Florida | 1-4364 | 59-0739250 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
11690 NW 105th Street Miami, Florida | 33178 |
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Non-GAAP Financial Measures | |||
Operating Revenue Measures: | |||
Operating Revenue FMS Operating Revenue DTS Operating Revenue SCS Operating Revenue FMS EBT as a % of FMS Operating Revenue DTS EBT as a % of DTS Operating Revenue SCS EBT as a % of SCS Operating Revenue | Operating revenue is defined as total revenue for Ryder System, Inc. or each business segment (FMS, DTS and SCS), respectively, excluding any (1) fuel and (2) subcontracted transportation. 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, DTS EBT and SCS EBT, our primary measures of segment performance, are not non-GAAP measures. Fuel: We exclude FMS, DTS and SCS fuel from the calculation of our operating revenue measures, as fuel is an ancillary service that we provide our customers, which 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 trailing market fuel costs. Subcontracted transportation: We also 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 DTS and SCS 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. | ||
Operating Revenue Growth Excluding Foreign Exchange | Operating revenue growth excluding foreign exchange is calculated by dividing the results for the current and prior year periods by the exchange rates in effect on March 31, 2016, which was the last day of the prior year period, rather than the actual exchange rates in effect as of March 31, 2017. Ryder's period-over-period operating revenue growth excluding foreign exchange excludes the effects of changes in foreign currency exchange rates from our operating revenue financial measures. Due to the variability of foreign exchange rates from period to period, we believe operating revenue growth excluding foreign exchange is useful to investors to evaluate period-over-period operating performance. | ||
Comparable Earnings Measures: | |||
Comparable Earnings Before Income Tax (EBT) Comparable Earnings Comparable Earnings per Diluted Common Share (EPS) Comparable EPS Forecast Comparable Tax Rate | Comparable EBT, comparable earnings, comparable EPS, comparable EPS forecast and comparable tax rate are defined, respectively, as GAAP EBT, earnings, EPS, EPS forecast and effective tax rate, all from continuing operations, excluding (1) non-operating pension costs and (2) any other 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: Our comparable earnings measures exclude non-operating pension costs, which include the amortization of net actuarial loss, interest cost and expected return on plan assets components of pension and postretirement costs. We exclude non-operating pension costs because we consider these to be impacted by financial market performance and outside the operational performance of our business. Other Items: Our comparable earnings measures also exclude other items that are not representative of our business operations. These other items vary from period to period and, in some periods, there may be no such items. In this reporting period, we exclude the following other item from our comparable earnings measures in this Form 8-K: (1) Operating tax adjustment (in the first quarter 2017). In the first quarter of 2017, it was determined that certain operating tax expenses related to prior periods had not been recognized in prior period earnings, resulting in a one-time charge to reflect those expenses. Calculation of comparable tax rate: The comparable provision for income taxes is computed using the same methodology as the GAAP provision for income taxes. Income tax effects of non-GAAP adjustments are calculated based on the statutory tax rates of the jurisdictions to which the non-GAAP adjustments relate. |
Adjusted Return on Average Capital (ROC) Adjusted ROC Spread | Adjusted ROC: Adjusted ROC is defined as adjusted net earnings divided by average adjusted total capital and represents the rate of return generated by the capital deployed in our business. The adjustments represent the comparable items described above which are excluded, as applicable, from the calculation of net earnings and average shareholder's equity (a component of average total capital). Adjusted ROC Spread: Adjusted ROC spread is defined as the difference between adjusted ROC and the weighted average cost of capital. We use adjusted ROC and adjusted ROC spread as internal measures of how effectively we use the capital invested (borrowed or owned) in our operations. | ||
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: 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 and (3) operating property and equipment, (4) collections on direct finance leases and (5) 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: We refer to the net amount of cash generated from operating activities and investing activities (excluding changes in restricted cash and acquisitions) from continuing operations as “free cash flow”. We calculate free cash flow as the sum of (1) net cash provided by operating activities, (2) net cash provided by the sale of revenue earning equipment and (3) operating property and equipment, (4) collections on direct finance leases and (5) other cash inflows from investing activities, less (6) 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. |
Exhibit 99.1 | Press Release, dated April 25, 2017, relating to Ryder System, Inc.’s financial results for the three months ended March 31, 2017. |
Date: April 25, 2017 | RYDER SYSTEM, INC. (Registrant) | |
By: | /s/ ART A. GARCIA | |
Art A. Garcia, Executive Vice President and Chief Financial Officer |
• | Q1 GAAP EPS from Continuing Operations Down $0.34 or 32% to $0.71, Impacted by Lower Used Vehicle Sales and Rental Results of $0.44 |
• | Q1 Comparable EPS (non-GAAP) from Continuing Operations Down $0.30 or 27% to $0.82 Impacted by Items Above |
• | Record Q1 Total Revenue Grows 7% to $1.7 Billion; Record Q1 Operating Revenue (non-GAAP) Up 3% to $1.4 Billion |
• | Revised Full-Year 2017 GAAP EPS Forecast Range of $3.90 to $4.20 vs. Prior Forecast of $4.78 to $5.08, Driven by a More Challenging Environment for the Company's Transactional Businesses, Primarily in Commercial Rental |
• | Revised Full-Year 2017 Comparable EPS Forecast Range (non-GAAP) of $4.25 to $4.55 vs. Prior Forecast of $5.10 to $5.40 |
(dollars in millions, except EPS) | Earnings Before Taxes | Earnings | Diluted Earnings Per Share | |||||||||||||||||||||||
2017 | 2016 | Change | 2017 | 2016 | Change | 2017 | 2016 | Change | ||||||||||||||||||
GAAP | $ | 60.0 | 88.7 | (32)% | $ | 38.3 | 56.2 | (32)% | $ | 0.71 | 1.05 | (32)% | ||||||||||||||
Non-operating pension costs | 7.2 | 6.9 | 4.2 | 4.0 | 0.08 | 0.07 | ||||||||||||||||||||
Operating tax adjustment | 2.2 | — | 1.7 | — | 0.03 | — | ||||||||||||||||||||
Comparable (non-GAAP) | $ | 69.4 | 95.6 | (27)% | $ | 44.2 | 60.1 | (27)% | $ | 0.82 | 1.12 | (27)% |
(in millions) | Total Revenue | Operating Revenue (non-GAAP) | |||||||||||||||||||
2017 | 2016 | % Change | % Change excl. FX (non-GAAP) | 2017 | 2016 | % Change | % Change excl. FX | ||||||||||||||
Total | $ | 1,748.2 | 1,629.7 | 7% | 8% | $ | 1,445.1 | 1,406.0 | 3% | 4% | |||||||||||
FMS | $ | 1,132.5 | 1,097.9 | 3% | 4% | $ | 962.2 | 962.3 | —% | 1% | |||||||||||
DTS | $ | 266.7 | 244.8 | 9% | 9% | $ | 193.4 | 190.3 | 2% | 2% | |||||||||||
SCS | $ | 462.7 | 388.7 | 19% | 20% | $ | 361.8 | 322.4 | 12% | 13% |
(dollars in millions, except EPS) | Earnings | Diluted EPS | |||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||
Earnings from continuing operations | $ | 38.3 | 56.2 | $ | 0.71 | 1.05 | |||||||
Discontinued operations | (0.1 | ) | (0.4 | ) | — | (0.01 | ) | ||||||
Net earnings | $ | 38.1 | 55.8 | $ | 0.71 | 1.04 |
• | Fleet Management Solutions - Ryder’s FMS business segment provides a broad range of services to help businesses of all sizes, across virtually every industry, deliver for their customers. From leasing, maintenance, and fueling, to commercial rental and used vehicle sales, customers rely on Ryder’s expertise to help them lower their costs, redirect capital to other parts of their business, and focus on what they do best - so they can grow. |
• | Dedicated Transportation Solutions - Ryder’s DTS business segment combines the best of Ryder’s leasing and maintenance capability with the safest and most professional drivers in the industry. With a dedicated transportation solution, Ryder helps customers increase their competitive position, reduce risk, and integrate their transportation needs with their overall supply chain. |
• | Supply Chain Solutions - Ryder’s SCS business segment optimizes logistics networks to make them more responsive and able to be leveraged as a competitive advantage. Globally-recognized brands in the automotive, consumer goods, food and beverage, healthcare, industrial, oil and gas, |
Three Months | ||||||
2017 | 2016 | |||||
Lease and rental revenues | $ | 767.6 | 767.8 | |||
Services revenue | 851.9 | 759.1 | ||||
Fuel services revenue | 128.7 | 102.8 | ||||
Total revenues | 1,748.2 | 1,629.7 | ||||
Cost of lease and rental | 578.8 | 552.5 | ||||
Cost of services | 714.1 | 631.7 | ||||
Cost of fuel services | 125.9 | 98.9 | ||||
Other operating expenses | 31.3 | 30.2 | ||||
Selling, general and administrative expenses | 201.8 | 204.4 | ||||
Non-service retirement benefit costs | 7.3 | 6.8 | ||||
Used vehicle sales, net | (0.8 | ) | (19.1 | ) | ||
Interest expense | 34.9 | 37.9 | ||||
Miscellaneous income, net | (5.0 | ) | (2.3 | ) | ||
1,688.2 | 1,541.0 | |||||
Earnings from continuing operations before income taxes | 60.0 | 88.7 | ||||
Provision for income taxes | 21.7 | 32.5 | ||||
Earnings from continuing operations | 38.3 | 56.2 | ||||
Loss from discontinued operations, net of tax | (0.1 | ) | (0.4 | ) | ||
Net earnings | $ | 38.1 | 55.8 | |||
Earnings (loss) per common share - Diluted | ||||||
Continuing operations | $ | 0.71 | 1.05 | |||
Discontinued operations | — | (0.01 | ) | |||
Net earnings | $ | 0.71 | 1.04 | |||
Earnings per share information - Diluted | ||||||
Earnings from continuing operations | $ | 38.3 | 56.2 | |||
Less: Distributed and undistributed earnings allocated to unvested stock | (0.1 | ) | (0.2 | ) | ||
Earnings from continuing operations available to common stockholders | $ | 38.1 | 56.0 | |||
Weighted-average shares outstanding - Diluted | 53.4 | 53.4 | ||||
EPS from continuing operations | $ | 0.71 | 1.05 | |||
Non-operating pension costs | 0.08 | 0.07 | ||||
Operating tax adjustment | 0.03 | — | ||||
Comparable EPS from continuing operations * | $ | 0.82 | 1.12 |
March 31, 2017 | December 31, 2016 | |||||
Assets: | ||||||
Cash and cash equivalents | $ | 38.0 | 58.8 | |||
Other current assets | 1,075.4 | 1,042.8 | ||||
Revenue earning equipment, net | 8,171.2 | 8,147.7 | ||||
Operating property and equipment, net | 754.3 | 745.9 | ||||
Other assets | 935.0 | 907.3 | ||||
$ | 10,973.8 | 10,902.5 | ||||
Liabilities and shareholders' equity: | ||||||
Current liabilities | $ | 1,004.7 | 952.7 | |||
Total debt | 5,326.2 | 5,391.3 | ||||
Other non-current liabilities (including deferred income taxes) | 2,563.1 | 2,506.2 | ||||
Shareholders' equity | 2,079.8 | 2,052.3 | ||||
$ | 10,973.8 | 10,902.5 |
March 31, 2017 | December 31, 2016 | ||||
Debt to equity | 256 | % | 263 | % | |
Effective interest rate (average cost of debt) | 2.6 | % | 2.7 | % |
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Cash provided by operating activities from continuing operations | $ | 331.3 | 368.0 | |||
Free cash flow * | 82.8 | (60.8 | ) | |||
Capital expenditures paid | 361.3 | 575.0 | ||||
Capital expenditures (accrual basis) | $ | 436.1 | 497.5 | |||
Less: Proceeds from sales (primarily revenue earning equipment) | (96.5 | ) | (120.6 | ) | ||
Net capital expenditures | $ | 339.6 | 376.9 |
Three months ended March 31, | |||||
2017 | 2016 | ||||
Return on average shareholders' equity | 11.9 | % | 15.8 | % | |
Return on average assets | 2.2 | % | 2.9 | % | |
Adjusted return on capital * | 4.6 | % | 5.7 | % | |
Weighted average cost of capital | 4.3 | % | 4.4 | % | |
Return on capital spread ** | 0.3 | % | 1.3 | % |
Three Months | |||||||||
2017 | 2016 | B(W) | |||||||
Total Revenue: | |||||||||
Fleet Management Solutions: | |||||||||
ChoiceLease | $ | 656.3 | 622.9 | 5 | % | ||||
SelectCare | 113.6 | 114.4 | (1 | )% | |||||
Commercial rental | 174.0 | 204.8 | (15 | )% | |||||
Other | 18.3 | 20.2 | (10 | )% | |||||
Fuel services revenue | 170.3 | 135.6 | 26 | % | |||||
Total Fleet Management Solutions | 1,132.5 | 1,097.9 | 3 | % | |||||
Dedicated Transportation Solutions | 266.7 | 244.8 | 9 | % | |||||
Supply Chain Solutions | 462.7 | 388.7 | 19 | % | |||||
Eliminations | (113.7 | ) | (101.8 | ) | (12 | )% | |||
Total revenue | $ | 1,748.2 | 1,629.7 | 7 | % | ||||
Operating Revenue: * | |||||||||
Fleet Management Solutions | $ | 962.2 | 962.3 | — | % | ||||
Dedicated Transportation Solutions | 193.4 | 190.3 | 2 | % | |||||
Supply Chain Solutions | 361.8 | 322.4 | 12 | % | |||||
Eliminations | (72.2 | ) | (69.0 | ) | (5 | )% | |||
Operating revenue | $ | 1,445.1 | 1,406.0 | 3 | % | ||||
Business segment earnings: | |||||||||
Earnings from continuing operations | |||||||||
before income taxes: | |||||||||
Fleet Management Solutions | $ | 52.1 | 83.3 | (37 | )% | ||||
Dedicated Transportation Solutions | 11.3 | 14.3 | (21 | )% | |||||
Supply Chain Solutions | 27.4 | 19.8 | 39 | % | |||||
Eliminations | (11.2 | ) | (11.7 | ) | 4 | % | |||
79.6 | 105.6 | (25 | )% | ||||||
Unallocated Central Support Services | (10.2 | ) | (10.0 | ) | (2 | )% | |||
Non-operating pension costs | (7.2 | ) | (6.9 | ) | (5 | )% | |||
Other items | (2.2 | ) | — | NM | |||||
Earnings from continuing operations before income taxes | 60.0 | 88.7 | (32 | )% | |||||
Provision for income taxes | 21.7 | 32.5 | 33 | % | |||||
Earnings from continuing operations | $ | 38.3 | 56.2 | (32 | )% |
Three Months | |||||||||
2017 | 2016 | B(W) | |||||||
Fleet Management Solutions | |||||||||
FMS total revenue | $ | 1,132.5 | 1,097.9 | 3 | % | ||||
Fuel services revenue(a) | (170.3 | ) | (135.6 | ) | 26 | % | |||
FMS operating revenue * | $ | 962.2 | 962.3 | — | % | ||||
Segment earnings before income taxes | $ | 52.1 | 83.3 | (37 | )% | ||||
FMS earnings before income taxes as % of FMS total revenue | 4.6 | % | 7.6 | % | |||||
FMS earnings before income taxes as % of FMS operating revenue * | 5.4 | % | 8.7 | % | |||||
Dedicated Transportation Solutions | |||||||||
DTS total revenue | $ | 266.7 | 244.8 | 9 | % | ||||
Subcontracted transportation | (45.3 | ) | (31.2 | ) | 45 | % | |||
Fuel(a) | (28.0 | ) | (23.3 | ) | 20 | % | |||
DTS operating revenue * | $ | 193.4 | 190.3 | 2 | % | ||||
Segment earnings before income taxes | $ | 11.3 | 14.3 | (21 | )% | ||||
DTS earnings before income taxes as % of DTS total revenue | 4.2 | % | 5.8 | % | |||||
DTS earnings before income taxes as % of DTS operating revenue * | 5.8 | % | 7.5 | % | |||||
Supply Chain Solutions | |||||||||
SCS total revenue | $ | 462.7 | 388.7 | 19 | % | ||||
Subcontracted transportation | (82.5 | ) | (52.0 | ) | 59 | % | |||
Fuel(a) | (18.5 | ) | (14.3 | ) | 29 | % | |||
SCS operating revenue * | $ | 361.8 | 322.4 | 12 | % | ||||
Segment earnings before income taxes | $ | 27.4 | 19.8 | 39 | % | ||||
SCS earnings before income taxes as % of SCS total revenue | 5.9 | % | 5.1 | % | |||||
SCS earnings before income taxes as % of SCS operating revenue * | 7.6 | % | 6.1 | % | |||||
Three months ended March 31, | Change | ||||||
2017 | 2016 | 2017/2016 | |||||
ChoiceLease | |||||||
Average fleet count | 137,100 | 132,600 | 3% | ||||
End of period fleet count | 137,900 | 133,300 | 3% | ||||
Miles/unit per day change - % (a) | 1.5 | % | 0.5 | % | |||
Commercial rental | |||||||
Average fleet count | 37,300 | 41,000 | (9)% | ||||
End of period fleet count | 37,300 | 40,100 | (7)% | ||||
Rental utilization - power units | 67.2 | % | 70.4 | % | (320) bps | ||
Rental rate change - % (b) | 1.1 | % | 0.1 | % | |||
Customer vehicles under | |||||||
SelectCare contracts (c) | |||||||
Average fleet count | 50,100 | 48,200 | 4% | ||||
End of period fleet count | 50,400 | 49,500 | 2% | ||||
Customer vehicles under | |||||||
SelectCare on-demand (d) | |||||||
Fleet serviced during the period | 9,300 | 7,100 | 31% | ||||
DTS | |||||||
Average fleet count (e) | 8,200 | 8,000 | 3% | ||||
End of period fleet count (e) | 8,300 | 8,200 | 1% | ||||
SCS | |||||||
Average fleet count (e) | 7,700 | 6,900 | 12% | ||||
End of period fleet count (e) | 7,800 | 7,000 | 11% | ||||
Used vehicle sales (UVS) | |||||||
Average UVS inventory | 7,100 | 8,500 | (16)% | ||||
End of period fleet count | 6,700 | 8,600 | (22)% | ||||
Used vehicles sold | 4,500 | 4,700 | (4)% | ||||
UVS pricing change - % (f) | |||||||
Tractors | (16 | )% | (8 | )% | |||
Trucks | (20 | )% | 6 | % |
(a) | Represents the percentage change compared to prior year period in miles driven per vehicle per workday on US lease power units. |
(b) | Represents percentage change compared to prior year period in average global rental rate per day on power units using constant currency. |
(c) | Excludes customer vehicles under SelectCare on-demand contracts. |
(d) | Comprised of the number of vehicles serviced under on-demand maintenance agreements. Vehicles included in the end of period count may have been serviced more than one time during the respective period. |
(e) | These vehicle counts are also included within the average fleet counts for ChoiceLease, Commercial Rental and SelectCare. |
(f) | Represents percentage change compared to prior year period in average sales proceeds on used vehicle sales using constant currency. |
Non-GAAP Financial Measure | Comparable GAAP Measure | Reconciliation in Section Entitled |
Operating Revenue Measures: | ||
Operating Revenue | Total Revenue | Appendix - Non-GAAP Financial Measure Reconciliations |
FMS Operating Revenue | FMS Total Revenue | Business Segment Information - Unaudited |
DTS Operating Revenue | DTS Total Revenue | |
SCS Operating Revenue | SCS Total Revenue | |
Operating Revenue Growth Excluding Foreign Exchange | Total Revenue | Appendix - Non-GAAP Financial Measure Reconciliations |
FMS EBT as a % of FMS Operating Revenue | FMS EBT as a % of FMS Total Revenue | Business Segment Information - Unaudited |
DTS EBT as a % of DTS Operating Revenue | DTS EBT as a % of DTS Total Revenue | |
SCS EBT as a % of SCS Operating Revenue | SCS EBT as a % of SCS Total Revenue | |
Comparable Earnings Measures: | ||
Comparable Earnings Before Income Tax and Comparable Tax Rate | Earnings Before Income Tax and Effective Tax Rate from Continuing Operations | Appendix - Non-GAAP Financial Measure Reconciliations |
Comparable Earnings | Earnings from Continuing Operations | Appendix - Non-GAAP Financial Measure Reconciliations |
Comparable EPS and Comparable EPS Forecast | EPS from Continuing Operations EPS Forecast from Continuing Operations | Consolidated Condensed Statements of Earnings - Unaudited Appendix - Non-GAAP Financial Measure Reconciliations (Forecast) |
Adjusted Return on Average Capital (ROC) and Adjusted ROC Spread | 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 total debt and average shareholders' equity to adjusted average total capital is provided. | Appendix - Non-GAAP Financial Measure Reconciliations |
Cash Flow Measures: | ||
Total Cash Generated and Free Cash Flow | Cash Provided by Operating Activities | Appendix - Non-GAAP Financial Measure Reconciliations |
OPERATING REVENUE RECONCILIATION | ||||||
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Total revenue | $ | 1,748.2 | 1,629.7 | |||
Fuel | (175.3 | ) | (140.5 | ) | ||
Subcontracted transportation | (127.8 | ) | (83.2 | ) | ||
Operating revenue * | $ | 1,445.1 | 1,406.0 |
OPERATING REVENUE GROWTH EXCLUDING FOREIGN EXCHANGE RECONCILIATION | ||||||||
2017 vs 2016 Growth | Fx Impact (a) | Growth excl Fx* | ||||||
RSI Total Revenue | 7 | % | (1 | )% | 8 | % | ||
RSI Operating Revenue* | 3 | % | (1 | )% | 4 | % | ||
FMS Total Revenue | 3 | % | (1 | )% | 4 | % | ||
FMS Operating Revenue* | — | % | (1 | )% | 1 | % | ||
SCS Total Revenue | 19 | % | (1 | )% | 20 | % | ||
SCS Operating Revenue* | 12 | % | (1 | )% | 13 | % | ||
ChoiceLease Revenue | 5 | % | (1 | )% | 6 | % | ||
Commercial Rental Revenue | (15 | )% | (1 | )% | (14 | )% |
TOTAL CASH GENERATED/FREE CASH FLOW RECONCILIATION | ||||||
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Net cash provided by operating activities from continuing operations | $ | 331.3 | 368.0 | |||
Proceeds from sales (primarily revenue earning equipment) (b) | 96.5 | 120.6 | ||||
Collections on direct finance leases and other items (b) | 16.3 | 25.6 | ||||
Total cash generated * | 444.1 | 514.2 | ||||
Purchases of property and revenue earning equipment (b) | (361.3 | ) | (575.0 | ) | ||
Free cash flow ** | $ | 82.8 | (60.8 | ) | ||
Memo: | ||||||
Net cash provided by (used in) financing activities | $ | (106.2 | ) | 60.5 | ||
Net cash used in investing activities | $ | (247.1 | ) | (429.0 | ) |
(a) | FX impact was calculated by dividing the results for the current and prior year periods by the exchange rates in effect on March 31, 2016, which was the last day of the prior year period, rather than the actual exchange rates in effect as of March 31, 2017. |
(b) | Included in cash flows from investing activities. |
ADJUSTED RETURN ON CAPITAL RECONCILIATION | ||||||
Twelve months ended March 31, | ||||||
2017 | 2016 | |||||
Net earnings (12-month rolling period) | $ | 244.5 | 308.2 | |||
+ Restructuring and other items | 14.7 | 15.8 | ||||
+ Income taxes | 130.8 | 165.3 | ||||
Adjusted earnings before income taxes | 389.9 | 489.3 | ||||
+ Adjusted interest expense (a) | 145.1 | 151.7 | ||||
- Adjusted income taxes (b) | (186.5 | ) | (225.5 | ) | ||
= Adjusted net earnings for ROC (numerator) [A] | $ | 348.5 | 415.5 | |||
Average total debt | $ | 5,496.7 | 5,358.3 | |||
Average off-balance sheet debt | 1.3 | 1.5 | ||||
Average shareholders' equity | 2,064.8 | 1,945.2 | ||||
Adjustment to equity (c) | 1.1 | 3.1 | ||||
Adjusted average total capital (denominator) [B] | $ | 7,563.9 | 7,308.1 | |||
Adjusted ROC * [A]/[B] | 4.6 | % | 5.7 | % |
(a) | Represents reported interest expense plus imputed interest on off-balance sheet obligations. |
(b) | Represents provision for income taxes plus income taxes on restructuring and other items and adjusted interest expense. |
(c) | Represents the impact to equity of items to arrive at comparable earnings. |
COMPARABLE EARNINGS/EARNINGS BEFORE INCOME TAX/TAX RATE RECONCILIATION | |||||
2017 | |||||
Consolidated Statements of Earnings Line Item | Three Months | ||||
Earnings from continuing operations before income taxes | $ | 60.0 | |||
Non-operating pension costs | SG&A | 7.2 | |||
Operating tax adjustment | 2.2 | ||||
Comparable earnings from continuing operations before income taxes* | 69.4 | ||||
Provision for income taxes | (21.7 | ) | |||
Income tax effects of non-GAAP adjustments** | (3.6 | ) | |||
Comparable provision for income taxes** | (25.2 | ) | |||
Earnings from continuing operations | 38.3 | ||||
Non-operating pension costs | SG&A | 4.2 | |||
Operating tax adjustment | 1.7 | ||||
Comparable earnings from continuing operations* | $ | 44.2 | |||
Tax rate on continuing operations | 36.2 | % | |||
Income tax effects of non-GAAP adjustments** | 0.2 | % | |||
Comparable tax rate on continuing operations** | 36.4 | % |
2016 | |||||
Consolidated Statements of Earnings Line Item | Three Months | ||||
Earnings from continuing operations before income taxes | $ | 88.7 | |||
Non-operating pension costs | SG&A | 6.9 | |||
Comparable earnings from continuing operations before income taxes* | 95.6 | ||||
Provision for income taxes | (32.5 | ) | |||
Income tax effects of non-GAAP adjustments** | (2.9 | ) | |||
Comparable provision for income taxes** | (35.4 | ) | |||
Earnings from continuing operations | 56.2 | ||||
Non-operating pension costs | SG&A | 4.0 | |||
Comparable earnings from continuing operations* | $ | 60.1 | |||
Tax rate on continuing operations | 36.7 | % | |||
Income tax effects of non-GAAP adjustments** | 0.4 | % | |||
Comparable tax rate on continuing operations** | 37.1 | % |
COMPARABLE EARNINGS PER SHARE FORECAST RECONCILIATION | |||||
Comparable earnings per share from continuing operations forecast:* | Second Quarter 2017 | Full Year 2017 | |||
EPS from continuing operations | $0.79 to $0.89 | $3.90 to $4.20 | |||
Non-operating pension costs, net of tax | 0.08 | 0.32 | |||
Operating tax adjustment | — | 0.03 | |||
Comparable EPS from continuing operations forecast* | $0.87 to $0.97 | $4.25 to $4.55 |
TOTAL CASH GENERATED/FREE CASH FLOW FORECAST RECONCILIATION | |||
2017 Forecast | |||
Net Cash Provided by Operating Activities from Continuing Operations | $ | 1,700 | |
Proceeds from sales (primarily revenue earning equipment) (1) | 390 | ||
Collections of direct finance leases (1) | 80 | ||
Total cash generated* | 2,170 | ||
Capital expenditures (1) | (1,920 | ) | |
Free cash flow ** | $ | 250 | |
Memo: | |||
Net cash used in financing activities | $ | 250 | |
Net cash used in investing activities | $ | 1,450 |
(1) | Included in cash flows from investing activities. |