Ryder System (R) 8-K Regulation FD Disclosure

Pension Overview

December 2011

Exhibit No. 99.1

Proprietary and Confidential

2

Safe Harbor

Note Regarding Forward-Looking Statements: Certain statements and information included in this

presentation are "forward-looking statements" under the Federal Private Securities Litigation Reform

Act of 1995 including statements relating to estimated pension expense and contributions for 2011.

Accordingly, these forward-looking statements should be evaluated with consideration given to the

many

risks

and

uncertainties

that

could

cause

actual

results

and

events

to

differ

materially

from

those

in the forward-looking statements. Important factors that could cause such differences include, among

others, the adequacy of actuarial assumptions and estimates; macroeconomic factors, including

market volatility, that affect our investment returns, discount rates, costs and funding requirements; the

impact of new pension regulations; actual withdrawal liability and funding levels of multi-employer

plans; and a change in the level of pension contributions resulting from, among other things, a change

in expected free cash flow levels. Our expectations are also subject to the risks described in our filings

with the Securities and Exchange Commission (SEC). The risks included here and in our SEC filings

are

not

exhaustive.

New

risks

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 risks on our business. Accordingly, we

undertake no obligation to publicly update or revise any forward-looking statements, whether as a

result of new information, future events, or otherwise.

Proprietary and Confidential

3

Purpose of Overview

Page   4

Plan Overview / Recent Changes

Page   5

Accounting Fundamentals

Page   6

Pension Funded Status

Page 10

Pension Investment Strategies and Results

Page 18

Pension Contribution Requirements

Page 23

Pension Expense

Page 27

Pension Equity Charges

Page 41

Conclusions

Page 44

Contents

Proprietary and Confidential

4

Provide clarity to the main components and drivers of pension expense:

generally and specific to Ryder’s continuing operations

Provide insight into the factors which create funding requirements: generally

and specific to Ryder

Provide information on Ryder’s U.S. pension funding status, pension asset

returns and asset allocation strategies

Provide information on estimated future cash funding requirements

Provide information on estimated 2012 pension costs, go-forward sensitivity

guides and drivers of changes in 2012 pension costs

Provide information on equity charges as a result of under-funded status

Purpose of Overview

Proprietary and Confidential

5

Ryder historically offered defined-benefit pension benefits in the U.S., U.K, and

Canada.  Substantially all employees, except U.S. drivers and warehouseman,

were covered under the plans.  The majority of the employees covered by the

plans are in Fleet Management Solutions and Central Support Services.

Effective 1/1/08, U.S. pension plans were frozen for participants who did not

meet

certain

grandfathering

criteria.

Currently,

only

8%

of

the

active participants

accrue benefits under the plan.

Effective 1/1/10, the Canadian pension plan was frozen for participants who did

not meet certain grandfathering criteria.  Currently, only 16% of the active

participants accrue benefits under the plan.

Effective 3/31/10, the U.K. pension plan was frozen for all participants.

The freeze of the pension plans will minimize the volatility in earnings over time.

Impacted employees participate in new enhanced defined contribution plans. 

Reductions in pension expense associated with the freeze of the plans are

generally

being

offset

by

costs

associated

with

the

new

enhanced

defined

contribution plans.

Plan Overview / Recent Changes

Accounting Fundamentals

Proprietary and Confidential

7

Guiding

literature

–

FASB

Accounting

Standards

Codification

(ASC)

Topic

715,

“Compensation

–

Retirement

Benefits”

Delayed

Recognition

-

changes

in

pension

obligation

and

the

value

of

net

assets

are

recognized

in

earnings

systematically

and

gradually

over

future

periods

Net

Reporting

of

Expense

-

consequences

of

events

and

transactions

(compensation element, interest cost, investment return) are recorded as a single

net expense

Offsetting

of

Assets

and

Liabilities

-

value

of

pension

assets

and

liabilities

to

participants (funded status) shown net on the balance sheet

Assumptions-Based

Expense

Calculation

-

discount

rate,

pension

earnings

rate,

salary progression rate, retirement and mortality rate.

Accounting Fundamentals

Proprietary and Confidential

8

Discount

Rate

-

rate

that

discounts

expected

future

cash

benefit

payments

to

a

present value.

Rate determined from models that match the expected benefit payments underlying the

liability to coupons and maturities from a hypothetical portfolio of high quality corporate

bonds.

Rate considered in determining 2012 pension expense of our primary U.S. Plan is

4.90% vs. 5.70% in 2011.  Weighted-average rate for international plans is 4.76% vs.

5.55% in 2011.

Record low rates are driving the increase in the projected benefit obligation and also

the decrease in the funded status of the plans.

Pension

Earnings

Rate

-

long-term

expected

rate

of

return

on

assets

based

on

asset allocation, current returns and expected reinvestment rates.

Rate considered in determining 2012 pension expense for our primary U.S. Plan is

7.05% vs. 7.45% in 2011.  Weighted-average rate for international plans is 6.00% vs.

6.84% in 2011.

Rate includes impact of investment management and other fees.

Accounting Fundamentals

Pension Assumptions

Proprietary and Confidential

9

–

annual rate of growth based on expected compensation

until retirement, including all salary increase components (merit, promotion, equity,

overtime and inflation).

Rate used to produce our 12/31/2011 pension liability valuation and 2012 pension

expense, for our primary U.S. plan, remained at 4.0% based on actuarial review of

historical experience.

Assumption less significant now that plans are frozen with limited active participants (i.e.

assumption only relevant for grandfathered participants).

–

retirement rate based on actual plan experience;

mortality rate based on standard actuarial tables.

Mortality assumptions used to produce our 12/31/2011 pension liability valuation and

2012 pension expense, for our primary U.S. plan, were unchanged from prior year.

Accounting Fundamentals

Accounting Fundamentals

Pension Assumptions

Salary

Progression

Rate

Retirement

and

Mortality

Rate

Pension Funded Status

Proprietary and Confidential

11

* Actuarial losses are amortized to earnings over the average remaining service life of active participants or the

average remaining life expectancy of inactive participants if all or almost all of the plan’s participants are

inactive.

Ryder System, Inc. and Subsidiaries

Funded Status and Balance Sheet Impact of Pension

Funded Status

(Dollars in millions)

2011

2010

2009

Projected benefit obligations (PBO) at 12/31

$

1,967.6

1,744.2

1,603.6

Fair value of Plan assets at 12/31

1,418.0

1,428.8

1,282.9

Funded status

$

(549.5)

(315.4)

(320.7)

Non-current asset

$

0.3

20.6

10.6

Current liability

(3.1)

(3.0)

(2.7)

Non-current liability

(546.7)

(333.1)

(328.6)

Funded status

$

(549.5)

(315.4)

(320.7)

Unrecognized net actuarial loss *

$

927.0

658.5

638.4

Actuarial Assumptions U.S. Plan:

Discount Rate

4.90%

5.70%

6.20%

Salary Progression Rate

4.00%

4.00%

4.00%

Proprietary and Confidential

12

(Dollars in millions)

2011

2010

2009

U.S. Qualified Plan

$

(480.8)

(288.2)

(287.8)

U.S. Non Qualified Plan

(42.1)

(39.6)

(37.1)

International Plans

(26.6)

12.4

4.2

Total Consolidated Funded Status

$

(549.5)

(315.4)

(320.7)

Percent Funded

72%

82%

80%

Consolidated Funded Status

Funded Status

Proprietary and Confidential

13

(1)

Actual

return

on

plan

assets

was

approximately

negative

0.5%

for

2011.

(2)

Discount

rate

was

4.90%

at

12/31/11

(5.70%

at

12/31/10

and

6.20%

at

12/31/09).

12/31/11

12/31/10

12/31/09

(Dollars in millions)

Fair Value of Assets (FVA)

1,063.4

$

(1)

1,077.8

$   

963.1

$      

PV of Liability (PBO)

1,544.2

(2)

1,366.0

1,250.9

Funded Status

(480.8)

$  

(288.2)

$     

(287.8)

$     

           Percent Funded

69%

79%

77%

U.S. Qualified Pension Plan

Funded Status

Proprietary and Confidential

14

Pension Assets

Pension assets are measured at the end of each reporting year (12/31)

Point-in-time valuation

Reflects fair market value

Not market-related (smoothed) value which is another accepted method

The fair market value of pension assets changes from year to year as a

result of the following items:

Actual returns earned on plan assets

Contributions to the plan

Benefit payments to retirees 

Payment of plan expenses

Funded Status

Proprietary and Confidential

15

Pension Liabilities

Projected

Benefit

Obligation

(PBO)

measures

the

present

value

of

expected

future benefit payments to plan participants including future salary increases

Point-in-time valuation (year-end unless interim assessment required)

Based on service to date of valuation

Based on selected discount rate

The discount rate is based on actuarial models that match expected timing of

expected benefit payments to coupons and maturities from a hypothetical

portfolio of high quality (Aa or better) corporate bonds at the end of each

reporting year (December 31). 

Future

benefit

payments

are

based

on

current

plan

provisions

and

are

impacted by the following assumptions:

Retirement age

Mortality, Disability, Turnover, etc.

Salary progression rate

Funded Status

Proprietary and Confidential

16

Historical Consolidated Funded Status

74

80

83

78

93

100

66

80

82

72

60

80

100

120

140

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Note: All years as of 12/31

Funded Status

Proprietary and Confidential

17

Historical Funded Status -

U.S. Qualified Plan Only

77

83

87

81

97

100

62

77

79

69

40

60

80

100

120

140

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Note: All years as of 12/31

Funded Status

Discount Rate

6.50%

6.00%

5.90%

5.65%

6.00%

6.35%

6.25%

6.20%

5.70%

4.90%

Pension Investment Strategies and Results

Proprietary and Confidential

19

The purpose of the pension fund is to accumulate sufficient assets to

meet the Plan’s future payment obligations (liabilities).

Ryder’s Investment Committee oversees the asset management and

investment activities of our North American pension plans.

Responsibilities include:

Establishing and maintaining a broad asset allocation strategy

Building investment structure within asset classes to ensure diversification

Retaining and monitoring investment managers

Evaluating performance of plans

Assets are accumulated largely through investment returns; asset

allocation is structured to produce the required long-term returns within

a risk-controlled framework.

Allocation of assets is largely a function of the time horizon for future

liability payments and expected return/risk characteristics for the various

asset classes. Investment allocations are subject to change at any time.

Pension Investment Strategies & Results

Proprietary and Confidential

20

Asset Allocation Strategy

Pension Investment Strategies & Results

Ryder’s U.S. pension asset allocation and approved targets are as follows:

12/31/11

Allocation

12/31/10

Allocation

Target

*

U.S. Equity

42%

47%

40%

Non-U.S. Equity

20%

20%

20%

U.S. Fixed Income

31%

26%

30%

Alternative Investments

7%

2%

10%

Cash

**

0%

5%

0%

100%

100%

100%

*

Asset allocation targets are approved and managed by the Ryder Investment Committee.

**

We made a voluntary pension contribution at the end of December 2010 of $50 million, which was allocated to the target asset

classes in January 2011.

Proprietary and Confidential

21

U.S. Qualified Pension Plan Asset Return History

Pension Investment Strategies & Results

-0.5%

7.05%

5.75%

-35

-25

-15

-5

5

15

25

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

-35

-25

-15

-5

5

15

25

Annual Actual Asset Return

Current Expected Long Term Return on Assets

Rolling 15-Year Compound Annual Return

Proprietary and Confidential

22

Current Expected Long-Term Return on Assets

Long-term return assumptions are based on:

Actuarial review of asset allocation strategy

Long-term expected asset returns based on 12/31 actual asset allocation

Investment management fees paid using plan assets

2012 expected return for U.S. pension assets decreased to 7.05% from 7.45%

in 2011. The downward adjustment was driven by lower expected asset return

for fixed income and alternative investments compared to 2011.

Pension Contribution Requirements

24

Pension Contribution

Annual U.S. cash contribution requirements were historically determined

under Employee Retirement Income Security Act (ERISA).

In 2006, the Pension Protection Act (PPA) was passed which amended

ERISA for the purpose of strengthening pension funding and helping the

Pension Benefit Guarantee Corporation (PBGC) remain solvent.

Below is a summary of the contribution and PBGC premium requirements

under PPA:

Minimum

Funding

Requirements

-

sufficient

contributions

to

cover

normal

costs for the period and the amount to amortize funding shortfalls (if liability

exceeds assets) over 7 years.

Additional contribution requirements if funded status falls below certain thresholds

and

plan

considered

“at-risk”

(80%

for

1/1/2011

and

later).

“At-risk”

status

is

determined based on the prior year funded percentage.

Based

on

the

current

pension

assumptions,

the

U.S.

Qualified

Plan

is

“at-risk”

on

1/1/2012

(not

at-risk

from

2013

to

2017).

The

“at-risk”

status

triggers

an

additional

funding

requirement

of

approximately

$4

million

in

the

2012

plan

year.

PBGC premium

–

a flat dollar amount (per participant) for U.S. Plan PLUS a

variable premium per participant when U.S. Plan is less than 100% funded

(under PPA, no exemptions).

25

For

2011

funding

purposes,

Ryder

used

the

same

elections

as

used

in

2010:

Smoothed assets

Smoothed discount rate

Smoothing should produce more stable contribution requirements

Contribution requirements are influenced primarily by the following factors:

Funded status

Actual return on plan assets

Discount rate applied to expected plan payouts –

based on corporate bond

yield curve

Salary growth, retirement age and turnover

Mortality –

table issued by IRS and updated every year

The Internal Revenue Code allows annual contributions greater than PPA

minimum funding requirements, thus a range of contributions is possible.

However,

under

current

PPA

“credit

balance”

rules,

excess

contributions

in

a current period may not be totally available for determining future

contribution requirements.

Pension Contribution

Proprietary and Confidential

26

Pension Contribution

Under PPA minimum funding rules and based on current market assumptions,

Ryder will be required to make significant contributions in the next five years.  In

general,

Ryder

may

elect

to

make

voluntary

contributions

earlier

than

required

and

in amounts greater than the minimum requirements.

The

following

table

presents

Ryder’s

estimated

minimum

funding

requirements

(1)

: 

As of

Dec 2011

As of

Dec 2010

($ in millions)

Present value over 5 years

(2)

U.S. Qualified Plan

(3)

$        442

$        302

All other plans

$          54

$          50

Subsequent Calendar Year

U.S. Qualified Plan

$          65

$          

-

All other plans

$          16

$          15

1/1/2012 PPA Funded Status

(4)

74%

75%

(1) U.S. Qualified Plan Contributions as of December 31, 2011 are based on a discount rate of 5.56% for 2012

and 5.10% for 2013 through 2017 and return on assets of 7.05%.  The level of future contributions will change

based on actual discount rate and plan asset performance.

(2) The present value of the future contributions is discounted based on Ryder’s  5-year borrowing rate.

(3) U.S. Qualified Plan undiscounted by year: 2012; $65M, 2013; $113M, 2014; $111M, 2015; $108M, 2016;

$88M, 2013

includes

estimated

$4M

additional

funding

requirement

triggered

by

"at-risk" status for 2012 plan

year.

(4) Funded status < 80% as of 1/1/2011 triggered the "at-risk" status for plan year 2012.  In December 2011 a

$13M contribution was made to avoid the "at-risk" status for the 2013 plan year.

Pension Expense

Proprietary and Confidential

28

Consolidated Pension Expense History

Pension Expense

(Dollars in millions)

2011

2010

2009

Service cost

14.7

$     

15.2

21.0

Interest cost

97.5

96.1

93.0

Expected return on plan assets

(101.8)

(93.1)

(74.9)

Settlement/Curtailment loss

-

1.5

0.1

Recognized net actuarial loss

20.2

19.0

24.0

Amortization of prior service credit

(2.3)

(2.3)

(2.2)

Pension expense, excluding union plans

28.4

36.5

61.0

Union-administered plans

6.0

5.2

5.2

Net pension expense

34.3

$     

41.7

66.2

U.S.

Actuarial

Assumptions:

Discount rate

5.70%

6.20%

6.25%

Salary progression rate

4.00%

4.00%

4.00%

Expected return on plan assets

7.45%

7.65%

7.90%

Gain and loss amortization in years

25

26

27

Proprietary and Confidential

29

(Amounts in millions)

2011

2010

2009

U.S. Qualified Plan

25.9

$      

30.7

$     

47.7

U.S. Non Qualified Plan

3.0

3.1

3.2

International Plans

(0.6)

2.7

10.1

Union Administered Plans

6.0

5.2

5.2

Net Pension Expense

34.3

$      

41.7

$     

66.2

Years Ended December 31:

Detail of Consolidated Pension

Expense History

Pension Expense

Proprietary and Confidential

30

•

Service cost is

determined as the

actuarial present value of

benefits for employee

service during the period

•

Amount is impacted by:

1) Discount Rate

2) Number of                

employees

3) Expected lives /

retirement period

of

employees

Service Cost

Pension Expense

(Amounts in millions)

2011

2010

Company-administered plans:

Service cost

14.7

$   

15.2

$ 

Interest cost

97.5

96.1

Expected return on plan assets

(101.8)

(93.1)

Settlement loss

-

1.5

Recognized net actuarial loss

20.2

19.0

Amortization of prior service credit

(2.3)

(2.3)

Pension expense, excluding union plans

28.4

36.5

Union-administered plans

6.0

5.2

Net pension expense

34.3

$   

41.7

$ 

Proprietary and Confidential

31

•

Interest cost represents

the increase in the

projected benefit

obligation due to the

passage of time

•

Amount is measured

by accrual of interest

cost at assumed

discount rate

Interest Cost

(Amounts in millions)

2011

2010

Company-administered plans:

   Service cost

14.7

$    

15.2

$ 

   Interest cost

97.5

96.1

   Expected return on plan assets

(101.8)

(93.1)

   Settlement loss

-  

1.5

   Recognized net actuarial loss

20.2

19.0

   Amortization of prior service credit

(2.3)

(2.3)

Pension expense, excluding union plans

28.4

36.5

Union-administered plans

6.0

5.2

Net pension expense

34.3

$    

41.7

$ 

Pension Expense

Proprietary and Confidential

32

•

Return on Plan assets

represents the assumed

change in the fair value of

Plan assets during the

year, after considering plan

contributions and

distributions

•

Average long-term U.S.

expected rate of return of:

2002

8.75%

2003-2007 

8.50%

2008

8.40%

2009

7.90%

2010

7.65%

2011

7.45%

Expected Return on Assets

(Amounts in millions)

2011

2010

Company-administered plans:

   Service cost

14.7

$    

15.2

$  

   Interest cost

97.5

96.1

   Expected return on plan assets

(101.8)

(93.1)

   Settlement loss

-  

1.5

   Recognized net actuarial loss

20.2

19.0

   Amortization of prior service credit

(2.3)

(2.3)

Pension expense, excluding union plans

28.4

36.5

Union-administered plans

6.0

5.2

Net pension expense

34.3

$    

41.7

$  

Pension Expense

Proprietary and Confidential

33

•

Settlement loss recognized in

2010 upon election by a

number of Canadian

employees to receive a lump-

sum payment

(1) For 2010, lump-sum

payments were greater

than service and interest

cost and triggered

settlement accounting

(2) Recognized

proportionate amount of

unrecognized loss

Pension Expense

Settlement/Curtailment Loss

(Amounts in millions)

2011

2010

Company-administered plans:

Service cost

14.7

$   

15.2

$ 

Interest cost

97.5

96.1

Expected return on plan assets

(101.8)

(93.1)

Settlement loss

-

1.5

Recognized net actuarial loss

20.2

19.0

Amortization of prior service credit

(2.3)

(2.3)

Pension expense, excluding union plans

28.4

36.5

Union-administered plans

6.0

5.2

Net pension expense

34.3

$   

41.7

$ 

Proprietary and Confidential

34

•

Actuarial gains or losses

(G/L) include changes in

pension assets or

obligations resulting from

experience different than

that assumed or changes in

assumptions

•

G/L recognized over time

•

G/L recognition is subject to

a “corridor”

which is

generally 10% of the greater

of pension obligations or

assets

•

Corridor at 12/31/11 was

$197 million

•

For U.S. and U.K. plans,

gains and losses are

recognized over average

remaining life expectancy of

plan participants, in light of

plan freeze

Actuarial Gain / Loss

(Amounts in millions)

2011

2010

Company-administered plans:

   Service cost

14.7

$    

15.2

$  

   Interest cost

97.5

96.1

   Expected return on plan assets

(101.8)

(93.1)

   Settlement loss

-  

1.5

   Recognized net actuarial loss

20.2

19.0

   Amortization of prior service credit

(2.3)

(2.3)

Pension expense, excluding union plans

28.4

36.5

Union-administered plans

6.0

5.2

Net pension expense

34.3

$    

41.7

$  

Pension Expense

Proprietary and Confidential

35

•

Prior service credit

represents the cost of

retroactive benefit

reductions made in a

Plan amendment

•

Recognized over the

anticipated future service

period of employees

affected

Prior Service Credit

(Amounts in millions)

2011

2010

Company-administered plans:

   Service cost

14.7

$    

15.2

$  

   Interest cost

97.5

96.1

   Expected return on plan assets

(101.8)

(93.1)

   Settlement loss

-  

1.5

   Recognized net actuarial loss

20.2

19.0

   Amortization of prior service credit

(2.3)

(2.3)

Pension expense, excluding union plans

28.4

36.5

Union-administered plans

6.0

5.2

Net pension expense

34.3

$    

41.7

$  

Pension Expense

Proprietary and Confidential

36

Ryder participates in 11 multi-employer pension (MEP) plans that provide benefits to

employees covered by collective bargaining agreements as follows:

The annual net pension cost of the plans is equal to the annual contribution which was $6.0

million in 2011.

If any MEP plan fails to meet certain minimum funding requirements, we could be required

to make additional contributions up to 10% of current requirements.

Employers participating in MEP plans can elect to withdraw from the plans, contingent upon

labor union consent, and be subject to a withdrawal obligation based on the plan’s

unfunded vested benefits. Based on the most recent available plan information, we estimate

our withdrawal obligation to be approximately $27 million.  We have no intention of taking

any such action at this time.

Union-Administered Pension Plans

Pension Fund

Employees

Pension Fund

Employees

IAM National

324

New England Teamsters

19

Western Conference Teamsters

252

Local 11

14

Local 701

137

IBT 710

3

IAM Motor City

65

Local 272

13

Central States

30

Cleveland Bakers and Teamsters

3

Auto Industries

29

Proprietary and Confidential

37

Sensitivity Analysis -

U.S. Qualified Pension Plan

Pension Expense

2011

Pension

Projected

Assumption

Change

Expense

Benefit Obligation

US/Int'l

Expected Long-Term Return on Assets

7.45%/6.84%

+/-

0.25%

-/+

$  3.6

Million

Actual 2011 Asset Returns vs. Expected

7.45%/6.84%

+/-

0.25%

-/+

$  0.4

Million

Contributions at beginning of year

+

$ 50 Million

-

$  3.5

Million

Discount Rate

5.70%/5.55%

+

0.25%

-

$  1.5

Million

-

$ 48

Million

Discount Rate

5.70%/5.55%

-

0.25%

+

$  1.3

Million

+

$ 48

Million

Salary Progression Rate

4.00%

+/-

0.25%

+/

-

$  0.1

Million

+/-

$   1

Million

Proprietary and Confidential

38

(Amounts in millions)

Estimate

Actual

Actual

2012

2011

2010

U.S. Qualified Plan

36.0

$      

25.9

30.7

U.S. Non Qualified Plan

3.4

3.0

3.1

International Plans

3.9

(0.6)

2.7

Union Administered Plans

6.0

6.0

5.2

Net Pension Expense

49.3

$      

34.3

41.7

Years Ended December 31:

2012 Expectations -

Consolidated Pension Expense

Pension Expense

Proprietary and Confidential

39

Drivers of the Change in 2012

Consolidated

Pension Expense

(Amounts in millions)

2011 Pension Expense

34

$          

Lower than Assumed Return on Assets in 2011

11

Lower Expected Return Assumption

7

Benefit of Pension Contribution

(6)

Lower Discount Rate

4

Other

(1)

2012 Estimated Pension Expense

49

$          

Pension Expense

Proprietary and Confidential

40

2011 Expectations -

U.S. Qualified Pension Plan

Pension Expense

Estimate

Actual

Actual

(Amounts in millions)

2012

2011

2010

U.S. Qualified Pension Plan

Service cost

12.9

$       

12.3

11.6

Interest cost

74.3

76.2

75.9

Expected return on plan assets

(75.1)

(77.8)

(71.2)

Net amortization

23.9

15.2

14.4

Pension expense (income)

36.0

$       

25.9

30.7

Actuarial Assumptions:

Discount rate

4.90%

5.70%

6.20%

Salary progression rate

4.00%

4.00%

4.00%

Expected return on plan assets

7.05%

7.45%

7.65%

Years Ended December 31:

Pension Equity Charges

Proprietary and Confidential

42

Funded Status = Fair value of plan assets compared to PBO

Overfunded Plan

Balance sheet asset

Underfunded Plan

Balance sheet liability

Year-end (December 31 for Ryder) calculation in conjunction with actuarial

valuation

Certain changes in funded status are recognized through other

comprehensive income.

Relates to actuarial gains/losses and prior service costs/credits that arise during

the period but are not recognized in pension expense

Changes are recognized net of tax

Accumulated changes in other comprehensive income are presented within

shareholders’

equity

Pension Equity Charges

The funded status of a defined benefit plan is recognized in the balance 

sheet.

Proprietary and Confidential

43

Negative/Low asset returns and a declining interest rate environment have

led

to

significant

unrecognized

actuarial

losses.

Following

is

a

summary of

cumulative pension equity charges:

The higher equity charge in 2011 reflects the impact of a lower discount rate

and lower than expected pension asset returns.

Global

revolving

credit

facility

includes

a

covenant

to

maintain

a

ratio

of

debt

to consolidated tangible net worth, as defined, of less than or equal to 300%.

Pension equity charge is included in debt covenant calculation.

Ratio at 12/31/11 was 255% and Ryder continues to be in compliance with the debt covenant.

Pension Equity Charges

Cumulative Equity

Annual Charge /

Year

Charge

(Benefit)

2007

$148

($53)

2008

$480

$332

2009

$412

($68)

2010

$423

$11

2011

$595

$172

Conclusions

Proprietary and Confidential

45

Ryder has frozen U.S. and Canadian pension plans to most active

employees and U.K. pension plan to all employees.

Pension expense is sensitive to expected long-term asset returns versus

actual returns as well as interest rate changes.

Difference between actual and expected asset returns and the

impact of

interest rate changes are required to be amortized in order to smooth

recognition of gains and losses

Plan cash contributions can lower pension expense.

Pension

expense

for

all

plans

(especially

our

primary

U.S.

plan) is

expected to increase in 2012 vs. 2011.

Driven by impact of 2011 asset returns that were less than

assumed return rates, lower expected asset returns as well as a lower

discount rate

Conclusions

Proprietary and Confidential

46

Minimum pension funding requirements are manageable relative to total

cash generated.

At

year

end

2011,

the

plans

were

72%

funded

on

accounting

basis.

The

funded status is negative $550M.

Underfunded status results in a charge to equity (cumulative $595M at

12/31/11).

Pension charge to equity in 2011 does not affect earnings or current

compliance with the debt covenant.

Conclusions