8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): October 22, 2003

RYDER SYSTEM, INC.

(Exact Name of Registrant as Specified in its Charter)

Florida
(State or Other Jurisdiction
of Incorporation) 1-4364
(Commission
File Number) 59-0739250
(IRS Employer
Identification No.)

3600 NW 82nd Avenue, Miami, Florida
(Address of Principal Executive Offices) 33166
(Zip Code)

(305) 500-3726
(Registrant’s telephone number, including area code)

Item 7(c). Exhibits

Exhibit 99.1	Press Release of Ryder System, Inc., dated October 22, 2003, reporting Ryder System, Inc.’s financial results for the quarterly period ended September 30, 2003.
Exhibit 99.2	Presentation made by Ryder System, Inc. for use in connection with a conference call and webcast related to its financial results for the quarterly period ended September 30, 2003.

Item 12. Results of Operations and Financial Condition

     On October 22, 2003, Ryder System, Inc. (the “Company”) issued a press release reporting its financial results for the quarterly period ended September 30, 2003 (the “Press Release”). The Company will host a conference call and webcast related to the Press Release during which a presentation will be made on the Company’s financial results for the quarterly period ended September 30, 2003 (the “Presentation”). The Presentation is also available on the Company’s website. A copy of the Press Release and the Presentation are being furnished hereto as Exhibits 99.1 and 99.2, respectively.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RYDER SYSTEM, INC. (Registrant)
Date: October 22, 2003	/s/ Tracy A. Leinbach
	Tracy A. Leinbach Executive Vice President and Chief Financial Officer

EX-99.1 3 g85362exv99w1.htm EX-99.1 PRESS RELEASE

Exhibit 99.1

News Release

FOR IMMEDIATE RELEASE

Contacts:	Media:	Investor Relations:
	David Bruce (305) 500-4999	Bob Brunn (305) 500-4053

RYDER ANNOUNCES THIRD QUARTER 2003 RESULTS

-Third Quarter 2003 Earnings Increase 20% from Year-Earlier Period-
- -Supply Chain Operations Drive Earnings Improvement for Third Consecutive Quarter-

     MIAMI, October 22, 2003 – Ryder System, Inc. (NYSE:R), a global leader in transportation and supply chain management solutions, today announced earnings before the cumulative effect of accounting changes of $40.5 million for the quarter ended September 30, 2003, up 20% compared with $33.8 million in the year-earlier period. Net earnings including the cumulative effect of accounting changes totaled $37.5 million for the third quarter of 2003. Revenue for the third quarter was $1.19 billion, down just under 2% from $1.21 billion in the comparable period last year.

     Earnings per diluted share (EPS) before the cumulative effect of accounting changes were $0.63 in the third quarter of 2003, up 17% compared with $0.54 in the year-earlier period. EPS for the third quarter included a $0.02 per share net recovery resulting from a previously disclosed settlement of a commercial dispute with a vendor, partially offset by severance charges. EPS in the third quarter of 2003 also included a $0.05 non-cash charge related to the cumulative effect of a change in accounting for variable interest entities as required by the Financial Accounting Standards Board’s Interpretation No. 46 (FIN 46). EPS in the year-earlier period included a $0.01 benefit related to recovery of restructuring and other items.

     “Ryder overcame more than $13 million of additional pension expense in the quarter and delivered improved year-over-year net earnings for the sixth consecutive quarter,” said Ryder Chairman, President and Chief Executive Officer Gregory T. Swienton. “Supply Chain Solutions operations helped drive overall earnings for the third consecutive quarter. Improved operating performance within Fleet Management Solutions was overshadowed by that business segment’s absorption of the majority of the Company’s increased pension expense.”

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     Third quarter 2003 revenue was impacted by continuing soft economic conditions in the U.S., which led to reduced transportation miles run within all business segments, and volume reductions within some sectors of the Supply Chain Solutions (SCS) business segment. These conditions in the U.S. were partially offset by higher fuel revenue driven by higher prices, as well as improvement in the commercial rental product line. Additionally, there was improved performance in the Company’s Canadian, Latin American and Asian operations. Commercial rental revenue for the third quarter of 2003 grew 7% compared with the year-earlier period, marking the fourth consecutive quarter of year-over-year rental revenue improvement.

Year-to-Date Operating Results

     Revenue through the third quarter of 2003 was $3.59 billion, up slightly from $3.57 billion for the same period of 2002. Ryder’s year-to-date earnings, before the cumulative effect of accounting changes, were $96.1 million, up 20% from $80.1 million for the comparable period of the prior year. EPS before the cumulative effect of accounting changes were $1.51 for the first nine months of 2003, up 18% from $1.28 for the same period of 2002. Net earnings year-to-date were $92.0 million, up 50% from $61.2 million for the year-earlier period. EPS were $1.45 for the first nine months of 2003, up 48% from $0.98 for the same period last year.

     EPS through the third quarter of 2003 included $0.06 in non-cash charges related to the cumulative effect of changes in accounting principles associated with the third quarter adoption of FIN 46 and the first quarter adoption of Statement of Financial Accounting Standards (SFAS) No. 143 related to the eventual retirement of long-lived assets (primarily related to components of revenue earning equipment). EPS in the year-earlier period included a $0.30 non-cash charge related to the cumulative effect of a change in accounting for goodwill, as required by the adoption of SFAS No. 142.

Third Quarter Business Segment Operating Results

     Ryder’s primary measurement of business segment financial performance, Net Before Tax (NBT), allocates Central Support Services costs to each business segment.

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Fleet Management Solutions

     Ryder’s Fleet Management Solutions (FMS) business segment combines several capabilities into a comprehensive package that provides one-stop outsourcing of the acquisition, maintenance, management and disposal of vehicles. Ryder’s commercial rental service offers customers a method to expand their fleets in order to address specific or short-term capacity needs.

     In the FMS business segment, total revenue for the third quarter of 2003 was $809.3 million, flat compared with $809.9 in the year-earlier period. Dry revenue (revenue excluding fuel) in the third quarter 2003 was $655.3 million, down 1% compared with $662.0 million in the third quarter of last year. Dry revenue was affected by the impact of ancillary business not renewed earlier in the year. Fuel revenue for the third quarter of 2003 increased 4% compared with the same period in 2002 due to higher fuel prices.

     Full service lease and programmed maintenance revenue for the third quarter of 2003 was down 1% from the same period last year because of continued softness in the U.S. economy. However, Ryder’s third quarter 2003 commercial rental revenue grew 7% from the year-earlier period, reflecting better pricing on a slightly larger fleet.

     The FMS business segment’s NBT decreased 6% to $55.0 million in the third quarter of 2003 compared with $58.5 million in the same period of 2002. This decrease was related primarily to the third quarter 2003 pension expense increase of nearly $12 million compared with the same period last year, as well as lower U.S. leasing demand. The impact of these items was partially offset by better rental pricing, lower financing costs, and improvement in overhead expenses stemming from Ryder’s cost management and process improvement actions. Business segment NBT as a percentage of dry revenue was 8.4% in the third quarter of 2003 compared with 8.8% in the same quarter a year ago.

Supply Chain Solutions

     Ryder’s Supply Chain Solutions (SCS) business segment enables customers to improve shareholder value and their customers’ satisfaction by enhancing supply chain performance and reducing costs. The solutions involve management of the logistics pipeline as a synchronized, integrated process – from raw material supply to finished

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goods distribution. By improving business processes and employing new technologies, the flow of goods and cash is made faster and consumes less capital.

     In the SCS business segment, third quarter 2003 revenue totaled $331.0 million, down 5% from $348.5 million in the comparable period in 2002. Third quarter 2003 operating revenue (revenue excluding freight under management) was $236.6 million, down 4% from $247.0 million in the comparable period a year ago. The decreases were due primarily to volume reductions resulting from the slow economy, increasingly competitive market conditions and the non-renewal of certain customer contracts.

     The SCS business segment’s NBT was $12.2 million in the third quarter of 2003, an improvement from a loss of $0.7 million in the same quarter of 2002. Business segment NBT as a percentage of operating revenue was 5.2% in the third quarter of 2003 compared with negative NBT in the same quarter of 2002. Consistent with the first half of 2003, these increases were driven by process improvement, reduced overhead spending on a global basis and improved operational performance. Third quarter results also benefited from more than $2 million in operating tax refunds and the earlier than expected resolution of a customer contractual matter. Excluding these items, business segment NBT as a percentage of operating revenue would have been 4.2% in the third quarter of 2003.

Dedicated Contract Carriage

     Ryder’s Dedicated Contract Carriage (DCC) business segment provides customers with vehicles, drivers, management and administrative support, with the assets committed to a specific customer for a contractual term. DCC supports customers with both basic and sophisticated logistics and transportation needs, including routing and scheduling, specialized driver services, and logistical engineering support.

     In the DCC business segment, third quarter 2003 revenue totaled $127.0 million, down 3% from $131.0 million in the third quarter of 2002. Operating revenue (revenue excluding freight under management) in the third quarter was $125.9 million, down 3% from $130.1 million in the year-earlier period. Revenue decreases were primarily due to reduced volumes with existing customers.

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     The DCC business segment’s NBT decreased in the third quarter of 2003 to $7.2 million compared with $9.9 million in the third quarter of 2002. Business segment NBT as a percentage of operating revenue was 5.7% compared with 7.6% in 2002. Segment NBT was impacted by higher safety and insurance costs, as well as reduced volumes.

Corporate Financial Information

Central Support Services

     Central Support Services (CSS) are overhead costs incurred to support all business segments and product lines. Substantially all CSS costs are allocated to the various business segments.

     In the third quarter of 2003, total CSS costs decreased to $52.5 million, from $60.1 million in the year-earlier period. This marked the eleventh consecutive quarter of reduced year-over-year CSS costs. The decreases were attributable to reduced spending across all functional areas, resulting from ongoing cost management and process improvement actions.

Capital Expenditures

     Capital expenditures for the quarter ended September 30, 2003 were $162.0 million, down slightly from $163.0 million in the year-earlier period. Capital expenditures for the first nine months of 2003 were $575.2 million, up 30% compared with $443.2 million for the same period of 2002. The year-to-date increase in capital expenditures reflects planned higher vehicle replacements, primarily related to the rental product line.

Leverage and Free Cash Flow

     As previously announced, the Company adopted the provisions of FIN 46 related to the accounting for variable interest entities, effective July 1, 2003. As a result, the Company’s balance sheet was modified to reflect an increase of $421.4 million in revenue-earning equipment and $414.0 million in debt. Cash provided by operating activities and free cash flow increased due to the add-back of depreciation on revenue-earning equipment related to the variable interest entities.

5

     Balance-sheet debt as of September 30, 2003 increased by $225 million compared with year-end 2002. The increase largely resulted from the adoption of FIN 46, partially offset by the pay-down of debt through positive cash flow. The leverage ratio for balance-sheet debt as of September 30, 2003 was 144% compared with 140% at year-end. Total obligations including securitization to equity as of September 30, 2003 were 159%, down from 201% at year-end. Free cash flow for the first nine months of 2003 is estimated to be $265.0 million compared with $288.6 million for the year-earlier period.

     Commenting on Ryder’s corporate financial performance, Ryder Executive Vice President and Chief Financial Officer Tracy A. Leinbach stated, “Our results show that we are much more effective at managing costs, assets, debt and capital than we were just a few years ago. The Margin Improvement Program we put in place last year for our Supply Chain Solutions business resulted in significantly increased profit margins for that segment through the first three quarters. We are now taking that same Program to other areas of the Company.”

Outlook

     Commenting on the Company’s outlook, Swienton stated, “Ryder’s Supply Chain Solutions business delivered strong earnings performance for the third consecutive quarter, partially aided by the pull-forward of benefits that were not expected until the fourth quarter. Our transactional business, such as commercial rental in the Fleet Management Solution business segment, continued to improve. However, we are not satisfied with revenues from our contractual offerings. Despite a robust pipeline of business in all three segments, we have not yet generated the desired conversion rates for both new contracts and renewals. Many prospects and customers still remain cautious about making long-term capital commitments. Our outlook does not anticipate an immediate economic recovery substantial enough to positively impact our customer base in the near term.”

     He continued, “In view of these factors, we are slightly adjusting our full-year EPS forecast to the range of $2.04 to $2.08, resulting from a fourth quarter EPS range of between $0.53 to $0.57.”

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About Ryder

     Ryder provides leading-edge transportation, logistics, and supply chain management solutions worldwide. Ryder’s product offerings range from full-service leasing, commercial rental and programmed maintenance of vehicles to integrated services such as dedicated contract carriage and carrier management. Additionally, Ryder offers comprehensive supply chain solutions, consulting, lead logistics management services and e-Business solutions that support customers’ entire supply chains, from inbound raw materials and parts through distribution and delivery of finished goods. Ryder serves customer needs throughout North America, in Latin America, Europe and Asia.

     The National Safety Council selected Ryder to receive the 2002 Green Cross for Safety Medal – its highest honor – for exemplary commitment to workplace safety and corporate citizenship. For the seventh consecutive year, Ryder was featured in the 2003 Fortune Most Admired Companies survey of corporate reputations. Ryder is ranked 87 in the InformationWeek 500 of leading business users of information technology in 2003. InternetWeek named Ryder as one of the top 100 U.S. companies for effectiveness in using the Internet to achieve tangible business benefits. For the sixth consecutive year, Ryder has been named a top three third-party logistics provider by Inbound Logistics.

     Ryder’s stock is a component of the Dow Jones Transportation Average and the Standard & Poor’s 500 Index. With 2002 revenue of $4.78 billion, Ryder ranks 345th on the Fortune 500.

     For more information on Ryder System, Inc., visit www.ryder.com.

# # #

Note Regarding Forward Looking Statements: Certain statements and information included in this presentation are “forward-looking statements” under the Federal Private Securities Litigation Reform Act of 1995. Accordingly, we advise that these forward-looking statements be evaluated with consideration given to the many uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward-looking statements. Important factors that could cause such differences include, among others, the competitive pricing environment applicable to the Company’s businesses, customer retention levels, changes in customers’ business environments, changes in market conditions affecting the sale of used vehicles, adverse changes in debt ratings, changes in accounting assumptions, greater than expected expenses associated with the Company’s activities and changes in general economic conditions.

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Note Regarding Non-GAAP Financial Measures: This news release and the attached financial schedules include certain non-GAAP financial measures as defined under SEC rules. We have denoted each non-GAAP financial measure in the attached financial schedules and have provided a reconciliation of each such measure to the most comparable GAAP measure. Additional information regarding non-GAAP financial measures can be found in our investor presentation for the third quarter and in our reports filed with the SEC, which are available in the investors area of our website at www.ryder.com.

Conference Call and Webcast Information:

Ryder’s third quarter 2003 earnings webcast is scheduled for Wednesday, October 22, 2003 from 11:00 a.m. to 12:00 noon (Eastern Time). Speakers will be Chairman, President and Chief Executive Officer Gregory T. Swienton and Executive Vice President and Chief Financial Officer Tracy A. Leinbach.

• To join the conference call live: Begin 10 minutes prior to the conference by dialing the audio phone number 1-888-398-5319 using the Passcode: Ryder and Conference Leader: Bob Brunn. Then, access the presentation via the Net Conference website at www.mymeetings.com/nc/join/ using the Conference Number: RH7122540 and Passcode: RYDER.

• To access audio replays of the conference and view a presentation of Ryder’s earnings results: Dial 1-888-568-0807 and use the Passcode: 1022, then view the presentation by visiting the investors area of Ryder’s website at www.ryder.com.

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RYDER SYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS — UNAUDITED
Periods ended September 30, 2003 and 2002
(In millions, except per share data)

		Three Months						Nine Months
		2003			2002			2003			2002
Revenue		$	1,193.6			1,212.4		$	3,585.4			3,571.6
Operating expense			508.5			494.7			1,518.4			1,458.0
Salaries and employee-related costs			309.0			320.3			936.8			951.2
Freight under management expense			95.5			102.4			307.5			302.6
Depreciation expense			171.0			140.1			457.9			412.4
Gains on vehicle sales, net			(2.8	)		(3.6	)		(11.1	)		(9.8	)
Equipment rental			29.0			84.8			170.3			266.6
Interest expense			24.1			22.3			65.8			70.4
Miscellaneous income, net			(1.5	)		(0.6	)		(7.1	)		(3.4	)
Restructuring and other recoveries, net			(2.7	)		(0.8	)		(3.7	)		(2.0	)
			1,130.1			1,159.6			3,434.8			3,446.0
Earnings before income taxes and cumulative effect of changes in accounting principles			63.5			52.8			150.6			125.6
Provision for income taxes			(23.0	)		(19.0	)		(54.5	)		(45.5	)
Earnings before cumulative effect of changes in accounting principles			40.5			33.8			96.1			80.1
Cumulative effect of changes in accounting principles			(3.0	)		—			(4.1	)		(18.9	)
Net earnings		$	37.5			33.8		$	92.0			61.2
Diluted earnings per common share		$	0.58			0.54		$	1.45			0.98
Weighted average common shares — diluted			64.3			62.8			63.5			62.6
Supplemental earnings per share information:
	Earnings before cumulative effect of changes in accounting principles	$	0.63			0.54			1.51			1.28
	Cumulative effect of changes in accounting principles		(0.05	)		—			(0.06	)		(0.30	)
	Net earnings	$	0.58			0.54		$	1.45			0.98
	Memo: EPS Impact of restructuring and other recoveries, net	$	0.02			0.01			0.04			0.02

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RYDER SYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS — PRELIMINARY AND UNAUDITED
(Dollars in millions)

		September 30,		December 31,
		2003		2002
Assets:
	Cash and cash equivalents	$	102.8		104.2
	Other current assets		963.3		920.0
	Revenue earning equipment (a)		3,010.7		2,497.6
	Operating property and equipment		505.2		530.9
	Other assets		629.7		714.3
		$	5,211.7		4,767.0
Liabilities and Shareholders’ Equity:
	Current liabilities (including current portion of long-term debt) (a)	$	1,047.5		862.1
	Long-term debt (a)		1,445.5		1,389.1
	Other non-current liabilities (including deferred income taxes)		1,485.8		1,407.6
	Shareholders’ equity		1,232.9		1,108.2
		$	5,211.7		4,767.0

SELECTED KEY RATIOS

	September 30,			December 31,
	2003			2002
Debt to equity (a)		144	%		140	%
Total obligations to equity (b) *		159	%		201	%

	Twelve months ended
	September 30,
	2003			2002
Return on average common equity (c)		10.6	%		4.9	%
Return on average assets (c)		2.6	%		1.3	%
Average asset turnover		98.5	%		97.4	%

(a)	Includes impact of consolidating vehicle securitization trusts effective July 1, 2003.
(b)	Total obligations represent debt plus off-balance sheet equipment obligations.
(c)	Includes the effect of accounting changes.
*	Non-GAAP financial measure

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RYDER SYSTEM, INC. AND SUBSIDIARIES

BUSINESS SEGMENT REVENUE AND EARNINGS — UNAUDITED
Periods ended September 30, 2003 and 2002
(Dollars in millions)

				Three Months									Nine Months
				2003			2002			B(W)			2003			2002			B(W)
REVENUE:
	Fleet Management Solutions:
		Full service lease and programmed maintenance		$	448.8			451.4			(0.6	%)	$	1,341.7			1,351.0			(0.7	%)
		Commercial rental			131.8			123.2			7.0	%		361.2			339.0			6.5	%
		Fuel			154.0			147.9			4.1	%		484.4			429.0			12.9	%
		Other			74.7			87.4			(14.5	%)		233.1			259.4			(10.1	%)
			Total Fleet Management Solutions		809.3			809.9			(0.1	%)		2,420.4			2,378.4			1.8	%
	Supply Chain Solutions				331.0			348.5			(5.0	%)		1,010.9			1,043.9			(3.2	%)
	Dedicated Contract Carriage				127.0			131.0			(3.1	%)		384.3			384.3			0.0	%
	Eliminations				(73.7	)		(77.0	)		4.3	%		(230.2	)		(235.0	)		2.0	%
			Total revenue	$	1,193.6			1,212.4			(1.6	%)	$	3,585.4			3,571.6			0.4	%
BUSINESS SEGMENT EARNINGS:
	Earnings before income taxes:
		Fleet Management Solutions		$	55.0			58.5			(6.0	%)	$	140.3			150.5			(6.8	%)
		Supply Chain Solutions			12.2			(0.7	)	NA				27.0			(5.1	)	NA
		Dedicated Contract Carriage			7.2			9.9			(27.3	%)		22.4			23.3			(3.9	%)
		Eliminations			(7.6	)		(8.5	)		10.6	%		(24.4	)		(25.1	)		2.8	%
					66.8			59.2			12.8	%		165.3			143.6			15.1	%
	Unallocated Central Support Services				(6.0	)		(7.2	)		16.7	%		(18.4	)		(20.0	)		8.0	%
	Earnings before restructuring and other recoveries, net and income taxes				60.8			52.0			16.9	%		146.9			123.6			18.9	%
	Restructuring and other recoveries, net				2.7			0.8			237.5	%		3.7			2.0			85.0	%
	Earnings before income taxes				63.5			52.8			20.3	%		150.6			125.6			19.9	%
	Provision for income taxes				(23.0	)		(19.0	)		(21.1	%)		(54.5	)		(45.5	)		(19.8	%)
	Earnings before cumulative effect of changes in accounting principles				40.5			33.8			19.8	%		96.1			80.1			20.0	%
	Cumulative effect of changes in accounting principles				(3.0	)		—		NA				(4.1	)		(18.9	)		78.3	%
	Net earnings			$	37.5			33.8			10.9	%	$	92.0			61.2			50.3	%

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RYDER SYSTEM, INC. AND SUBSIDIARIES

BUSINESS SEGMENT INFORMATION — UNAUDITED
Periods ended September 30, 2003 and 2002
(Dollars in millions)

		Three Months									Nine Months
	2003			2002			B(W)			2003			2002			B(W)
FLEET MANAGEMENT SOLUTIONS
Total revenue	$	809.3			809.9			(0.1	%)	$	2,420.4			2,378.4			1.8	%
Fuel revenue		(154.0	)		(147.9	)		4.1	%		(484.4	)		(429.0	)		12.9	%
Dry revenue *	$	655.3			662.0			(1.0	%)	$	1,936.0			1,949.4			(0.7	%)
Segment net before tax earnings	$	55.0			58.5			(6.0	%)	$	140.3			150.5			(6.8	%)
Earnings before income taxes as % of total revenue		6.8	%		7.2	%					5.8	%		6.3	%
Earnings before income taxes as % of dry revenue*		8.4	%		8.8	%					7.2	%		7.7	%
SUPPLY CHAIN SOLUTIONS
Total revenue	$	331.0			348.5			(5.0	%)	$	1,010.9			1,043.9			(3.2	%)
Freight Under Management (FUM) expense		(94.4	)		(101.5	)		7.0	%		(304.5	)		(299.7	)		(1.6	%)
Operating revenue *	$	236.6			247.0			(4.2	%)	$	706.4			744.2			(5.1	%)
Segment net before tax earnings	$	12.2			(0.7	)	NA			$	27.0			(5.1	)	NA
Earnings before income taxes as % of total revenue		3.7	%		(0.2	%)					2.7	%		(0.5	%)
Earnings before income taxes as % of operating revenue*		5.2	%		(0.3	%)					3.8	%		(0.7	%)
DEDICATED CONTRACT CARRIAGE
Total revenue	$	127.0			131.0			(3.1	%)	$	384.3			384.3			0.0	%
Freight Under Management (FUM) expense		(1.1	)		(0.9	)		(22.2	%)		(2.9	)		(2.9	)		(0.0	%)
Operating revenue*	$	125.9			130.1			(3.2	%)	$	381.4			381.4			(0.0	%)
Segment net before tax earnings	$	7.2			9.9			(27.3	%)	$	22.4			23.3			(3.9	%)
Earnings before income taxes as % of total revenue		5.7	%		7.6	%					5.8	%		6.1	%
Earnings before income taxes as % of operating revenue*		5.7	%		7.6	%					5.9	%		6.1	%

* Non-GAAP financial measure

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RYDER SYSTEM, INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURE RECONCILIATIONS — PRELIMINARY AND UNAUDITED
Periods ended September 30, 2003 and 2002
(Dollars in millions)

FREE CASH FLOW RECONCILIATION

	Nine Months
	2003			2002
Cash provided by operating activities	$	638.1			476.3
Changes in the aggregate balance of trade receivables sold		—			100.0
Collections on direct finance leases		46.3			48.0
Sales of property and revenue earning equipment		155.8			107.5
Purchases of property and revenue earning equipment		(575.2	)		(443.2	)
Net free cash flow *	$	265.0			288.6

DEBT TO EQUITY RECONCILIATION

		3Q 2003		% to Equity			2Q 2003		% to Equity			4Q 2002		% to Equity
On-Balance Sheet Debt		$	1,776.0		144	%	$	1,496.1		126	%	$	1,551.5		140	%
	PV of mimimum lease payments and guaranteed residual va1ues under operating leases for equipment		189.7					300.1					370.4
	PV of contingent rentals under securitizations (a)		—					256.0					311.0
Total Obligations Including Securitization *		$	1,965.7		159	%	$	2,052.2		173	%	$	2,232.9		201	%

(a)	In connection with adopting FIN 46 effective July 1, 2003, the Company consolidated the vehicle securitization trusts previously disclosed as off-balance sheet debt.
*	Non-GAAP financial measure

13 EX-99.2 4 g85362exv99w2.htm EX-99.2 3RD QUARTER 2003 EARNINGS CONFERENCE CALL

EXHIBIT 99.2

Third Quarter 2003 Earnings Conference Call October 22, 2003

Safe Harbor Language Note: Certain statements and information included in this presentation are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995. Accordingly, we advise that these forward-looking statements be evaluated with consideration given to the many uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward-looking statements. Important factors that could cause such differences include, among others, the competitive pricing environment applicable to the Company's businesses, customer retention levels, changes in customers' business environments, changes in market conditions affecting the sale of used vehicles, adverse changes in debt ratings, changes in accounting assumptions, greater than expected expenses associated with the Company's activities and changes in general economic conditions. The risks included here are not exhaustive. 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 the Company's business. Accordingly, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Contents Third Quarter Results Key Initiatives Update Asset Management Update Earnings Outlook Pension Update Q & A

3rd Quarter Results Earnings per diluted share before the cumulative effect of an accounting change were $0.63, up from $0.54 in 3Q02 Includes $0.02 benefit from net restructuring recoveries Lease revenue slightly down year-over-year; demand remains slow Continuing year-over-year improvement in commercial rental revenue; improved pricing increasing both revenue and margin Increase in fuel revenue due to higher fuel costs Asset management activities continue to contribute to improved results with 15% year-over-year reduction in non-revenue earning equipment Fleet Management Solutions returns negatively impacted by lower lease revenue and absorption of pension expense increase, offset by improved rental and asset management results Overview

3rd Quarter Results (continued) Dedicated Contract Carriage returns down from prior year due to higher insurance costs and lower revenue Total and U.S. Supply Chain Solutions revenue down due to volume reductions and non-renewal of certain contracts Revenue increases realized in Canada, Latin America and Asia, partially offset by declines in Europe Supply Chain Solutions returns positively affected by overhead reductions and improved operational performance globally Strong cost management in overhead areas continues to positively contribute to results Ryder elected to adopt FIN 46, Consolidation of Variable Interest Entities, in the third quarter Overview

Earnings Per Share Third Quarter Actual Results

Earnings Per Share Year-To-Date Actual Results

Business Segment Third Quarter Fully Allocated ($ Millions) (1) Allocation of Recoveries, Net across business segments was as follows: FMS $2.4 in 2003 and $0.5 in 2002; CSS - $(0.6) in 2003 and $0.2 in 2002; SCS - $0.4 in 2003 and $0.1 in 2002; DCC - $0.5 in 2003

Business Segment Year-To-Date Fully Allocated ($ Millions) (1) Allocation of Recoveries, Net across business segments was as follows: FMS - $3.2 in 2003 and $0.5 in 2002; CSS - $(0.4) in 2003 and $1.4 in 2002; SCS - $0.4 in 2003 and $0.1 in 2002; DCC - $0.5 in 2003

Capital Expenditures ($ Millions) Year-To-Date Full Service Lease Commercial Rental Property, Plant & Equipment Acquisitions Other East 57 37 5 0 1 Year-To-Date 2003

Debt to Equity Ratio Continued and focused emphasis to strengthen the balance sheet ($ Millions) Notes: - 4Q2002 and beyond includes impact of a pension related equity charge of $227.6 million. - 3Q2003 includes impact of consolidating variable interest entities previously disclosed as off-balance sheet debt. (1) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures.

Free Cash Flow (1) Includes non-cash restructuring and other recoveries, net and cumulative effect of changes in accounting principles (2) Changes in working capital exclude sale of receivables (3) Non-GAAP financial measure; refer to Appendix - Non-GAAP Financial Measures ($ Millions) Year-To-Date Preliminary

Contents Third Quarter Results Key Initiatives Update Asset Management Update Earnings Outlook Pension Update Q & A

2003 Key Initiatives Focus on cost management and process improvement initiatives continues 2003 new initiatives added an incremental $31 million in pre-tax earnings Maintenance Asset Management Overhead Reduction SCS Margin Improvement Insurance and Safety Other $44 - $49 million 2003 Impact of Implemented Initiatives ($ Millions) Status Update

Contents Third Quarter Results Key Initiatives Update Asset Management Update Earnings Outlook Pension Update Q & A

Asset Management Update Total number of non-revenue earning vehicles of 7,200 is down 1,233 units or 15% vs. prior year period Not yet earning (NYE) vehicles are 548 No longer earning (NLE) vehicles are 6,652 3,512 of these units are held for sale at the used truck centers Used tractor retail sales proceeds continue to show signs of improvement for three consecutive quarters, up 7% from 4Q02 The overall number of vehicles sold was up 4% compared to 2Q03 at 3,548 Note: U.S. only

Asset Management Update Focused efforts in the area of asset management continue to positively impact earnings and strengthen free cash flow Redeployments have declined 14% and total extensions have declined 20%; however, both continue to be ahead of plan Note: U.S. only Redeployments Total Extensions Early Terminations Early Replacements YTD Sep 99 2295 1281 5642 4644 YTD Sep 00 3431 1663 5298 3337 YTD Sep 01 3829 2022 5339 1157 YTD Sep 02 4356 3942 4832 837 YTD Sep 03 3762 3166 3452 673

Contents Third Quarter Results Key Initiatives Update Asset Management Update Earnings Outlook Pension Update Q & A

Earnings Outlook Revising full year 2003 forecasted earnings to $2.04 - $2.08 per share. Current projection for EPS is as follows: ($ Earnings Per Share) Year-to-Date(1) 4th Qtr Full Year 2003 Actual/Proj. EPS 1.51 0.53-0.57 2.04-2.08 (1) Excludes cumulative effect of changes in accounting principles charge of $0.06. Includes restructuring recoveries of $0.04.

Contents First Quarter Results Key Initiatives Update Asset Management Update Earnings Outlook Pension Update Q & A

Pension Update Ryder made $50M contribution to U.S. pension plan in October 2003 Analysis indicated positive economic benefit to optional contribution in 2003 Present value of estimated required contributions over the next 5 years totals $135M to U.S. plan and $205M globally (assuming expected long-term rate of return realized and other assumptions remain unchanged) Global pension plan contributions for 2003 total an estimated $65M Current U.S. plan assumptions: 8.5% expected long-term rate of return, 6.5% discount rate, 5% rate of increase in compensation, and 8.5-year amortization period for gains/losses U.S. plan results: Actual September 2003 YTD return of 13% in U.S. plan Current discount rate is approximately 6.25% Assuming YTD results pension expense for 2004 would decrease by approximately $6M to $8M Final expense will be based on portfolio performance through 12/31/03 and year-end corporate bond rates used to derive discount rate in liability calculation

Q & A

Appendix Business Segment Detail Non-Revenue Earning Equipment FIN 46 - Balance Sheet Detail Non-GAAP Financial Measures

Fleet Management Solutions (FMS) ($ Millions) Third Quarter (a) The Company uses dry revenue, a non-GAAP financial measure, to evaluate the operating performance of the FMS business segment and as a measure of sales activity. Fuel services revenue, which is directly impacted by fluctuations in market fuel prices, is excluded from the dry revenue computation as fuel is largely a pass through to customers for which the Company realizes minimal changes in profitability as a result of fluctuations in fuel services revenue.

Fleet Management Solutions (FMS) ($ Millions) Year-To-Date (a) The Company uses dry revenue, a non-GAAP financial measure, to evaluate the operating performance of the FMS business segment and as a measure of sales activity. Fuel services revenue, which is directly impacted by fluctuations in market fuel prices, is excluded from the dry revenue computation as fuel is largely a pass through to customers for which the Company realizes minimal changes in profitability as a result of fluctuations in fuel services revenue.

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

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

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

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

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

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

Non-Revenue Earning Equipment Not Yet Earning - "NYE" No Longer Earning - "NLE" Total 10,727 Dec 2000 Total 12,040 Mar 2001 Total 10,915 June 2001 Total 10,991 Sept 2001 Total 11,072 Dec 2001 Total 10,361 Mar 2002 Units held for sale 3,485 5,215 5,115 Total 8,838 Mar 2003 Total 8,691 June 2002 Total 8,433 Sept 2002 Status Total 8,131 Dec 2002 3,512 Total 7,985 Jun 2003 Note: U.S. only Total 7,200 Sept 2003

FIN 46 - Balance Sheet Detail Balance Sheet Impact of Consolidating VIEs

Non-GAAP Financial Measures This presentation includes "non-GAAP financial measures" as defined by SEC rules. As required by SEC rules, we provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure and an explanation why management believes that presentation of the non-GAAP financial measure provides useful information to investors. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. Specifically, the following non-GAAP financial measures are included in this presentation:

Free Cash Flow Reconciliation ($ Millions) Year-To-Date Preliminary (a) The Company uses free cash flow, a non-GAAP financial measure, because management considers it to be an important measure of comparative operating performance. Management believes free cash flow provides investors with an important perspective on the cash available for debt service, acquisitions and shareholders after making capital investments required to support ongoing business operations. The calculation of free cash flow may be different from the calculation used by other companies and therefore comparability may be limited.

Debt to Equity Reconciliation (a) The Company uses total obligations, a non-GAAP financial measure, which includes certain off-balance sheet financial obligations relating to revenue earning equipment. Management believes this non-GAAP financial measure is useful to investors as it is a more complete measure of the Company's existing financial obligations and helps investors better assess the Company's overall leverage position. Note: In connection with adopting FIN 46 effective July 1, 2003, the Company consolidated the vehicle securitization trusts previously disclosed as off-balance sheet debt.

EX-99.1

EX-99.1 Press Release

EX-99.2

EX-99.2 3rd Quarter 2003 Earnings Conference Call