investments I, LLC (Whiplash) and Midwest Warehouse & Distribution System (Midwest). Total revenue in both periods also increased from higher subcontracted transportation and fuel revenue.

EBT and comparable EBT (a non-GAAP measure) increased to $338 million and $308 million, respectively, in the second quarter of 2022 from $204 million and $176 million, respectively, in the prior year period. For the six months ended June 30, 2022, EBT and comparable EBT (a non-GAAP measure) increased to $590 million and $568 million, respectively, as compared to earnings of $274 million and $254 million, respectively in the prior year period. The increases in both periods were primarily due to higher gains on used vehicles sold in North America, higher commercial rental results and a declining impact of depreciation expense from prior residual value estimate changes.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

CONSOLIDATED RESULTS

Lease & Related Maintenance and Rental


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

Lease & related maintenance and rental revenues	$	1,049,604	$	986,694	$	2,074,589	$	1,927,116	6%	8%
Cost of lease & related maintenance and rental	687,894		702,444		1,386,735		1,432,588		(2)%	(3)%
Gross margin	$	361,710	$	284,250	$	687,854	$	494,528	27%	39%
Gross margin %	34%		29%		33%		26%

Lease & related maintenance and rental revenues represent revenues from our ChoiceLease and commercial rental product offerings within our FMS business segment. Revenues increased 6% in the second quarter of 2022 and 8% for the six months ended June 30, 2022, driven primarily by increases in commercial rental demand and pricing.

Cost of lease & related maintenance and rental represents the direct costs related to lease & related maintenance and rental revenues and are comprised of depreciation of revenue earning equipment, maintenance costs (primarily repair parts and labor), and other costs such as licenses, insurance and operating taxes. Cost of lease & related maintenance and rental excludes interest costs from vehicle financing, which are reported within "Interest Expense" in our Condensed Consolidated Statements of Earnings. Cost of lease & related maintenance and rental decreased 2% in the second quarter of 2022 and 3% for the six months ended June 30, 2022, due to declining depreciation expense impacts from prior residual value estimate changes.

Lease & related maintenance and rental gross margin increased in the second quarter of 2022 and for the six months ended June 30, 2022, primarily due to higher commercial rental pricing and utilization, a declining impact of depreciation expense from prior residual value estimate changes, and higher ChoiceLease pricing.

Services


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

Services revenue	$	1,777,586	$	1,276,140	$	3,447,124	$	2,441,628	39%	41%
Cost of services	1,520,121		1,090,015		2,966,830		2,089,807		39%	42%
Gross margin	$	257,465	$	186,125	$	480,294	$	351,821	38%	37%
Gross margin %	14%		15%		14%		14%

Services revenue represents all the revenues associated with our SCS and DTS business segments, as well as SelectCare and fleet support services associated with our FMS business segment. Services revenue increased 39% in the second quarter of 2022 and 41% for the six months ended June 30, 2022, due to increases in revenue in SCS and DTS growth from acquisitions, new business, higher volumes and higher pricing.

Cost of services represents the direct costs related to services revenue and is primarily comprised of salaries and employee-related costs, subcontracted transportation (purchased transportation from third parties), fuel, vehicle liability costs and maintenance costs. Cost of services increased 39% in the second quarter and 42% for the six months ended June 30, 2022, primarily due to the growth in revenues and higher subcontracted transportation and labor costs in SCS and DTS.

Services gross margin increased 38% in the second quarter of 2022 and increased 37% for the six months ended June 30, 2022, due to the increase in revenue. Services gross margin as a percentage of revenue declined slightly in the second quarter of 2022 due to higher labor costs and remained consistent for the six months ended June 30, 2022.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

Fuel


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

Fuel services revenue	$	206,472	$	119,403	$	365,811	$	235,115	73%	56%
Cost of fuel services	202,524		117,453		360,171		232,159		72%	55%
Gross margin	$	3,948	$	1,950	$	5,640	$	2,956	102%	91%
Gross margin %	2%		2%		2%		1%

Fuel services revenue represents fuel services provided to our FMS customers. Fuel services revenue increased 73% in the second quarter of 2022 and 56% for the six months ended June 30, 2022, primarily reflecting higher fuel prices passed through to customers.

Cost of fuel services includes the direct costs associated with providing our customers with fuel. These costs include fuel, salaries and employee-related costs of fuel island attendants and depreciation of our fueling facilities and equipment. Cost of fuel services increased 72% in the second quarter of 2022 and 55% for the six months ended June 30, 2022, as a result of higher fuel prices.

Fuel services gross margin increased in the second quarter of 2022 and for the six months ended June 30, 2022. Fuel services gross margin as a percentage of revenue remained flat at 2% in the second quarter of 2022 and increased to 2% for the six months ended June 30, 2022. Fuel is largely a pass-through to customers for which we realize minimal changes in margin during periods of steady market fuel prices. However, fuel services margin is impacted by sudden increases or decreases in market fuel prices during a short period of time, as customer pricing for fuel is established based on current market fuel costs. Fuel services gross margin for the second quarter of 2022 and six months ended June 30, 2022, was not significantly impacted by these price change dynamics as fuel prices fluctuated during the period.

Selling, General and Administrative Expenses


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

Selling, general and administrative expenses (SG&A)	$	360,687	$	302,749	$	702,696	$	578,391	19%	21%
Percentage of total revenue	12%		13%		12%		13%

SG&A expenses increased 19% and 21%in the second quarter and six months ended June 30, 2022, respectively. The increase in both periods is mainly due to higher incentive-based compensation costs, higher bad debt expense, amortization of intangibles from the Whiplash and Midwest acquisitions and higher travel expense, offset by decreased deferred compensation. The increase in SG&A expenses for the six months ended June 30, 2022, also included increased strategic investments in information technology. SG&A expenses as a percentage of total revenue decreased to 12% for the second quarter of 2022 and for the six months ended June 30, 2022.

Non-Operating Pension Costs, net


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

Non-operating pension costs, net	$	2,581	$	(373)	$	5,368	$	(382)	NM	NM

_______________________________

NM - Denotes Not Meaningful throughout the MD&A

Non-operating pension costs, net include the amortization of net actuarial loss and prior service cost, interest cost and expected return on plan assets components of pension and postretirement benefit costs, as well as any significant charges for settlements or curtailments if recognized. The non-operating pension costs, net increased due to lower return on assets from a shift in mix of assets and higher interest expense from a higher discount rate partially offset by lower amortization expense.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

Used Vehicle Sales, net


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

Gains on used vehicle sales, net	$	(129,566)	$	(51,634)	$	(242,560)	$	(80,485)	151%	201%

Used vehicle sales, net includes gains or losses from sales of used vehicles, selling costs associated with used vehicles and write-downs of vehicles held for sale to fair market values (referred to as "valuation adjustments"). Used vehicle sales, net increase in the second quarter of 2022 and six months ended June 30, 2022, due to higher proceeds per unit on sales of used vehicles.

Average proceeds per unit increased in the second quarter of 2022 and for the six months ended June 30, 2022, primarily reflecting higher retail pricing and retail channel mix. The following table presents the average used vehicle pricing changes for North America compared to the prior year:


	Proceeds per unit change 2022/2021 (1)
	Three Months	Six Months
Tractors	91%	117%
Trucks	81%	94%

————————————

(1) Represents percentage change compared to prior year period in average sales proceeds on used vehicle sales using constant currency.

Interest expense


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

Interest expense	$	55,324	$	54,155	$	107,688	$	108,861	2%	(1)%
Effective interest rate	3.4%		3.4%		3.3%		3.4%

Interest expense in the second quarter of 2022 increased 2% from the prior year and decreased 1% for the six months ended June 30, 2022, reflecting a lower effective interest rate due to a higher mix of variable rate debt partially offset by higher average outstanding debt.

Miscellaneous income, net


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

Miscellaneous income, net	$	(14,576)	$	(43,812)	$	(14,202)	$	(49,246)	(67)%	(71)%

Miscellaneous income, net consists of investment income on securities used to fund certain benefit plans, interest income, gains on sales of operating property, foreign currency transaction remeasurement and other non-operating items. Miscellaneous income, net was income of $15 million in the second quarter of 2022 compared to income of $44 million in the prior year period and $14 million for the six months ended June 30, 2022, compared to income of $49 million in the prior year period, primarily due to higher gains on sale of properties in the prior year.

Restructuring and other items, net


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

Restructuring and other items, net	$	10,302	$	7,667	$	24,556	$	18,326	34%	34%

Refer to Note 14, "Other Items Impacting Comparability" in the Notes to Condensed Consolidated Financial Statements for a discussion of restructuring charges and other items.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

Provision for income taxes


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

Provision for income taxes	$	98,029	$	54,005	$	174,078	$	72,688	82%	139%
Effective tax rate on continuing operations	29.0%		26.5%		29.5%		26.5%
Comparable tax rate on continuing operations (1)	26.8%		26.5%		27.2%		26.3%

————————————

Our effective tax rate on continuing operations was 29.0% in the second quarter of 2022 compared to 26.5% in the prior year, and 29.5% for the six months ended June 30, 2022, compared to 26.5% in the prior period. The increase in the effective tax rate for both periods was due to incremental U.S. tax on higher foreign earnings related to the exit of our U.K. FMS business.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

OPERATING RESULTS BY BUSINESS SEGMENT


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

Revenue:
Fleet Management Solutions	$	1,621,095	$	1,408,241	$	3,150,323	$	2,743,726	15%	15%
Supply Chain Solutions	1,173,958		775,630		2,262,500		1,482,330		51%	53%
Dedicated Transportation Solutions	450,228		354,711		875,176		675,218		27%	30%
Eliminations	(211,619)		(156,345)		(400,475)		(297,415)		(35)%	(35)%
Total	$	3,033,662	$	2,382,237	$	5,887,524	$	4,603,859	27%	28%
Operating Revenue: (1)
Fleet Management Solutions	$	1,306,960	$	1,224,673	$	2,589,107	$	2,392,786	7%	8%
Supply Chain Solutions	798,430		534,558		1,536,521		1,037,156		49%	48%
Dedicated Transportation Solutions	305,564		255,849		602,019		492,688		19%	22%
Eliminations	(103,848)		(92,260)		(204,954)		(182,447)		(13)%	(12)%
Total	$	2,307,106	$	1,922,820	$	4,522,693	$	3,740,183	20%	21%

Earnings from continuing operations before income taxes:
Fleet Management Solutions	$	285,322	$	158,451	$	533,521	$	221,853	80%	140%
Supply Chain Solutions	52,640		41,041		86,859		73,998		28%	17%
Dedicated Transportation Solutions	23,156		13,162		43,367		26,144		76%	66%
Eliminations	(29,174)		(19,186)		(55,764)		(31,460)		52%	77%
	331,944		193,468		607,983		290,535		72%	109%
Unallocated Central Support Services	(23,768)		(17,864)		(39,772)		(36,296)		33%	10%
Non-operating pension costs, net (2)	(2,581)		373		(5,368)		382		NM	NM
Other items impacting comparability, net (3)	32,776		27,596		27,399		19,219		19%	43%
Earnings from continuing operations before income taxes	$	338,371	$	203,573	$	590,242	$	273,840	66%	116%

————————————

(2)Refer to Note 13, "Employee Benefit Plans," for a discussion on this item.

(3)Refer to Note 14, "Other Items Impacting Comparability," and below for a discussion of items excluded from our primary measure of segment performance.

As part of management’s evaluation of segment operating performance, we define the primary measurement of our segment financial performance as segment “Earnings from continuing operations before income taxes” (EBT), which includes an allocation of Central Support Services (CSS), and excludes non-operating pension costs, net and certain other items as discussed in Note 14, "Other Items Impacting Comparability," in the Notes to Condensed Consolidated Financial Statements. CSS represents those costs incurred to support all business segments, including finance and procurement, corporate services, human resources, information technology, public affairs, legal, marketing, and corporate communications.

The objective of the EBT measurement is to provide clarity on the profitability of each segment and, ultimately, to hold leadership of each business segment accountable for their allocated share of CSS costs. Segment results are not necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented. Certain costs are not attributable to any segment and remain unallocated in CSS, including costs for investor relations, public affairs and certain executive compensation.

Our FMS segment leases revenue earning equipment, as well as provides rental vehicles, fuel, maintenance and other ancillary services to the SCS and DTS segments. Inter-segment EBT allocated to SCS and DTS includes earnings related to equipment used in providing services to SCS and DTS customers. EBT related to inter-segment equipment and services billed to SCS and DTS customers (equipment contribution) are included in both FMS and the segment that served the customer and then eliminated upon consolidation (presented as “Eliminations”).

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

The following table sets forth the benefits from equipment contribution included in EBT for our SCS and DTS business segments:


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

Equipment Contribution:
Supply Chain Solutions	$	10,971	$	7,822	$	21,201	$	13,045	40%	63%
Dedicated Transportation Solutions	18,203		11,364		34,563		18,415		60%	88%
Total	$	29,174	$	19,186	$	55,764	$	31,460	52%	77%

The increase in SCS and DTS equipment contribution in the second quarter of 2022 and in the six months ended June 30, 2022, is primarily related to higher proceeds on sales of used vehicles, fleet growth and increased fuel margins due to rapid fluctuations in fuel prices.

Items excluded from our segment EBT measure and their classification within our Condensed Consolidated Statements of Earnings are as follows (in thousands):


		Three months ended June 30,				Six months ended June 30,
Description	Classification	2022		2021		2022		2021

Restructuring and other, net (1)	Restructuring and other items, net	$	(10,302)	$	(2,577)	$	(24,556)	$	(5,605)

ERP implementation costs (1)	Restructuring and other items, net	—		(5,090)		—		(12,721)



Gain on sale of U.K. revenue earning equipment	Used vehicles sales, net	20,080		—		28,371		—
Gains on sale of properties (1)	Miscellaneous income, net	22,998		35,263		23,584		36,768
ChoiceLease liability insurance revenue (1)	Revenue	—		—		—		777
Other items impacting comparability, net		32,776		27,596		27,399		19,219
Non-operating pension costs, net (2)	Non-operating pension costs	(2,581)		373		(5,368)		382
		$	30,195	$	27,969	$	22,031	$	19,601

———————————

(1)Refer to Note 14, “Other Items Impacting Comparability,” in the Notes to Condensed Consolidated Financial Statements for additional information.

(2)Includes the amortization of net actuarial loss and prior service cost, interest cost and expected return on plan assets components of pension and postretirement benefit costs, as well as any significant charges for settlements or curtailments if recognized.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

Fleet Management Solutions


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

ChoiceLease	$	802,577	$	802,832	$	1,604,919	$	1,599,920	—%	—%

Commercial rental (1)	340,676		266,969		653,830		489,978		28%	33%
SelectCare and other	163,707		154,872		330,358		302,888		6%	9%
Fuel services and ChoiceLease liability insurance(2)	314,135		183,568		561,216		350,940		71%	60%

FMS total revenue	$	1,621,095	$	1,408,241	$	3,150,323	$	2,743,726	15%	15%

FMS operating revenue (3)	$	1,306,960	$	1,224,673	$	2,589,107	$	2,392,786	7%	8%

FMS EBT	$	285,322	$	158,451	$	533,521	$	221,853	80%	140%

FMS EBT as a % of FMS total revenue	17.6%		11.3%		16.9%		8.1%		630 bps	880 bps

FMS EBT as a % of FMS operating revenue (3)	21.8%		12.9%		20.6%		9.3%		890 bps	122 bps

					Twelve months ended June 30,				Change 2022/2021
					2022		2021
FMS EBT as a % of FMS total revenue					16.0%		5.5%		1,050 bps
FMS EBT as a % of FMS operating revenue (3)					19.0%		6.3%		1,270 bps

————————————

(1)For the three months ended June 30, 2022 and 2021, rental revenue from lease customers in place of a lease vehicle represented 32% and 29% of commercial rental revenue, respectively. For the six months ended June 30, 2022 and 2021, rental revenue from lease customers in place of a lease vehicle represented 33% and 30% of commercial rental revenue, respectively.

(2)In the first quarter of 2021, we completed the previously announced exit of the extension of our liability insurance coverage for ChoiceLease customers.

(3)Non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section of this MD&A for reconciliations of the most comparable GAAP measure to the non-GAAP financial measure and the reasons why management believes this measure is important to investors.

FMS total revenue increased 15% in the second quarter of 2022 and for the six months ended June 30, 2022, due to higher operating revenue (a non-GAAP measure excluding fuel and ChoiceLease liability insurance revenues) and higher fuel service revenue primarily reflecting higher fuel prices passed through to customers. FMS operating revenue increased 7% in the second quarter and 8% for the six months ended June 30, 2022, primarily due to higher commercial rental revenue driven by strong demand and higher pricing.

FMS EBT in the second quarter of 2022 increased to $285 million from $158 million in the prior year period. FMS EBT in the six months ended June 30, 2022, increased to $534 million from $222 million in the prior year period. FMS EBT increased primarily from higher used vehicle sales and rental results, reflecting benefits from tight truck capacity and initiatives to improve returns in these areas. Lease pricing and maintenance cost initiatives also contributed to higher results. Increased gains on used vehicles sold and a declining impact of depreciation expense from prior vehicle residual value estimate changes contributed $84 million and $200 million for the three and six months ended June 30, 2022, respectively, in higher year-over-year earnings. Used vehicle pricing in North America significantly increased from the prior year for both trucks and tractors and global ending inventory levels declined to 4,200 vehicles, remaining below the target range of 7,000 - 9,000 vehicles. Commercial rental results benefited from higher utilization and increased power fleet pricing. Rental power fleet utilization increased to 85% from 80% in the second quarter of 2022 compared to prior period and increased to 83% from 76% in the six months ended June 30, 2022, compared to prior period.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

Our global fleet of owned and leased revenue earning equipment and SelectCare vehicles, including vehicles under on-demand maintenance, is summarized as follows (number of units rounded to the nearest hundred):


				Change
	June 30, 2022	December 31, 2021	June 30, 2021	June 2022/ Dec 2021	June 2022/ June 2021
End of period vehicle count
By type:
Trucks (1)	75,400	75,100	75,400	—%	—%
Tractors (2)	70,300	70,700	72,000	(1)%	(2)%
Trailers and other (3)	40,700	43,500	43,400	(6)%	(6)%

Total	186,400	189,300	190,800	(2)%	(2)%

By product line:
ChoiceLease	138,500	143,900	146,200	(4)%	(5)%
Commercial rental	41,500	40,700	38,000	2%	9%
Service vehicles and other	2,200	2,200	2,300	—%	(4)%
	182,200	186,800	186,500	(2)%	(2)%
Held for sale	4,200	2,500	4,300	68%	(2)%
Total	186,400	189,300	190,800	(2)%	(2)%



Customer vehicles under SelectCare contracts (4)	55,200	54,500	52,900	1%	4%


Quarterly average vehicle count
By product line:
ChoiceLease	142,900	144,500	146,900	(1)%	(3)%
Commercial rental	41,900	40,400	36,700	4%	14%
Service vehicles and other	2,200	2,200	2,300	—%	(4)%
	187,000	187,100	185,900	—%	1%
Held for sale	3,600	2,700	5,100	33%	(29)%
Total	190,600	189,800	191,000	—%	—%




Customer vehicles under SelectCare contracts (4)	55,900	54,200	53,200	3%	5%
Customer vehicles under SelectCare on-demand (5)	6,200	6,300	6,400	(2)%	(3)%
Total vehicles serviced	252,700	250,300	250,600	1%	1%

———————————

(1)Generally comprised of Class 1 through Class 7 type vehicles with a Gross Vehicle Weight (GVW) up to 33,000 pounds.

(2)Generally comprised of over the road on highway tractors and are primarily comprised of Class 8 type vehicles with a GVW of over 33,000 pounds.

(3)Generally comprised of dry, flatbed and refrigerated type trailers.

(4)Excludes customer vehicles under SelectCare on-demand contracts.

(5)Comprised of the number of unique vehicles serviced under on-demand maintenance agreements for the quarterly periods. This does not represent averages for the periods. Vehicles included in the count may have been serviced more than one time during the respective period.

Note: Quarterly amounts were computed using a 6-point average based on monthly information.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

The following table provides information on our North America active ChoiceLease fleet (number of units rounded to nearest hundred) and our global commercial rental power fleet (excludes trailers):


							Change
	June 30, 2022		December 31, 2021		June 30, 2021		June 2022/ Dec 2021		June 2022/ June 2021
Active ChoiceLease fleet
End of period vehicle count (1)	128,900		128,900		129,900		—%		(1)%

Quarterly average vehicle count (1)	128,500		129,200		130,300		(1)%		(1)%

Commercial rental statistics



Quarterly commercial rental utilization - power fleet (2)	84.5	%	85.2	%	79.6	%	(70)	bps	490	bps
Year-to-date commercial rental utilization - power fleet (2)	83.1	%	85.2	%	76.4	%	(210) bps		670	bps

———————————

(1)Active ChoiceLease vehicles are calculated as those units currently earning revenue and not classified as not yet earning or no longer earning units.

(2)Rental utilization is calculated using the number of days units are rented divided by the number of days units are available to rent based on the days in the calendar year.

Supply Chain Solutions


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months
Consumer packaged goods and retail	$	423,383	$	233,791	$	818,519	$	454,277	81%	80%
Automotive	217,384		179,849		412,024		351,721		21%	17%
Technology and healthcare	73,840		57,529		144,249		112,234		28%	29%
Industrial and other	83,823		63,389		161,729		118,924		32%	36%
Subcontracted transportation and fuel	375,528		241,072		725,979		445,174		56%	63%

SCS total revenue	$	1,173,958	$	775,630	$	2,262,500	$	1,482,330	51%	53%

SCS operating revenue (1)	$	798,430	$	534,558	$	1,536,521	$	1,037,156	49%	48%

SCS EBT	$	52,640	$	41,041	$	86,859	$	73,998	28%	17%
SCS EBT as a % of SCS total revenue	4.5%		5.3%		3.8%		5.0%		(80) bps	(120) bps
SCS EBT as a % of SCS operating revenue (1)	6.6%		7.7%		5.7%		7.1%		(110) bps	(140) bps

Memo:
End of period fleet count	11,700		10,000		11,700		10,000		17%	17%

					Twelve months ended June 30,				Change 2022/2021
					2022		2021
SCS EBT as a % of SCS total revenue					3.3%		5.8%		(250) bps
SCS EBT as a % of SCS operating revenue (1)					4.8%		8.2%		(340) bps

————————————

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

The following table summarizes the components of the change in revenue on a percentage basis versus the prior year:


	Three months ended June 30, 2022				Six months ended June 30, 2022
	Total		Operating (1)		Total		Operating (1)
Organic, including price and volume	25	%	23	%	26	%	22	%
Acquisition	23		26		24		26

Fuel	3		—		3		—

Net increase	51	%	49	%	53	%	48	%

————————————

SCS total revenue increased 51% in the second quarter of 2022 and 53% in the six months ended June 30, 2022, primarily as a result of higher operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation). SCS operating revenue increased 49% in the second quarter of 2022 and 48% for the six months ended June 30, 2022, primarily due to the acquisitions of Whiplash and Midwest and strong revenue growth in all industry verticals from new business, higher volumes and increased pricing.

SCS EBT increased 28% in the second quarter of 2022 and 17% for the six months ended June 30, 2022, primarily due to revenue growth from new business, higher pricing and acquisitions. This increase was partially offset by customer accommodation charges, bad debt and incentive-based compensation costs. The positive impact of acquisitions included non-cash amortization expense of $7 million and $15 million during the three and six months ended June 30, 2022, respectively. EBT was also negatively impacted by lower earnings in the automotive vertical as a result of supply chain disruptions and labor challenges during the six months ended June 30, 2022.

Dedicated Transportation Solutions


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months

DTS total revenue	$	450,228	$	354,711	$	875,176	$	675,218	27%	30%

DTS operating revenue (1)	$	305,564	$	255,849	$	602,019	$	492,688	19%	22%




DTS EBT	$	23,156	$	13,162	$	43,367	$	26,144	76%	66%
DTS EBT as a % of DTS total revenue	5.1%		3.7%		5.0%		3.9%		140 bps	110 bps

DTS EBT as a % of DTS operating revenue (1)	7.6%		5.1%		7.2%		5.3%		250 bps	190 bps

Memo:


End of period fleet count	11,600		10,400		11,600		10,400		12%	12%

					Twelve months ended June 30,				Change 2022/2021
					2022		2021
DTS EBT as a % of DTS total revenue					4.0%		5.2%		(120) bps
DTS EBT as a % of DTS operating revenue (1)					5.7%		6.9%		(120) bps

————————————

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

DTS total revenue increased 27% in the second quarter of 2022 and 30% for the six months ended June 30, 2022, primarily due to higher operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation). DTS operating revenue increased 19% in the second quarter of 2022 and 22% in the six months ended June 30, 2022, primarily due to new business, increased pricing and volumes.

DTS EBT increased 76% in second quarter of 2022 and 66% for the six months ended June 30, 2022, primarily due to pricing increases, new business and gains on sales of vehicles partially offset by strategic investments.

Central Support Services


	Three months ended June 30,				Six months ended June 30,				Change 2022/2021
(Dollars in thousands)	2022		2021		2022		2021		Three Months	Six Months








Total CSS	107,144		93,584		204,087		182,142		14%	12%
Allocation of CSS to business segments	(83,376)		(75,720)		(164,315)		(145,846)		10%	13%
Unallocated CSS	$	23,768	$	17,864	$	39,772	$	36,296	33%	10%

Total CSS costs increased 14% and 12%in the second quarter and six months ended June 30, 2022, respectively, due to strategic investments in technology and marketing, higher incentive-based compensation-related expenses and higher professional fees. Total CSS costs were partially offset by investment income from Ryder Ventures, our corporate venture capital fund. Unallocated CSS costs increased 33% in the second quarter of 2022 primarily reflecting increased professional fees and incentive-based compensation costs. Unallocated CSS costs increased 10% for the six months ended June 30, 2022, primarily reflecting increased professional fees partially offset by Ryder Ventures investment income.

FINANCIAL RESOURCES AND LIQUIDITY

Cash Flows

The following is a summary of our cash flows from continuing operations:


	Six months ended June 30,
(In thousands)	2022		2021

Net cash provided by (used in):
Operating activities	$	1,102,776	$	1,131,233
Investing activities	(982,412)		(533,408)
Financing activities	(330,026)		(478,971)
Effect of exchange rate changes on cash	(15,482)		(2,369)
Net change in cash, cash equivalents, and restricted cash	$	(225,144)	$	116,485

	Six months ended June 30,
(In thousands)	2022		2021
Net cash provided by operating activities
Earnings from continuing operations	$	416,164	$	201,152
Non-cash and other, net	906,161		950,869
Collections on sales-type leases	64,404		62,778
Changes in operating assets and liabilities	(283,953)		(83,566)



Cash flows from operating activities from continuing operations	$	1,102,776	$	1,131,233

Cash provided by operating activities remained at $1.1 billion for the six months ended June 30, 2022, as higher earnings were offset by higher working capital needs. For the six months ended June 30, 2022, the increase in working capital needs was primarily attributed to an increase in receivables from higher revenues partially offset by an increase in accounts payable due to the timing of payments. Cash used in investing activities increased to $982 million for the six months ended June 30, 2022 compared with $533 million in 2021 primarily due to the acquisition of Whiplash and an increase in cash paid for capital expenditures partially offset by higher proceeds from the sale of revenue earning equipment. Cash used in financing activities

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

decreased to $330 million for the six months ended June 30, 2022 compared to $479 million in 2021 due to higher debt borrowing needs partially offset by an increase in common stock repurchases.

The following table shows our free cash flow computation:


	Six months ended June 30,
(In thousands)	2022		2021

Net cash provided by operating activities	$	1,102,776	$	1,131,233
Sales of revenue earning equipment (1)	600,822		330,277

Sales of operating property and equipment (1)	35,342		44,409


Other (1)	7,332		691
Total cash generated (2)	1,746,272		1,506,610
Purchases of property and revenue earning equipment (1)	(1,195,012)		(904,399)
Free cash flow (2)	$	551,260	$	602,211

————————————

(1)Included in cash flows from investing activities.

(2)Non-GAAP financial measure. Reconciliations of net cash provided by operating activities to total cash generated and to free cash flow are set forth in

this table. Refer to the “Non-GAAP Financial Measures” section of this MD&A for the reasons why management believes this measure is important to investors.

Free cash flow (a non-GAAP measure) decreased to $551 million for the six months ended June 30, 2022, from $602 million in 2021 primarily due to an increase in cash paid for capital expenditures partially offset by higher proceeds from the sale of revenue earning equipment, including the sale of U.K. vehicles related to our exit plan.

The following table provides a summary of gross capital expenditures:


	Six months ended June 30,
(In thousands)	2022		2021

Revenue earning equipment:
ChoiceLease	$	810,249	$	501,053
Commercial rental	363,921		397,092
	1,174,170		898,145
Operating property and equipment	132,699		64,886
Gross capital expenditures	1,306,869		963,031
Changes in accounts payable related to purchases of property and revenue earning equipment	(111,857)		(58,632)
Cash paid for purchases of property and revenue earning equipment	$	1,195,012	$	904,399

Gross capital expenditures increased to $1.3 billion for the six months ended June 30, 2022 primarily reflecting higher planned investments in the ChoiceLease fleet.

Financing and Other Funding Transactions

We utilize external capital primarily to support working capital needs and growth in our asset-based product lines. The variety of financing alternatives typically available to fund our capital needs include commercial paper, long-term and medium-term public and private debt, asset-backed securities, bank term loans, leasing arrangements, and bank credit facilities. Our principal sources of financing are issuances of unsecured commercial paper and medium-term notes.

Cash and cash equivalents totaled $448 million as of June 30, 2022. As of June 30, 2022, approximately $355 million was held outside the U.S. and is available to fund operations. We have historically asserted our intent to permanently reinvest foreign earnings outside of the U.S. In 2021, we reevaluated our historic assertion with respect to our U.K. and Germany operations and no longer consider these earnings to be indefinitely reinvested. The deferred tax liability recorded on the U.K. and Germany undistributed earnings is not material. We intend to continue to permanently reinvest the earnings of our remaining foreign subsidiaries indefinitely.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

We believe that our operating cash flows, together with our access to the public unsecured bond market, commercial paper market and other available debt financing, will be adequate to meet our operating, investing and financing needs in the foreseeable future. However, volatility or disruption in the public unsecured debt market or the commercial paper market may impair our ability to access these markets or secure terms commercially acceptable to us. If we cease to have access to public bonds, commercial paper and other sources of unsecured borrowings, we would meet our liquidity needs by drawing upon contractually committed lending agreements or by seeking other funding sources.

In February 2022, we issued an aggregate principal amount of $450 million unsecured medium terms notes that mature on March 1, 2027. The notes bear interest at a rate of 2.85% per year. In May 2022, we issued an aggregate principal amount of $300 million unsecured medium terms notes that mature on June 15, 2027. The notes bear interest at a rate of 4.30% per year. Refer to Note 9, “Debt,” in the Notes to Condensed Consolidated Financial Statements for additional information on our global revolving credit facility, trade receivables financing program, medium-term notes, and asset-backed financing obligations.

Our ability to access unsecured debt in the capital markets is impacted by both our short-term and long-term debt ratings. These ratings are intended to provide guidance to investors in determining the credit risk associated with our particular securities based on current information obtained by the rating agencies from us or from other sources. Ratings are not recommendations to buy, sell or hold our debt securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Lower ratings generally result in higher borrowing costs, as well as reduced access to unsecured capital markets. A significant downgrade of our short-term debt ratings would impair our ability to issue commercial paper and likely require us to rely on alternative funding sources. A significant downgrade would not affect our ability to borrow amounts under our global revolving credit facility described below, assuming ongoing compliance with the terms and conditions of the credit facility.

Our debt ratings and rating outlooks as of June 30, 2022 were as follows:

Rating Summary

Short-term

Short-term Outlook

Long-term

Long-term Outlook

Standard & Poor’s Ratings Services

—

BBB

Positive

Moody’s Investors Service

Stable

Baa2

Stable

Fitch Ratings

—

BBB+

Stable

DBRS

R-1 (Low)

Stable

A (Low)

Stable

As of June 30, 2022, we had the following amounts available to fund operations under the following facilities:


	(In millions)

Global revolving credit facility	$	654
Trade receivables financing program	$	250

In accordance with our funding philosophy, we attempt to align the aggregate average remaining re-pricing life of our debt with the aggregate average remaining re-pricing life of our vehicle assets. We utilize both fixed-rate and variable-rate debt to achieve this alignment and generally target a mix of 20% - 40% variable-rate debt as a percentage of total debt outstanding. The variable-rate portion of our total debt (including notional value of swap agreements) was 23% and 16% as of June 30, 2022 and December 31, 2021, respectively.

Our debt to equity ratio was 233% and 235% as of June 30, 2022 and December 31, 2021, respectively. The debt to equity ratio represents total debt divided by total equity. The decrease in the debt to equity ratio from year-end 2021 primarily reflects increased earnings partially offset by higher share repurchases.

Share Repurchases and Cash Dividends

In February 2022, we repurchased 3.1 million shares for $300 million pursuant to our accelerated share repurchase program, with final settlement scheduled to occur no later than the end of October 2022. The number of shares ultimately to be repurchased will be based on the average of Ryder's daily volume-weighted average price per share of common stock during a repurchase period, less a discount and subject to the terms and conditions of the program agreement.

Refer to Note 10, “Share Repurchase Programs,” in the Notes to Condensed Consolidated Financial Statements for a discussion on our share repurchase programs.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

In May 2022 and 2021, our Board of Directors declared a quarterly cash dividend of $0.58 and $0.56 per share of common stock, respectively. The dividends were paid during the second quarter of each respective year. In July 2022, the Board of Directors declared a regular quarterly cash dividend of $0.62 per share of common stock, an increase of 7% compared to the cash dividend we have paid since July 2021.

RECENT ACCOUNTING PRONOUNCEMENTS

Refer to Note 2, “Recent Accounting Pronouncements," in the Notes to Condensed Consolidated Financial Statements for a discussion of recent accounting pronouncements.

NON-GAAP FINANCIAL MEASURES

This Quarterly Report on Form 10-Q includes information extracted from condensed consolidated financial information, but not required by generally accepted accounting principles in the United States (GAAP) to be presented in the financial statements. Certain elements of this information are considered “non-GAAP financial measures” as defined by SEC rules. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance or liquidity prepared in accordance with GAAP. Also, our non-GAAP financial measures may not be comparable to financial measures used by other companies. We provide a reconciliation of each of these non-GAAP financial measures to the most comparable GAAP measure in this non-GAAP financial measures section or in the MD&A above. We also provide the reasons why management believes each non-GAAP financial measure is useful to investors in this section.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

Specifically, we refer to the following non-GAAP financial measures in this Form 10-Q:


Non-GAAP Financial Measure			Comparable GAAP Measure
Operating Revenue Measures:
Operating Revenue			Total Revenue
FMS Operating Revenue			FMS Total Revenue
SCS Operating Revenue			SCS Total Revenue
DTS Operating Revenue			DTS Total Revenue
FMS EBT as a % of FMS Operating Revenue			FMS EBT as a % of FMS Total Revenue
SCS EBT as a % of SCS Operating Revenue			SCS EBT as a % of SCS Total Revenue
DTS EBT as a % of DTS Operating Revenue			DTS EBT as a % of DTS Total Revenue
Comparable Earnings Measures:
Comparable Earnings Before Income Tax			Earnings Before Income Tax
Comparable Earnings			Earnings from Continuing Operations
Comparable Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)			Net Earnings
Comparable EPS			EPS from Continuing Operations
Comparable Tax Rate			Effective Tax Rate from Continuing Operations
Adjusted Return on Equity (ROE)			Not Applicable. However, 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 shareholders' equity to adjusted average equity is provided in the following reconciliations.
Cash Flow Measures:
Total Cash Generated and Free Cash Flow			Cash Provided by Operating Activities from Continuing Operations

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

Set forth in the table below is an overview of each non-GAAP financial measure and why management believes that the presentation of each non-GAAP financial measure provides useful information to investors.


Operating Revenue Measures:
Operating Revenue FMS Operating Revenue SCS Operating Revenue DTS Operating Revenue FMS EBT as a % of FMS Operating Revenue SCS EBT as a % of SCS Operating Revenue DTS EBT as a % of DTS Operating Revenue			Operating revenue is defined as total revenue for Ryder System, Inc. or each business segment (FMS, SCS and DTS) excluding any (1) fuel and (2) subcontracted transportation, as well as (3) revenue from our ChoiceLease liability insurance program which was discontinued in early 2020. We believe operating revenue provides useful information to investors as we use it to evaluate the operating performance of our core businesses and as a measure of sales activity at the consolidated level for Ryder System, Inc., as well as for each of our business segments. We also use segment EBT as a percentage of segment operating revenue for each business segment for the same reason. Note: FMS EBT, SCS EBT and DTS EBT, our primary measures of segment performance, are not non-GAAP measures. Fuel: We exclude FMS, SCS and DTS fuel from the calculation of our operating revenue measures, as fuel is an ancillary service that we provide our customers. Fuel revenue is impacted by fluctuations in market fuel prices and the costs are largely a pass-through to our customers, resulting in minimal changes in our profitability during periods of steady market fuel prices. However, profitability may be positively or negatively impacted by rapid changes in market fuel prices during a short period of time, as customer pricing for fuel services is established based on current market fuel costs. Subcontracted transportation: We exclude subcontracted transportation from the calculation of our operating revenue measures, as these services are also typically a pass-through to our customers and, therefore, fluctuations result in minimal changes to our profitability. While our SCS and DTS business segments subcontract certain transportation services to third party providers, our FMS business segment does not engage in subcontracted transportation and, therefore, this item is not applicable to FMS. ChoiceLease liability insurance: We exclude ChoiceLease liability insurance as we announced our plan in the first quarter of 2020 to exit the extension of our liability insurance coverage for ChoiceLease customers. The exit of this program was completed in the first quarter of 2021. We are excluding the revenues associated with this program for better comparability of our on-going operations.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)


Comparable Earnings Measures:
Comparable Earnings before Income Taxes (EBT) Comparable Earnings Comparable Earnings per Diluted Common Share (EPS) Comparable Tax Rate Adjusted Return on Equity (ROE)			Comparable EBT, comparable earnings and comparable EPS are defined, respectively, as GAAP EBT, earnings and EPS, all from continuing operations, excluding (1) non-operating pension costs, net and (2) any other significant items that are not representative of our business operations. We believe these comparable earnings measures provide useful information to investors and allow for better year-over-year comparison of operating performance. Non-operating pension costs, net: Our comparable earnings measures exclude non-operating pension costs, which include the amortization of net actuarial loss and prior service cost, interest cost and expected return on plan assets components of pension and postretirement benefit costs, as well as any significant charges for settlements or curtailments if recognized. We exclude non-operating pension costs, net because we consider these to be impacted by financial market performance and outside the operational performance of our business. Other Items Impacting Comparability: Our comparable and adjusted earnings measures also exclude other significant items that are not representative of our business operations as detailed in the reconciliation table below. These other significant items vary from period to period and, in some periods, there may be no such significant items. Comparable tax rate 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 marginal tax rates to which the non-GAAP adjustments are related. Adjusted ROE is defined as adjusted net earnings divided by adjusted average shareholders' equity and represents the rate of return on shareholders' investment. Other items impacting comparability described above are excluded, as applicable, from the calculation of net earnings and average shareholders' equity. We use adjusted ROE as an internal measure of how effectively we use the owned capital invested in our operations.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)


Comparable Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)			Comparable EBITDA is defined as net earnings, first adjusted to exclude discontinued operations and the following items, all from continuing operations: (1) non-operating pension costs, net and (2) any other items that are not representative of our business operations (these items are the same items that are excluded from comparable earnings measures for the relevant periods as described immediately above) and then adjusted further for (1) interest expense, (2) income taxes, (3) depreciation, (4) used vehicle sales results and (5) amortization. We believe comparable EBITDA provides investors with useful information, as it is a standard measure commonly reported and widely used by analysts, investors and other interested parties to measure financial performance and our ability to service debt and meet our payment obligations. In addition, we believe that the inclusion of comparable EBITDA provides consistency in financial reporting and enables analysts and investors to perform meaningful comparisons of past, present and future operating results. Other companies may calculate comparable EBITDA differently; therefore, our presentation of comparable EBITDA may not be comparable to similarly-titled measures used by other companies. Comparable EBITDA should not be considered as an alternative to net earnings, earnings from continuing operations before income taxes or earnings from continuing operations determined in accordance with GAAP, as an indicator of the Company’s operating performance, as an alternative to cash flows from operating activities (determined in accordance with GAAP), as an indicator of cash flows, or as a measure of liquidity.
Cash Flow Measures:
Total Cash Generated Free Cash Flow			We consider total cash generated and free cash flow to be important measures of comparative operating performance, as our principal sources of operating liquidity are cash from operations and proceeds from the sale of revenue earning equipment. Total Cash Generated is defined as the sum of (1) net cash provided by operating activities, (2) net cash provided by the sale of revenue earning equipment, (3) net cash provided by the sale of operating property and equipment and (4) other cash inflows from investing activities. We believe total cash generated is an important measure of total cash flows generated from our ongoing business activities. Free Cash Flow is defined as the net amount of cash generated from operating activities and investing activities (excluding changes in restricted cash and acquisitions) from continuing operations. We calculate free cash flow as the sum of (1) net cash provided by operating activities, (2) net cash provided by the sale of revenue earning equipment and operating property and equipment, and (3) other cash inflows from investing activities, less (4) purchases of property and revenue earning equipment. We believe free cash flow provides investors with an important perspective on the cash available for debt service and for shareholders, after making capital investments required to support ongoing business operations. Our calculation of free cash flow may be different from the calculation used by other companies and, therefore, comparability may be limited. * See Total Cash Generated and Free Cash Flow reconciliations in the Financial Resources and Liquidity section of Management's Discussion and Analysis.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

The following table provides a reconciliation of GAAP earnings before taxes (EBT), earnings from continuing operations, and earnings per diluted share (Diluted EPS) from continuing operations to comparable EBT, comparable earnings and comparable EPS. Certain items included in EBT, earnings and diluted EPS from continuing operations have been excluded from our comparable EBT, comparable earnings and comparable diluted EPS measures. The following table lists a summary of these items, which are discussed in more detail throughout our MD&A and within the Notes to Condensed Consolidated Financial Statements:


	Continuing Operations
	Three months ended June 30,				Six months ended June 30,
(In thousands, except per share amounts)	2022		2021		2022		2021

EBT	$	338,371	$	203,573	$	590,242	$	273,840
Non-operating pension costs, net	2,581		(373)		5,368		(382)
Restructuring and other, net (1)	10,302		2,577		24,556		5,605
ERP implementation costs (1)	—		5,090		—		12,721




Gains on sale of U.K. revenue earning equipment (1)	(20,080)		—		(28,371)		—
Gains on sale of properties (1)	(22,998)		(35,263)		(23,584)		(36,768)





ChoiceLease liability insurance revenue (1)	—		—		—		(777)
Comparable EBT	$	308,176	$	175,604	$	568,211	$	254,239

Earnings from continuing operations	$	240,342	$	149,568	$	416,164	$	201,152
Non-operating pension costs, net	1,629		(1,031)		3,391		(1,786)
Restructuring and other, net (including ChoiceLease liability insurance results) (1)	10,665		3,204		24,955		5,784
ERP implementation costs (1)	—		3,779		—		9,444
Gains on sale of U.K. revenue earning equipment (1)	(20,080)		—		(28,371)		—
Gains on sale of properties (1)	(22,997)		(26,812)		(23,580)		(27,999)




Tax adjustments, net (2)	15,985		430		21,284		733
Comparable Earnings	$	225,544	$	129,138	$	413,843	$	187,328

Diluted EPS	$	4.72	$	2.78	$	8.05	$	3.75
Non-operating pension costs, net	0.03		(0.02)		0.07		(0.03)
Restructuring and other, net (including ChoiceLease liability insurance results) (1)	0.21		0.06		0.48		0.10
ERP implementation costs (1)	—		0.07		—		0.18



Gains on sale of U.K. revenue earning equipment (1)	(0.39)		—		(0.55)		—
Gains on sale of properties (1)	(0.45)		(0.50)		(0.46)		(0.52)





Tax adjustments, net (2)	0.31		0.01		0.41		0.01
Comparable EPS	$	4.43	$	2.40	$	8.00	$	3.49

————————————

(1)Refer to Note 14, “Other Items Impacting Comparability,” in the Notes to Condensed Consolidated Financial Statements for additional information.

(2)Adjustments include the global tax impact related to gains on sales of U.K. revenue earning equipment and properties in the second quarter and six months ended June 30, 2022, and expiring state net operating losses in the second quarter and six months ended June 30, 2021.

Note: Amounts may not be additive due to rounding.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

The following table provides a reconciliation of the effective tax rate to the comparable tax rate:


	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021







Effective tax rate on continuing operations (1)	29.0	%	26.5	%	29.5	%	26.5	%
Tax adjustments and income tax effects of non-GAAP adjustments (2)	(2.2)	%	—	%	(2.3)	%	(0.2)	%
Comparable tax rate on continuing operations (1)	26.8	%	26.5	%	27.2	%	26.3	%

————————————

(1)The effective tax rate on continuing operations and comparable tax rate are based on EBT and comparable EBT, respectively, found on the previous page.

(2)Refer to the table above for more information on tax adjustments. Income tax effects of non-GAAP adjustments are calculated based on the marginal tax rates to which the non-GAAP adjustments are related.

The following table provides a reconciliation of earnings to comparable EBITDA:


	Three months ended June 30,				Six months ended June 30,
(In thousands)	2022		2021		2022		2021

Net earnings	$	239,400	$	149,105	$	414,987	$	199,930
Loss from discontinued operations, net of tax	942		463		1,177		1,222
Provision for income taxes	98,029		54,005		174,078		72,688
EBT	338,371		203,573		590,242		273,840
Non-operating pension costs, net	2,581		(373)		5,368		(382)
Other items impacting comparability, net (1)	(32,776)		(27,596)		(27,399)		(19,219)
Comparable EBT	308,176		175,604		568,211		254,239
Interest expense	55,324		54,155		107,688		108,861
Depreciation	424,892		444,259		854,229		905,420
Used vehicle sales, net (2)	(109,487)		(51,634)		(214,190)		(80,485)
Amortization	9,202		1,671		19,221		3,435
Comparable EBITDA(3)	$	688,107	$	624,055	$	1,335,159	$	1,191,470

————————————

(1)Refer to the table above in the Operating Results by Segment for a discussion on items excluded from our comparable measures and their classification within our Condensed Consolidated Statements of Earnings and Note 14,“Other Items Impacting Comparability” in the Notes to Condensed Consolidated Financial Statements for additional information.

(2)Refer to Note 6, "Revenue Earning Equipment, net," in the Notes to Condensed Consolidated Financial Statements for additional information.

The following table provides a reconciliation of total revenue to operating revenue:


	Three months ended June 30,				Six months ended June 30,
(In thousands)	2022		2021		2022		2021

Total revenue	$	3,033,662	$	2,382,237	$	5,887,524	$	4,603,859
Subcontracted transportation and fuel	(726,556)		(459,417)		(1,364,831)		(862,899)
ChoiceLease liability insurance revenue (1)	—		—		—		(777)
Operating revenue	$	2,307,106	$	1,922,820	$	4,522,693	$	3,740,183

————————————

(1)In the first quarter of 2021, we completed the previously announced exit of the extension of our liability insurance coverage for ChoiceLease customers.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

The following table provides a reconciliation of FMS total revenue to FMS operating revenue:


	Three months ended June 30,				Six months ended June 30,				Twelve months ended June 30,
(Dollars in thousands)	2022		2021		2022		2021		2022		2021

FMS total revenue	$	1,621,095	$	1,408,241	$	3,150,323	$	2,743,726	$	6,085,545	$	5,375,779
Fuel services and ChoiceLease liability insurance (1)	(314,135)		(183,568)		(561,216)		(350,940)		(948,693)		(636,476)
FMS operating revenue	$	1,306,960	$	1,224,673	$	2,589,107	$	2,392,786	$	5,136,852	$	4,739,303

FMS EBT	$	285,322	$	158,451	$	533,521	$	221,853	$	974,758	$	298,205
FMS EBT as a % of FMS total revenue	17.6%		11.3%		16.9%		8.1%		16.0%		5.5%
FMS EBT as a % of FMS operating revenue	21.8%		12.9%		20.6%		9.3%		19.0%		6.3%

————————————

(1)In the first quarter of 2021, we completed the previously announced exit of the extension of our liability insurance coverage for ChoiceLease customers.

The following table provides a reconciliation of SCS total revenue to SCS operating revenue:


	Three months ended June 30,				Six months ended June 30,				Twelve months ended June 30,
(Dollars in thousands)	2022		2021		2022		2021		2022		2021

SCS total revenue	$	1,173,958	$	775,630	$	2,262,500	$	1,482,330	$	3,934,968	$	2,878,985
Subcontracted transportation and fuel	(375,528)		(241,072)		(725,979)		(445,174)		(1,225,087)		(843,831)
SCS operating revenue	$	798,430	$	534,558	$	1,536,521	$	1,037,156	$	2,709,881	$	2,035,154

SCS EBT	$	52,640	$	41,041	$	86,859	$	73,998	$	130,212	$	165,997
SCS EBT as a % of SCS total revenue	4.5%		5.3%		3.8%		5.0%		3.3%		5.8%
SCS EBT as a % of SCS operating revenue	6.6%		7.7%		5.7%		7.1%		4.8%		8.2%

The following table provides a reconciliation of DTS total revenue to DTS operating revenue:


	Three months ended June 30,				Six months ended June 30,				Twelve months ended June 30,
(Dollars in thousands)	2022		2021		2022		2021		2022		2021

DTS total revenue	$	450,228	$	354,711	$	875,176	$	675,218	$	1,657,146	$	1,275,760
Subcontracted transportation and fuel	(144,664)		(98,862)		(273,157)		(182,530)		(492,892)		(318,441)
DTS operating revenue	$	305,564	$	255,849	$	602,019	$	492,688	$	1,164,254	$	957,319

DTS EBT	$	23,156	$	13,162	$	43,367	$	26,144	$	66,281	$	66,173
DTS EBT as a % of DTS total revenue	5.1%		3.7%		5.0%		3.9%		4.0%		5.2%
DTS EBT as a % of DTS operating revenue	7.6%		5.1%		7.2%		5.3%		5.7%		6.9%

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

The following tables provide numerical reconciliations of net earnings to adjusted net earnings and average shareholders' equity to adjusted average shareholders' equity (Adjusted ROE), and of the non-GAAP elements used to calculate the adjusted return on equity to the corresponding GAAP measures:


	Twelve months ended June 30,
(Dollars in thousands)	2022		2021

Net earnings	$	734,261	$	261,392
Other items impacting comparability, net (1)	(18,617)		19,779
Income taxes (2)	272,418		79,930
Adjusted earnings before income taxes	988,062		361,101
Adjusted income taxes (3)	(251,091)		(80,094)
Adjusted net earnings	$	736,971	$	281,007

Average shareholders’ equity	$	2,642,143	$	2,252,610
Average adjustments to shareholders’ equity (4)	(6,765)		44,961
Adjusted average shareholders’ equity	$	2,635,378	$	2,297,571

Adjusted return on equity (5)	28.0%		12.2%

————————————

(1)Refer to the table below for a composition of Other items impacting comparability, net for the 12-month rolling period

(2)Includes income taxes on discontinued operations

(3)Represents provision for income taxes plus income taxes on other items impacting comparability

(4)Represents the impact of other items impacting comparability, net of tax, to equity for the respective period

(5)Adjusted return on equity is calculated by dividing Adjusted net earnings into Adjusted average shareholders' equity


	Twelve months ended June 30,
(In thousands)	2022		2021

Restructuring and other, net	$	38,607	$	35,179
ERP Implementation costs	(6)		25,614
Gains on sale of U.K. revenue earning equipment	(28,371)		—
Gains on sale of properties	(28,847)		(42,186)
Early redemption of medium-term notes	—		8,999
ChoiceLease liability insurance revenue	—		(7,827)
Other items impacting comparability, net	$	(18,617)	$	19,779

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Forward-looking statements (within the meaning of the Federal Private Securities Litigation Reform Act of 1995) are statements that relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends concerning matters that are not historical facts. These statements are often preceded by or include the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “may,” “could,” “should” or similar expressions. This Quarterly Report contains forward-looking statements including statements regarding:

•our expectations with respect to the ongoing effects of the COVID-19 pandemic or any future variants, including the global supply chain disruption on our business and financial results;

•our expectations regarding the effects of OEM delivery delays;

•the cyclical nature of the industries in which we compete;

•our expectations regarding supply and demand of vehicles and its effect on pricing;

•our expectations of the long-term residual values of revenue earning equipment, including the probability of incurring losses or having to decrease residual value estimates in the event of a potential cyclical downturn;

•the expected pricing for used vehicles and sales channel mix;

•our expectations of cash flow from operating activities, free cash flow, and capital expenditures;

•the adequacy of our accounting estimates and reserves for goodwill and other asset impairments, residual values and other depreciation assumptions, deferred income taxes and annual effective tax rates, variable revenue considerations, the valuation of our pension plans, and allowance for credit losses;

•the adequacy of our fair value estimates of publicly traded debt and other debt;

•our ability to fund all of our operating, investing and financial needs for the foreseeable future through internally generated funds and outside funding sources;

•our expected level of use and availability of outside funding sources, anticipated future payments under debt and lease agreements, and risk of losses resulting from counterparty default under hedging and derivative agreements;

•our ability to meet our objectives with the share repurchase programs;

•the anticipated impact of fuel price and exchange rate fluctuations;

•our expectations as to return on pension plan assets, future pension expense and estimated contributions;

•our expectations regarding the scope and anticipated outcomes with respect to certain claims, proceedings and lawsuits;

•our ability to access commercial paper and other available debt financing in the capital markets;

•our expectations regarding the benefits from our strategic investments, including Whiplash;

•our expectations regarding the benefits of our pricing adjustments with respect to labor shortage costs in SCS and DTS;

•our expectations regarding the timeline for the exit of the FMS U.K. business;

•our expectations regarding the achievement of our return on equity improvement initiatives;

•our expectations regarding the diminishing impact of prior residual value estimate changes on return on equity improvement;

•our expectations regarding the labor shortages impact on labor and subcontracted transportation costs;

•our expectations regarding the U.S. federal, state and foreign tax positions;

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

•our expectations regarding the finalized valuation and purchase price consideration allocation for the acquisition of Whiplash; and

•the anticipated impact of recent accounting pronouncements.

These statements, as well as other forward-looking statements contained in this Quarterly Report, are based on our current plans and expectations and are subject to risks, uncertainties and assumptions. We caution readers that certain important factors could cause actual results and events to differ significantly from those expressed in any forward-looking statements. These risk factors, include the following:

•Market Conditions:

◦Changes in general economic and financial conditions globally leading to decreased demand for our services and products, lower profit margins, increased levels of bad debt and reduced access to credit and financial markets.

◦Decreases in freight demand that would impact both our transactional and variable-based contractual business.

◦Changes in our customers’ operations, financial condition or business environment that may limit their demand for, or ability to purchase, our services and products.

◦Decreases in market demand affecting the commercial rental market and used vehicle sales as well as global economic conditions.

◦Volatility in customer volumes and shifting customer demand in the industries serviced by our SCS business.

◦Changes in current financial, tax or regulatory requirements that could negatively impact our financial results.

◦Ongoing developments related to geopolitical events, including the ongoing armed conflict between Russia and Ukraine, and its impact on the global economy and our business.

•Competition:

◦Advances in technology may impact demand for our services or may require increased investments to remain competitive.

◦Competition from other service providers, who may have greater capital resources or lower capital costs, or from our customers, who may choose to provide services themselves.

◦Continued consolidation in the markets in which we operate, which may create large competitors with greater financial resources.

◦Our inability to maintain current pricing levels due to economic conditions, demand for services, customer acceptance or competition.

•Profitability:

◦Our inability to obtain adequate profit margins for our services.

◦Lower than expected sales volumes or customer retention levels.

◦Decreases in commercial rental fleet utilization and pricing.

◦Lower than expected used vehicle sales pricing levels and fluctuations in the anticipated proportion of retail versus wholesale sales.

◦Loss of key customers in our SCS and DTS business segments.

◦Our inability to adapt our product offerings to meet changing consumer preferences on a cost-effective basis.

◦The inability of our legacy information technology systems to provide timely access to data.

◦Sudden changes in fuel prices and fuel shortages.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS — (Continued)

◦Higher prices for vehicles, diesel engines and fuel as a result of new regulations.

◦Higher than expected maintenance costs and lower than expected benefits associated with our maintenance initiatives.

◦Lower than expected revenue growth due to production delays at our automotive SCS customers, primarily related to the worldwide semiconductor supply shortage.

◦The inability of an original equipment manufacturer or supplier to provide vehicles or components, primarily related to the worldwide semiconductor supply shortage.

◦Our inability to successfully execute our strategic returns and asset management initiatives, maintain our fleet at normalized levels and right-size our fleet in line with demand.

◦Our key assumptions and pricing structure of our SCS and DTS contracts prove to be inaccurate.

◦Increased unionizing, labor strikes and work stoppages.

◦Difficulties in attracting and retaining drivers and technicians due to driver and technician shortages, which may result in higher costs to procure drivers and technicians and higher turnover rates affecting our customers.

◦Our inability to manage our cost structure.

◦Our inability to limit our exposure for customer claims.

◦Unfavorable or unanticipated outcomes in legal or regulatory proceedings or uncertain positions.

◦Business interruptions or expenditures due to severe weather or natural occurrences.

•Financing Concerns:

◦Higher borrowing costs.

◦Unanticipated or increasing interest rate and currency exchange rate fluctuations.

◦Negative funding status of our pension plans caused by lower than expected returns on invested assets and unanticipated changes in interest rates.

◦Withdrawal liability as a result of our participation in multi-employer plans.

◦Instability in U.S. and worldwide credit markets, resulting in higher borrowing costs and/or reduced access to credit.

•Accounting Matters:

◦Reductions in residual values or useful lives of revenue earning equipment.

◦Increases in compensation levels, retirement rate and mortality resulting in higher pension expense; regulatory changes affecting pension estimates, accruals and expenses.

◦Changes in accounting rules, assumptions and accruals.

•Other risks detailed from time to time in our SEC filings including our 2021 Annual Report on Form 10-K and in “Item 1A.-Risk Factors” of this Quarterly Report.

New risk factors 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 risk factors on our business. As a result, we cannot provide assurance as to our future results or achievements. You should not place undue reliance on the forward-looking statements contained herein, which speak only as of the date of this Quarterly Report. We do not intend, or assume any obligation, to update or revise any forward-looking statements contained in this Quarterly Report, whether as a result of new information, future events or otherwise.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to Ryder’s exposures to market risks since December 31, 2021. Please refer to the 2021 Annual Report on Form 10-K for a complete discussion of Ryder’s exposures to market risks.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the second quarter of 2022, we carried out an evaluation, under the supervision and with the participation of management, including Ryder’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Ryder’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of the end of the second quarter of 2022, Ryder’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) were effective.

Changes in Internal Control over Financial Reporting

During the six months ended June 30, 2022, there were no changes in Ryder's internal control over financial reporting that have materially affected or are reasonably likely to materially affect such internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, please refer to Note 15, “Contingencies and Other Matters,” in the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

To our knowledge and except to the extent additional factual information disclosed in this Quarterly Report on Form 10-Q relates to such risk factors, there have been no material changes in the risk factors described in “Item 1A. Risk Factors” in our Form 10-K for the year ended December 31, 2021, filed with the SEC on February 17, 2022. Our operations could also be affected by additional risk factors that are not presently known to us or by factors that we currently consider not material to our business.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information with respect to purchases we made of our common stock during the three months ended June 30, 2022:


(Dollars in thousands, except per share)	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Maximum Number of Shares That May Yet Be Purchased Under the Discretionary and Anti-Dilutive Programs (2) and the Accelerated Share Repurchase Program (3)
April 1 through April 30, 2022	56	$	65.98	—	7,552,270
May 1 through May 31, 2022	6,706	73.74		—	7,552,270
June 1 through June 30, 2022	201	77.28		—	7,552,270
Total	6,963	$	73.78	—

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(1)During the three months ended June 30, 2022, we purchased an aggregate of 6,963 shares of our common stock in employee-related transactions. Employee-related transactions may include: (i) shares of common stock withheld as payment for the exercise price of options exercised or to satisfy the tax withholding liability associated with our share-based compensation programs and (ii) open-market purchases by the trustee of Ryder’s deferred compensation plans relating to investments by employees in our stock, one of the investment options available under the plans

(2)In October 2021, our Board of Directors authorized two new share repurchase programs. The first program grants management discretion to repurchase up to 2.0 million shares of common stock over a period of two years, commencing on October 14, 2021 and expiring on October 14, 2023 (the "2021 Discretionary Program"). The 2021 Discretionary Program is designed to provide management with capital structure flexibility while concurrently managing objectives related to balance sheet leverage, acquisition opportunities, and shareholder returns. The second program authorizes management to repurchase up to 2.5 million shares of common stock, issued to employees under the company's employee stock plans since September 1, 2021 (the "2021 Anti-Dilutive Program"). The 2021 Anti-Dilutive Program is designed to mitigate the dilutive impact of shares issued under the company's employee stock plans. The 2021 Anti-Dilutive Repurchase Program commenced on October 14, 2021 and expires on October 14, 2023. Share repurchases under both programs can be made from time to time using the company's working capital and a variety of methods, including open-market transactions and trading plans established pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934. The timing and actual number of shares repurchased are subject to market conditions, legal requirements and other factors, including balance sheet leverage, availability of quality acquisitions and stock price.

(3)In February 2022, our Board of Directors authorized a new accelerated share repurchase program (ASR) to repurchase up to $300 million of common stock, with final settlement scheduled to occur no later than the end of October 2022. The number of shares to be repurchased will be based on the average of Ryder's daily volume-weighted average price per share of common stock during a repurchase period, less a discount and subject to adjustments pursuant to the terms and conditions of the program agreement. During the six months ended June 30, 2022, we repurchased 3,052,270 shares for $300 million under the ASR.

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ITEM 6. EXHIBITS


Exhibit Number						Description

31.1						Certification of Robert E. Sanchez pursuant to Rule 13a-14(a) or Rule 15d-14(a)
31.2						Certification of John J. Diez pursuant to Rule 13a-14(a) or Rule 15d-14(a)
32						Certification of Robert E. Sanchez and John J. Diez pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C Section 1350
101.INS						XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Label Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

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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 thereunto duly authorized.


		RYDER SYSTEM, INC.
		(Registrant)

Date:	July 27, 2022	By:	/s/ JOHN J. DIEZ
			John J. Diez
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)

Date:	July 27, 2022	By:	/s/ CRISTINA GALLO-AQUINO
			Cristina Gallo-Aquino
			Senior Vice President and Controller
			(Principal Accounting Officer)