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~~MARCH 31, 2023


☐			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~~March 31, 2023, was ~~51,194,660~~.46,492,233.

RYDER SYSTEM, INC.

FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS

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,					Three months ended March 31,
(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
(In millions, except per share amounts)										(In millions, except per share amounts)	2023		2022
Lease & related maintenance and rental revenue										Lease & related maintenance and rental revenue	$	979	$	1,025
Services revenue	Services revenue	1,777,586		1,276,140		3,447,124		2,441,628		Services revenue	1,821		1,670
Fuel services revenue	Fuel services revenue	206,472		119,403		365,811		235,115		Fuel services revenue	152		159
Total revenues		3,033,662		2,382,237		5,887,524		4,603,859
Total revenue										Total revenue	2,952		2,854

Cost of lease & related maintenance and rental	Cost of lease & related maintenance and rental	687,894		702,444		1,386,735		1,432,588		Cost of lease & related maintenance and rental	674		699
Cost of services	Cost of services	1,520,121		1,090,015		2,966,830		2,089,807		Cost of services	1,607		1,450
Cost of fuel services	Cost of fuel services	202,524		117,453		360,171		232,159		Cost of fuel services	149		155

Selling, general and administrative expenses	Selling, general and administrative expenses	360,687		302,749		702,696		578,391		Selling, general and administrative expenses	363		342
Non-operating pension costs		2,581		(373)		5,368		(382)
Non-operating pension costs, net										Non-operating pension costs, net	10		3
Used vehicle sales, net	Used vehicle sales, net	(129,566)		(51,634)		(242,560)		(80,485)		Used vehicle sales, net	(72)		(113)
Interest expense	Interest expense	55,324		54,155		107,688		108,861		Interest expense	65		52
Miscellaneous income, net	Miscellaneous income, net	(14,576)		(43,812)		(14,202)		(49,246)		Miscellaneous income, net	(20)		—
Restructuring and other items, net	Restructuring and other items, net	10,302		7,667		24,556		18,326		Restructuring and other items, net	(25)		14
		2,695,291		2,178,664		5,297,282		4,330,019			2,751		2,602

Earnings from continuing operations before income taxes	Earnings from continuing operations before income taxes	338,371		203,573		590,242		273,840		Earnings from continuing operations before income taxes	201		252
Provision for income taxes	Provision for income taxes	98,029		54,005		174,078		72,688		Provision for income taxes	61		76
Earnings from continuing operations	Earnings from continuing operations	240,342		149,568		416,164		201,152		Earnings from continuing operations	140		176
Loss from discontinued operations, net of tax	Loss from discontinued operations, net of tax	(942)		(463)		(1,177)		(1,222)		Loss from discontinued operations, net of tax	(1)		—
Net earnings	Net earnings	$	239,400	$	149,105	$	414,987	$	199,930	Net earnings	$	139	$	176

Earnings (loss) per common share — Basic	Earnings (loss) per common share — Basic									Earnings (loss) per common share — Basic
Continuing operations	Continuing operations	$	4.80	$	2.84	$	8.20	$	3.83	Continuing operations	$	3.00	$	3.42
Discontinued operations	Discontinued operations	(0.02)		(0.01)		(0.02)		(0.02)		Discontinued operations	(0.01)		—
Net earnings	Net earnings	$	4.78	$	2.83	$	8.18	$	3.80	Net earnings	$	2.99	$	3.42

Earnings (loss) per common share — Diluted	Earnings (loss) per common share — Diluted									Earnings (loss) per common share — Diluted
Continuing operations	Continuing operations	$	4.72	$	2.78	$	8.05	$	3.75	Continuing operations	$	2.95	$	3.35
Discontinued operations	Discontinued operations	(0.02)		(0.01)		(0.02)		(0.02)		Discontinued operations	(0.01)		—
Net earnings	Net earnings	$	4.70	$	2.77	$	8.03	$	3.73	Net earnings	$	2.94	$	3.35

See accompanying ~~notes~~Notes to ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

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

Table of Contents

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


	Three months ended March 31,
(In millions)	2023		2022
Net earnings	$	139	$	176
Other comprehensive income:








Changes in cumulative translation adjustment and unrealized gains from cash flow hedges	9		2

Amortization of pension and postretirement items	7		6

Income tax expense related to amortization of pension and postretirement items	(2)		(1)
Amortization of pension and postretirement items, net of taxes	5		5






Other comprehensive income, net of taxes	14		7

Comprehensive income	$	153	$	183

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


(In thousands, except share amounts)		June 30, 2022		December 31, 2021
(In millions, except share amounts)						(In millions, except share amounts)	March 31, 2023		December 31, 2022

Assets:	Assets:					Assets:
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	447,737	$	233,961	Cash and cash equivalents	$	253	$	267
Receivables, net	Receivables, net	1,692,911		1,464,737		Receivables, net	1,682		1,610
Inventories	Inventories	82,097		68,677		Inventories	74		78
Prepaid expenses and other current assets	Prepaid expenses and other current assets	194,570		693,239		Prepaid expenses and other current assets	251		245
Total current assets	Total current assets	2,417,315		2,460,614		Total current assets	2,260		2,200
Revenue earning equipment, net	Revenue earning equipment, net	8,319,137		8,323,039		Revenue earning equipment, net	8,253		8,190
Operating property and equipment, net of accumulated depreciation of $1,310,627 and $1,273,637		1,070,030		984,978
Operating property and equipment, net of accumulated depreciation of $1,393 and $1,377						Operating property and equipment, net of accumulated depreciation of $1,393 and $1,377	1,093		1,148
Goodwill	Goodwill	854,202		570,905		Goodwill	861		861
Intangible assets, net	Intangible assets, net	310,745		170,205		Intangible assets, net	288		295
Operating lease right-of-use assets						Operating lease right-of-use assets	673		715
Sales-type leases and other assets	Sales-type leases and other assets	1,504,453		1,324,582		Sales-type leases and other assets	1,115		986
Total assets	Total assets	$	14,475,882	$	13,834,323	Total assets	$	14,543	$	14,395

Liabilities and shareholders’ equity:	Liabilities and shareholders’ equity:					Liabilities and shareholders’ equity:
Current liabilities:	Current liabilities:					Current liabilities:
Short-term debt and current portion of long-term debt	Short-term debt and current portion of long-term debt	$	1,414,684	$	1,333,363	Short-term debt and current portion of long-term debt	$	1,674	$	1,349
Accounts payable	Accounts payable	966,555		747,898		Accounts payable	980		767
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	1,206,580		1,119,602		Accrued expenses and other current liabilities	1,101		1,200
Total current liabilities	Total current liabilities	3,587,819		3,200,863		Total current liabilities	3,755		3,316
Long-term debt	Long-term debt	5,178,550		5,246,306		Long-term debt	4,666		5,003
Other non-current liabilities	Other non-current liabilities	1,437,446		1,314,404		Other non-current liabilities	1,507		1,568
Deferred income taxes	Deferred income taxes	1,439,507		1,274,804		Deferred income taxes	1,610		1,571
Total liabilities	Total liabilities	11,643,322		11,036,377		Total liabilities	11,538		11,458

Commitments and contingencies (Note 15)	Commitments and contingencies (Note 15)	0		0		Commitments and contingencies (Note 15)
Shareholders’ equity:	Shareholders’ equity:					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
Preferred stock, no par value per share — authorized, 3,800,917; none outstanding, March 31, 2023 and December 31, 2022						Preferred stock, no par value per share — authorized, 3,800,917; none outstanding, March 31, 2023 and December 31, 2022	—		—
Common stock, $0.50 par value per share — authorized, 400,000,000; outstanding, March 31, 2023 — 46,492,233 and December 31, 2022 — 46,286,664						Common stock, $0.50 par value per share — authorized, 400,000,000; outstanding, March 31, 2023 — 46,492,233 and December 31, 2022 — 46,286,664	23		23
Additional paid-in capital	Additional paid-in capital	1,148,835		1,194,334		Additional paid-in capital	1,168		1,192
Retained earnings	Retained earnings	2,379,800		2,265,957		Retained earnings	2,596		2,518
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(721,672)		(689,241)		Accumulated other comprehensive loss	(782)		(796)
Total shareholders’ equity	Total shareholders’ equity	2,832,560		2,797,946		Total shareholders’ equity	3,005		2,937
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	14,475,882	$	13,834,323	Total liabilities and shareholders’ equity	$	14,543	$	14,395

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


		Six months ended June 30,					Three months ended March 31,
(In thousands)		2022		2021
(In millions)						(In millions)	2023		2022

Cash flows from operating activities from continuing operations:	Cash flows from operating activities from continuing operations:					Cash flows from operating activities from continuing operations:
Net earnings	Net earnings	$	414,987	$	199,930	Net earnings	$	139	$	176
Less: Loss from discontinued operations, net of tax	Less: Loss from discontinued operations, net of tax	(1,177)		(1,222)		Less: Loss from discontinued operations, net of tax	(1)		—
Earnings from continuing operations	Earnings from continuing operations	416,164		201,152		Earnings from continuing operations	140		176
Depreciation expense	Depreciation expense	854,229		905,420		Depreciation expense	445		430

Used vehicle sales, net	Used vehicle sales, net	(242,560)		(80,485)		Used vehicle sales, net	(72)		(113)
Amortization expense and other non-cash charges, net	Amortization expense and other non-cash charges, net	50,427		26		Amortization expense and other non-cash charges, net	28		31
Non-cash lease expense	Non-cash lease expense	92,728		46,599		Non-cash lease expense	59		45
Non-operating pension costs, net and share-based compensation expense	Non-operating pension costs, net and share-based compensation expense	27,882		22,912		Non-operating pension costs, net and share-based compensation expense	20		14
Deferred income tax expense	Deferred income tax expense	123,455		56,397		Deferred income tax expense	42		58
Collections on sales-type leases	Collections on sales-type leases	64,404		62,778		Collections on sales-type leases	30		34
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Receivables	Receivables	(187,425)		(105,319)		Receivables	(7)		(64)
Inventories	Inventories	(13,478)		(1,422)		Inventories	4		(6)
Prepaid expenses and other assets	Prepaid expenses and other assets	(31,406)		945		Prepaid expenses and other assets	(26)		(15)
Accounts payable	Accounts payable	82,019		65,771		Accounts payable	45		13
Accrued expenses and other non-current liabilities		(133,663)		(43,541)
Accrued expenses and other liabilities						Accrued expenses and other liabilities	(230)		(137)
Net cash provided by operating activities from continuing operations	Net cash provided by operating activities from continuing operations	1,102,776		1,131,233		Net cash provided by operating activities from continuing operations	478		466

Cash flows from investing activities from continuing operations:	Cash flows from investing activities from continuing operations:					Cash flows from investing activities from continuing operations:
Purchases of property and revenue earning equipment	Purchases of property and revenue earning equipment	(1,195,012)		(904,399)		Purchases of property and revenue earning equipment	(641)		(584)
Sales of revenue earning equipment	Sales of revenue earning equipment	600,822		330,277		Sales of revenue earning equipment	216		223
Sales of operating property and equipment	Sales of operating property and equipment	35,342		44,409		Sales of operating property and equipment	48		3
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(429,771)		—		Acquisitions, net of cash acquired	—		(425)

Other investing activities		6,207		(3,695)

Net cash used in investing activities from continuing operations	Net cash used in investing activities from continuing operations	(982,412)		(533,408)		Net cash used in investing activities from continuing operations	(377)		(783)

Cash flows from financing activities from continuing operations:	Cash flows from financing activities from continuing operations:					Cash flows from financing activities from continuing operations:
Net borrowings (repayments) of commercial paper and other	Net borrowings (repayments) of commercial paper and other	208,023		(198,560)		Net borrowings (repayments) of commercial paper and other	(216)		63
Debt proceeds	Debt proceeds	951,008		—		Debt proceeds	664		650
Debt repayments	Debt repayments	(1,111,379)		(189,699)		Debt repayments	(471)		(493)
Dividends on common stock	Dividends on common stock	(62,811)		(60,826)		Dividends on common stock	(35)		(34)
Common stock issued	Common stock issued	(9,027)		20,552		Common stock issued	(23)		(12)
Common stock repurchased	Common stock repurchased	(300,280)		(48,978)		Common stock repurchased	(45)		(300)

Other financing activities	Other financing activities	(5,560)		(1,460)		Other financing activities	—		(4)
Net cash used in financing activities from continuing operations	Net cash used in financing activities from continuing operations	(330,026)		(478,971)		Net cash used in financing activities from continuing operations	(126)		(130)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(15,482)		(2,369)		Effect of exchange rate changes on cash, cash equivalents, and restricted cash	11		(4)
(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

Decrease in cash, cash equivalents, and restricted cash						Decrease in cash, cash equivalents, and restricted cash	(14)		(451)
Cash, cash equivalents, and restricted cash at beginning of period	Cash, cash equivalents, and restricted cash at beginning of period	673,325		151,294		Cash, cash equivalents, and restricted cash at beginning of period	267		673
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period	$	447,737	$	267,992	Cash, cash equivalents, and restricted cash at end of period	$	253	$	222

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited)


	Three months ended March 31, 2023
	Preferred Stock		Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss
(In millions, except share amounts in thousands)	Amount		Shares	Par								Total
Balance as of January 1, 2023	$	—	46,287	$	23	$	1,192	$	2,518	$	(796)	$	2,937

Comprehensive income	—		—	—		—		139		14		153
Common stock dividends declared —$0.62 per share	—		—	—		—		(30)		—		(30)
Common stock issued under employee stock award and stock purchase plans and other (1)	—		670	—		(23)		2		—		(21)

Common stock repurchases	—		(465)	—		(12)		(33)		—		(45)
Share-based compensation	—		—	—		11		—		—		11
Balance as of March 31, 2023	$	—	46,492	$	23	$	1,168	$	2,596	$	(782)	$	3,005

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 March 31, 2022
	Preferred Stock		Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss
(In millions, except share amounts in thousands)	Amount		Shares	Par								Total
Balance as of January 1, 2022	$	—	53,789	$	27	$	1,194	$	2,266	$	(689)	$	2,798

Comprehensive income	—		—	—		—		176		7		183
Common stock dividends declared —$0.58 per share	—		—	—		—		(31)		—		(31)
Common stock issued under employee stock award and stock purchase plans and other (1)	—		400	—		(12)		—		—		(12)

Common stock repurchases	—		(3,052)	(1)		(59)		(240)		—		(300)
Share-based compensation	—		—	—		11		—		—		11
Balance as of March 31, 2022	$	—	51,137	$	26	$	1,134	$	2,171	$	(682)	$	2,649

————————————

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'~~holders’ withholding tax liability upon exercise of ~~options~~

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

See accompanying Notes to Condensed Consolidated Financial Statements.

~~Table of Contents~~

~~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.~~

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. GENERAL

Interim Financial Statements

The accompanying unaudited ~~Condensed Consolidated Financial Statements~~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~~where Ryder is determined to be ~~consolidated~~the primary beneficiary in accordance with generally accepted accounting principles in the United States (GAAP). Ryder is deemed to be the primary beneficiary if we have the power to direct the activities that most significantly impact the entity’s economic performance and we share in the significant risks and rewards of the entity. The accompanying unaudited ~~Condensed Consolidated Financial Statements~~condensed consolidated financial statements have been prepared in accordance with the accounting policies described in our ~~2021~~2022 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~~three months ended March 31, 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 added the "Operating lease right-of-use assets" financial statement line to the unaudited Condensed Consolidated Balance Sheets. These assets were previously included in "Sales-type leases and other assets" in the unaudited Condensed Consolidated Balance Sheets.

We report our financial performance based on 3three 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, brokerage, 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~~, including dedicated vehicles, professional 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~~We substantially completed the exit from our ~~intentions to exit the~~ FMS Europe (primarily United Kingdom (U.K.) ~~business. We~~) business as of December 31, 2022, and we expect to complete the ~~exit~~shutdown of operations as well as the sale of the ~~FMS U.K. business~~remaining vehicles and properties by mid-2023.

~~2. RECENT ACCOUNTING PRONOUNCEMENTS~~

RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~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.

3.2. SEGMENT REPORTING

Our primary measurement of segment financial performance, defined as segment ~~“Earnings~~"Earnings from continuing operations before income ~~taxes”~~taxes" (EBT), includes an allocation of costs from Central Support Services (CSS) and excludes ~~non-operating~~Non-operating pension costs, net, intangible amortization expense, and certain other items as discussed in Note 14, ~~“Other~~"Other Items Impacting Comparability.”" The objective of the EBT measurement is to provide clarity on the profitability of each business segment and, ultimately, to hold leadership of each business segment accountable for their allocated share of CSS costs. Certain costs are not attributable to any segment and remain unallocated in CSS, including costs for investor relations, public affairs and certain executive compensation. In the first quarter of 2023, we revised our primary measure of segment financial performance to exclude intangible amortization expense. We revised the presentation of the prior period to conform to the current period presentation. This change did not have a material impact to segment results. Segment results are not

~~Table of Contents~~

~~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~~Earnings from continuing operations before income taxes:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(In thousands)		2022		2021		2022		2021

(In millions)										(In millions)	2023		2022
Revenue:	Revenue:									Revenue:
Fleet Management Solutions:	Fleet Management Solutions:									Fleet Management Solutions:
ChoiceLease	ChoiceLease	$	802,577	$	802,832	$	1,604,919	$	1,599,920	ChoiceLease	$	776	$	764

Commercial rental	Commercial rental	340,676		266,969		653,830		489,978		Commercial rental	304		306
SelectCare and other	SelectCare and other	163,707		154,872		330,358		302,888		SelectCare and other	182		148
Fuel services and ChoiceLease liability insurance (1)		314,135		183,568		561,216		350,940
FMS Europe										FMS Europe	—		64
Fuel services revenue										Fuel services revenue	241		247

Fleet Management Solutions	Fleet Management Solutions	1,621,095		1,408,241		3,150,323		2,743,726		Fleet Management Solutions	1,503		1,529
Supply Chain Solutions	Supply Chain Solutions	1,173,958		775,630		2,262,500		1,482,330		Supply Chain Solutions	1,201		1,089
Dedicated Transportation Solutions	Dedicated Transportation Solutions	450,228		354,711		875,176		675,218		Dedicated Transportation Solutions	454		425
Eliminations ~~(2)~~(1)	Eliminations ~~(2)~~(1)	(211,619)		(156,345)		(400,475)		(297,415)		Eliminations ~~(2)~~(1)	(206)		(189)
Total revenue	Total revenue	$	3,033,662	$	2,382,237	$	5,887,524	$	4,603,859	Total revenue	$	2,952	$	2,854

Earnings from continuing operations before taxes:
Earnings from continuing operations before income taxes:										Earnings from continuing operations before income taxes:
Fleet Management Solutions	Fleet Management Solutions	$	285,322	$	158,451	$	533,521	$	221,853	Fleet Management Solutions	$	182	$	249
Supply Chain Solutions	Supply Chain Solutions	52,640		41,041		86,859		73,998		Supply Chain Solutions	17		43
Dedicated Transportation Solutions	Dedicated Transportation Solutions	23,156		13,162		43,367		26,144		Dedicated Transportation Solutions	29		20
Eliminations	Eliminations	(29,174)		(19,186)		(55,764)		(31,460)		Eliminations	(25)		(26)
		331,944		193,468		607,983		290,535			203		286
Unallocated Central Support Services	Unallocated Central Support Services	(23,768)		(17,864)		(39,772)		(36,296)		Unallocated Central Support Services	(15)		(16)
Intangible amortization expense (2)										Intangible amortization expense (2)	(9)		(10)
Non-operating pension costs, net (3)	Non-operating pension costs, net (3)	(2,581)		373		(5,368)		382		Non-operating pension costs, net (3)	(10)		(3)
Other items impacting comparability, net (4)	Other items impacting comparability, net (4)	32,776		27,596		27,399		19,219		Other items impacting comparability, net (4)	32		(5)
Earnings from continuing operations before income taxes	Earnings from continuing operations before income taxes	$	338,371	$	203,573	$	590,242	$	273,840	Earnings from continuing operations before income taxes	$	201	$	252

————————————

(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~~revenue in our FMS business segment.

(2)Included within "Selling, general and administrative expenses" in our Condensed Consolidated Statements of Earnings.

(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.

During the first quarter of 2023, we identified impairment indicators primarily associated with specialized sortation and conveyor equipment used in the warehouse operations of a specific SCS customer. The impairment indicators were triggered by the credit deterioration and eventual bankruptcy of this customer in April 2023. These events resulted in a significant decline in the current forecasted operating cash flows associated with the equipment. We performed an asset impairment test under the income-based approach using a discounted cash flow method of valuation and determined we had an impairment of $30 million.

RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Events and/or changes in circumstances may occur in the near term resulting in a change in management’s estimates of undiscounted cash flows. Any such events or changes could ultimately impact the amount of the impairment loss. In the fourth quarter of 2022, we were notified by this customer of their intent to early terminate operations at one of their distribution centers and we recorded an impairment charge of $20 million in the fourth quarter of 2022.

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


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(In thousands)		2022		2021		2022		2021

(In millions)										(In millions)	2023		2022
Fleet Management Solutions	Fleet Management Solutions	$	560,749	$	503,874	$	1,111,839	$	871,582	Fleet Management Solutions	$	621	$	551
Supply Chain Solutions	Supply Chain Solutions	39,625		14,450		65,575		22,980		Supply Chain Solutions	12		26
Dedicated Transportation Solutions	Dedicated Transportation Solutions	1,115		256		1,454		562		Dedicated Transportation Solutions	—		—
Central Support Services	Central Support Services	9,234		4,768		16,144		9,275		Central Support Services	8		7
Purchases of property and revenue earning equipment	Purchases of property and revenue earning equipment	$	610,723	$	523,348	$	1,195,012	$	904,399	Purchases of property and revenue earning equipment	$	641	$	584

3. REVENUE

Disaggregation of Revenue

The following tables disaggregate our revenue recognized by primary geographical market by our reportable business segments and by industry for SCS. Refer to Note 2, "Segment Reporting," for the disaggregation of our revenue by major products/service lines.

Primary Geographical Markets


	Three months ended March 31, 2023
(In millions)	FMS		SCS		DTS		Eliminations		Total
United States	$	1,426	$	1,069	$	454	$	(196)	$	2,753
Canada	77		62		—		(10)		129

Mexico	—		70		—		—		70

Total revenue	$	1,503	$	1,201	$	454	$	(206)	$	2,952


	Three months ended March 31, 2022
(In millions)	FMS		SCS		DTS		Eliminations		Total
United States	$	1,388	$	971	$	425	$	(179)	$	2,605
Canada	77		60		—		(10)		127
Europe	64		—		—		—		64
Mexico	—		58		—		—		58

Total revenue	$	1,529	$	1,089	$	425	$	(189)	$	2,854

Table of Contents

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.Industry

~~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~~Beginning in the first quarter of 2023, we introduced the omnichannel retail industry to ~~Note 14, "Other Items Impacting Comparability" for further information on~~provide better visibility to 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

~~Table of Contents~~

~~RYDER SYSTEM, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

~~(unaudited)~~

~~Industry~~

revenue mix following recent acquisitions and organic growth. This new vertical includes retail, e-commerce, last mile services, and technology. Our SCS business segment included revenue from the ~~below~~following 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


	Three months ended March 31,
(In millions)	2023		2022
Omnichannel retail	$	453	$	418
Automotive	393		354
Consumer packaged goods	227		196
Industrial and other	128		121
Total SCS revenue	$	1,201	$	1,089

Lease & Related Maintenance and Rental ~~Revenues~~Revenue

The non-lease revenue from maintenance services related to our ~~FMS business~~ChoiceLease product is recognized in "Lease & related maintenance and rental ~~revenues"~~revenue" in the Condensed Consolidated Statements of Earnings. For the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ we recognized ~~$262~~$243 million and ~~$260 million, respectively. For the six months ended June 30, 2022 and 2021, we recognized $519 million and $510~~$257 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


	Three months ended March 31,
(In millions)	2023		2022
Balance as of beginning of period	$	544	$	593
Recognized as revenue during period from beginning balance	(56)		(60)
Consideration deferred during period, net	43		48
Foreign currency translation adjustment and other	2		—
Balance as of end of period	$	533	$	581

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 was $2.4 billion as of March 31, 2023, and 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.

4. RECEIVABLES, NET


(In millions)	March 31, 2023		December 31, 2022

Trade	$	1,468	$	1,476
Sales-type lease	137		120
Other, primarily warranty and insurance	114		55
	1,719		1,651
Allowance for credit losses and other	(37)		(41)
Receivables, net	$	1,682	$	1,610

109

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

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,					Three months ended March 31,
(In thousands)		2022		2021
(In millions)						(In millions)	2023		2022

Balance as of beginning of period	Balance as of beginning of period	$	31,304	$	43,024	Balance as of beginning of period	$	41	$	31
Changes to provisions for credit losses	Changes to provisions for credit losses	18,409		(1,076)		Changes to provisions for credit losses	8		4
Write-offs and other	Write-offs and other	(11,720)		(1,316)		Write-offs and other	(12)		(7)
Balance as of end of period	Balance as of end of period	$	37,993	$	40,632	Balance as of end of period	$	37	$	28

6.5. REVENUE EARNING EQUIPMENT, NET


		Estimated Useful Lives (In Years)		June 30, 2022									December 31, 2021										Estimated Useful Lives (In Years)		March 31, 2023									December 31, 2022
(Dollars in thousands)			Cost			Accumulated Depreciation			Net			Cost			Accumulated Depreciation			Net
(Dollars in millions)																					(Dollars in millions)			Estimated Useful Lives (In Years)			Cost			Accumulated Depreciation			Net			Cost			Accumulated Depreciation			Net

Held for use:	Held for use:																					Held for use:
Trucks	Trucks	3 — 7		$	5,380,625		$	(2,167,247)		$	3,213,378		$	5,223,127		$	(2,055,135)		$	3,167,992	Trucks		3 — 7		$	5,303		$	(2,133)		$	3,170		$	5,282		$	(2,114)		$	3,168
Tractors	Tractors	4 — 7.5		7,264,179			(3,144,334)			4,119,845			7,256,002			(3,059,206)			4,196,796		Tractors		4 — 7.5		7,142			(3,096)			4,046			7,153			(3,153)			4,000
Trailers and other	Trailers and other	9.5 — 12		1,555,425			(663,521)			891,904			1,780,487			(868,820)			911,667		Trailers and other		9.5 — 12		1,615			(693)			922			1,610			(690)			920
Held for sale(1)	Held for sale(1)			362,028			(268,018)			94,010			209,506			(162,922)			46,584		Held for sale(1)				463			(348)			115			388			(286)			102
Total	Total			$	14,562,257		$	(6,243,120)		$	8,319,137		$	14,469,122		$	(6,146,083)		$	8,323,039	Total				$	14,523		$	(6,270)		$	8,253		$	14,433		$	(6,243)		$	8,190

————————————

(1)Revenue earning equipment held for sale where net book values exceed fair values are adjusted to fair value on a nonrecurring basis and these adjustments are considered Level 3 fair value measurements. The fair value of revenue earning equipment held for sale adjusted with Level 3 fair value measurements were $4 million and $3 million as of March 31, 2023, and December 31, 2022, respectively. The net book value of all other assets held for sale were below fair value.

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 For the ~~closest million):~~

~~Table of Contents~~

~~RYDER SYSTEM, INC. AND SUBSIDIARIES~~

~~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~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~included $20 million~~we did not adjust the estimated residual values and ~~$28 million, respectively,~~useful lives of ~~gains on sales of vehicles in the U.K. Refer to Note 14, "Other Items Impacting Comparability"~~existing revenue earning equipment.

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~~"Used vehicle sales, ~~net”~~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).

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

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:~~components of "Used vehicle sales, net" were as follows:

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


	Three months ended March 31,
(In millions)	2023		2022

Gains on vehicle sales, net (1)	$	(75)	$	(115)
Losses from valuation adjustments	3		2
Used vehicle sales, net	$	(72)	$	(113)

——————————————

(1)~~Reflects only~~For the ~~portion where~~three months ended March 31, 2023 and 2022, gains on vehicle sales, 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~~includes $2 million and ~~$43~~$8 million, asrespectively, related to the exit of ~~June 30, 2022 and December 31, 2021, respectively.~~the FMS U.K.business.

~~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)
6. ACCRUED EXPENSES AND OTHER LIABILITIES


	March 31, 2023						December 31, 2022
(In millions)	Accrued Expenses		Non-Current Liabilities		Total		Accrued Expenses		Non-Current Liabilities		Total
Salaries and wages	$	131	$	—	$	131	$	259	$	—	$	259
Deferred compensation	5		86		91		5		80		85
Pension and other employee benefits	14		181		195		29		179		208


Insurance obligations, primarily self-insured	179		296		475		179		309		488




Operating taxes	137		—		137		132		—		132

Interest	41		—		41		41		—		41
Deposits, mainly from customers	81		—		81		84		—		84
Operating lease liabilities	187		506		693		191		541		732
Deferred revenue (1)	184		349		533		178		366		544


Other	142		89		231		102		93		195
Total	$	1,101	$	1,507	$	2,608	$	1,200	$	1,568	$	2,768

————————————

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

1211

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

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~~revenue from leases were as follows:


		Three months ended June 30,				Six months ended June 30,					Three months ended March 31,
(In thousands)		2022		2021		2022		2021

(In millions)										(In millions)	2023		2022
Operating leases	Operating leases									Operating leases
Lease income related to ChoiceLease	Lease income related to ChoiceLease	$	378,837	$	386,650	$	760,382	$	776,261	Lease income related to ChoiceLease	$	360	$	382
Lease income related to commercial rental (1)	Lease income related to commercial rental (1)	325,134		255,098		623,269		465,382		Lease income related to commercial rental (1)	$	288	$	298

Sales-type leases	Sales-type leases									Sales-type leases

Interest income related to net investment in leases	Interest income related to net investment in leases	$	10,227	$	11,040	$	20,955	$	25,455	Interest income related to net investment in leases	$	15	$	11

Variable lease income excluding commercial rental (1)	Variable lease income excluding commercial rental (1)	$	71,122	$	72,129	$	145,342	$	144,122	Variable lease income excluding commercial rental (1)	$	72	$	74

————————————

(1)Lease income related to commercial rental includes both fixed and variable lease income. Variable lease income is approximately 15% to ~~25%~~20% of total commercial rental ~~income based on management's internal estimates.~~income.

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

(In millions)						(In millions)	March 31, 2023		December 31, 2022
Net investment in the lease — lease payment receivable	Net investment in the lease — lease payment receivable	$	521,196	$	583,008	Net investment in the lease — lease payment receivable	$	738	$	598
Net investment in the lease — unguaranteed residual value in assets	Net investment in the lease — unguaranteed residual value in assets	35,390		46,740		Net investment in the lease — unguaranteed residual value in assets	55		43

		556,586		629,748			793		641
Estimated loss allowance	Estimated loss allowance	(2,855)		(3,705)		Estimated loss allowance	(5)		(6)
Total	Total	$	553,731	$	626,043	Total	$	788	$	635

1312

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

9.8. DEBT


		Weighted Average Interest Rate							Weighted Average Interest Rate
(Dollars in thousands)		June 30, 2022	Maturities	June 30, 2022		December 31, 2021
(Dollars in millions)								(Dollars in millions)	March 31, 2023	Maturities	March 31, 2023		December 31, 2022

Debt:	Debt:							Debt:
U.S. commercial paper	U.S. commercial paper	1.59%	2026	$	746,252	$	531,157	U.S. commercial paper	5.02%	2026	$	457	$	672
Canadian commercial paper	Canadian commercial paper	—%	2026	—		7,087		Canadian commercial paper	—	2026	—		—
Trade receivables financing program	Trade receivables financing program	0.44%	2023	50,000		—		Trade receivables financing program	5.60%	2023	215		50
Global revolving credit facility	Global revolving credit facility	—%	2026	—		—		Global revolving credit facility	—	2026	—		—
Unsecured U.S. obligations	Unsecured U.S. obligations	3.41%	2024	200,000		200,000		Unsecured U.S. obligations	4.16%	2027	375		375
Unsecured U.S. notes — Medium-term notes (1)		3.42%	2022-2027	5,019,000		5,149,893
Unsecured medium-term note issued February 2018								Unsecured medium-term note issued February 2018	—	2023	—		450
Unsecured medium-term note issued June 2018								Unsecured medium-term note issued June 2018	3.75%	2023	450		450
Unsecured medium-term note issued October 2018								Unsecured medium-term note issued October 2018	3.88%	2023	300		300
Unsecured medium-term note issued February 2019								Unsecured medium-term note issued February 2019	3.65%	2024	600		600
Unsecured medium-term note issued August 2019								Unsecured medium-term note issued August 2019	2.50%	2024	550		550
Unsecured medium-term note issued April 2020								Unsecured medium-term note issued April 2020	4.63%	2025	400		400
Unsecured medium-term note issued May 2020								Unsecured medium-term note issued May 2020	3.35%	2025	400		400
Unsecured medium-term note issued December 1995								Unsecured medium-term note issued December 1995	6.95%	2025	150		150
Unsecured medium-term note issued November 2021 (1)								Unsecured medium-term note issued November 2021 (1)	5.50%	2026	274		270
Unsecured medium-term note issued November 2019								Unsecured medium-term note issued November 2019	2.90%	2026	400		400
Unsecured medium-term note issued February 2022 (1)								Unsecured medium-term note issued February 2022 (1)	4.16%	2027	436		434
Unsecured medium-term note issued May 2022								Unsecured medium-term note issued May 2022	4.30%	2027	300		300
Unsecured medium-term note issued February 2023								Unsecured medium-term note issued February 2023	5.65%	2028	500		—
Unsecured foreign obligations	Unsecured foreign obligations	2.72%	2022-2024	111,533		140,265		Unsecured foreign obligations	2.88%	2024	50		50
Asset-backed U.S. obligations (2)	Asset-backed U.S. obligations (2)	2.67%	2022-2026	447,621		526,712		Asset-backed U.S. obligations (2)	3.06%	2023-2029	460		477
Finance lease obligations and other	Finance lease obligations and other		2022-2030	40,796		44,595		Finance lease obligations and other		2023-2041	43		42
				6,615,201		6,599,709					6,361		6,370
Debt issuance costs and original issue discounts	Debt issuance costs and original issue discounts			(21,967)		(20,040)		Debt issuance costs and original issue discounts			(21)		(18)
Total debt				6,593,234		6,579,669
Total debt (3)								Total debt (3)			6,340		6,352
Short-term debt and current portion of long-term debt	Short-term debt and current portion of long-term debt			(1,414,684)		(1,333,363)		Short-term debt and current portion of long-term debt			(1,674)		(1,349)
Long-term debt	Long-term debt			$	5,178,550	$	5,246,306	Long-term debt			$	4,666	$	5,003

————————————

(1)Includes ~~the~~ impact from the fair market values of hedging instruments on our notes, which was ~~$31~~$39 million as of ~~June 30, 2022,~~March 31, 2023, and ~~not material~~$47 million as of December 31, ~~2021.~~2022, and was included in "Other non-current liabilities" within the unaudited Condensed Consolidated Balance Sheets. The notional amount of ~~the executed~~ interest rate swaps designated as fair value hedges was ~~$650~~$500 million and $450 million as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

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

(3)The unsecured medium-term notes bear semi-annual interest.

The fair value of total debt (excluding finance lease and asset-backed U.S. obligations) was approximately ~~$6.2~~$5.9 billion ~~for both periods~~and $5.7 billion as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022, respectively. 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,~~March 31, 2023, there was ~~$654~~$943 million available under the global revolving 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,~~March 31, 2023, the ratio was ~~172%~~156%. 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.

AsOn April 25, 2023, certain terms of ~~June 30, 2022,~~our global revolving credit facility were amended. Pursuant to the ~~available proceeds under~~amendment, among other items, (i) the ~~trade receivables financing program were $250 million. In May 2022, we extended the maturity~~definition of consolidated net worth was revised to exclude impacts from our exit of the ~~trade receivables financing program to expire in May 2023.~~

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-term notes that mature on June 15, 2027. The notes bear interest at a rate of 4.30% per year.

~~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.

FMS U.K. business,

1413

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

(ii) LIBOR was replaced as an available benchmark interest rate with Term SOFR, and (iii) the maximum absolute dollar amounts for our trade receivables financing program and asset-backed financings were removed and only percentage-based maximum amounts remain.

We had letters of credit and surety bonds outstanding of $515 million and $513 million as of March 31, 2023 and December 31, 2022, respectively, which primarily guarantee the payment of insurance claims.

As of March 31, 2023, the available proceeds under the trade receivables financing program were $1 million. As of March 31, 2023, utilization of the credit facility included borrowing of $215 million and letters of credit outstanding of $84 million. On April 24, 2023, we extended the trade receivables financing program for an additional year to April 2024.

The following table summarizes our debt proceeds and repayments in 2023:


Three months ended March 31, 2023
(In millions)	Debt Proceeds			Debt Repayments
Medium-term notes (1)	$	499	Medium-term notes	$	450


U.S. and foreign term loans, finance lease obligations and other	165		U.S. and foreign term loans, finance lease obligations and other	21

Total debt proceeds	$	664	Total debt repaid	$	471

_______________

(1)Proceeds from medium-term notes presented net of discount and issuance costs.

Debt proceeds were used to repay maturing debt and for general corporate purposes. If the unsecured medium-term notes are downgraded below investment grade following, or as a result of, a change in control, the note holders can require us to repurchase all or a portion of the notes at a purchase price equal to 101% of principal value plus accrued and unpaid interest.

9. SHARE REPURCHASE PROGRAMS

We maintain ~~2 additional~~two 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~~our 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~~our employee stock plans. The 2021 Anti-Dilutive Program commenced October 14, 2021 and expires October 14, 2023. In February 2023, our board of directors authorized a new discretionary share repurchase program to grant management discretion to repurchase up to 2 million shares of common stock over a period of two years (the "2023 Discretionary Program"). Share repurchases under both programs can be made from time to time using ~~the company's~~our working capital and a variety of methods, ~~including~~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~~three months ended ~~June 30,~~March 31, 2023, we repurchased 0.5 million shares for $45 million under the 2021 Anti-Dilutive Program and did not repurchase any shares under the 2023 Discretionary Program. During the three months ended March 31, 2022,, we did not repurchase any shares under ~~these programs~~the 2021 Anti-Dilutive Program.

In February 2022, our board of directors authorized an accelerated share repurchase program to repurchase up to $300 million of common stock, with final settlement scheduled to occur no later than the end of October 2022. During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, we ~~repurchased 638,001 shares~~remitted $300 million to our agent for ~~$49~~the accelerated share repurchase program. We received an initial share amount of approximately 3 million, ~~under~~representing approximately 80% of the ~~2019 anti-dilutive program.~~total notional value of the accelerated share repurchase agreement.

~~11.~~10. 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~~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)

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)


	Three months ended March 31,
(In millions)		2023		2022

Cumulative translation adjustments		$	(224)	$	(159)
Net actuarial loss and prior service cost		(561)		(524)
Unrealized gain from cash flow hedges		3		1

Accumulated other comprehensive loss		$	(782)	$	(682)

11. EARNINGS PER SHARE

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


	Three months ended March 31,
(Dollars in millions, except per share amounts; share amounts in thousands)	2023		2022
Earnings per share — Basic: (1)
Earnings from continuing operations	$	140	$	176
Less: Distributed and undistributed earnings allocated to unvested stock	(1)		(1)
Earnings from continuing operations available to common shareholders	$	139	$	175

Weighted average common shares outstanding	46,377		51,097

Earnings from continuing operations per common share — Basic	$	3.00	$	3.42

Earnings per share — Diluted: (1)
Earnings from continuing operations	$	140	$	176
Less: Distributed and undistributed earnings allocated to unvested stock	—		—
Earnings from continuing operations available to common shareholders — Diluted	$	140	$	176

Weighted average common shares outstanding — Basic	46,377		51,097
Effect of dilutive equity awards	1,097		1,379
Weighted average common shares outstanding — Diluted	47,474		52,476

Earnings from continuing operations per common share — Diluted	$	2.95	$	3.35

Anti-dilutive equity awards not included in diluted EPS	627		461

_______________

(1)Amounts in the table may not recalculate exactly due to rounding of earnings and shares.

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

12. ~~EARNINGS PER SHARE~~SHARE-BASED COMPENSATION PLANS

We generally grant share-based awards in the first quarter of each year during our annual equity award process. The vesting conditions for the awards granted were consistent with prior year. The following table ~~presents~~is a summary of the ~~calculation~~awards granted in the first quarter 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

2023:~~————————————~~

~~Note: Amounts may not be additive due to rounding.~~




(Shares in millions)	Shares Granted	Weighted-Average Fair Market Value Per Share


Time-vested restricted stock rights	0.2		$	96.38
Performance-based restricted stock rights	0.1		101.25






Total	0.3		$	98.16

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,					Three months ended March 31,
(In thousands)		2022		2021		2022		2021

(In millions)										(In millions)	2023		2022

Company-administered plans:	Company-administered plans:									Company-administered plans:
Service cost		$	198	$	180	$	438	$	548

Interest cost	Interest cost	15,785		14,483		31,609		29,018		Interest cost	$	22	$	16

Expected return on plan assets	Expected return on plan assets	(18,484)		(21,791)		(37,066)		(43,485)		Expected return on plan assets	(19)		(19)

Amortization of net actuarial loss and prior service cost										Amortization of net actuarial loss and prior service cost	7		6

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

Net pension expense	Net pension expense	$	2,798	$	(97)	$	5,752	$	209	Net pension expense	$	10	$	3

Company-administered plans:	Company-administered plans:									Company-administered plans:
U.S.	U.S.	$	3,324	$	2,090	$	6,647	$	4,453	U.S.	$	8	$	3
Non-U.S.	Non-U.S.	(526)		(2,187)		(895)		(4,244)		Non-U.S.	2		—

Net pension expense	Net pension expense	$	2,798	$	(97)	$	5,752	$	209	Net pension expense	$	10	$	3

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~~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 contribute to our pension plans for the year ~~2022.~~2023. 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:

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(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)

14. OTHER ITEMS IMPACTING COMPARABILITY~~————————————~~

~~(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~~

Our primary measure of ~~U.K. revenue earning equipment~~segment performance as shown in Note 2, "Segment Reporting," excludes unallocated corporate costs, intangible amortization expense, and ~~properties~~ —~~For~~certain items we do not believe are representative of 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~~ongoing operations of our ~~plan to exit the FMS U.K. business. We recorded gains on sale~~business segments. Excluding these other items from our segment measure of ~~properties~~performance allows for ~~the six months ended June 30, 2021, primarily for certain FMS properties~~better year over year comparison:


	Three months ended March 31,
(In millions)	2023		2022

FMS Europe results (1)	$	4	$	—
Gains on sale of U.K. revenue earning equipment (2)	(2)		(8)
Gains on sale of U.K. properties (3)	(5)		(1)
Commercial claims proceeds, net of fees (1)	(31)		7
Severance and other, net (1)	3		3
FMS U.K. exit	(31)		1
Other, net (1)	(1)		4

Other items impacting comparability	$	(32)	$	5

________________________

(1)Included within "Restructuring and other items, net" in ~~the U.K. that were restructured as part~~our Condensed Consolidated Statements of ~~cost reduction activities in prior periods. The gains on sale of U.K. revenue earning equipment are reflected~~Earnings.

(2)Included within "Used ~~Vehicles Sales,~~vehicle sales, net" ~~and the gains on sale~~in our Condensed Consolidated Statements of ~~properties are reflected~~Earnings.

(3)Included 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.

~~Table of Contents~~

~~RYDER SYSTEM, INC. AND SUBSIDIARIES~~

~~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~~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. On April 18, 2023, the parties reached an agreement in principle to resolve this action, subject to the execution of definitive settlement documentation and court approval. We expect that the settlement amount will be covered by insurance, and accordingly is not material to our financial position or results of operations.

As previously disclosed, between June 2020 and February 2, 2021, 5five 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 the allegations set forth in the Securities Class Action complaint and allege

Table of Contents

RYDER SYSTEM, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

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. ~~NaN~~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"). ~~NaN~~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 continue to believe that 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,					Three months ended March 31,
(In thousands)		2022		2021
(In millions)						(In millions)	2023		2022

Interest paid	Interest paid	$	100,282	$	104,417	Interest paid	$	63	$	48
Income taxes paid	Income taxes paid	$	66,501	$	15,812	Income taxes paid	$	17	$	9

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

Cash paid for operating lease liabilities						Cash paid for operating lease liabilities	$	55	$	42

Right-of-use assets obtained in exchange for lease obligations:	Right-of-use assets obtained in exchange for lease obligations:					Right-of-use assets obtained in exchange for lease obligations:
Finance leases	Finance leases	$	5,096	$	5,622	Finance leases	$	5	$	4
Operating leases	Operating leases	$	118,351	$	30,274	Operating leases	$	14	$	49

Capital expenditures acquired but not yet paid	Capital expenditures acquired but not yet paid	$	290,176	$	167,587	Capital expenditures acquired but not yet paid	$	361	$	257

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~~2022 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,~~three months ended March 31, 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.

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~~Business Trends

In the ~~second quarter~~three months ended March 31, 2023, market conditions for our used vehicle sales and ~~first half of 2022,~~rental continued to normalize, although used vehicle trends were moderately higher than expected. We are still experiencing favorable trends in logistics and transportation solutions due to secular trends including ongoing 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~~a limited supply of vehicles available in the market. These market ~~contributed~~conditions, along with successful management of initiatives to ~~robust demand~~increase long-term returns, are driving revenue growth and ~~pricing for~~benefiting earnings in our ~~rental~~Supply Chain Solutions (SCS) and ~~used vehicles.~~Dedicated Transportation Solutions (DTS) business segments.

In our Fleet Management Solutions (FMS) North America business, used vehicle pricing declined from the historical highs of the prior year and rental utilization continued to normalize. We anticipate that market conditions for 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. Wewill continue to ~~anticipate that~~weaken in 2023. ChoiceLease vehicle fleet grew during the ~~historically strong used vehicle sales~~first quarter 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 higherour lease pricing ~~on new and renewing leases, resulting in~~initiatives are delivering improved portfolio returns. ~~If the limited supply of vehicles continues for an extended period, we will likely continue~~We expect to ~~experience~~realize incremental earnings 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.as our remaining portfolio is renewed at higher returns.

In our ~~Supply Chain Solutions (SCS)~~SCS business, ~~we are seeing~~ strong outsourcing trends in warehousing and distribution ~~as well as~~continue. Higher pricing and volumes drove strong revenue growth in ~~e-commerce fulfillment~~SCS and ~~last mile delivery of big and bulky items. We continue to experience~~DTS. SCS revenue growth also benefited from new contract wins in ~~SCS~~the prior year. Pricing adjustments and ~~Dedicated Transportation Solutions (DTS), which combined~~cost recovery initiatives benefited earnings in both segments, with ~~recent acquisitions, contributed to significant revenue growth. Our previously announced acquisitions are performing well and above expectations and provide us with enhanced capabilities~~profitability in ~~fast-growing e-commerce fulfillment and in multi-client warehousing. During~~DTS at the ~~second quarter and first half of 2022, continued labor shortages, resulted in higher labor costs, impacting all~~high end of our ~~business segments, particularly our DTS and~~target range. SCS ~~segments.~~earnings in the first quarter were adversely affected by a $30 million asset impairment charge related to a customer bankruptcy. We are also seeing weaker trends in the omnichannel retail vertical. In the ~~second~~first quarter ~~our~~of 2023, DTS ~~and SCS pricing adjustments more than covered~~contract sales activity slowed, consistent with a softer freight environment. We expect the ~~negative impact~~moderation in DTS contract sales activity to continue for the remainder 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.~~year.

W~~hile~~While we are experiencing positive momentum in our businesses, other unknown effects ~~of the pandemic,~~from 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 and financial ~~results, and significant judgments and estimates.~~results.

SELECTED OPERATING PERFORMANCE ITEMS

•Total revenue of $3.0 billion and operating revenue (a non-GAAP measure) of $2.3 billion for ~~second~~first quarter of ~~2022~~2023 increased ~~27%~~3% and ~~20%~~6%, respectively as compared to prior year, primarily reflecting SCS revenue growth ~~across all business segments~~

•Diluted EPS from continuing operations of ~~$4.72~~$2.95 in the ~~second~~first quarter of ~~2022~~2023 versus ~~$2.78~~$3.35 in prior year

•Comparable EPS (a non-GAAP measure) from continuing operations of $2.81 in the first quarter of 2023 down from $3.59 in prior year, reflecting ~~significantly improved~~strong but lower results in FMS, and ~~higher~~a SCS asset impairment partially offset by lower share count and better results in DTS

•Adjusted Return on Equity (ROE) (a non-GAAP measure) of 27% in the first quarter of 2023

Table of Contents

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~~$478 million and free cash flow (a non-GAAP measure) of ~~$551~~$101 million in the ~~second~~first quarter of ~~2022~~2023

Total revenue increased 3% in the first quarter of 2023 due to higher operating revenue, partially offset by lower fuel revenue and subcontracted transportation. Operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation) increased 6% in the first quarter of 2023, primarily reflecting SCS revenue growth.

EBT and comparable EBT (a non-GAAP measure) decreased in the first quarter of 2023 primarily due to lower gains on used vehicles sold in North America and lower commercial rental results in FMS and a SCS asset impairment partially offset by higher earnings in DTS.

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			Three months ended March 31,				Change 2023/2022
(Dollars in thousands, except per share)		2022		2021		2022		2021		Three Months	Six Months

(Dollars in millions, except per share)												(Dollars in millions, except per share)	2023		2022		Three Months
Total revenue	Total revenue	$	3,033,662	$	2,382,237	$	5,887,524	$	4,603,859	27%	28%	Total revenue	$	2,952	$	2,854	3%
Operating revenue (1)	Operating revenue (1)	2,307,106		1,922,820		4,522,693		3,740,183		20%	21%	Operating revenue (1)	2,346		2,216		6%

Earnings from continuing operations before income taxes (EBT)	Earnings from continuing operations before income taxes (EBT)	$	338,371	$	203,573	$	590,242	$	273,840	66%	116%	Earnings from continuing operations before income taxes (EBT)	$	201	$	252	(20)%
Comparable EBT (1)	Comparable EBT (1)	308,176		175,604		568,211		254,239		75%	123%	Comparable EBT (1)	179		260		(31)%
Earnings from continuing operations	Earnings from continuing operations	240,342		149,568		416,164		201,152		61%	107%	Earnings from continuing operations	140		176		(20)%
Comparable earnings from continuing operations (1)	Comparable earnings from continuing operations (1)	225,544		129,138		413,843		187,328		75%	121%	Comparable earnings from continuing operations (1)	133		188		(29)%
Net earnings	Net earnings	239,400		149,105		414,987		199,930		61%	108%	Net earnings	139		176		(21)%
Comparable EBITDA (1)	Comparable EBITDA (1)	688,107		624,055		1,335,159		1,191,470		10%	12%	Comparable EBITDA (1)	628		647		(3)%

Earnings per common share (EPS) — Diluted	Earnings per common share (EPS) — Diluted											Earnings per common share (EPS) — Diluted
Continuing operations	Continuing operations	$	4.72	$	2.78	$	8.05	$	3.75	70%	115%	Continuing operations	$	2.95	$	3.35	(12)%
Comparable (1)	Comparable (1)	4.43		2.40		8.00		3.49		85%	129%	Comparable (1)	2.81		3.59		(22)%
Net earnings	Net earnings	4.70		2.77		8.03		3.73		70%	115%	Net earnings	2.94		3.35		(12)%

(1)Non-GAAP financial measure. Refer to the ~~“Non-GAAP~~"Non-GAAP Financial ~~Measures”~~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) increas~~ed 20% in~~ ~~the second quarter of 2022 and~~ ~~21% i~~n 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			Three months ended March 31,				Change 2023/2022
(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%
(Dollars in millions)												(Dollars in millions)	2023		2022			Three Months
Lease & related maintenance and rental revenue												Lease & related maintenance and rental revenue	$	979	$	1,025		(4)%
Cost of lease & related maintenance and rental	Cost of lease & related maintenance and rental	687,894		702,444		1,386,735		1,432,588		(2)%	(3)%	Cost of lease & related maintenance and rental	674		699			(4)%
Gross margin	Gross margin	$	361,710	$	284,250	$	687,854	$	494,528	27%	39%	Gross margin	$	305	$	326		(6)%
Gross margin %	Gross margin %	34%		29%		33%		26%				Gross margin %	31%		32%

Lease & related maintenance and rental ~~revenues~~revenue represent ~~revenues~~revenue from our ChoiceLease and commercial rental product offerings within our FMS business segment. ~~Revenues~~ ~~increased~~ 6%Revenue decreased 4% in the ~~second~~first quarter of ~~2022 and 8% for~~2023, reflecting a 4% negative impact from the ~~six months ended June 30, 2022, driven primarily by increases in commercial rental demand and pricing.~~exit of the FMS U.K business.

Cost of lease & related maintenance and rental represents the direct costs related to lease & related maintenance and rental ~~revenues~~revenue 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"~~expense" in our Condensed Consolidated Statements of Earnings. Cost of lease & related maintenance and rental decreased 2%4% in the ~~second~~first quarter of ~~2022 and 3% for~~2023, primarily from the ~~six months ended June 30, 2022, due to declining depreciation expense impacts from prior residual value estimate changes.~~exit of the FMS U.K. business.

Table of Contents

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

AND RESULTS OF OPERATIONS — (Continued)

Lease & related maintenance and rental gross margin ~~increased~~decreased in the ~~second~~first quarter of ~~2022 and for the six months ended June 30, 2022,~~2023, primarily due to lower commercial rental demand partially offset by higher commercial rental ~~pricing~~pricing. Lease & related maintenance and ~~utilization, a declining impact~~rental gross margin percentage decreased in the first quarter of ~~depreciation expense from prior residual value estimate changes, and higher ChoiceLease pricing.~~2023, primarily due to lower commercial rental utilization.

Services


		Three months ended June 30,				Six months ended June 30,				Change 2022/2021			Three months ended March 31,				Change 2023/2022
(Dollars in thousands)		2022		2021		2022		2021		Three Months	Six Months

(Dollars in millions)												(Dollars in millions)	2023		2022			Three Months
Services revenue	Services revenue	$	1,777,586	$	1,276,140	$	3,447,124	$	2,441,628	39%	41%	Services revenue	$	1,821	$	1,670		9%
Cost of services	Cost of services	1,520,121		1,090,015		2,966,830		2,089,807		39%	42%	Cost of services	1,607		1,450			11%
Gross margin	Gross margin	$	257,465	$	186,125	$	480,294	$	351,821	38%	37%	Gross margin	$	214	$	220		(3)%
Gross margin %	Gross margin %	14%		15%		14%		14%				Gross margin %	12%		13%

Services revenue represents all the ~~revenues~~revenue 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%~~9% in the ~~second~~first quarter of ~~2022 and 41% for the six months ended June 30, 2022,~~2023, due to increases in revenue in SCS and DTS ~~growth from acquisitions,~~primarily driven by new business, higher volumes and increased pricing. Services revenue also increased from higher ~~pricing.~~volumes in SelectCare.

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%~~11% in the ~~second~~first quarter ~~and 42% for the six months ended June 30, 2022, primarily due to the~~of 2023, from growth in ~~revenues~~revenue and ~~higher subcontracted transportation and labor costs in~~a $30 million SCS ~~and DTS.~~asset impairment charge as a result of a customer bankruptcy.

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~~decreased in the ~~second~~first quarter of ~~2022~~2023, due to a SCS asset impairment partially offset by higher ~~labor costs~~pricing, new business, and ~~remained consistent for the six months ended June 30, 2022.~~increased volumes.

~~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			Three months ended March 31,				Change 2023/2022
(Dollars in thousands)		2022		2021		2022		2021		Three Months	Six Months

(Dollars in millions)												(Dollars in millions)	2023		2022			Three Months
Fuel services revenue	Fuel services revenue	$	206,472	$	119,403	$	365,811	$	235,115	73%	56%	Fuel services revenue	$	152	$	159		(4)%
Cost of fuel services	Cost of fuel services	202,524		117,453		360,171		232,159		72%	55%	Cost of fuel services	149		155			(4)%
Gross margin	Gross margin	$	3,948	$	1,950	$	5,640	$	2,956	102%	91%	Gross margin	$	3	$	4		(25)%
Gross margin %	Gross margin %	2%		2%		2%		1%				Gross margin %	2%		3%

Fuel services revenue represents fuel services provided to our FMS customers. Fuel services revenue ~~increased 73%~~decreased 4% in the ~~second~~first quarter of ~~2022 and 56% for the six months ended June 30, 2022,~~2023, primarily reflecting a lower volume of gallons sold partially offset by 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%~~decreased 4% in the ~~second~~first quarter of ~~2022 and 55% for the six months ended June 30, 2022,~~2023, as a result of lower volume of gallons sold partially offset by 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%~~declined in the ~~second~~first quarter of ~~2022 and increased~~2023, compared to ~~2% for the six months ended June 30, 2022.~~prior year. 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~~first quarter of ~~2022 and six months ended June 30, 2022,~~2023, was not significantly impacted by these price change dynamics as fuel prices fluctuated during the period.

Table of Contents

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

AND RESULTS OF OPERATIONS — (Continued)

Selling, General and Administrative Expenses


		Three months ended June 30,				Six months ended June 30,				Change 2022/2021			Three months ended March 31,						Change 2023/2022
(Dollars in thousands)		2022		2021		2022		2021		Three Months	Six Months

(Dollars in millions)												(Dollars in millions)	2023			2022				Three Months
Selling, general and administrative expenses (SG&A)	Selling, general and administrative expenses (SG&A)	$	360,687	$	302,749	$	702,696	$	578,391	19%	21%	Selling, general and administrative expenses (SG&A)	$	363		$	342			6%
Percentage of total revenue	Percentage of total revenue	12%		13%		12%		13%				Percentage of total revenue	12		%	12		%

SG&A expenses increased ~~19% and 21%~~6%in the ~~second~~first 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.~~2023. The increase in SG&A expenses ~~for~~in the ~~six months ended June 30, 2022, also included increased~~first quarter of 2023 primarily reflects higher travel and bad debt expense, strategic investments in information ~~technology.~~technology and marketing and increased compensation-related expenses. SG&A expenses as a percentage of total revenue ~~decreased to~~ remained at 12% for the ~~second~~first quarter of ~~2022 and for the six months ended June 30, 2022.~~2023.

Non-Operating Pension Costs, ~~net~~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~~


	Three months ended March 31,				Change 2023/2022
(Dollars in millions)	2023		2022			Three Months
Non-operating pension costs, net	$	10	$	3		233%

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.~~an increase in expected return on plan assets.

~~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			Three months ended March 31,				Change 2023/2022
(Dollars in thousands)		2022		2021		2022		2021		Three Months	Six Months

(In millions)												(In millions)	2023		2022			Three Months
Gains on used vehicle sales, net	Gains on used vehicle sales, net	$	(129,566)	$	(51,634)	$	(242,560)	$	(80,485)	151%	201%	Gains on used vehicle sales, net	$	(72)	$	(113)		(36)%

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~~decreased in the ~~second~~first quarter of ~~2022~~ ~~and six months ended June 30, 2022,~~2023, due to ~~higher~~lower proceeds per unit on sales of used ~~vehicles.~~vehicles partially offset by higher volumes.

Average proceeds per unit ~~increased~~decreased in the ~~second~~first quarter of ~~2022 and for the six months ended June 30, 2022, primarily reflecting higher retail pricing and retail channel mix.~~2023. 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%

~~————————————~~


			2023/2022
			Three Months
Tractors			(35)%
Trucks			(16)%

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

Interest ~~expense~~Expense


		Three months ended June 30,				Six months ended June 30,				Change 2022/2021			Three months ended March 31,						Change 2023/2022
(Dollars in thousands)		2022		2021		2022		2021		Three Months	Six Months

(In millions)												(In millions)	2023			2022				Three Months
Interest expense	Interest expense	$	55,324	$	54,155	$	107,688	$	108,861	2%	(1)%	Interest expense	$	65		$	52			25%
Effective interest rate	Effective interest rate	3.4%		3.4%		3.3%		3.4%				Effective interest rate	4.1		%	3.1		%

Interest expense increased 25% in the ~~second~~first quarter of ~~2022 increased 2%~~2023, reflecting higher interest rates primarily 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.

Table of Contents

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

AND RESULTS OF OPERATIONS — (Continued)

Miscellaneous ~~income,~~Income, net


		Three months ended June 30,				Six months ended June 30,				Change 2022/2021			Three months ended March 31,				Change 2023/2022
(Dollars in thousands)		2022		2021		2022		2021		Three Months	Six Months

(In millions)												(In millions)	2023		2022			Three Months
Miscellaneous income, net	Miscellaneous income, net	$	(14,576)	$	(43,812)	$	(14,202)	$	(49,246)	(67)%	(71)%	Miscellaneous income, net	$	(20)	$	—		NM

NM - Denotes Not Meaningful throughout the MD&A

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~~$20 million in the ~~second~~first 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,~~2023, primarily ~~due to~~reflecting higher gains on ~~sale~~sales of ~~properties in~~properties.

We expect to complete the ~~prior year.~~exit of U.K. operations by mid-2023, and as a result of the liquidation of the balance sheet, we anticipate recognizing a foreign currency cumulative translation adjustment loss of approximately $180 million or $3.75 per share. The foreign currency cumulative translation adjustment loss will have no impact on our consolidated financial position or cash flows.

Restructuring and ~~other items,~~Other Items, net


		Three months ended June 30,				Six months ended June 30,				Change 2022/2021			Three months ended March 31,				Change 2023/2022
(Dollars in thousands)		2022		2021		2022		2021		Three Months	Six Months

(In millions)												(In millions)	2023		2022			Three Months
Restructuring and other items, net	Restructuring and other items, net	$	10,302	$	7,667	$	24,556	$	18,326	34%	34%	Restructuring and other items, net	$	(25)	$	14		NM

Refer to Note 14, "Other Items Impacting ~~Comparability"~~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~~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%


	Three months ended March 31,						Change 2023/2022
(In millions)	2023			2022				Three Months
Provision for income taxes	$	61		$	76			(20)%
Effective tax rate from continuing operations	30.5		%	30.2		%
Comparable effective tax rate on continuing operations (1)	25.5		%	27.6		%

————————————

Our effective tax rate on continuing operations was ~~29.0%~~30.5% in the ~~second~~first quarter of ~~2022~~2023 compared to ~~26.5%~~30.2% in the prior ~~year, and 29.5% for~~year. The comparable effective tax rate on continuing operations decreased to 25.5% in the ~~six months ended June 30, 2022, compared to 26.5%~~first quarter of 2023 from 27.6% in the prior ~~period.~~year. The ~~increase~~decrease in the ~~effective~~comparable rate reflects discrete tax ~~rate for both periods was due to incremental U.S. tax on higher foreign earnings related to~~benefits in the ~~exit~~first quarter of ~~our U.K. FMS business.~~2023.

2523

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			Three months ended March 31,				Change 2023/2022
(Dollars in thousands)		2022		2021		2022		2021		Three Months	Six Months

(In millions)												(In millions)	2023		2022			Three Months
Revenue:	Revenue:											Revenue:
Fleet Management Solutions	Fleet Management Solutions	$	1,621,095	$	1,408,241	$	3,150,323	$	2,743,726	15%	15%	Fleet Management Solutions	$	1,503	$	1,529		(2)%
Supply Chain Solutions	Supply Chain Solutions	1,173,958		775,630		2,262,500		1,482,330		51%	53%	Supply Chain Solutions	1,201		1,089			10%
Dedicated Transportation Solutions	Dedicated Transportation Solutions	450,228		354,711		875,176		675,218		27%	30%	Dedicated Transportation Solutions	454		425			7%
Eliminations	Eliminations	(211,619)		(156,345)		(400,475)		(297,415)		(35)%	(35)%	Eliminations	(206)		(189)			(9)%
Total	Total	$	3,033,662	$	2,382,237	$	5,887,524	$	4,603,859	27%	28%	Total	$	2,952	$	2,854		3%

Operating Revenue: (1)	Operating Revenue: (1)											Operating Revenue: (1)
Fleet Management Solutions	Fleet Management Solutions	$	1,306,960	$	1,224,673	$	2,589,107	$	2,392,786	7%	8%	Fleet Management Solutions	$	1,262	$	1,282		(2)%
Supply Chain Solutions	Supply Chain Solutions	798,430		534,558		1,536,521		1,037,156		49%	48%	Supply Chain Solutions	879		738			19%
Dedicated Transportation Solutions	Dedicated Transportation Solutions	305,564		255,849		602,019		492,688		19%	22%	Dedicated Transportation Solutions	322		296			9%
Eliminations	Eliminations	(103,848)		(92,260)		(204,954)		(182,447)		(13)%	(12)%	Eliminations	(117)		(100)			(17)%
Total	Total	$	2,307,106	$	1,922,820	$	4,522,693	$	3,740,183	20%	21%	Total	$	2,346	$	2,216		6%

Earnings from continuing operations before income taxes:	Earnings from continuing operations before income taxes:											Earnings from continuing operations before income taxes:
Fleet Management Solutions	Fleet Management Solutions	$	285,322	$	158,451	$	533,521	$	221,853	80%	140%	Fleet Management Solutions	$	182	$	249		(27)%
Supply Chain Solutions	Supply Chain Solutions	52,640		41,041		86,859		73,998		28%	17%	Supply Chain Solutions	17		43			(60)%
Dedicated Transportation Solutions	Dedicated Transportation Solutions	23,156		13,162		43,367		26,144		76%	66%	Dedicated Transportation Solutions	29		20			45%
Eliminations	Eliminations	(29,174)		(19,186)		(55,764)		(31,460)		52%	77%	Eliminations	(25)		(26)			4%
		331,944		193,468		607,983		290,535		72%	109%		203		286			(29)%
Unallocated Central Support Services	Unallocated Central Support Services	(23,768)		(17,864)		(39,772)		(36,296)		33%	10%	Unallocated Central Support Services	(15)		(16)			(6)%
Non-operating pension costs, net (2)		(2,581)		373		(5,368)		382		NM	NM
Intangible amortization expense												Intangible amortization expense	(9)		(10)			(10)%
Non-operating pension costs (2)												Non-operating pension costs (2)	(10)		(3)			233%
Other items impacting comparability, net (3)	Other items impacting comparability, net (3)	32,776		27,596		27,399		19,219		19%	43%	Other items impacting comparability, net (3)	32		(5)			NM
Earnings from continuing operations before income taxes	Earnings from continuing operations before income taxes	$	338,371	$	203,573	$	590,242	$	273,840	66%	116%	Earnings from continuing operations before income taxes	$	201	$	252		(20)%

————————————

(2)~~Refer to Note 13, "Employee Benefit Plans," for a discussion~~Includes the amortization of net actuarial loss and prior service cost, interest cost and expected return on ~~this item.~~plan assets components of pension and postretirement benefit costs.

(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~~"Earnings from continuing operations before income ~~taxes”~~taxes" (EBT), which includes an allocation of Central Support Services (CSS), and excludes non-operating pension costs, ~~net~~intangible amortization expense, 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 business segment and, ultimately, to hold leadership of each business segment accountable for their allocated share of CSS costs. In the first quarter of 2023, we revised our primary measurement of segment financial performance to exclude intangible amortization expense. This change did not have a material impact to segment results. 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 corporate 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

Table of Contents

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

AND RESULTS OF OPERATIONS — (Continued)

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”~~"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			Three months ended March 31,				Change 2023/2022
(Dollars in thousands)		2022		2021		2022		2021		Three Months	Six Months

(In millions)												(In millions)	2023		2022			Three Months
Equipment Contribution:	Equipment Contribution:											Equipment Contribution:
Supply Chain Solutions	Supply Chain Solutions	$	10,971	$	7,822	$	21,201	$	13,045	40%	63%	Supply Chain Solutions	$	10	$	10		—%
Dedicated Transportation Solutions	Dedicated Transportation Solutions	18,203		11,364		34,563		18,415		60%	88%	Dedicated Transportation Solutions	14		16			(13)%
Total	Total	$	29,174	$	19,186	$	55,764	$	31,460	52%	77%	Total	$	24	$	26		(8)%

The ~~increase in SCS and~~decreased DTS equipment contribution in the ~~second~~first quarter of ~~2022 and in the six months ended June 30, 2022, is primarily~~2023 was related to ~~higher~~lower proceeds on sales of used vehicles ~~fleet growth~~ and ~~increased fuel margins due to rapid fluctuations in fuel prices.~~lower utilization of the DTS vehicle fleet.

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


		Three months ended March 31,
Description	Classification	2023		2022
FMS Europe results (1)	Restructuring and other items, net	$	(4)	$	—
Gains on sale of U.K. revenue earning equipment (1)	Used vehicles sales, net	2		8
Gains on sale of U.K. properties (1)	Miscellaneous income, net	5		1
Commercial claims proceeds, net of fees (1)	Restructuring and other items, net	31		(7)
Severance and other, net (1)	Restructuring and other items, net	(3)		(3)
FMS U.K. exit (1)		31		(1)
Other, net (1)	Restructuring and other items, net	1		(4)

Other items impacting comparability, net		32		(5)
Non-operating pension costs (2)	Non-operating pension costs	(10)		(3)
		$	22	$	(8)

———————————

(1)Refer to Note 14, ~~“Other~~"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 March 31,				Change 2023/2022
(Dollars in millions)	2023		2022		Three Months
ChoiceLease	$	776	$	764	2%

Commercial rental (1)	304		306		(1)%
SelectCare and other	182		148		23%
FMS Europe	—		64		NM
Fuel services revenue	241		247		(2)%

FMS total revenue	$	1,503	$	1,529	(2)%

FMS operating revenue (2)	$	1,262	$	1,282	(2)%

FMS EBT	$	182	$	249	(27)%
FMS EBT as a % of FMS total revenue	12.1%		16.3%		(420) bps
FMS EBT as a % of FMS operating revenue (2)	14.4%		19.4%		(500) bps

	Twelve months ended March 31,				Change 2023/2022
	2023		2022
FMS EBT as a % of FMS total revenue	15.7%		14.5%		120 bps
FMS EBT as a % of FMS operating revenue (2)	19.1%		16.8%		230 bps

————————————

(1)For the three months ended March 31, 2023 and 2022, rental revenue from lease customers in place of a lease vehicle represented 37% and 34% of commercial rental revenue, respectively.

(2)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 decreased 2% in the first quarter of 2023, due to lower operating revenue (a non-GAAP measure excluding fuel) and lower fuel services revenue due to lower gallons sold partially offset by higher fuel prices passed through to customers. FMS operating revenue decreased 2% in the first quarter of 2023, reflecting a 4% increase in North America due to higher SelectCare and ChoiceLease revenue offset by a 6%negative impact from the exit of the FMS U.K. business.

FMS EBT decreased 27% in the first quarter of 2023, primarily from lower gains on used vehicle sales and decreased commercial rental results. Lower North America gains reflect a 16% and 35% decrease in used truck and tractor pricing, respectively, partially offset by higher volumes. Lower commercial rental results reflect decreased utilization partially offset by a 3%

increase in power fleet pricing. Rental power fleet utilization

decreased

75%

from a record level of 82% in the first quarter of the prior year, on a 6% larger average power fleet.

~~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.~~

2826

Table of Contents

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

AND RESULTS OF OPERATIONS — (Continued)

Our ~~global~~North America 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						Change
		June 30, 2022	December 31, 2021	June 30, 2021	June 2022/ Dec 2021	June 2022/ June 2021		March 31, 2023	December 31, 2022	March 31, 2022	Mar 2023/ Dec 2022	Mar 2023/ Mar 2022
End of period vehicle count	End of period vehicle count						End of period vehicle count
By type:	By type:						By type:
Trucks (1)	Trucks (1)	75,400	75,100	75,400	—%	—%	Trucks (1)	72,900	72,100	70,300	1%	4%
Tractors (2)	Tractors (2)	70,300	70,700	72,000	(1)%	(2)%	Tractors (2)	70,100	69,300	69,100	1%	1%
Trailers and other (3)	Trailers and other (3)	40,700	43,500	43,400	(6)%	(6)%	Trailers and other (3)	41,800	41,200	39,300	1%	6%

Total	Total	186,400	189,300	190,800	(2)%	(2)%	Total	184,800	182,600	178,700	1%	3%

By product line:	By product line:						By product line:
ChoiceLease	ChoiceLease	138,500	143,900	146,200	(4)%	(5)%	ChoiceLease	136,600	134,600	133,900	1%	2%
Commercial rental	Commercial rental	41,500	40,700	38,000	2%	9%	Commercial rental	41,100	41,800	39,800	(2)%	3%
Service vehicles and other	Service vehicles and other	2,200	2,200	2,300	—%	(4)%	Service vehicles and other	2,000	2,100	2,000	(5)%	—%
		182,200	186,800	186,500	(2)%	(2)%		179,700	178,500	175,700	1%	2%
Held for sale	Held for sale	4,200	2,500	4,300	68%	(2)%	Held for sale	5,100	4,100	3,000	24%	70%
Total	Total	186,400	189,300	190,800	(2)%	(2)%	Total	184,800	182,600	178,700	1%	3%

Memo: U.K. Vehicle Count (excluded from above)							Memo: U.K. Vehicle Count (excluded from above)	400	1,000	12,300	(60)%	(97)%

Customer vehicles under SelectCare contracts (4)	Customer vehicles under SelectCare contracts (4)	55,200	54,500	52,900	1%	4%	Customer vehicles under SelectCare contracts (4)	52,600	54,600	54,500	(4)%	(3)%

Quarterly average vehicle count	Quarterly average vehicle count						Quarterly average vehicle count
By product line:	By product line:						By product line:
ChoiceLease	ChoiceLease	142,900	144,500	146,900	(1)%	(3)%	ChoiceLease	135,300	134,500	133,800	1%	1%
Commercial rental	Commercial rental	41,900	40,400	36,700	4%	14%	Commercial rental	41,200	41,800	39,300	(1)%	5%
Service vehicles and other	Service vehicles and other	2,200	2,200	2,300	—%	(4)%	Service vehicles and other	2,000	2,000	2,000	—%	—%
		187,000	187,100	185,900	—%	1%		178,500	178,300	175,100	—%	2%
Held for sale	Held for sale	3,600	2,700	5,100	33%	(29)%	Held for sale	4,600	3,700	2,700	24%	70%
Total	Total	190,600	189,800	191,000	—%	—%	Total	183,100	182,000	177,800	1%	3%

Customer vehicles under SelectCare contracts (4)	Customer vehicles under SelectCare contracts (4)	55,900	54,200	53,200	3%	5%	Customer vehicles under SelectCare contracts (4)	54,100	55,300	53,700	(2)%	1%
Customer vehicles under SelectCare on-demand (5)	Customer vehicles under SelectCare on-demand (5)	6,200	6,300	6,400	(2)%	(3)%	Customer vehicles under SelectCare on-demand (5)	5,200	5,800	6,300	(10)%	(17)%
Total vehicles serviced	Total vehicles serviced	252,700	250,300	250,600	1%	1%	Total vehicles serviced	242,400	243,200	237,800	—%	2%

————————————

(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.

2927

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											Change
		June 30, 2022		December 31, 2021		June 30, 2021		June 2022/ Dec 2021		June 2022/ June 2021			March 31, 2023		December 31, 2022		March 31, 2022		Mar 2023/ Dec 2022	Mar 2023/ Mar 2022
Active ChoiceLease fleet	Active ChoiceLease fleet											Active ChoiceLease fleet
End of period vehicle count (1)	End of period vehicle count (1)	128,900		128,900		129,900		—%		(1)%		End of period vehicle count (1)	129,100		128,400		128,700		1%	—%

Quarterly average vehicle count (1)	Quarterly average vehicle count (1)	128,500		129,200		130,300		(1)%		(1)%		Quarterly average vehicle count (1)	128,700		128,800		128,900		—%	—%

Commercial rental statistics	Commercial rental statistics											Commercial rental statistics
Quarterly commercial rental utilization - power fleet (2)												Quarterly commercial rental utilization - power fleet (2)	75	%	82	%	82	%	(800) bps	(700) bps

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

Beginning in the first quarter of 2023, we introduced the omnichannel retail industry to provide better visibility to the revenue mix following recent acquisitions and organic growth. This new vertical includes retail, e-commerce, last mile services, and technology.


	Three months ended March 31,				Change 2023/2022
(Dollars in millions)	2023		2022			Three Months
Omnichannel retail	$	311	$	270		15%
Automotive	254		195			30%
Consumer packaged goods	218		187			17%
Industrial and other	96		86			12%
Subcontracted transportation and fuel	322		351			(8)%

SCS total revenue	$	1,201	$	1,089		10%

SCS operating revenue (1)	$	879	$	738		19%

SCS EBT	$	17	$	43		(60)%
SCS EBT as a % of SCS total revenue	1.4%		3.9%			(250) bps
SCS EBT as a % of SCS operating revenue (1)	1.9%		5.8%			(390) bps

Memo:
End of period fleet count (2)	13,500		11,600			16%

	Twelve months ended March 31,				Change 2023/2022
	2023		2022
SCS EBT as a % of SCS total revenue	4.0%		3.7%			30 bps
SCS EBT as a % of SCS operating revenue (1)	5.7%		5.4%			30 bps

————————————

(2)End of period power fleet count is 4,300 and 3,900 as of March 31, 2023 and March 31, 2022, respectively.

SCS total revenue increased 10% in the first quarter of 2023, due to higher operating revenue (a non-GAAP measure excluding subcontracted transportation and fuel) partially offset by lower subcontracted transportation. SCS operating revenue

3028

Table of Contents

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

AND RESULTS OF OPERATIONS — (Continued)

~~The following table summarizes~~increased 19% in the ~~components~~first quarter of ~~the change~~2023, due to strong revenue growth in ~~revenue on a percentage basis versus the prior year:~~all industry verticals primarily reflecting new business, higher volumes and increased pricing.

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 EBT decreased 60% in the first quarter of 2023, due to a $30 million asset impairment charge related to a customer bankruptcy. Refer to Note 2, "Segment Reporting," for additional discussion. The decrease was partially offset by revenue growth, primarily from automotive vertical performance.

Dedicated Transportation Solutions


	Three months ended March 31,				Change 2023/2022
(Dollars in millions)	2023		2022			Three Months
DTS total revenue	$	454	$	425		7%

DTS operating revenue (1)	$	322	$	296		9%




DTS EBT	$	29	$	20		45%
DTS EBT as a % of DTS total revenue	6.4%		4.7%			170 bps
DTS EBT as a % of DTS operating revenue (1)	9.0%		6.8%			220 bps

Memo:
End of period fleet count (2)	11,400		11,700			(3)%

	Twelve months ended March 31,				Change 2023/2022
	2023		2022
DTS EBT as a % of DTS total revenue	6.1%		3.6%			250 bps
DTS EBT as a % of DTS operating revenue (1)	8.8%		5.0%			380 bps

————————————

(2)End of period power fleet count is 5,400 as of March 31, 2023 and March 31, 2022.

~~SCS~~DTS total revenue increased ~~51% in~~7% in the ~~second~~first quarter of ~~2022 and 53% in the six months ended June 30, 2022,~~2023, primarily ~~as a result of~~due to higher operating revenue (a non-GAAP measure excluding ~~fuel~~subcontracted transportation and ~~subcontracted transportation)~~fuel). ~~SCS~~DTS operating revenue increased ~~49% in~~9% in the ~~second~~first quarter of ~~2022 and 48% for the six months ended June 30, 2022, primarily~~2023, due to ~~the acquisitions of Whiplash~~increased pricing and ~~Midwest and strong revenue growth in all industry verticals from new business, higher volumes and increased pricing.~~volumes.

~~SCS~~DTS EBT increased ~~28%~~45% in the ~~second~~first quarter of ~~2022 and 17% for the six months ended June 30, 2022, primarily~~2023, 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.

improved conditions for hiring professional drivers.

~~Dedicated Transportation Solutions~~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
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

~~————————————~~


	Three months ended March 31,				Change 2023/2022
(Dollars in millions)	2023		2022			Three Months







Total CSS	$	103	$	97		6%
Allocation of CSS to business segments	(88)		(81)			9%
Unallocated CSS	$	15	$	16		(6)%

~~(1)~~

Total CSS cost~~Non-GAAP financial measure. Refer~~s increased 6% in the first quarter of 2023, primarily due to strategic investments in information technology and marketing and increased professional fees partially offset by the ~~“Non-GAAP Financial Measures” section~~gain from the sale of ~~this MD&A for reconciliations~~our corporate headquarters building and lower compensation-related expenses. Unallocated CSS slightly decreased in the first quarter of 2023 reflecting the ~~most comparable GAAP measure to~~gain from the ~~non-GAAP financial measure and the reasons why management believes this measure is important to investors.~~sale of our corporate headquarters building offset by increased professional fees.

3129

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,					Three months ended March 31,
(In thousands)		2022		2021
(In millions)						(In millions)	2023		2022

Net cash provided by (used in):	Net cash provided by (used in):					Net cash provided by (used in):
Operating activities	Operating activities	$	1,102,776	$	1,131,233	Operating activities	$	478	$	466
Investing activities	Investing activities	(982,412)		(533,408)		Investing activities	(377)		(783)
Financing activities	Financing activities	(330,026)		(478,971)		Financing activities	(126)		(130)
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(15,482)		(2,369)		Effect of exchange rate changes on cash	11		(4)
Net change in cash, cash equivalents, and restricted cash	Net change in cash, cash equivalents, and restricted cash	$	(225,144)	$	116,485	Net change in cash, cash equivalents, and restricted cash	$	(14)	$	(451)

		Six months ended June 30,					Three months ended March 31,
(In thousands)		2022		2021
(In millions)						(In millions)	2023		2022
Net cash provided by operating activities	Net cash provided by operating activities					Net cash provided by operating activities
Earnings from continuing operations	Earnings from continuing operations	$	416,164	$	201,152	Earnings from continuing operations	$	140	$	176
Non-cash and other, net	Non-cash and other, net	906,161		950,869		Non-cash and other, net	522		465
Collections on sales-type leases	Collections on sales-type leases	64,404		62,778		Collections on sales-type leases	30		34
Changes in operating assets and liabilities	Changes in operating assets and liabilities	(283,953)		(83,566)		Changes in operating assets and liabilities	(214)		(209)

Cash flows from operating activities from continuing operations	Cash flows from operating activities from continuing operations	$	1,102,776	$	1,131,233	Cash flows from operating activities from continuing operations	$	478	$	466

Cash provided by operating activities ~~remained at $1.1 billion~~increased to $478 million for the ~~six~~three months ended ~~June 30,~~March 31, 2023, compared with $466 million in 2022, asprimarily reflecting 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 earnings. Cash used in investing activities ~~increased~~decreased to ~~$982~~$377 million for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023, compared with ~~$533~~$783 million in ~~2021~~2022, primarily due to the acquisition of the Whiplash ~~and an increase~~business in ~~cash paid for capital expenditures partially offset by higher proceeds from the sale of revenue earning equipment.~~2022. 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~~$126 million for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023, compared ~~to $479~~with $130 million in ~~2021 due to higher debt borrowing needs partially offset by an increase in common stock repurchases.~~2022.

The following table shows our free cash flow computation:


		Six months ended June 30,					Three months ended March 31,
(In thousands)		2022		2021
(In millions)						(In millions)	2023		2022

Net cash provided by operating activities	Net cash provided by operating activities	$	1,102,776	$	1,131,233	Net cash provided by operating activities	$	478	$	466
Sales of revenue earning equipment (1)	Sales of revenue earning equipment (1)	600,822		330,277		Sales of revenue earning equipment (1)	216		223

Sales of operating property and equipment (1)	Sales of operating property and equipment (1)	35,342		44,409		Sales of operating property and equipment (1)	48		3

Other (1)		7,332		691

Total cash generated (2)	Total cash generated (2)	1,746,272		1,506,610		Total cash generated (2)	742		692
Purchases of property and revenue earning equipment (1)	Purchases of property and revenue earning equipment (1)	(1,195,012)		(904,399)		Purchases of property and revenue earning equipment (1)	(641)		(584)
Free cash flow (2)	Free cash flow (2)	$	551,260	$	602,211	Free cash flow (2)	$	101	$	108

————————————

(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~~"Non-GAAP Financial ~~Measures”~~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~~of $101 million for the ~~six~~three months ended ~~June 30, 2022, from $602~~March 31, 2023, compared to $108 million in ~~2021 primarily due to an~~2022, was generally unchanged as increase in cash paid for capital expenditures ~~partially~~was largely offset by higher proceeds from the sale of ~~revenue earning equipment, including the sale of U.K. vehicles related to our exit plan.~~operating property and equipment.

Table of Contents

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

AND RESULTS OF OPERATIONS — (Continued)

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


	Three months ended March 31,
(In millions)	2023		2022

Revenue earning equipment:
ChoiceLease	$	579	$	422
Commercial rental	177		180
	756		602
Operating property and equipment	46		60
Gross capital expenditures	802		662
Changes to liabilities related to purchases of property and revenue earning equipment	(161)		(78)
Cash paid for purchases of property and revenue earning equipment	$	641	$	584

Gross capital expenditures increased to ~~$1.3 billion~~$802 million for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023, primarily reflecting higher planned investments in ~~the ChoiceLease fleet.~~ChoiceLease.

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~~$253 million as of ~~June 30, 2022~~March 31, 2023. As of ~~June 30, 2022, approximatel~~March 31, 2023,~~y $355~~ $206 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 earningsOur intention is ~~not material. We intend to continue~~ to permanently reinvest the earnings of our ~~remaining~~ foreign subsidiaries, ~~indefinitely.~~with the exception of our U.K. and Germany subsidiaries where the assertion was removed in 2021. Federal, state and foreign income taxes, withholding taxes and the tax impact of foreign currency exchange gains or losses were considered on the remaining U.K. and Germany undistributed earnings as of March 31, 2023, and there was no impact to deferred taxes. In February 2023, we repatriated $38 million of foreign earnings from the U.K.

~~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,~~2023, we issued an aggregate principal amount of ~~$450~~$500 million unsecured ~~medium terms~~medium-terms notes that mature on March 1, ~~2027.~~2028. 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%~~5.65% per year. Refer to Note 9~~, “Debt~~,”8, "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.

Table of Contents

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

AND RESULTS OF OPERATIONS — (Continued)

Our debt ratings and rating outlooks as of ~~June 30, 2022~~March 31, 2023, were as follows:

Rating Summary

Short-term

Short-term Outlook

Long-term

Long-term Outlook

Standard & Poor’s Ratings Services(1)

—

BBB

~~Positive~~Stable

Moody’s Investors Service

Stable

Baa2

Stable

Fitch Ratings

—

BBB+

Stable

DBRS

R-1 (Low)

Stable

A (Low)

Stable

————————————

(1)In April 2023, the long-term rating was upgraded to BBB+.

As of ~~June 30, 2022,~~March 31, 2023, we had the following amounts available to fund operations under the following facilities:


	(In millions)

Global revolving credit facility	$	~~654~~943
Trade receivables financing program	$	~~250~~1

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%~~18% and ~~16%~~19% as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

Our debt to equity ratio was ~~233%~~211% and ~~235%~~216% as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, 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,~~

As of March 31, 2023, we repurchased ~~3.1~~0.5 million shares for ~~$300~~$45 million ~~pursuant to our accelerated share repurchase program, with final settlement scheduled to occur no later than~~under 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.2021 Anti-Dilutive program.

Refer to Note ~~10, “Share~~9, "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~~February 2023 and 2022, ~~and 2021,~~ our ~~Board~~board of ~~Directors~~directors declared a quarterly cash dividend of ~~$0.58~~$0.62 and ~~$0.56~~$0.58 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~~"non-GAAP financial ~~measures”~~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.

3532

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

3633

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.~~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, 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.

3734

Table of Contents

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~~Comparable Earnings and ~~comparable~~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.~~impacting comparability (as further described below). 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, net, 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~~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 adjusted net earnings and adjusted average shareholders' equity. We use adjusted ROE as an internal measure of how effectively we use the owned capital invested in our operations.

3835

Table of Contents

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~~our 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.

3936

Table of Contents

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


	Continuing Operations
	Three months ended March 31,
(In millions, except per share amount)	2023		2022
EBT	$	201	$	252
Non-operating pension costs, net	10		3
FMS U.K. exit (1)	(31)		1
Other, net (1)	(1)		4
Comparable EBT	$	179	$	260

Earnings	$	140	$	176
Non-operating pension costs, net	8		2
FMS U.K. exit (1)	(31)		1
Other, net (1)	(1)		4
Tax adjustments, net (2)	17		5
Comparable Earnings	$	133	$	188

Diluted EPS	$	2.95	$	3.35
Non-operating pension costs, net	0.17		0.04
FMS U.K. exit (1)	(0.66)		0.02
Other, net (1)	(0.01)		0.08
Tax adjustments, net (2)	0.36		0.10
Comparable EPS	$	2.81	$	3.59

————————————

(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~~impacts related to the FMS U.K. exit in the first quarter of 2023, and gains on sales of U.K. revenue earning equipment and properties in the ~~second~~first quarter ~~and~~ of 2022.

~~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.

4037

Table of Contents

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 %


	Three months ended March 31,
(In millions)	2023	2022






Effective tax rate on continuing operations (1)	30.5%	30.2%
Tax adjustments and income tax effects of non-GAAP adjustments (2)	(5.0)%	(2.6)%
Comparable effective tax rate on continuing operations (1)	25.5%	27.6%

————————————

(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,					Three months ended March 31,
(In thousands)		2022		2021		2022		2021

(In millions)										(In millions)	2023		2022
Net earnings	Net earnings	$	239,400	$	149,105	$	414,987	$	199,930	Net earnings	$	139	$	176
Loss from discontinued operations, net of tax	Loss from discontinued operations, net of tax	942		463		1,177		1,222		Loss from discontinued operations, net of tax	1		—
Provision for income taxes	Provision for income taxes	98,029		54,005		174,078		72,688		Provision for income taxes	61		76
EBT	EBT	338,371		203,573		590,242		273,840		EBT	201		252
Non-operating pension costs, net	Non-operating pension costs, net	2,581		(373)		5,368		(382)		Non-operating pension costs, net	10		3
Other items impacting comparability, net (1)	Other items impacting comparability, net (1)	(32,776)		(27,596)		(27,399)		(19,219)		Other items impacting comparability, net (1)	(32)		5
Comparable EBT	Comparable EBT	308,176		175,604		568,211		254,239		Comparable EBT	179		260
Interest expense	Interest expense	55,324		54,155		107,688		108,861		Interest expense	65		52
Depreciation	Depreciation	424,892		444,259		854,229		905,420		Depreciation	445		430
Used vehicle sales, net (2)	Used vehicle sales, net (2)	(109,487)		(51,634)		(214,190)		(80,485)		Used vehicle sales, net (2)	(70)		(105)
Amortization	Amortization	9,202		1,671		19,221		3,435		Amortization	9		10
Comparable EBITDA(3)		$	688,107	$	624,055	$	1,335,159	$	1,191,470
Comparable EBITDA										Comparable EBITDA	$	628	$	647

————————————

(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~~5,"Revenue Earning Equipment, net," in the Notes to ~~Condensed~~ Consolidated Financial Statements for additional information. In 2023, used vehicle sales, net of $2 million related to the sale of used vehicles in the U.K. is excluded as it is included above in "Other Items Impacting Comparability."

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

~~————————————~~


	Three months ended March 31,
(In millions)	2023		2022
Total revenue	$	2,952	$	2,854
Subcontracted transportation and fuel	(606)		(638)


Operating revenue	$	2,346	$	2,216

~~(1)~~

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

4138

Table of Contents

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,					Three months ended March 31,				Twelve months ended March 31,
(Dollars in thousands)		2022		2021		2022		2021		2022		2021
(Dollars in millions)														(Dollars in millions)	2023		2022		2023		2022
FMS total revenue														FMS total revenue	$	1,503	$	1,529	$	6,301	$	5,873
Fuel services revenue														Fuel services revenue	(241)		(247)		(1,108)		(818)

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	FMS operating revenue	$	1,306,960	$	1,224,673	$	2,589,107	$	2,392,786	$	5,136,852	$	4,739,303	FMS operating revenue	$	1,262	$	1,282	$	5,193	$	5,055

FMS EBT	FMS EBT	$	285,322	$	158,451	$	533,521	$	221,853	$	974,758	$	298,205	FMS EBT	$	182	$	249	$	990	$	850
FMS EBT as a % of FMS total revenue	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 total revenue	12.1%		16.3%		15.7%		14.5%
FMS EBT as a % of FMS operating revenue	FMS EBT as a % of FMS operating revenue	21.8%		12.9%		20.6%		9.3%		19.0%		6.3%		FMS EBT as a % of FMS operating revenue	14.4%		19.4%		19.1%		16.8%

————————————

~~(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,					Three months ended March 31,				Twelve months ended March 31,
(Dollars in thousands)		2022		2021		2022		2021		2022		2021

(Dollars in millions)														(Dollars in millions)	2023		2022		2023		2022
SCS total revenue	SCS total revenue	$	1,173,958	$	775,630	$	2,262,500	$	1,482,330	$	3,934,968	$	2,878,985	SCS total revenue	$	1,201	$	1,089	$	4,832	$	3,537
Subcontracted transportation and fuel	Subcontracted transportation and fuel	(375,528)		(241,072)		(725,979)		(445,174)		(1,225,087)		(843,831)		Subcontracted transportation and fuel	(322)		(351)		(1,437)		(1,091)

SCS operating revenue	SCS operating revenue	$	798,430	$	534,558	$	1,536,521	$	1,037,156	$	2,709,881	$	2,035,154	SCS operating revenue	$	879	$	738	$	3,395	$	2,446

SCS EBT	SCS EBT	$	52,640	$	41,041	$	86,859	$	73,998	$	130,212	$	165,997	SCS EBT	$	17	$	43	$	194	$	132
SCS EBT as a % of SCS total revenue	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 total revenue	1.4%		3.9%		4.0%		3.7%
SCS EBT as a % of SCS operating revenue	SCS EBT as a % of SCS operating revenue	6.6%		7.7%		5.7%		7.1%		4.8%		8.2%		SCS EBT as a % of SCS operating revenue	1.9%		5.8%		5.7%		5.4%

~~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%

4239

Table of Contents

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

AND RESULTS OF OPERATIONS — (Continued)

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


	Three months ended March 31,				Twelve months ended March 31,
(Dollars in millions)	2023		2022		2023		2022
DTS total revenue	$	454	$	425	$	1,815	$	1,562
Subcontracted transportation and fuel	(132)		(129)		(550)		(447)

DTS operating revenue	$	322	$	296	$	1,265	$	1,115

DTS EBT	$	29	$	20	$	111	$	56
DTS EBT as a % of DTS total revenue	6.4%		4.7%		6.1%		3.6%
DTS EBT as a % of DTS operating revenue	9.0%		6.8%		8.8%		5.0%

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,					Twelve months ended March 31,
(Dollars in thousands)		2022		2021

(Dollars in millions)						(Dollars in millions)	2023		2022
Net earnings	Net earnings	$	734,261	$	261,392	Net earnings	$	832	$	644
Other items impacting comparability, net (1)	Other items impacting comparability, net (1)	(18,617)		19,779		Other items impacting comparability, net (1)	(121)		(13)
Income taxes (2)	Income taxes (2)	272,418		79,930		Income taxes (2)	339		228
Adjusted earnings before income taxes	Adjusted earnings before income taxes	988,062		361,101		Adjusted earnings before income taxes	1,050		859
Adjusted income taxes (3)	Adjusted income taxes (3)	(251,091)		(80,094)		Adjusted income taxes (3)	(280)		(215)
Adjusted net earnings		$	736,971	$	281,007
Adjusted net earnings [A]						Adjusted net earnings [A]	$	770	$	644

Average shareholders’ equity	Average shareholders’ equity	$	2,642,143	$	2,252,610	Average shareholders’ equity	$	2,887	$	2,532
Average adjustments to shareholders’ equity (4)	Average adjustments to shareholders’ equity (4)	(6,765)		44,961		Average adjustments to shareholders’ equity (4)	(15)		(2)
Adjusted average shareholders’ equity		$	2,635,378	$	2,297,571
Adjusted average shareholders’ equity [B]						Adjusted average shareholders’ equity [B]	$	2,872	$	2,530

Adjusted return on equity (5)		28.0%		12.2%

Adjusted return on equity [A/B]						Adjusted return on equity [A/B]	27%		25%

————————————

(1)Refer to the table below for ~~a composition of Other items impacting comparability,~~(benefit) and charge adjustments to net earnings, net for the 12-month rolling ~~period~~period.

(2)Includes income taxes on discontinued ~~operations~~operations.

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

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
Note: Amounts may not be additive due to rounding.


	Twelve months ended March 31,
(In millions)	2023		2022

FMS U.K. exit	$	(114)	$	(28)
Other, net	(7)		10
ERP implementation costs	—		5
Other items impacting comparability, net	$	(121)	$	(13)

4340

Table of Contents

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”~~"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~~ongoing global supply chain ~~disruption~~disruptions 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;~~with respect to a softening macroeconomic and freight environment;

•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;pricing and demand;

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

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

•our expectations in our FMS business segment regarding ChoiceLease;

•our expectations in our SCS and DTS business segments related to revenue and earnings growth and contract sales activity;

•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, asset impairments, the valuation of our pension plans, ~~and~~ allowance for credit ~~losses;~~losses, and self-insurance loss reserves;

•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 energy prices, interest rate movements, subcontracted transportation costs, 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~~intent to permanently reinvest the ~~benefits from~~earnings of our ~~strategic investments, including Whiplash;~~non U.K. & Germany foreign subsidiaries indefinitely;

•our expectations regarding the benefits offrom our ~~pricing adjustments with respect to labor shortage costs in SCS~~strategic investments and ~~DTS;~~initiatives;

•our expectations regarding the ~~timeline for the~~ exit of the FMS U.K. ~~business;~~business and the timing of such exit;

•our expectation regarding a material foreign currency cumulative translation adjustments loss;

•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;~~

4441

Table of Contents

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

AND RESULTS OF OPERATIONS — (Continued)

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

•our expectations with respect to the asset impairment charge associated with specialized sortation and ~~purchase price consideration allocation for~~conveyor equipment used in the ~~acquisition~~warehouse operation of ~~Whiplash; and~~a specific SCS customer;

•the anticipated impact of ~~recent accounting pronouncements.~~inflationary pressures;

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

•our expectations regarding the U.S. federal, state and foreign tax positions and realizability of deferred tax assets.

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, among others, include the following:

•Market Conditions:

◦Changes in general economic and financial conditions ~~globally~~in the U.S. and worldwide 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~~which 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.~~we service.

◦Changes in current financial, tax or other 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.~~operating results.

•Competition:

◦Advances in technology may impact demand for our services or may require increased investments to remain ~~competitive.~~competitive, and our customers may not be willing to accept higher prices to cover the cost of these investments.

◦Competition from other service providers, ~~who~~some of which 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~~where 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.~~

4542

Table of Contents

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

AND RESULTS OF OPERATIONS — (Continued)

◦Decreases in volume in our omnichannel retail vertical.

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

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

◦The inability of our information security program to safeguard our data.

◦Sudden changes in market fuel prices and fuel shortages.

◦Higher prices for vehicles, diesel engines and fuel as a result of new ~~regulations.~~regulations or inflationary cost pressures.

◦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.~~as originally scheduled.

◦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, including any assumptions made with respect to inflation, of our SCS and DTS contracts prove to be inaccurate.

◦Increased unionizing, labor strikes and work stoppages.

◦Difficulties in attracting and retaining professional drivers, warehouse personnel and technicians due to ~~driver and technician~~labor 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 other natural occurrences.

•Financing Concerns:

◦Higher borrowing costs.

◦Increased inflationary pressures.

◦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.

Table of Contents

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

AND RESULTS OF OPERATIONS — (Continued)

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

~~Table of Contents~~

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.~~2022. Please refer to the ~~2021~~2022 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~~first quarter of ~~2022,~~2023, 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~~first quarter of ~~2022,~~2023, 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~~three months ended ~~June 30, 2022,~~March 31, 2023, 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.

4744

Table of Contents

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, please refer to Note 15, ~~“Contingencies~~"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~~"Item 1A. Risk ~~Factors”~~Factors" in our Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the SEC on February ~~17, 2022.~~15, 2023. 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:~~March 31, 2023:
(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 —


(Dollars in millions, 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)
January 1 through January 31, 2023	60	$	83.40	—	1,574,607
February 1 through February 28, 2023	788,489	97.18		465,110	1,109,497
March 1 through March 31, 2023	195	86.08		—	1,109,497
Total	788,744	$	97.18	465,110

————————————

(1)During the three months ended ~~June 30, 2022,~~March 31, 2023, we purchased an aggregate of ~~6,963~~323,634 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~~plans.

(2)~~In October 2021, our Board~~Our board of ~~Directors~~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~~our employee stock plans. The 2021 Anti-Dilutive Repurchase Program commenced on October 14, 2021 and expires on October 14, 2023. In February 2023, our board of directors authorized a new discretionary share repurchase program to grant management discretion to repurchase up to 2 million shares of common stock over a period of two years (the "2023 Discretionary Program"). Share repurchases under both programs can be made from time to time using ~~the company's~~our 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)~~

ITEM 5. OTHER INFORMATION

~~In February 2022,~~

On April 25, 2023, certain terms of 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 pursuantglobal revolving credit facility were amended. Pursuant to the ~~terms and conditions~~amendment, among other items, (i) the definition of consolidated net worth was revised to exclude impacts from our exit of the ~~program agreement. During~~FMS U.K. business, (ii) LIBOR was replaced as an available benchmark interest rate with Term SOFR, and (iii) the ~~six months ended June 30, 2022, we repurchased 3,052,270 shares~~maximum absolute dollar amounts for ~~$300 million under the ASR.~~our trade receivables financing programs and asset-backed financings were removed and only percentage-based maximum amounts remain.

4845

Table of Contents

ITEM 6. EXHIBITS


Exhibit Number						Description

10*						First Amendment to Third Amended and Restated Global Revolving Credit Agreement, dated as of December 14, 2021, by and among Ryder System, Inc., certain Ryder subsidiaries, and the lenders and agents named therein
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)

* Management contract or compensation plan arrangement pursuant to Item 601(b)(10) of Regulation S-K.

4946

Table of Contents

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~~April 26, 2023	By:	/s/ JOHN J. DIEZ
			John J. Diez
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)

Date:	~~July 27, 2022~~April 26, 2023	By:	/s/ CRISTINA GALLO-AQUINO
			Cristina Gallo-Aquino
			Senior Vice President and Controller
			(Principal Accounting Officer)

5047



		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	76

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2019

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	4744

ITEM 4.	Controls and Procedures	4744

PART II . OTHER INFORMATION

ITEM 1.	Legal Proceedings	4845

ITEM 1A.	Risk Factors	4845

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4845







ITEM 6.	Exhibits	4946

SIGNATURE		5047


	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


	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


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


(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	—