R - Earnings call transcript Q1 2021

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Operator

Good morning and welcome to the Ryder System First Quarter 2021 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 you to Mr. President, Ryder. Corporate Vice Product and Senior for Strategy Brunn, Investor Strategy Relations, New Bob Mr. may you Brunn, begin.

Robert Brunn

like differ expectations that much. Reform to some Private XXXX contained I'd Securities Ryder's Executive the very forward-looking on XXXX. information These in and first remind current to and Thanks of Robert Chairman Good available meaning quarter earnings release, this earnings presentation and subject are morning and factors. statements measure with within and morning's Chief Litigation and nearest conference and call Financial financial call Ryder's of you'll this economic, political website. filings Act Parker, presentation, market, in statements President during factors changes and the is Commission, and the are Officer; welcome to management's about are hear you the Exchange business, these each of to Actual on More today's in circumstances. non-GAAP materially changes in may results Officer. a reconciliation expectations due detailed Sanchez, are based from uncertainty competitive, on Vice earnings to Securities regulatory Executive Ryder's measure and these Chief GAAP which Presenting call. Scott

President presentation. the the Transportation, on following the are time, Solutions; Additionally, and and Supply Dedicated and for over Steve this of questions call Management Diez, Global Fleet Robert. I'll Global call John Solutions Sensing, President to Chain of At available turn today

Robert Sanchez

updated making our actions of We'll that call an and the as us. our morning, this we'll then outlook our ROE on for we're well XXXX, quarter overview progress joining as first everyone, achieve morning, for meaningful results. to target. thanks review our Good provide On

growth With our number a conditions. even economic we're customers remarks, of call significant current has of been e-commerce and trends overview opportunities open recovery Accelerating on support meaningful by a by and our target. our Ryder prepared anticipated few for questions. remain great in long-term stronger encouraged in our months Last The let's outsourcing, in and environment. for progress freight Overall, particularly We we'll in to we've transportation encouraged than returns that, Ryder. business and focused turn logistics the primarily for ago. the an the Following made towards are improvement our increasing Mile, continue growth to fulfillment just reaching

we in and are better as customer time, While in objectives. of our for continue long-term and campaign strategic innovative we such driving to in collaboration and same solutions, platform; SCS DTS the our visibility support freight our returns, invest higher awareness Ever at also RyderShare, brand

and for awareness flexibility resiliency logistics chain provide that solutions of to technology with the and does partnerships grow, innovative As supply market end-to-end so customer continues can demand strategic scale.

forefront to As sales result, the record technology and a in pipeline moved sales chain of activity. supply discussions, robust resulting has a

First forecast by quarter vehicle earnings used FMS, as lease as in results. sales better were rental higher and our primarily driven well outperformance than

initiative remains million. outlook. we our of all activity this our track maintenance reflect and savings savings full forecast on EPS segments, multiyear across addition, updated business In $XX our sales cost for raised strong year targeted year's to three saw We

vehicle cash prior due higher cash free year to and used was quarter First flow lower expenditures. than higher proceeds capital sales

million. forecast flow year $XXX unchanged cash remains $XXX free full Our at million to

and Scott well key first segment. each our it stronger We FMS we're economic policy, we saw ROE positioned business strong performance. continue ROE quarter in we achieve turn target long-term point, that to our to expect in due XXXX, to previous above change to results XX% XX% to XXXX. to trends XX% with tax in no believe realize our forecast this conditions now Assuming I'll freight At discuss of in over

Scott Parker

higher earnings was contributed $X.XX the of results the quarter sales improved $X.XX residual depreciation quarter lower company vehicle operations and impact loss reflect prior first Return revenue and share increased changes. from reflecting improved a as in expense equity are declining estimate primarily earnings. the used results. and Total X% from earnings vehicle of value the continuing reflecting quarter a revenue. compared and per in first in rental the chain higher for Robert. lease a to used results related prior results year year. Higher first depreciation five. on to improved, $X.X Thanks, supply on sales prior Improved impact page also to billion Operating rental the Comparable

in as prior the our improvement changes past higher quarter the prior just from continue continued benefit in actions to flow to estimate as metric, Robert earnings expect Free returns. primary ROE, and we the residual for was mentioned. value from move cash increase financial year, the than our We impact COVID

declines page Fleet a on as mostly results X% by FMS increased Management Solutions higher increased increase in robust price, six. revenue Rental other and environment. driven reflecting to SelectCare was market Turning revenue. offset operating in rental pricing by X% revenue X% a

contributed increased prior with earnings. pretax were lease higher down prior lower $XX date. smaller year. and related Although year-over-year Improved revenue offset well and benefited by on expense the and as the of for X.X%. the fleet. costs, X% and was by percent increased fleet to improved EBT the higher to this resulted ChoiceLease rental pricing higher as turning power pricing earnings positive rental, quarter higher improvement to contributed In $XX to quarter, demand it during results. Results FMS operating results. estimate XX% initiative FMS average lower benefited Rental increased redeployed depreciation fleet. throughout quarter vehicle also value first April due including saw primarily vehicles on million utilization FMS slightly, lease demand. and used benefits from prior $XXX rental results the a partially a smaller in lower of million cost be debt the vehicles, was the as April March on we up sales also a changes year maintenance million, utilization comparisons our leased earnings. Utilization expense. residual bad into realized XX% was to pricing Higher to impact revenue quarter savings from above from of from and fewer XX% incremental as for maintenance

were X.X%, used For encouraged company's for increases in long-term reflecting highlights the changes. primarily in vehicle it trailing prior the expense estimate conditions from used residual value XX-month period, quarter. sales resulting market XXXX. sold trucks. target although We're Sequentially, tractors was and higher high seven our results continued by the mix digits for market year-over-year up global retail for improved vehicle proceeds for sales proceeds of primarily reflect XX% the Page through the improvement were channels. single to X% a price lesser Globally, very the of truck XX% trucks. double-digit depreciation and up up fourth tractors pricing proceeds and, proceeds of Higher were XX% quarter vehicles extent, versus tractor both and a

proceeds up estimates. the truck may second sensitivity, maintain provided by a in quarter needed increase you in tractors noting and Since increase order we year, that of XXXX tractor XXXX, were to proceeds our the XX%. XX% be a last US XX% and As second the would depreciation of residual in recall, XX% in policy current US up a quarter trucks were in

they since that age Although are generally not these or occurred have pricing second XXXX. quarter adjusted, indicative mix increases of improvements the are of

such, in for at and is above US levels. average tractors these improvements, As policy with pricing trucks the depreciation or

for conditions X,XXX is improved used versus market year capacity. the down and vehicles below the from the During Inventory vehicles and investments was sale down year, at prior up X,XXX is quarter, vehicles, inventory X,XXX reflecting range vehicles we and of to held retail quarter sales our vehicle our target X,XXX sold XX% X,XXX that sequentially. expanded X,XXX vehicles. end Used prior

primarily of versus and by offset Turning to tech. softer impact page operating was in higher negative partially overhead, the increases increased Operating due industrial Growth revenue eight. EBT business year supply as prior first offset goods, to quarter. the and by a marketing SCS over business was were the lost investments volumes. unchanged, packaged on in reflecting semiconductor driven percent SCS revenues the the weather and increased largely sectors, in our year. quarter, higher X.X% Automotive retail and for X%, X% new chain seasonally year consumer reflecting double-digit in high and revenue impacts by pretax earnings of percent including continued technology. pricing - partially volumes, reflecting this shortage COVID prior and the increased

target period, line X.X% in trailing long-term our high with However, it single of digits. XX-month for was the

reflecting in year. on by from to lower line new improved nine. our trailing performance, before were percent Moving a tax of Operating by with which as offset and insurance increased for DTS It was earnings volumes. X.X% prior line page DTS the X% partially the revenue X%, with up offset single-digit revenue higher pricing as prior dedicated was quarter, business operating in year is period, for EBT costs. operating target. was the the high XX-month

with the benefiting rental rental Turning is and and than capture strong investment and capital year, Rental to activity. to - from effects below investment. environment approximately in prior by higher lease spending support to pricing in A fleet due expected prior versus capital sales support expected the medium-duty forecast XX% are XXXX, the lease in supported increased capital Lease expenditure of e-commerce increased freight strong pricing the line year investment. million prior be returns was our slide $XXX $XXX demand this Full and was fleet. Lease activity lease mostly COVID plan planned million, and year. light increased XX. We prior year. initiatives and order grow in up spending to year vehicles, reflecting and demand from to market higher in in

the expenditures year is as full $X when replacement to below levels $X.X due on in to levels Our and chart spending primarily from shown gross was at for the This forecast bottom unchanged normalized page. billion XXXX, of XXXX well capital billion up COVID. at the is

Turning to slide XX.

to Our free remains record of our business our XXXX million forecasted flow $XXX XXXX cycle. the flow free reflects to Balance cash level last over generating flow FMS target growth $XXX well conditions, cash of in range. to is capital-intensive to million the balance above end at below strategy decline is this free historical levels. under and bottom year cash while the COVID but is leverage year expected the sheet

Robert vehicle as ROE and demand contractual mentioned, and to expected declining cost reflects first Rental EBITDA that a initiatives sales savings XXXX higher now and depreciation include to a to stronger-than-expected with market comparable achieve Importantly, also impact XX% quarter contribute to XX% recovery of and performance. Higher improved pricing expect in ROE. growth are lease we recovery. used operating maintenance

the of increase year. to turn to discuss call XXXX. to in outlook We the EBITDA continue to I'll over the Robert expect balance our comparable for back

Robert Sanchez

Scott. Thanks,

to above year. now EPS of forecast comparable $X.XX from Turning XX. EPS forecast of loss prior the in of $X.XX significantly prior full comparable to year of above raising forecast our year We're EPS the page to on our and our prior to outlook to $X.XX $X.XX second $X.XX We're a quarter $X.XX, our $X.XX. providing also loss well $X.XX

freight higher expected results. forecast continue at XXXX. Our performance economic vehicle used least key on sales through conditions strong assumes the of are rental the and Lease drivers

price We lease from benefit sales actions, performance. - from increased expect operating improved our activity pricing and to

earnings to continue quarter opportunities. awareness benefit new track from rental our residual any the and meet revenue of We value and are FMS, to strategic and quarter anticipated quarterly adjustments. high or brand impact aimed first exceed strategic Accelerating year last-mile e-commerce future remain valuation chain, DTS, This the the estimate not growth growth expected support driving to losses decline, to of benefit investments depreciation include year-over-year targets. gains does approximately from balance returns investments single the outsourcing and XXXX. in in or with resulting products also growth pricing In on our SCS second forecasting in in line gains used including we're sales $XX expect impact potential changes campaign. at in levels. to and prior technologies we're sale on be in also on or of vehicle for in million delivery, strong, in Supply new dedicated by trends chain supply digit and technology impacted In is

of shortage delay and FMS. Finally, activity impacting for customers rental delivery some in and semiconductor our lease supply automotive levels the is could vehicles chain new of

higher expect there the assumed supply chain shortage. delivery rental in to will delays by some as service higher-than-expected placed we In semiconductor as have impact lease vehicles to due of pricing. and activity We already offset be during FMS, earnings the be quarter well utilization impact first in will

slide over and key we've the revenue shown are pretax XX, earnings this growth that segment on components reminder, outlined previously here highlights our The XX% ROE As primary achieving a of and goals target target. long-term operating financial to cycle. are

provide our Turning ROE regarding to brief increase to our reminder achieve to a slide XX. and I'd like planned returns target. actions

the on to depreciation of moving - residual levels the higher shown to As chart, driver prior the past value estimate is changes. biggest impact past moving related

cyclical at is needed maintenance earnings addition, savings rental our certain returns reach pricing actions, In expected continued primarily cost to is improvements vehicle demand and areas five our increases businesses. in utilization conditions types, recovery remaining XX expected benefit and customer used are that on and used The strong just provide applications channel. to and include chain XXXX. accelerated trends ROE capitalizing from initiatives initiative, through market multiyear that growth cost and more progress in targeted expanding lease expected benefits. to come vehicle We're to Improving are target our sales returns and retail in our continue to key Slide the we're the highlights actions market outlined. dedicated that pricing and on sales making I by performance supply including

saw pricing lease initiatives. actions. to to depreciation In on allocation demand digit, continue refine rental, year-over-year pricing benefit analytics using continue from We're that data continued supported capital and reflecting is vehicles decisions. our and to new In planned leased further rental by results our our quarter the single impact performance, mid April. into Revenue increased expect first pricing growth optimization decline. portfolio favorable trends strong We by to pricing FMS, and we

additional in our return brand and more multiyear delivered maintenance end $XX million and Mile in include savings fulfillment our our the million accelerate an to than Our These $XX RyderShare and savings SCS network. through last dedicated awareness year, chain Ryder XXXX. savings initiative in on initiatives we're has cost Last to investment investing annual and solution in and in campaign, in DTS of track We're strategic supply businesses. growth our e-commerce higher continued expanding achieve

that logistics prepared That outsourcing support morning. We and and these continue trends positioned see concludes well opportunities. strong leverage our we're transportation remarks to to this compelling believe

file we we to our note to please go that later questions, expect Before XX-Q today.

yourself to As a reminder, limit one each. question please

have At we’ll open up it you you’re we for operator If this time, questions, and get I'll turn as to back in questions. to the as over additional line can. take welcome to the queue many the

Operator

Instructions] [Operator first our we'll from Stephens. go question And Long take you. with ahead go and Justin Thank Please ahead.

Justin Long

And morning. good Thanks, congrats on the quarter.

Robert Sanchez

Thanks, Justin. Good morning.

Justin Long

just you a with used think the the in of And used seeing there? thoughts you're theme I'm on of market if trucks, then also change if curious year year, any the you're Robert, Thanks. you if tailwind the updated have start the some the mix to out of buyers wanted question enter seeing the capacity truck second given I tightness in on depreciation buyers, the impact. quarter, non-traditional this in full the be Curious on said would for it million. I XXXX. $XX

Robert Sanchez

the this it Thanks, said said $XXX remind or it beginning at what quarter. we Well, would million was call, And first just of in last the year. the the in we year you, to be year-over-year million Okay. benefit $XX Justin.

there think anything we're saying Scott. quarter. to don't you number. send of that? million $XX to that I I'll in Scott, add the is So - changes now that to significant is it second there's in Scott want over

Scott Parker

Yes.

of is, what that still the we And the again, Robert's benefit, mentioned for the at of did. $XXX $XXX for that this that, about million Justin, million the there's estimate improvement outlook no think we XXXX best change point. to our is year. talked and We kind right. a we remainder

Robert Sanchez

used on that on me the your question bit a hand we're then over can give let and John and truck color to market, used the Diez, - market. seeing you what he So little of truck in

John Diez

Sure.

investments. to from or the of few we looking digital a buyers in part into through there are seeing seeing, channel, the our improved sales which One, deck marketplace, coming comments trucking side. many as we vehicle are our noted e-commerce new on results to used Justin, of retail the new side. in are here, as the engage that, And

are e-commerce in in to as trucks good meet activity straight as we need. that both So seeing market well tractor the

So they're that's for. the and in we that's coming what looking where buyers see new

Justin Long

Okay, the helpful. time. I appreciate

Robert Sanchez

Justin. Thanks,

Operator

next Instructions] [Operator Scott on go our from from Please we'll move And to Research. Wolfe ahead. question ahead and Group go

Scott Group

Hey, guys. thanks. Morning,

Robert Sanchez

Scott. Morning,

Scott Group

doesn't How that The I want clarify adjustments. up you just in want depreciation CapEx free guidance think to So guidance. guidance ask significantly, cash come tailwind, thing. to all? flow raised the then excludes $XXX one I - And change the no at million earnings move of the valuation I

now Just contemplate there are are this incremental above year? longer-term residual assumptions, valuation to that adjustments the prices

Robert Sanchez

Well, on free question the let cash me flow. just the answer

I $XXX our forecast. range in think $XXX there the It key have million. is we pretty wide free a cash Scott, was flow is-- to million

So the all that by really CapEx the yet. us some and of doesn't of impact hasn't of the range taken we're saying is out earnings change offset - that in

puts still range. the and the Scott, of takes, want - question? do part other some but second that the address we're So same in to you

Scott Parker

Yes. any Scott, UVS gains. perspective, yes, on excludes the million, impact least it the at $XXX about thinking of

depreciation of a in that As - remember, of very we little remaining. had XXXX. And bit you little there's accelerated most

the in our gain deck, into factor - selling. outlook in we that that kind we're sales current assets the on on we're seeing your regards So of that to the

through those depreciation units remember, did all that mid than you sell expect XXXX. the we accelerate the of to at lower As we policy for

our revisit those the policy the will I gains we I From earnings seeing will on that So perspective, portfolio. think about policy talked last a depreciation. we've better just result on think in call,

kind on trends any this year, that we'll to this kind of of end or of kind above And year see pricing. we levels. get the As market at of as kind as we of in are kind overall adjustments and through we look of we those work mentioned, the and the at

Scott Group

of on give if you rule Did thumb a we... ever

Robert Sanchez

I Like said...

Scott Group

Yes. Go ahead, please.

Robert Sanchez

No. I'll balance what adjustments are valuation million saying UVS a saw what we going quarter, in that to is net expecting the just to that similar about gains. you we're year which for quarter to the is it's on gains. net of And we're tell the in UVS first the - be $XX

Scott Group

but getting Okay. something, maybe earnings or XX% that I residual a ever give - was if of or of by ahead going myself, what did say, assumption thumb I'm from if we you just X% we means increase to rule - the standpoint? if an

Scott Parker

have of kind provided we perspective. Scott, thumb not that historically of from sensitivity rule a

Scott Group

all Okay, appreciate guys. you, it. right. Thank

Robert Sanchez

Thanks, Scott.

Operator

And we'll Fowler go ahead. next go Please from ahead and question KeyBanc Todd Markets. take our from Capital

Todd Fowler

and on you're maybe to rental lease your by guidance, looks maybe Can In raising you're of it $X.XX. guidance first morning. you Thanks of quarter. the three better about between drivers the like bucket talked the looks to midpoint, pieces Great. the like upside half remarks, and gains. full those kind areas? pricing change seeing was where the prepared It bridge the that year good Robert, the at it in the you about in help really increase

Robert Sanchez

increase vehicles it's the better we as that pricing them redeployed, what gotten we gotten we we've expected. Look, had of year, throughout in lot seeing year. Yes. you the system. the that and And had a throughout we've out fact also is to the rental in lease, rental seeing the of an performance expect the demand - FMS And the story. coming originally primarily expected were better being demand of we're We're know, impact than

quarters be it to then in quarter. maybe we're had than as that of this gains we as now bit in UVS, we benefit what the better to what in to And and big is little obviously, So Remember, out looking the isn't million. close originally going fourth at maybe was it we estimated. below saw the a be said we're originally $XX quarter, expecting

the to piece also in that chain color of from Some we other business making some there John, supply want of that? is then have additional the add the our we're semiconductor some offset to area. you of investments that and to that the in is But headwinds any that

John Diez

it's thing would item the that that both years saw demand to QX one better The in the one that, balance around momentum that is Todd. pricing rental, I and add also mentioned Robert around through of we carrying and the

Todd Fowler

of clarification, was comps XQ, Okay. for the I the year. John, we that double XQ that I X% just we the consistent is pricing in more should the know going back the Robert digits mentioned half. rental to with in think saw difficult expect get So that Is rest that increase? the year? for rest for what be of the

If I'd Thanks. just that, clarify it. could appreciate you

John Diez

would that. look, expect first the you say, Yes. I should half,

the As we the to you year, last in pricing saw saw into It the of some still taking be half year. wobble the as going coming back balance throughout from actions the year. but started But bit good second going they're of there's in for increases demand down and QX, improvements may a year-over-year to QX, be we QX little system. healthy year-over-year

Todd Fowler

Thanks time. for the helpful. That’s

Robert Sanchez

Thanks, Todd.

Operator

next our Truist. Benjamin take go from we'll Please And question Stephanie from ahead.

Stephanie Benjamin

afternoon. good Hi,

Robert Sanchez

Stephanie. Hi,

Stephanie Benjamin

updated outlook. I a give it performance. outlook line new didn't primarily is expectations, on the FMS on and like wanted sounds the to just due guidance increased clarify It appears top to you

bit provided than was assume So that we in that equipment, should quarter performance to but for be it too. question, a demand I'd outlook higher fourth that suffice in line when of appears to very say, there's - similar what and about little clear environment, I released? love was it hear the a also, the shortage that full - be a kind top year strong then to it's segment should Or think

to being that I'd as high to able well So balancing how hear demand. the love meet as you're Thanks. demand

Robert Sanchez

but improvement, say, Yes. would is Well, lot I line. I'll I give a not line, forecast level. there's proportional, to the just top you it bottom a of the mean some high

bottom part share line. I fair think your address we're the And on John second question. getting let more I'll than our of the

John Diez

Yes.

for would we vehicle see going even the some on year the seeing delivery, think mentioned what lease going demand had order pricing and then I highlight as that full is lease the new expected. top though the on So Stephanie, robust. we that in to come through We rental, than is activity, previously, are do the line to business challenges pretty well. what carry what book the is here we're you're is outperforming, especially we better had on And seeing side

going that some rental the of balance revenue the through see outperformance to So from of year. are you

Stephanie Benjamin

Appreciate about Absolutely. forward. what move the we focus secondly, you it. talk then year? you through And those that on business, bit increased investment in investments technology an going terms noted and a of we supply behind and the little Can chain maybe should expect in as

Robert Sanchez

Yes. the product some beginning the e-fulfillment that investments in We it technologies. line. talked investing Last investing some technology investing and our of we're adding about our additional making at and also in Ryder the year, different fact facilities -- nodes for We're Mile, in

years, think and the I really piece, that visibility over RyderShare seeing the is we're driver So I just just tool we us it's e-fulfillment would quarter and beyond a results supply for really, even this really the we're the by - collaboration say business big acceptance the two what chain very so X.X from encouraged developed dedicated the takeaway business. - that of last we're years, winning becoming far.

to me more color. hand a you he bit give so let Steve over So little it can

Steve Sensing

Yes. little Stephanie, bit I'll dig in deeper. a

where act we department we're investments, product our our the Robert serves and traffic really as management you think about business as said, hitting certainly lines. our I multiple RyderShare customers. technology think dedicated transportation across for as business

and out application We'll for rolling launching as for an on later we're So this into those 'XX to customers. early be well warehousing as well year brokerage. that

to do If but make in us. it continue customers, you our not to invest them e-comm, think business easier to we only for about have to to technology retain with

an on we're focused that, So later Last out And this system experience. order be Mile, management in customer year. rolling our we're we'll and improving

transit of So is us our the area for customers orders focus there. visibility a end key to in

say board. not said, retention, it's I'd the growth. And line top it's only really So across but also it's Robert as

Stephanie Benjamin

Well, you the Great. color. for much thank so

Robert Sanchez

Steph. Thank you,

Operator

Sachs. Alliger Please ahead. from next to And Goldman go we'll Jordan move question our from

Jordan Alliger

Can you revenue right. the sort I maybe color but growth. growth? dedicated the still started believe little on All a flat, on think sight single-digit provide line you high revenue believe out more of operating I year of the

So are of is I'm when closing? wondering what sort kick just acceleration off? the Thanks. or the pipeline seeing And you contracts in

Robert Sanchez

are you expect is the those their with secret. a that And that around it. help close it and companies and we're more activity of tell We're or looking digit, and you, year really really of of - we've the already into the more by the We're it's deals And to looking signed those Everybody's great back I'll saw Yes. many of encouraged maybe signing. lot this sales challenged that this for this single might half - deals dedicated growth year. shortage double-digit at we're we around as driver is even no are year. And a beginning high question. seeing activity really last running that private in fleet.

you on little let a Steve seen. what I'll color So we've more give

Steve Sensing

had of of this We to year, say, already to year. Yes. end there. ahead a close I'd the the good year really we're last date, expectation

is historical increasing we're campaign pipelines And right seeing that the to I in continued certainly good levels. better now deals. size the deal our some investment Ever think our is large

So we're excited.

to would year. see said, at the above in the that QX expect here Robert or and As the I balance range for of

Jordan Alliger

Great. Thank you.

Operator

And Brian Ossenbeck to on ahead. from JPMorgan. Please our next question we'll go move from

Brian Ossenbeck

taking the Thanks everyone. for Good question. Hey. morning,

a a more seeing you're slowdown the maybe dedicated. or you it's challenges, certain type the sort of dedicated little a now? the any bit issue of or have whether impairing bit regions Or where shortages Are that to seeing that market follow-up get put money you drivers? a on Just right Are growth? of are customer are any even you into seeing with not the to on side you your having

Robert Sanchez

Yes. shortage tell everybody, us. give color. you more I'll you, driver But let the I'd affects Steve including

a because we better -- lot are. we're at most a drivers living. than hiring that a is I we positive are do net-net, However, it fleets retaining and what believe for private That's

a markets. of each specializes We in driver recruiting that in the team have

thing good little geography. us more seeing more a even for what because So that's seeing. give and look what let for it by Steve get is you we're maybe help a though on things also, I'll when we're challenging very it's actually difficult, companies color

Steve Sensing

with good Yes. that's sum I'll by as of the really a always reviewing driver got we're working the to little on Certainly, compensation some that, think code Brian, code challenges. of ZIP and you - success after had customers way we're bit it detail a give to go good is kind we I what doing. up. of there. we've recover and our It ZIP

our making technology, speak is about a driver which experience. that earlier paperless Another didn't is investment RyderDrive I effectively

So that's easier. them, their attracting attractive retaining to making and very drivers jobs

in Robert our investment those we've As said, teams, really and recruiting on teams focused geographies. are recruiting increased

So One can be there. thing, key they that's of in markets, those been proactive date. and the we sign-on to bonuses effective are nuances and last adding know out very geographies

Brian Ossenbeck

opposite If policy But and the through, might the tax anything. out direction. a - on color level, had for Steve, Thanks, you come you time, time the last a can there. know changes. in you're I up can go tax paper come This through at we the us point. remind know I high this to anything I actually know it just expect at might white what not just changed. expecting follow I don't

see tax I Did is affect Or shields changed, and post really from year buy you think the depreciation time towards of we about tax the guess had to even mortem the Just that on when start versus a on big you forward, when that last like the it headlines around? assuming So customer-by-customer sort Can noisy? moving accelerated I'm moving lease? things impact was of tell the back part to these taxes. a what basis? too

Robert Sanchez

impact demand for the guess as leasing about our you're services, the the truck side? I talking on such Yes.

Brian Ossenbeck

Yes.

Robert Sanchez

guarantee. typical lease. with is and maintenance a vehicle, financing your all like It's not really the pure lease is the the then they're - most and reason that, the operating financial this the with bundle tell and you Yes. leasing for of of are the I all, Ryder yes, first trucks There piece, would is is component management from the but I'd really bundle purchase fleet the finally, the getting somewhat it. of always companies doing a maintenance the where residual of

So that maintenance demand And around to don't more law continue strong that on at we an the complexity vehicles think And having don't change. change the still technology see to demand I see will growing you'll people again, much I outsource. a expect that to of to impact capabilities. drive all. with for tax the continue

Brian Ossenbeck

right. you, All Robert. Thank

Robert Sanchez

Brian. you, Thank

Operator

we'll our ahead. final go And go question from ahead and take Research Jeff Please from Vertical Partners. Kauffman

Jeff Kauffman

much. very the direction you I'm just a for congratulations, question. in quarter. you, go question. different all, to of Thank fantastic looking with Well, first taking my a going Thank

competitors EBITDA. off and spinning XX, aware, probably will XX depending one you subsidiary times independent could into business be to, this be your who its As year later that fulfillment warehouse logistics you valuations, own XX, were of on listen

businesses one three thoughts? area, EBITDA, something we publicly that any better consider value? X.X have a the global had Is You of X.X probably times you to would the at in times traded this trading if comparison evaluating

Robert Sanchez

growth supply the value We pieces you which - the Brian, what going businesses, for obviously, have focused each - businesses. - sure of us get dedicated that business as been our know, have seen for the of strategy we on that moderate providing to has of really Yes. chain, really have why couple we're disclosure accelerating cash invest that really that's the - you've of the in has the and much business, generate leasing returns flow return. higher specific to more free around always a in years full is last we're in our making our over growth

over I - time strategy think that still early. mean it's I

that ROE I XX% know, really milestone evaluate we have do an continue you get differently. time very And important this that XX% But value thing remind again, company XX% we've acquisitions don't is move we because year, the comment as the think portfolio to, in of that anything - But we on or now, we'll is right else towards you, things by want and we really everybody, we as we will to company on a important either have. we think to our I'd like and will differently. pay I businesses to made that over to we think value really and regular I'm over do move like of tell that we work basis, of strategy progress the really XX% at encouraged were the - cycle. a return. that the again, to to have that. going still forward. do, do look can But we there's continue the XX% or or you to goal more is we our still year. tells to But I things dividends next spin-offs runway is the improve lot And got that that to

prior over we has it's the year, a and UVS That year those The this some of helped of that's market tailwind impact in earnings carrying each roll-off depreciation quite - to value again, But depreciation time. million But So create year-over-year. drops improved. from are improvement $XXX has bit going about us. still changes. off residual

We to expect that to probably improve. continue

more about which and is on impacting be shortage the bringing trucks going is into be that's truck If for trucks, semiconductor get that the because really where side, and in a to the supply both trucks. have to slowdown help used new the you the for going coming supply for - There'll the on to going need new new people market, trade-ins that into a fewer you're used demand it. trucks think deliveries, demand have to side. trucks going be market they to go to that's And there's on fewer truck used

early if through those in a this at and least like of all, in XXXX. been year you XX% all increasing about into our So pricing looks pricing, Around since have columns year. think positive we each our outlook next probably very that ROE, it

have you're for leases prior on XXXX, that them, renew not were up still we get renewal going that So to to we have that. come as better pricing that signed

So you're costs drive there. left continued $XXX continue Maintenance down. got to maintenance we $XX million number. costs, million going another see to still in our uplift We

folks, early this because is one and So room to the in next really see there. obviously, going of big sales too. innings to still remember in is strategy to would grow, that chain disproportionately the I a And are to investing really that's earnings then give our in of difference, are in we And the space. opportunities year, grow you a the marketing value earnings $XX lot in talked for get which rate another the going return about, big still in the And return, you from the that's supply that and in going allocation a enhancing high for then still start and make intent but be got are - early to We're year. us pull probably as innings looking technology, of dedicated $XX say, higher growth really million campaigns, supply million time. still we and from capital come. the We're growth dedicated that. that are we the acquisition going to chain businesses, over to - And have through to accelerated if

to that's So for and time. what runway pay lot dividends value that's we're of grow a think to And this We on. continue That's business we're there's still our for what doing. shareholders. to focused add going over us

Jeff Kauffman

you. Yes, terrific strategic Thank overview.

Robert Sanchez

Thank Jeff. you, right. All

Operator

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

Robert Sanchez

look certainly the most safe. shows. you, thank get over out to Well, during some of you we road everyone. Okay. as - forward to Stay quarter conferences seeing and I

Operator

you that conference. for And conclude does today's participation. your Thank

Ryder System (R) 28 Apr 212021 Q1 Earnings call transcript