R - Earnings call transcript Q3 2018

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Operator

Good morning, and welcome to the Ryder System Third Quarter 2018 Earnings Release Conference Call. All lines are in a listen-only mode until after the presentation. Today's call is being recorded.

If you have any objections, please disconnect at this time. I would now like to introduce Mr. Investor Strategy President, for Product Vice Ryder. Brunn, Relations, and Corporate Strategy Bob Mr. begin. you Brunn, may

Robert Brunn

during may uncertainty much. Litigation on very and Quarter I'd you of differ changes are morning's results factors certain includes from some Conference Third The and based these competitive, the changes political filings within to of and XXXX Call. Actual you'll measures. in subject meaning that are in financial XXXX. factors. forward-looking remind earnings statements statements non-GAAP these to materially Private expectations due Thanks in Commission. Ryder's expectations conference information with in like morning, Act market, call this Earnings circumstances. management's Good Securities and current welcome the presentation, is contained about to hear business, Reform the also this economic, release to Exchange Ryder's More Securities These and regulatory detailed and

of Chief Presenting to call, which non-GAAP reconciliations Robert Vice and this on website our Art Executive You'll measure available Chief today's and accompanying Garcia, GAAP investors.ryder.com. call and in the measure the President Sanchez, are presentation is Financial find Officer; each Officer. on in written Chairman Executive nearest

the on of are Dennis With the and of that, Dedicated call Steve to Solutions; and Additionally, Transportation presentation. President Robert. Global Solutions, it John over today Cooke, for Solutions; Supply let Global Sensing, Management Fleet Diez, following questions Chain President me President turn available of

Robert Sanchez

a and were used rental towards of Comparable of open initiatives. current outlook on the call up with to the third with outsourcing XX% and we'll Pretax of new joining and increased contractual transportation volumes. of in maintenance all prior information additional Dedicated. highlight XX% Both largely Good year, strong our the was quarter. growth million, business morning, the reform $X.XX. XXXX morning, rental quarter we average in shares due million from double-digit for share revenue The third the increases shares pretax commercial and costs results, second EBITDA us. under for we'll and driven financial by the higher a This the are our delivered to and our $XX.X year. some Then revenue discuss outstanding our increased was by favorable our consecutive new on Operating diluted progress forecasts was our for quarter. Comparable let's revenue, for and strong track our subcontracted second by year, for operating sales overview – or headwinds range to upper began thanks includes year X%, earnings of from wins We record segments, two-year benefiting in which billion February unchanged strategic XXXX. $XXX third everyone, and earnings third program on repurchase sales prior for revenue prior from from rate $X.XX revenue, turn $X.XX strong and and depreciation tax X $XX total record the the growth of that, quarter results. anti-dilutive vehicle improved in and third $X.XX prior quarter lower performance. of reflecting reflecting remained end $X.X fuel freight continuing excludes primarily the from sales We of results ChoiceLease performance. million than repurchasing With environment. a Comparable a operating X.X our number a operations for Page up business offset businesses from and XXXX, or an earnings. were tax questions. XX% performance for anticipated start-up Sales higher of despite per share million dedicated used quarter recap grew and year XX% activity cost. new vehicle by account Better-than-expected to

approximately XXX,XXX average $XX.XX. quarter, an we During shares price the at bought of

return quarter from to on Excluding significantly up XXXX, $X.XX, rate on than spread lower increased has pension market. XX.X% a the costs used rate vehicle basis the lower XX.X%, U.S. lower was continuing sales key prior spread and Operating were by the from financial basis. multiyear X $X.XX and significant point other was $X.X billion. XX% year's a of breakeven, been items, year. reform. third for tax last billion, Comparable reflecting rate year. to the EBITDA up from year-to-date of EPS highlights from Page federal related XX% comparable was capital negative the operations tax a tax year. last statistics the revenue impacted XX% XX up from used results downturn vehicle ROC spread in due prior The depreciation in Comparable

revenue X third activity organically spread year, X,XXX on and fleet cost, XXXX. was the basis and to forecast lease be now Page organically the We increased our capital their to XX in Fleet X% of growth rates ChoiceLease growth Solutions which strong since quarter from X% and we saw all trends driven expect key fuel, fleet business sales operating the in for turn remained prior higher by record on vehicles discuss excludes the sales. replacement full-year return very that reflecting by to higher points product increased Management breakeven. I'll lines. ChoiceLease a vehicles, due during year-end increased quarter. above original revenue,

around to growth We non-outsourced outsourcing. with from of to continue coming our penetrate effectively market new customers fleet recent the third

growth, We growth remain year would be fleet. to vehicles, their which X,XXX Company. ChoiceLease as X. We XX%, track lease of operating of XXX points Total this a X.X%, from this in also primarily earnings units for increased comparisons ChoiceLease due or a a continue up and revenue the new record to fleet fleet I'll quarter X%, model due from changes fleet X% expanding results prior year and see Transportation on commercial achieve depreciation vehicles. basis organic basis in costs partially certain DTS up offset valuation on growth sizes. performance. results customers residual Solutions were year-over-year, discuss challenging points this revenue maintenance minutes. by headwinds SelectCare benefited few depreciation prior although very the average revenue higher lower higher the used XXX on larger year. and from by quarter year was decreased increased the quarter conditions and up vehicles vehicle a by result value the driver driven to XX% on tax this and the FMS Dedicated higher reflecting up challenging into by XX%, business down up contributed a higher on to was quarter. was XX.X%, tight X,XXX strong on year was utilization XX% strong in adjustments. for earnings. Rental from as rental down revenue to wins. by grew strong continue vehicle percent We prior October. XX% year, These of were fleet throughout revenue gains and see higher to market year-over-year, now Page customer the new X% pricing those demand expected. older rental preventative and was outsourcing a trends freight demand and results demand. full-service the record to SelectCare reflecting driven trends, experienced separately rental prior pricing the reflecting headwinds Global and average power demand earnings freight Global environment. was very Commercial quarter, sequential Overall, sequential I'll FMS rental new turn offset including $XX and volumes. Favorable million sales XX% before of Used again operating

lease customers a Our business. remained sales team significant our to upselling continues Dedicated, on for growth opportunity to ongoing focus which this

see of our multi-service and earnings operating which Supply growth for Dedicated third revenue Chain segment. reported our Supply XX% in segment with is In provided grew addition, we as increased continue slightly. XX% the DTS year-to-date. to part quarter within reported solution, strong by Chain a Services Dedicated

quarter period benefit challenge customer of short unusually low a account. in labor large startup particularly to of This experiencing a revenue startup a market by hire the cost in need a high drivers which conditions. This from largely resulted growth, and new was tight an number due offset to patient the

a new transition quarter, the expect current Greenfield accounts have fourth to grew points this this volumes the we operation the solutions for Due of made Page already on not second and to for operating startup bulky e-fulfillment X.X% the did a provider Total from we've operating Last supply unusual drivers to revenue down revenue Mile delivery In and to as XX% I'll improvement basis business. operation. sequential performance new progress in XX% of their includes substantial we Additionally, in last-mile chain segment Ryder the before considerable market. from Group, issues. business grew the start quarter XX this in now tax big was the acquisition due earnings through Revenue the turn opportunity MXD year. percent and services issues, working with quarter any of e-commerce X. and higher was growth revenue of a as customer prior

CFO, better this industry by acquisition, turn prior call X.X% prior of revenue quarter, before XX% operating chain the all operating the I'll and including Garcia, across to year Art earnings the verticals, supply up the our up over from a revenue Excluding percent Supply growth, tax a XXX Segment earnings as account. operating for performance XX% chain to cover total capital improved on and were points due revenue XX% performance and organically items, At several grew respectively. to tax basis before startup were year. point, spending.

Art Garcia

Thanks, Robert.

equipment up and rental by $XXX reflects million of investments proceeds, of year-to-date gross lease from to over $XXX expenditures increased fleets. billion, million prior planned around Page the to to sale realized million. primarily refresh increase XX, expenditures Turning $XXX the just around This revenue totaled over grow We and from around by $X Net higher capital billion. just earning $X.X the capital primarily year.

and capital net is expenditures unchanged Our $X.X expenditures capital forecast billion full-year and $X.X for gross respectively. billion at

year-to-date up driven of $X.X from increase primarily We by positive total generated higher net reflecting working Turning for to billion year-to-date. to needs. prior the We Company's million by $XX increased cash cash year-to-date, X%. up earnings, of $X.X was million generated was billion of $XXX the almost million next just from $XXX $X.X negative cash The prior offset operating reflecting capital higher payments higher year-to-date, year year, operating partially billion the capital around cash-based activities page. over cash. $XXX capital increased by million, spending. Cash flow versus free expenditures

acquisitions the unchanged forecast full-year remains higher of flow increased negative in XXXX, early year-end in debt-to-equity XXX% just billion at reflects position, $X.X from reflecting total Debt-to-equity XXX% increased from spending primarily at by end of free under fleet for XX of capital million $XXX Our around two acquisitions. investments million. $XXX Page cash at our debt well end growth the as to and third year. quarter the and as the XXXX addresses

balance leverage to end toward XXX% range low our is the of Our sheet target of XXX%.

at partially for end remains to this At quarter over to up balance offset provide at point, year-end $X.X the unchanged sheet Robert used forecast Our XXX%. back sales update. the dividends. vehicle was from leverage of just over I'll year-end due to XXXX Equity billion, by the earnings call a hand

Robert Sanchez

for Used X,XXX XX%, up increased where year-over-year of for of Page sales. prior inventory to inventory standpoint, reflects up vehicles at were channel, differences, and XX% improvement vehicles inventory sequentially. our of to by and digits proceeds Adjusted prepared end, sequential for of vehicle pricing our number the sold during a receive were range Art. the also trucks. and and key low mid-single summarizes X,XXX up X,XXX XXX to pricing Thanks, still year, quarter X,XXX the pricing The were an XX% vehicle our and outlook. XXX per vehicles Page vehicles. was that being up reflects better second for by down truck tractors year. XX were but down we elevated was of vehicles. a truck by XX% turn and year-ago. on from to tractor vehicles below We by Retail proceeds for for younger end prices tractors use trucks up average leased sale declined a age sold. reflects XXXX, quarter and were partially prices around held From This results greater sale and quarter, a sequentially. global Sequentially, used last XX% and for XX%, realizing year was vehicle of prior vehicles sales Proceeds sold compared similar X% proceeds vehicle X%. tractor cover up used used down age mixed for vehicles X%. now retail were the XX peak I'll Compared target

for sales We prior on positive be Our quarter year-over-year remains our overall performance FMS strong in growth and expectations. track by with will operating anticipate driven a earnings earnings outlook the headwinds. lower fourth the and impact organic full-year. fleet and from our vehicles for on Based growth vehicle depreciation ChoiceLease at sales strong remains used forecast X,XXX activity robust pipeline, sales a a record

strong did year fleet anticipate continued than a prior of a increase. favorable environment a and price although average full-year for year, lesser expect rental the We growth to We the and extent, for this comparisons. X% earlier X% rental in challenging results, fleet more year-end demand with a XX%

is growth to used revenue improved remain range, the to recent with remain anticipated us are for pricing We Ryder’s and third Solutions continued of vehicle as vehicle performance target positioning trends. inventory the Dedicated our to to consistent earnings double-digit forecasting used deliver compared anticipate generally well Transportation We XXXX. near low-end quarter.

strong Chain the we to with performance. Solutions $X.XX range of EPS Supply these year-to-date $X.XX. comparable $X.XX range consistent narrowing expect results of are In also to in improvement the forecasts light versus year-over-year $X.XX full-year We prior to factors,

Our increase XX% an $X.XX $X.XX, of quarter comparable year. $X.XX in forecast from prior XX% the to fourth is EPS to

I'd that initiatives. of Slide brief to some XX, strategic a you are on update progress the making Turning provide like to on our we

and in continue year-to-date. momentum profitable XXXX contractual are with sales long-term to growth on XXXX record continued sales into pleased the driving we that has from First, focus very record

the our our we In team, size new sales to launch driving across the addition outsourcing, collaborative from increased from success benefiting selling of products. trends realizing expand strong organization and initiatives to secular more are

We are seventh consecutive to of year on our track lease growth. fleet deliver organic

I have deliveries new XXXX. year, We for and businesses organic as sales this extended into are signing fleet activity lease we strong been expecting that from record vehicles growth lead times mentioned, OEM X,XXX well lease means

Last and Mile fast-growing e-commerce are Sales and the performance for with integration last-mile volumes the in a have markets. and we MXD, we pleased space. we provider service in of activity With recently expected been that XX for acquired Ryder acquisition, than and are April. strong big the in goods We the expanded big this better last-mile bulky leading and network bulky provider

and launched mobile continue rent has our We of app customer-facing in to daily we as invest This fleets new vehicle X,XXX engagement to can used browse, as well our now expect services. RyderGyde, recently vehicles release share to technology manage our inventory. from of With already system with users who second app. fleet-management over wallet and their retention and enhance devices mobile the RyderGyde, through customer increased and their purchase users existing

Finally, we budgeting from zero-based savings our achieve are cost new on track expected full-year to process.

or organically revenue targets we term cost Earnings expected the percent for dedicated model targets chain are on from future. should revenue additional growth FMS exceed a as operating impact that XXXX expected supply changes vehicle of target is primarily before below certain the tax come quarter. due XX outlook opportunities segments in their the vehicles. are on to FMS as are their and costs drive expect in result All financial used targets be reach to in to this to target. for maintenance beat sales while expectations year the year. higher older Page to efficiencies There We lower this year. provides and to expected our this to longer our discussed year, last compared the earlier and no operating of

and points near mostly year. below target by below ROC of these we the to cost year maintenance be be expanding forecast points. drive to for points that initiatives, be in as cost XX vehicles. this of network the target older focused to vehicle basis reflects room end expected current cost turnover the The forecast to their leverage spread after opportunities EBT maintenance sales impact lowering reduction is our the on facility largely We year percent, on the the is grow, their to Dedicated target and mid-XXXX, capital end and XXXX. to target range, operating end somewhat year, sales vehicles improving return on earnings on expect by benefiting of through certain of vehicle fleet while is to bottom fleet primarily basis used come capital chain model in this provides realizing XXX cost in growth of be sold our higher forecast model older sheet range. and is be leverage of the supply basis maintenance to which to support this results, used to operating continuing We're acquisitions Again, lower Balance additional out maintenance target the XXX near-term. non-asset-based and/or

the with lease turn can he that over an accounting you to overview call I’ll Now upcoming provide so the changes. of Art,

Art Garcia

Robert. Thanks,

lease current ChoiceLease The be the you which contract. non-lease cash a to the will earnings change. that A timing resulting of customers receipt our effective flow service deferred many around first accounting components the and component, the a January has revenue services guidance reflect related is lease know, maintenance no will non-lease XX-Q. recognition between on from and reflected in than of are straight-line leases. This established impact more flow basis of lifetime of as portion requires This will a recognition be guidance and more timing revenue and basis accounting. difference loaded recognized as will rather the maintenance or the customer As case, cash future issued for contract. earnings is for cash backend The to on recognized our account will at our the be over adopted of be There or FASB product. our result no lease revenue payment, maintenance the on new duration Ryder, for the make provided be will have new standard which a of separate quarter in Ryder adjustment revenue X, XXXX by in impact

we expect to such, any do not result. allocation our change a capital As make as to

guidance, the see reduction shareholder's significant one-time upon of increase debt-to-equity and new but will our adoption a accordingly. We to equity target expect

fleet In earnings be addition reduced page. lifecycle accounting of that one-time lease. ongoing impacts there again we more as impact are maintenance on will age adoption not impacts, change as the be will of the a earnings with total these aligned Moreover, volatility shown associated the next revenue be with to will over standard, maintenance well following the will expect The costs.

patterns, of and during will recognized a on our in-service, lease terminations, term, declining of typical among EPS maintenance increase costs age. revenue volume Given higher with results sales, annual timing may would impact be average significant the estimate importantly, during more The of fleet will equipment and vary expected depending XXXX revenue forecasts factors, our early periods since impact upon class. of new Most be lease lease, second other the of typically to of deferrals assumptions. half age. maintenance age, be is The dependent XXXX fleet the

such, anticipate to with new conjunction in on our the our discussions, in existing product ability not new call XXXX February. on business sell impact economics standard standard. of any the provided based a material of ChoiceLease result conference or retain forecast impact do As business does our be overall as estimate we and this will customer not new The

closing over the call to Robert back comments. Let turn for me now

Robert Sanchez

to turn limit Art. each. to concludes over morning. one please it operator open an order up At everyone prepared questions. time, opportunity, the In to to for remarks give I'll question Thanks, yourself our this the line That this

we'll queue additional have as as you back questions, can. many we welcome get to into calls If you're and take

Operator

come you. from Capital And KeyBanc Instructions] Markets. Fowler Todd our first Thank of will [Operator question

Todd Fowler

everyone. morning, Great, Good thanks.

Robert Sanchez

Good morning.

Todd Fowler

much can demand visibility Robert, you little And us But a start, saw year? the you rental sense base seeing the have then into be the into talk just XXXX in customer the that we've your morning. that rental you're prepared you freight that quarter? said quarter. you continuation a rental also fleet some little Good in from with be normalizes of bit can going where of a on into from I October the might of third and approach fourth the locked what going the of to next thoughts think you if up? you're give fleet remarks, the going into a to been, fleet how strong environment about bit the hearing what the

Robert Sanchez

can Yes. very you been rental the year. Todd, that tell has strong I market this

which of when As you We expect this are lined more into kind point. our the renting at second demand could I red period, mean, we vehicle. you got as half get into every peak might year, on. we rental a of of we’re possibly get hands the

you that going tell it's would the expectations that to the October into I certainly quarter. and do extremely continue strong, So through would fourth

are year, all I be think are still continue As are to the we going little customers. that, be but then the And tell. least second the strong the to of look into a be service, murkier, down half that to year first it's bit too as slowed indications that next maybe obviously things to in vehicles little should probably in into half, the early a a at visibility new going beyond vehicles for getting bit, coming little gets

which of key But on through accordingly give redeploy how things I'll you the adjust color us a to a it's think let process happened, be that as vehicles. to bit these of our we kind do with really the changes is kind go for fleet different Dennis of able I the works. little and

Dennis Cooke

Robert as adding QX, decline what just as into we Todd, is, to head in into head – quarter. a we first see Yes. said seasonal we'll the

we use take about see XXXX. increase So or as fleet down or decrease it to the down, techniques asset quarter, we'll first we're our management throughout X,XXX the fleet impact if by then preparing units. either And up any then we for

happen So way. either to we're ready for that

Todd Fowler

Great, that helps.

how is to this you the can some think the just us you've fleet pure revenue of much but I at transactional? then of contract remind that's tied rental revenue how kind is follow-up, of transactional? point and quick a lease got piece, rental the much for there's component a Just big

Robert Sanchez

lease Todd, fleet that the about is XX% supporting XX% you that and Yes. transactional. got

Todd Fowler

Okay. the and back time. for I'll turn it over the in Thanks queue. get

Robert Sanchez

we Hey going with Todd, said in had, this still We've a to peak want be we're around I would our revenue. XXXX. Even FMS and as keep to XX% rental always XX%, back to between remind you XX% that XX% one of other XX%. we've stronger stat. demand It year

we're still because rental we're not the So up some top not be know and – the all chasing way there could we to down. movements

we but dependent not are fleet, So refreshing is becoming too overly rental source the again on the of earnings growth.

Todd Fowler

Yes, we that just environment understand with relationship. It's concerns in broader people makes thinking that And some what year. think sense. going are next just the the obviously, I about into

So was that's coming where the from? question

Robert Sanchez

Right.

Okay.

Todd Fowler

you. Thank

Robert Sanchez

Thanks Todd.

Operator

to We Jeff now will Loop Instructions] [Operator Markets. Capital Kauffman with move

Jeffrey Kauffman

everybody. much, very you Thank

Robert Sanchez

morning, Good Jeff.

Jeffrey Kauffman

we've also trades. deliveries Quick other been mentioned they delayed on were OEMs. of talk question. about truckers, realizing there's calls, they the and vehicles seeing particularly When sitting XX% their what that companies on how they were And they from been increases

the that are with on wondering, delays were XX% proceeds. to in And the deliveries concentrated? well? so, used you seeing saying what consistent, more as is was where Now But vehicle you impact that be seemed I if just your

Dennis Cooke

Yes.

is this Jeff, So Dennis.

the the We on OEMs color to see. on units been I kind They've give that now that's about tell everyday. and working it. have right longer than we with But you We got you, the down. are what extended times units overdue coming normally lead out declining demand we’re had the have and and XXX spike seen are overdue in some of just delays with

Jeffrey Kauffman

got is arguably just or in up – here. in assume and a on is then that looking you are right. that from same to vehicles you've utilization following impacting All have you back that vehicles trade you because would And these service. P&L standpoint, How the question you're

Where affecting fleet? that a the influence? is rental that having is So larger

Art Garcia

with does it lease them longer. lead to customers, So older our units running

our has a for we've along We demand view, we new with come are the are support as frankly, said to the earlier seeing wait of seeing From customers, demand that been so in. Robert coming had rental that rental. earlier, units to point units rental high in the lease as in we the

Jeffrey Kauffman

Okay.

Art Garcia

not of [Indiscernible] units Jeff lot that training really is is that, we're in. whole

a impact from us. standpoint, So it trade doesn't

about are ours the seven-year three, trade four and holding the think truckers getting. some your turning the is Remember, over their fleets the maybe earlier, of period. I pricing – comment years, that values so they're

maybe as I if did you that that quarter, in mid-single digits. the XX% some folks. at you're we the look the So of said in XX% an like-for-like remarks, prepared hearing or see vehicles, Not increase the other from used

So what have been model we're seeing quarters seeing last not we're uptick – of couple is year flat. did older big on after the We the uptick pricing. still some in see the vehicles, relatively

some So material early signs, but maybe nothing improvement, but yet.

Jeffrey Kauffman

All right. one. That's my Thank you.

Art Garcia

Thank you.

Operator

We move will of from question Amit to Bank. Mehrotra Deutsche a now

Amit Mehrotra

operator. the Thanks Hi, everybody. taking for Thanks question.

truck associated the But well. with orders So Company truck endured, has new the guess just challenges the obviously I of used market. we've had a as amount record

in go replacement those see those you truck use given growth, think I'm to as in market? mean, I so to about down orders but for another be might bit? values so the think terms record trying of values protected or just about a your understand residual that somewhat updated maybe opposed a you just let how disproportionately just that, against know there used you've us help – if relationship we quite help little And bit, any do could I

Robert Sanchez

it's in the mean, I going to hard exactly tell Yes. what's to market. happen

inventory market some units we additional right into replaced. as the coming I see think you're should gets these that

you tell market right on trucks. now the would used some probably in I upward in pricing However, pressure there's

coming maybe probably and you're have, then two inventory more down in. more at look viewing – those we’ve kind offsetting of we of because as more again, some year, because forces, So going pressure uplifting from up – to next as demand, pressure pricing on

today continued probably into truck So we kind year as looking we year. and environment into a next going maybe next stable of as at going view used here offsetting sit those

Amit Mehrotra

Okay.

that, the OEMs? used the I that's and where times lead least? thinking over truck do update can today to I market near-term are factor you follow-up what on with mean, the at us the a as about Just just think obviously a

Dennis Cooke

run and at Dennis. Yes. Typically three-month Xx about Amit, months. this about six it’s now, right is the range, in

Amit Mehrotra

it. Got

Okay, thanks.

for adjustment And forma of I'm me just just is what little that current leases impact the an be change. XXXX, to accounting work a the at of I year. XXXX it to would sure just accounting in it a the second because of lease the the ChoiceLease why revenue missing? the any trying pro that bit and through, catch-up impact to if The equity of I'm understand reflection would still I way will, question, the the the debit on on of if I'm else a this the level your is if the one help on new earning being impact there that's cumulative be Art, equity book equity is of then of right streams, lease or just not given you higher guess look understand anything maybe Company? mix to the is but

Art Garcia

Right.

Okay.

on our piece, end. maintenance just in incurred because – going the back costs remember First the accounting deferral be to more always a it's our are

month deferring of effectively very very years. the first lease of low in because the a under in you So maintenance a new are start guidance costs couple this first

start time, first a the asset half. and it every So balance last unwind then for grows will year, to period over after has deferred the it really of a revenue

be to So really deferred going why there's that's revenue.

of vary, highlighted not there's that going far the in drive is remarks prepared in that XXXX, The calculation. my is yet. pros I now factors a thought as really right because talk about lot as As a the position to of to in so we're it everything, finalizing

a be as forecast to position into So on a XXXX I think XXXX well a going in to from view we're February as XXXX. better give and

Amit Mehrotra

a any mean deferral guess accrued what between what's allocation help is on of payments piece. help the for lease, maintenance? lease I there? understand and new maybe being I the I just revenue the the any I

Robert Sanchez

Yes, few now a tell you it's right of the in there given more with probably months. typically clarity expect more just we'll investment. That's you associated how would But will finance. provide here I – amount is primarily

Amit Mehrotra

good weekend. Okay, all right. Thanks guys. Have a

Art Garcia

you, All right. Thank Amit.

Operator

take Matt of now Goldman will Reustle We question from Sachs. a

Matthew Reustle

taking question. thanks Hey, the for

into nice well vehicles and mean you bit, have ChoiceLease on follow-up to I you guess delivered of months XXXX. wanted how now lead point? about Just times are out that business continue a six far it you at I year? mentioned topline being least some first And like there of Is the half that that next for this reason seems any and there. there's booking acceleration at shouldn’t

Robert Sanchez

question, healthy don't why to good see I continue. very, it a reason mean, doesn't we're That's see very continuing I Yes. any Matt. sales.

As I amount moving record There there's very trucks third road that's sales for active. number going on on. – for still not business. enough is a lease had mentioned, the and for we replacement the of quarter Pipeline our also the freight that's are

certainly, continue at through first to late mentioned We're vehicles of this expect I selling year. second least of next next the into as we quarter, year. half now quarter So early first

will think time. lead We lead have a have it So three-month if about historically, we time. you about six-month a now

half end our we'll we are. to of as continue have December, years, So things where they

We will in customer. years, a business have a of with half contractually locked our lease already

do. lease So than we'll business a more go we as around typically into XXXX, lot our certainty think have I contractual we

Matthew Reustle

$XX And forward year, double selling or in terms risk Is to I haven't decline And you. of know of terms you these that million $XX a to the used still into sales, strategic helpful? be pricing sequential terms depreciation for year? environment of is next but next Thank you you anything finalized for some new then in vehicles that Understood. online? accelerated in environment of anything, the mean the the just on there? that there same of any – come that are reduce consideration imply seeing of I the million there would seen for would dip as look the is in we've uptake there, follow-up just just recently the

Dennis Cooke

question, Dennis. Art, then the first the take I’ll the take will second. part of and is you this Matt,

while pre-sell inventory, truck quarter it's with in First for it actually we center. put range sell the that online center is and our looking we're part and we'll units rental actually selling we it used pretty with were before as lack much we've units to September. to came running X,XXX units, so the much the What at now still the by target do teams started will is way to units which X,XXX and started we frankly to our and of more in rose up. happened our for inventory, the is fleet below XXX gets used That weren't is where fleet truck

for decline. so that was we to now the have for more that sell, available the our reason teams So inventory

Robert Sanchez

But think we our are the inventory at keeping range. low – keeping the I we're think key is it, about target of our end

And we're these not you we So selling as taking can these? Art, many in our units address the foot this as just to want off on environment. of pedal

Art Garcia

did tell $XX just at that million I mentioned, stand, of headwinds on you side. the to we as quarter Right that were you last $XX discuss looking depreciation would was Matt, I depreciation now where we million. Yes.

headwinds results. total any looking about as for used depreciation change we're vehicle at as well would sales that year Now million $XX include the and in next

of there's vehicle include So been slight to move RV top-end, our but sales. around the that kind does new a

Robert Sanchez

Okay, that's helpful. Thank you.

Operator

question Research. Wolfe We from now Scott take Group will a of

Christian Theodoropoulos

for for Hi, a Guys. Christian of is provide on lease ballpark be X% you the or EPS Scott. actually XXXX? guys smaller? estimate just This Can change around Theodoropoulos bigger Could it

Robert Sanchez

we now, ready still where that. controls any of of a have Yes, before calculation. to lot sure lot go the kind internally specific to of tested we a Chris now, moving out we're right that do make in systems our lot work parts are. not We're in number with of we a There's that's right we've do there's

Christian Theodoropoulos

years then of And Okay. many becomes accounting a change how this out lease more before tailwind?

Art Garcia

the about, in going to it's to it’s be is going – just business sense, talked fleet we've as tailwind going you up when if obviously, age It's separate – Yes. that right. be

of anything. to units future from and it's track We growth We're what going So a if doesn't the happens X,XXX all year. out also, it, perspective units this do sail in dependent probably X,XXX right. then you year, growing every levels the about grow on it's think

depends it the So on what happens itself. with fleet

So moves. you to tell it's the really hard when thing

time, know discussion volatility, little us to going to about once just growth. of it's normal should less and are now, much drive growing give that's be it's less how part and business. our fleet, more become earnings fleet but it's to age we results. the right, in going It's going actually business, implemented, over this a the it's confusing to our think I going make I

Robert Sanchez

keep a Number deal cash the I with mind to one the Number from two overall the is things doesn't impact business. doesn't this. in is impact any couple the there’s deal. it over flow the it earnings think of life of

or long the we've very had I from the from will vehicle this had the third kind a thing periods, that's with actually of about ages. impact important older standpoint That getting earnings as getting fleet to because is treatment a the where fleet younger. talk the we've goes new better revenue think match that good thing is run, accounting this away the of maintenance that the costs in

any improvements, growth discussions at you kind in to And but age to and fleet and because too do earnings margins time. are of the our but down is before we've of So kind get younger. earnings had with to fleet given what what the is the hey, not the not from having away. equalizes the the operational is because This aged of all growth some going are that, we that with margins from happens past much get even of had fleet Those or you're so our just growth distant better say, the go that.

Christian Theodoropoulos

if accelerated headwind? a more your come, guidance assume residual will to you update provide into an looking Helpful. can potential any depreciation guys And XXXX? additional And depreciation there quarter accelerated be then terms that values in just or of fourth then is no does

Robert Sanchez

we've Yes, recently offset that year. upward more keep the say by continuation you that seen we're of some probably us current used to kind truck next from it as assuming I and I the year, of of and market lines into flat. got going Art would think a earlier. this relates there's volume Bottom Again, next benefits that

really that's assumption. the So

As we depreciation there. it have accelerated the do relates fourth in quarter, to not

think no to to that I expect for that got do that – Art really you gave So you incremental, we that number got XXXX – earlier. we've within would if the

the depreciation where that's accelerated would happen. So

Christian Theodoropoulos

Got it. Thank you, guys.

Robert Sanchez

you. Thank

Art Garcia

you. Thank

Operator

will Ben go We Hartford to Baird. of now

Benjamin Hartford

guys. prices. morning, Good on sticking used the equipment Robert, of just Hey. topic

fully this, largely at in As various the mid-XXXX, the end models, you I look older trucks, to your you by prepared year. about of out remarks alluded the think

of As XXXX’s any the the what you've quarter? and talked to XXXX bias value should Or XXXX’s, looking you the [use I for trucks year relative these regard to proceeds looks profile upward prices what context these of stability on about through exiting, look the with XXXX’s profile the model like years, and bit to the like? little residual say looks models current] the at of overall a at read

Robert Sanchez

the tell cost from can you you XXXX view is I standpoint Yes. vehicle, a of have most I the challenged would probably our been. tell maintenance they that are the

So probably this again get of I selling be through XXXXs. would expect selling already been that we'll some to many is we uplift is things But year. as kind which into next that mostly get XXXX’s, some we've of year what

XXXX. we the – over might would uplift some past XXXX yes, if apples-to-apples, versus you compare have So once just we some get XXXX, I expect

Benjamin Hartford

And the as XX% risk? the What's and to the as take stands XX% to it risk would would for reach downside level then what the look what today? you at it on that three-year the number drive target FMS, upside? What's

Robert Sanchez

growth strong the contractual we're really from earnings ChoiceLease. in in think seeing business, FMS the I benefits

So of consistent up some then are going and the every going keep headwind. been couple last rental the the the not year, expecting from stable a years we to go with year. continue And some was we to things far rental and lease. with just up rental, [bang vehicle a things bang as could growth we've used we're depreciation that it future and into it that rental, challenged to sales so expecting give in obviously to year, but rental, it’s year, up] be – are be This the

would it there us get think also. I

to some of end. going We that question, dip big incremental That's from those or keeps do really us some know the to headwinds really that. as how for back you UBS, getting to we your we're a we in of have come to two XXXX? rental higher mentioned get need you in short get So to from what

Benjamin Hartford

you. Okay. Thank

Operator

Brian of Stephens. question We Colley take from will now a

Brian Colley

guys. morning, Good Hey.

Robert Sanchez

Good morning.

Art Garcia

Good morning.

Brian Colley

to think from used years three that hit needs spread target environment much pricing ROC compared about do to levels how in truck the improve current now, thinking So to objective? the order you

Robert Sanchez

number Well, I we a that give you discussed. can

for to away? on it's XX% XX%. about accelerated pricing much call how We - go think to up go was I the that last said needs XX% to

need perspective of the kind we getting So away. something really of I year, the getting wanted think be in the able to end to as to for to headwinds would we're that kind relates Since we're to of that. see towards sales go everybody that's probably move put the vehicle I used it from

when look of the our just year earnings this in for range tax to we expecting the about, year, at that If be up XX% exclude should benefit reform. XX% what you come talked to we're you this

lot So we're going to than be up more tax a but us. that, is helping reform

you In exclude used to we from XX% depreciation. tax get XX% reform. overcame headwinds order So to and vehicle XX% if sales that,

used you from vehicle used think maintenance about XX% and X% So model headwinds vehicle. market on the impact is the older headwind costs

whole prior up the year look and the can going XX%. you at from say year started So earnings in it and we be XX% to XX% to we're

our as the parts keep contractual to look I abilities, mind continue grow got we the business. the to we at of think in – that you've So

We earnings and earnings say sales, I of contractual with from are vehicle should business. used new depreciation replacing

want there's – So I don't we we been XXXX. that us to into expect place we overcome to think overcoming headwind a the have puts better fact standpoint, I but it that from sure that move really decide there's in to a we big earning and make continue an as

Brian Colley

just and demand is? where it. rental demand business also month-to-month, any on, Got then could trended And talk for That's how helpful. October if about you and wondering update maybe the

Art Garcia

changes Yes. Brian, year-over-year were. month-by-month, what the a give demand we’ll you

XX% also. we're July, year-over-year August, up, increase So seeing XX% up. about September, October, in in a and XX% up. XX%

Brian Colley

quarter. Great. contractual about you growth That's and level the maybe talked ChoiceLease, be also trended but well. of Dedicated the about then And as ask lastly, just And visibility color would businesses, how to different XXXX I helpful have sales throughout wanted across helpful. then the businesses? into pipeline you for the FMS, SCS around know those

Robert Sanchez

Yes.

[indiscernible] record year call, think sales mentioned I record I the on sales quarter, this Dedicated as a had year.

get from signed So when starting the nature Supply and we're Chain you lead a Dedicated of you And long that. ramp startup. is up, actually very excited get about to so time

good seeing, growth do as saw Supply we're chain, we next in again year. chain the in especially got the year year, We that earnings good feel Dedicated. about normally up this had mean, this bang we've you into XX%. has year. visibility I as So were very supply a and quarter up

over going we're think be for XX% the I up full-year. to

So greater this year. earnings growth

probably come year, a into good going next all down contractual XXXX. growth three of or across the earnings expect and businesses more We some activity level, normalized we again, sales but expect that

Brian Colley

the there Great. and leave time. appreciate Well, I'll

Operator

[Operator Instructions] Securities. go We Mizuho will now Kubacki Kristine of to

Kristine Kubacki

the to as customers, a expect kind talk in expect underperformance and follow-up that as and morning. is my worse starting from that we little that pipeline of Good guess it startup? a margin dedicated, I Was would robust on expected your is that more is you're you then question original My Was question new on that dedicated And that on the be will it guidance? the should quarter? about learned up talked segment? you’ve in issue more in than perspective in and through you you about

Robert Sanchez

tell Kristine, the well, it I'll was Yes, it you No, guidance? in wasn't that guidance. in the

is of a question growing, we anomaly for the been of would – It challenge, So Greenfield short going the from been This recruiting we No, each have prepared an very considerably startup perfect learned location clearly our of remarks. we're location forward. on period. that was a terms market be had not we customer. It The – driver difficult plan a to mentioned was in a these. for it higher this kind in happened I very that storm, was as a the in on do results. because

the expect put combination learned got and under of challenge. we We’ve ended led not the got of quarter feel that just from So in Chain Supply we've across do the – it. control those perspective to it sort as and new the We that it this that things really and Dedicated.

over year. XXX given any We in startups have

we and it. while, with of we deal You challenge but once from a run XX% don't hear a them, in every into

arms had John of it's next his So quickly really making I going getting an the done and around their so a it, job not quarter. and think team great issue into

Kristine Kubacki

I you. Okay, Thank appreciate very it. good.

Robert Sanchez

Kris. you, Thank

Operator

Ossenbeck will question We a of now from JPMorgan. Brian take

Brian Ossenbeck

Thanks taking Hey, my good question. morning. for

Robert Sanchez

Good morning, Brian.

Brian Ossenbeck

changes see to want a back you a part talk newer in the a that to Is and to works sort stronger in smooth to more to and wanted is the at cycle thought we pricing a discussion? Is could you we're as be that the potentially ended on EVs there? become truck. At more out accounting you process mechanical just put a bit the pretty of his this it managing if as process on maybe to option? contracts? low were change that updated residual to residual stub look Just end, some in risk, of just So lot with of able curious it any might little perhaps try robust accounting, going the that whole I about if start thoughts widespread will get make relates fairly think that either and to favorable, outsourcing, separating of if they but is to some the strategic there's this how you're the you'd how something closer

Robert Sanchez

mentioned this part we I the a Yes, question from first standpoint, that on the think of call. I think your last pricing

– kind brought five-year the the number down the average from – a the really pricing away standpoint. a we it We've beginning as from residuals flow leases lowered of using to obviously seeing And that quite current and we cash we and derisk have we of lower were view rolling standpoint. bit that We at the it's a year. a from this moved really think levels as would the

So that. that's we've handled the way

in six-year residuals middle try best think average the doing are always can. of to of as the of that accounting the continuing terms we've process to is for, we in fairway I with had the the keep the we

this So point with dealing know, that, as accelerated we're as policy of changes. depreciation you and depreciation a at result

Brian Ossenbeck

anything you further doesn't the sort of with out here? those truck adjustments on make that flattening used But sound there's like would it. market Got

Robert Sanchez

No.

all. at about is Your electric vehicles question

that. a I away We're that, think equipment, probably the here. least more is the talking we especially really heavier around from into having about impact from at dig duty which we're decade any what

folks remember this, we talk on eye I the first used would pricing that mainstream meaningful down impacting in them and that this. would to on Those before have. to to start progress you in really working think would if an area. it we're have it. and bring the see start But more then We take keeping what it market. and the start impacting some started presence became new the are Obviously vehicles to a of market

do visibility we to to before we some So it. react to it need have

Brian Ossenbeck

cities. in mile looks understood. to And I'd but next just expanding you've mentioned Okay, be the it. you expansion your you your like other curious some fulfillment facilities, had thoughts a and got them partnerships some recent are to quick on get the of own follow-up,

in you into it could you you're areas put with growth partnerships? some you just sort would the expansion context, of grow Is the of expected as targeting the being that I what how it as if that that business So to well? is And next owned look and structure, future read there. sort

Steven Sensing

Steve. We location. three Yes. Brian, this is specifically new added in geographies,

So we we in locations network operate. hub XX our have that now

our Really location. into hub eight expanded the those also We build in get density markets. we And to when cities across we those up strategy to is U.S. density, in convert partnerships other

buying model our it's into good think to are really I sell and So it. are a customers

Brian Ossenbeck

time right. for your this All Thanks morning.

Operator

We of will Stifel. Ross now take a question from David

David Ross

gentlemen. morning, Good Yes.

Robert Sanchez

morning, Good David.

David Ross

costs change side On to we've maintenance you talked your I the costs once, their kind and were you, me things, XXXX of and uncertain engines and and fool the expensive, more pricing engines equipment of because problems ahead. technology equipment shame much maintenance obviously approach did new realized the that on pricing the been, about what's guess costs. How it's approach to the after maintenance with

Robert Sanchez

back David, XXXX. we adjustments in started making those

saw So from having started challenges. in, the XXXX’s we the beginning some even when coming we

in. we adjustments I as XXXX, as we that to the began we those have to about tell needed making we mean was see we making make. that we without the really so can you And probably that them them. talk – that So the put saw started to us adjustment caught one I

started on. making adjustments early we those So

David Ross

think or said And doing all national Steve, network, it’s are locations. then just guess I you you what's last-mile, on owner the follow-up hub or when timetable do that drivers you operators? XX the about with you when or might you a have think company coverage

Steven Sensing

can have hit two-day we XX% of service national and Yes, We today. level. coverage within a Canada about U.S.

partners out network, bulky – but So has in capabilities Same and a in again agent hub on really services we're combination a really day of so it's the the good add. now new in been I big our and think locations not market, always and about service demand thinking to coverage. right

David Ross

out Last of Hunt strategy big at you is competitors and that building also And would Mile say some how the that networks? Ryder and are Schneider like from your looking national, J.B. different bulky

Steven Sensing

that which our is on deluxe service for competition. the against got us a asking that bit Yes, Canada, demand across carriers services, that model behalf we've a think network across again delivering lot on us. Again, is great out different. a we – our white-glove – end and there and I U.S. are companies things a really carrier differentiate And I it. higher two and those are think of focused use of so are We of customers

David Ross

Thank you.

Robert Sanchez

Thanks, David.

Operator

to now Seaport And we go of Sterling Global will Securities. Kevin

Kevin Sterling

you. Thank Good morning, gentlemen.

Robert Sanchez

Kevin. morning, Good

Steven Sensing

Good morning.

Kevin Sterling

pending over with retirement. working enjoyed congratulations your Art you I the years. have on

Art Garcia

you. Thank absolutely. Yes,

Kevin Sterling

think of directionally of Robert, us think help could kind relates luck possible? maybe CapEx that but directionally you. best Yes, and as XXXX, as Is for it pinpoint about exactly, not you XXXX. we to CapEx to maybe about XXXX here

Robert Sanchez

for Sure. give some think let giving guidance I'll you you full I give XXXX. me color, you mean the without I –

be that to as relates be making we're to the we going a fleet we because adjustments though would the always year have refresh another – saw some may CapEx, the year. expect need to even grown this similar do. it As I got do we We've we same CapEx rental some what not to

the So be same we ballpark. should in

a because I plus years, a would aren't strong even until lease we continue. those some was in lease probably sales think coming to bit year, next vehicles higher expect of be though little that this

next tell year. up you would probably some I So CapEx is

and as of a give of the think I some bit color. you earnings relates little the it and to takes, puts I'll

the All working is on. impact to of of prior way, by as the lease any we're this, accounting, from mentioned, I still which

seeing to expect earnings and would that pipeline signed had we're into deals year. on from year ChoiceLease this that the contractual this all based going So XXXX, and the than in the more have and we I we've growth Dedicated

growth our year. but from process, the of year, some of more saw businesses still again maybe this we some than budgeting will I what positive contractual expect this So zero-based there. see much to be the as from saw not we as would benefits

some contractual earnings growth benefits. budgeting So see will accelerate zero-based will

this I don't a in saw used would see assuming headwind pickup is truck expect same a I Now, pricing. the year. generally we same the headwinds

to truck in market used to So going depreciation to And that sales. have be we're XX% headwind to you facing. about XX% improvement we're couple years vehicle headwind get from used start going this an we the with going and of either off an more a or

maintenance cost we I headwind half. when leaving On into the to – XXXX that get that talked the do so some expect we the leaving cut about would say next them we’ll standpoint, headwind start the get market year, less we'll market, because maybe

and have our year used into year, some we between going of that way was benefit a be in through. this maintenance sales what vehicle next XX% should to headwind terms so XX% be So might work

every rental going count growth We're not we're chase seeing that year-to-date. year. seeing we to probably saw not However, We're that that – the this going can. I'd same XX% we rental transaction to on

team. So I to wouldn't And type with over XX% Steve XX%. supply year-to-date, see year I and from earnings it’s repeat. rate his again. I'd I expect into that XX% the expect chains to of the expect also saw growth, going we normalized the year-to-date quarter wouldn't growth growth more a in growth that

growth interest, create probably next on overall, headwind somewhat some there insurance in additional So too. headwind of rate. will market year Also and the those terms the

maintenance that have of things. on the offset contractual of positive some may positive the be – the and some [CBD] might So other by from and maybe these

we and would growth into the here sit So when as puts to I to all expect put year. offset earnings and you today, able next headwinds takes together the again show be

is likely of Now growth earnings more will of important to that of from growth. the again, business. be parts going again the think be these. growth be some story And the not I of more double-digit because of But the is the it'll nonetheless, contractual part coming

it contractual up building and much we’re steady. So stream, this much and revenue earning more is dependable more

each that be the in of earnings good a you're that, start to coming are to more which to I see think going is going thing. year very from

sales, really growth are plan, the rental itself, none where right all that's But excited we to a not line. with point, is and value UVS, stone. the we're seeing happens you give we in still not obviously at a written kind used that how of on on still rental earnings not And benefits I But year earnings now grow would little so that's So our it we're ongoing going depending this can assuming way. what repeating be have. Ryder going We're bit our growth considering higher. in have the you're how locked headwinds and done excited. We're truck could in sort showing of assuming that to still and be we're tell of again, you with which business,

Kevin Sterling

the Is No. take of very fair? that or Robert it lumpiness the that out, business the that we've move And contractual like guess, was helpful. Thank just of past. seen some toward I in you. sounds more your

Robert Sanchez

the That's been along. all goal

Kevin Sterling

Gotcha.

Robert Sanchez

other and less this getting items some the historically that like of on more to really It been is we've dependent contractual really act dependent business model a on.

Kevin Sterling

just have here? market guys, talk you think still if that housing housing the in curious we at poles when if can way or possible one all? Okay, potential big historically is impact the the ask obviously business? any I'm as and in one what's are been a housing I gotcha. housing look does then And And And slow, another. question case slowdown seeing impact, you about of and I picture tied to any there's from you been your a at

Robert Sanchez

think base. is that diversified the of in one I terms very of customer our Yes, we're benefits

vertical. one not we're So married any single industry to

GDP as Now we the the of overall as you moves growth. economy the know bigger you might of periods might housing time where be have exposure. such And time a do have around, portion

impact the from seen changes let customer of I'll Dennis his – that. have any the housing based would But not market. have on We because big makeup the most in color probably of

Dennis Cooke

you various and kind a lot of just seen. Kevin, industry give to a I times for the indicator Yes, and say, as growth rental, leading which segments of a the let's we've sense prefer just

up XX%, point QX segment. view. was in food-and-beverage saw Retail is Industrial XX%, warehousing X%. Firstly, up housing of X%, was rental from of the actually We The industrials actually year-over-year, up about were up a XX%.

all look was to you So it's customer seeing you X%, as when the of to diversification because it segments automotive that wouldn't comes it, our kind go dependent Robert's say point, on we're housing, run at only I throughout when we're broad growth so our base. of but and of

Kevin Sterling

today. Thank Appreciate you, I Robert. That's all you, your thank time And had. That’s Dennis. great.

Robert Sanchez

Kevin. Thank you. right, All

Operator

will Capital. Cummings of We Copeland to now John go a

John Cummings

for question. taking Hi. Thanks the

is on bit buyback Just you given to significant just potential in your on, leverage a a more are thoughts the where your love of one and stock being forward? your just question where for terms target, hear trading, below going

Art Garcia

Yes. of John, we've been kind out there.

been has range. below our the leverage within we're the buyback of share range. it, would historically end now we're discretionary position Right Our kind look target but – at we fell we lower at still of when

spending in prospects lease the high of be replacement. for growth we're to said, rental capital at lot are a Robert strong spend continued Hopefully, XXXX around too. As looking going there

once So factored will buyback. that we all of has share we are I that drive decision about any where see kind think in to get

John Cummings

Okay, thanks.

Operator

now Group Scott Wolfe Research. We will to with go back

Scott Group

the follow-up. Thanks for guys. Hey

that $XX assume additional year more Or does number clarify, guys do million expected that already higher? accelerated headwind depreciation depreciation? accelerated that decided next of to Just go if really to you could quickly depreciation

Art Garcia

Obviously, some guess, it's review accelerated. assumes year. in to conclusions, the I [Kris, it this relative always additional call]. and did to subject final It include some Kris but incremental

Scott Group

you so guys. Perfect. much Thank

Robert Sanchez

it. You got

Operator

And now JPMorgan. to Brian we'll of Ossenbeck back go

Brian Ossenbeck

the for quick thanks follow-up. Hey,

that it, of and some that impact? residual rather, how how but in there there that you I anything similar trucks look AMT realization as XXXX and on to at newer expect and would Probably with you nature. pipeline in that You already the issues a engine the trucks as coming of was your collision any avoidance, guess types is things things, and XXXX your step of talked vintages the would other, you not especially pricing impact value through there XXXX to much terms – now, working about – the the affecting are Is has reactions and your as are that pipeline? the think of are to changes of

Dennis Cooke

maintenance in a costs one-year to apples-to-apples the continued on Yes. seen or up two-year annual for Brian, costs go is, decrease XXXX, a and this a see an is old, year have through year. is literally old saw in basis, We XXXX, from forth. Since we we so have XXXX. maintenance to Dennis. to old What every I two-year when increase would you one-year model monthly say old model year

not we're the what we we’ve see XXXX’s We've the they're the is improvements So high maintenance XXXX. seen to costs, XXXX’s and less have still but seeing since with it. actually answer XXXX’s that decline. and continue saw

Brian Ossenbeck

right. of Thanks, Q&A Dennis. Great. End All

Operator

Sanchez call And time, questions. are like to Mr. the I'd over Robert for closing this at remarks. to there additional no back turn

Robert Sanchez

past of top the you. little right. All We're a Thank the hour.

everybody's So I got think call. we

here So fourth your as road the in Company hit everyone thanks and forward for seeing interest we we the in quarter. look the to

you. thank So

Operator

thank participation. all for concludes conference. That today's We your you

Ryder System (R) 26 Oct 182018 Q3 Earnings call transcript