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Ryder System Inc.$47.66($.46)(.96%)

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 Ryder Reports Fourth Quarter and Full-Year 2016 Results, and Provides 2017 Forecast
   Thursday, February 02, 2017 7:55:01 AM ET

--Q4 Comparable EPS (non-GAAP) from Continuing Operations Down 36% to $1.07 Impacted by Items Above

--Record Q4 Total Revenue Grows 3% to $1.7 Billion; Record Q4 Operating Revenue (non-GAAP) of $1.5 Billion Up 2%

--Full-Year GAAP EPS from Continuing Operations Down 14% to $4.94

--Full-Year Comparable EPS (non-GAAP) from Continuing Operations Down 12% to $5.42

--Record Full-Year Total Revenue Increases 3% to $6.8 Billion; Record Full-Year Operating Revenue (non-GAAP) of $5.8 Billion Up 4%

--2017 GAAP EPS Forecast of $4.78 to $5.08 vs. $4.94 for 2016

--2017 Comparable EPS (non-GAAP) Forecast of $5.10 to $5.40 vs. $5.42 for 2016

Ryder System, Inc. (R ), a leader in commercial fleet management, dedicated transportation, and supply chain solutions, today reported fourth quarter and full-year earnings and revenue. Results for the three months ended December 31 were as follows:

                                                                                                                                                                                                 
(dollars in millions, except EPS)                                                   Earnings Before Taxes                                                                                   Earnings                                                                                        Diluted EPS
                                                       ------------------------------------------------------------------------------                     ----------------------------------------------------------------------------                     ----------------------------------------------------------------------------
                                                         2016      2015          Change                               2016    2015          Change                               2016    2015          Change
                                                       ----------------------------- ----- -------------------- ---------------------                     ---------------------------- ---- -------------------- ---------------------                     ---------------------------- ---- -------------------- ---------------------
GAAP                                                     $ 69.2   111.7          (38 )%                              $ 49.3   75.9          (35 )%                              $ 0.92   1.42          (35 )%
Non-operating pension costs                                 8.0                        4.8                                                                    4.7                       2.8                                                                   0.09                      0.05
Restructuring and other items                               5.1    14.2                              3.5   10.1                             0.06   0.19    
                                                       ----------------------------- ----- -------------------- ---------------------                     ---------------------------- ---- -------------------- ---------------------                     ---------------------------- ---- -------------------- ---------------------
Comparable (non-GAAP)                                    $ 82.3   130.8          (37 )%                              $ 57.5   88.8          (35 )%                              $ 1.07   1.66          (36 )%
                                                       === ==== ==================== ===== ==================== ========== =========                      == ==== ==================== ==== ==================== ========== =========                      == ==== ==================== ==== ==================== ========== =========
                                                                                                                                                                                                                                                                                                                   


The Company reported record fourth quarter total revenue and operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation). Total revenue increased due to higher operating revenue as well as increased purchased transportation passed through to customers, partially offset by negative impacts from foreign exchange. Operating revenue increased due to higher contractual revenue in all three business segments, partially offset by lower transactional rental revenue and negative impacts from foreign exchange. Total and operating revenue for the three months ended December 31 were as follows:

                                                                                                                                 
(in millions)                                                                        Total Revenue                                                                                                                 Operating Revenue (non-GAAP)
                                   ----------------------------------------------------------------------------------------------------------------                     ------------------------------------------------------------------------------------------------------------------
                                     2016      2015       % Change       % Change excl. FX                        2016      2015   % Change            % Change
                                                                                                                                     (non-GAAP)                                                                                                                          excl. FX
                                   -------  -------------------- ----- -------------------- --------------- -------------------- ----------------                       --------  -------------------- ----- -------------------- -------- -------------------- ------------------------
Total                               $ 1,729   1,673          3%                5 %                               $ 1,467   1,442      2%         3 %
FMS                                 $ 1,152                      1,152                       --%                            2 %                               $   992                        999                        (1)%                           1 %
DTS                                 $   257                        232                             11%                                 11 %                               $   193                        188                         3%                            3 %
SCS                                 $   430                        392                             10%                                 12 %                               $   353                        322                         9%                           11 %
                                                                                                                                                                                                                                                                      

Commenting on the Company’s results, Ryder Chairman and CEO Robert Sanchez said, "In the fourth quarter, the used vehicle environment proved even more challenging than expected, and we now anticipate these conditions to continue over the next 18 months. As we indicated was a possibility, we increased wholesaling activity during the quarter to reduce our inventory. Additionally, we adjusted used vehicle inventory valuations based on fourth quarter pricing and further declines anticipated in 2017. We also accelerated depreciation to reflect lower pricing on vehicles in operation we expect to make available for sale through June 2018. These valuation and depreciation actions totaled $0.35 in the quarter and better position these vehicles for sale. Commercial rental results were in line with expectations and improved from the first half of the year. This improvement was due to the actions we took earlier in 2016 to quickly align the fleet with reduced market demand. Despite difficult conditions in our transactional businesses, Ryder continued to make progress on our long-term strategy to profitably grow our contractual businesses. Full service lease delivered improved earnings with revenue growth of 5%, and both our dedicated transportation and supply chain businesses showed solid growth in revenue and pre-tax earnings.

"For the full year, GAAP EPS are down 14%, reflecting headwinds in our used vehicle sales and rental businesses that reduced EPS by 33%, or nearly $2.00 per share. Growth in our contractual businesses and cost-savings initiatives offset more than half of this decline. Despite a more challenging truck and freight environment, Ryder’s contractual product offerings showed solid revenue increases and continued to benefit from both secular outsourcing trends and our growth initiatives. An increasing percentage of new business is coming from companies that are new to outsourcing, accounting for more than 40% of new lease business and over 50% of new dedicated transportation business. We delivered our fifth consecutive year of lease fleet growth, despite a more difficult business environment, by adding 4,100 more vehicles in 2016, which represents the second highest organic growth in more than a decade. This helped us achieve record highs for the Company in both total revenue and operating revenue for the full-year 2016. We also continued to innovate in order to drive additional long-term growth. We introduced new, more flexible products and configurations, including ChoiceLease and SelectCare, which make it easier for do-it-yourselfers to start doing business with Ryder.

"Finally, our financial position remains solid. We delivered $1.6 billion of operating cash flow and free cash flow of approximately $200 million, enabling us to resume anti-dilutive share repurchases early in the year while continuing to grow our dividend."

Fourth Quarter Business Segment Operating Results

Fleet Management Solutions

In the Fleet Management Solutions (FMS) business segment, total revenue in the fourth quarter of 2016 was $1.15 billion, consistent with the same period of 2015 (and up 2% excluding foreign exchange), as increased purchased fuel passed through to customers was offset by lower operating revenue. Operating revenue (a non-GAAP measure excluding fuel) was $992 million, down 1% (or up 1% excluding foreign exchange), as lower transactional rental revenue was partially offset by higher contractual revenue. Full service lease revenue increased 5% (or 6% excluding foreign exchange), reflecting a larger average fleet size and higher prices on replacement vehicles. The number of full service lease vehicles (excluding U.K. trailers) increased by 5,300 partly due to a higher number of vehicles being prepared for sale. Adjusting for these units, the lease fleet grew by 4,100 units over the same period, and grew by 400 vehicles sequentially from the third quarter of 2016. Commercial rental revenue decreased 14% due to lower demand. Fuel services revenue increased 5%, reflecting higher fuel prices passed through to customers.

FMS earnings before tax were $64.4 million in the fourth quarter of 2016, down 48% compared with $123.5 million in the same period of 2015. Decreased earnings primarily reflect lower used vehicle sales results ($49.7 million), commercial rental performance, and accelerated depreciation ($9.6 million) on vehicles in operation that are expected to be made available for sale through June 2018. These impacts were partially offset by higher full service lease performance and lower overhead spending. Used vehicle sales results decreased due to lower pricing and increased used vehicle inventory valuation reserves. Lower pricing, in part, reflects increased wholesaling to bring used vehicle inventory levels closer to the Company’s target range. The valuation and depreciation adjustments reflect current and anticipated market pricing, better positioning the fleet for sale. Commercial rental performance declined reflecting lower demand. Global rental power fleet utilization was 77.3% for the fourth quarter, down 30 basis points. Utilization comparisons were greatly improved from the first half of the year, reflecting fleet right-sizing actions that resulted in a 13% smaller average global rental fleet consistent with the drop in rental demand. Full service lease results benefited from fleet growth. FMS earnings before tax as a percentage of FMS total revenue and FMS operating revenue were 5.6% and 6.5%, respectively, down 510 and 590 basis points, driven primarily by lower used vehicle sales results.

Dedicated Transportation Solutions

In the Dedicated Transportation Solutions (DTS) business segment, fourth quarter 2016 total revenue was up 11% to $257 million and operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation), was up 3% to $193.1 million, compared with the year-earlier period. DTS total revenue growth reflected increased purchased transportation passed through to customers and higher operating revenue. DTS operating revenue grew as a result of increased volumes, as well as new business and higher pricing.

DTS earnings before tax of $15.3 million increased 38% in the fourth quarter of 2016 compared with $11.1 million in 2015, due to revenue growth, improved operating performance, and prior-year customer bankruptcy charges of $1.5 million. DTS earnings before tax as a percentage of DTS total revenue and DTS operating revenue were 6.0% and 7.9%, respectively, up 120 and 200 basis points.

Supply Chain Solutions

In the Supply Chain Solutions (SCS) business segment, fourth quarter 2016 total revenue was up 10% (or 12% excluding foreign exchange) to $430 million and operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation) was up 9% (or 11% excluding foreign exchange) to $352.7 million, compared with the year-earlier period. SCS total revenue and operating revenue grew as a result of new business and increased volumes.

SCS earnings before tax of $26.4 million increased 11% in the fourth quarter of 2016 compared with $23.8 million in 2015. SCS fourth quarter 2016 earnings results reflect the impact of operating revenue growth. SCS earnings before tax as a percentage of SCS total revenue and SCS operating revenue were 6.1% and 7.5%, respectively, unchanged and up 10 basis points from the prior period.

Corporate Financial Information

Central Support Services

Central Support Services (CSS) are overhead costs incurred to support all business segments and product lines. Most CSS costs are allocated to the business segments. In the fourth quarter of 2016, unallocated CSS costs were $11 million, compared with $16 million reported in the year-earlier period. Unallocated CSS costs decreased due to a $2.8 million prior-year charge related to settlement of a customer-extended insurance claim and lower compensation-related costs in 2016.

Items Excluded from Comparable Earnings

Comparable fourth quarter 2016 results excluded pre-tax restructuring and other charges of $5.1 million ($3.5 million after tax), or $0.06 per diluted share, related to workforce reductions of approximately 250 employees. The Company expects the workforce reduction and other cost savings initiatives to produce annual savings of $0.32 per diluted share beginning in early 2017.

Non-operating components of pension costs are excluded from both comparable earnings and segment earnings before tax in order to more accurately reflect the operating performance of the business. Non-operating pension costs totaled $8.0 million ($4.7 million after tax) or $0.09 per diluted share in the fourth quarter of 2016, up from $4.8 million ($2.8 million after tax) or $0.05 per diluted share in the year-earlier period. This increase was largely due to lower asset returns.

Income Taxes

The Company’s effective income tax rate from continuing operations for the fourth quarter of 2016 was 28.8% of pre-tax earnings compared with 32.0% in the year-earlier period. The comparable effective income tax rate for the fourth quarter of 2016 was 30.1% of earnings before tax, compared with 32.1% in the year-earlier period. The fourth quarter 2016 effective income tax rate and comparable income tax rate decreased by 460 and 380 basis points, respectively, reflecting lower non-deductible items, as well as the excess tax benefits associated with share-based compensation awards. The fourth quarter of 2015 reflects a $2.0 million benefit arising from a favorable Canadian income tax settlement.

Capital Expenditures

Capital expenditures from continuing operations were $1.76 billion for 2016, compared with $2.70 billion in 2015. The decrease in capital expenditures primarily reflects lower planned investments in full service lease and commercial rental. Net capital expenditures (including proceeds from the sale of assets) from continuing operations were $1.34 billion in 2016, down from $2.27 billion in 2015. Proceeds, primarily from used vehicle sales, of $421 million decreased 1% from $427 million, due to lower vehicle pricing, partially offset by increased volumes.

Cash Flow

Operating cash flow from continuing operations in 2016 was $1.60 billion, up from $1.44 billion in 2015. Total cash generated from continuing operations (including proceeds from used vehicle sales) in 2016 was $2.10 billion, up $159 million from 2015. Free cash flow from continuing operations in 2016 was positive $194 million, compared with negative $728 million in 2015, reflecting decreased net capital expenditures.

Leverage

Total debt as of December 31, 2016 decreased by $111 million compared with year-end 2015. Debt to equity as of December 31, 2016 was 263% compared with 277% at year-end 2015. Total debt to equity was within Ryder’s long-term target range of 225% to 275%.

2017 Earnings Forecast

Commenting on the Company’s outlook, Mr. Sanchez said, "Based on an assumption of continued slow to moderate economic growth, we’re forecasting flat to lower earnings per share due to expected challenges in the used vehicle sales environment. We now anticipate that the used vehicle downturn will continue through mid-2018. While future pricing will be determined by the market, our forecast assumes average used vehicle pricing will decline by double digits year-over-year. We have accelerated depreciation on vehicles in operation, which we expect to make available for sale through mid-2018, to reflect this lower outlook.

"Our contractual products across all three business segments are forecasted to continue growing, but at a slower pace than in 2016. We are forecasting lease fleet growth of 3,500 vehicles, as growth from new outsourcing activity more than offset the impact of reduced OEM production. This forecast represents our sixth consecutive year of organic lease fleet growth, as we continue to attract customers that are new to outsourcing.

"Having right-sized our commercial rental fleet earlier in 2016, we expect improved utilization and better rental results for 2017. In addition to earnings growth from our contractual products and improved rental performance, we also anticipate earnings to benefit from workforce reductions taken in late 2016 and other cost-savings actions.

"We are planning modestly higher capital expenditures this year due to increased investments to refresh our rental fleet. We expect to deliver operating cash flow of $1.7 billion and free cash flow of $250 million, up by approximately $85 million and $60 million, respectively, from 2016. The free cash flow is anticipated to reduce our leverage to the middle of our target range, supporting our ability to continue share repurchases under our anti-dilutive program."

Ryder forecasts full-year 2017 GAAP earnings of $4.78 to $5.08 per diluted share, compared with $4.94 per diluted share in 2016. Ryder forecasts full-year 2017 comparable earnings from continuing operations of $5.10 to $5.40 per diluted share, compared with $5.42 per diluted share in 2016. Full-year earnings exclude non-operating pension costs of $0.32 per diluted share in 2017, and exclude non-operating pension, restructuring and other net charges of $0.48 in 2016. Total revenue for the full-year 2017 is forecast to be up 4% to approximately $7 billion. Operating revenue for the full-year 2017 is forecast to be up 3% to approximately $6 billion. Ryder is establishing a first quarter 2017 GAAP earnings forecast of $0.74 to $0.84 per diluted share, compared with $1.05 in the first quarter of 2016. The Company is also establishing a first quarter 2017 comparable earnings forecast of $0.82 to $0.92 per diluted share, compared with $1.12 in the first quarter of 2016. The first quarter presents the most challenging quarter for year-over-year comparisons. The first quarter reflects negative impacts in the used vehicle sales and commercial rental product lines, as well as accelerated depreciation on vehicles in operation, partially offset by earnings growth across Ryder’s contractual products and cost savings initiatives. First quarter earnings comparisons exclude pension costs of $0.08 per diluted share in 2017.

Supplemental Company Information

Fourth Quarter Net Earnings

                                                                                                                   
(dollars in millions, except EPS)                                                          Earnings                                                                                     Diluted EPS
                                                         ----------------------------------------------------------------------------                     -----------------------------------------------------------------------
                                                                     2016                          2015                                            2016                       2015
                                                         ------------------------------------------------- --------------------------                     ------------------------------------------------- --------------------
Earnings from continuing operations                       $ 49.3                        75.9                                            $ 0.92                                        1.42
Discontinued operations                                     (1.1 )                       0.3                          (0.01 )                                      0.01
                                                         ---------------------------- -------------------- ---- --------------------                      ---------------------------- -------------------- --------------------
Net earnings                                              $ 48.2     76.2                         $ 0.91                     1.43
                                                         == ==== ==================== ==================== ==== ====================                      == ==== ==================== ==================== ====================
                                                                                                                                                                                                             

Full-Year Operating Results

                                                           
(in millions)                                                                                                             Twelve months ended December 31
                                                                               ---------------------------------------------------------------------------------------------------------------------
                                                                                        2016                   2015                        Change
                                                                               ----------------------                     --------------------                      --------------------------------
Total revenue                                                                           $      6,787                                     6,572                               3 %
Operating revenue (non-GAAP)                                                            $      5,791                                     5,561                               4 %
                                                   
--------------------------------------------------------- -------------------- ------------------------------------------ -------------------- -------------------- --------------------------------
                                                                                                                                                                     
Earnings from continuing operations                                                     $      264.6                                     306.0                             (14 )%
Comparable earnings from continuing operations (non-GAAP)                               $      290.4                                     327.3                             (11 )%
Net earnings                                                                            $      262.5                                     304.8                             (14 )%
                                                   
--------------------------------------------------------- -------------------- ------------------------------------------ -------------------- -------------------- --------------------------------
                                                                                                                                                                     
Earnings per common share (EPS) - Diluted
    Continuing operations                                                               $       4.94                                      5.73                             (14 )%
    Comparable (non-GAAP)                                                               $       5.42                                      6.13                             (12 )%
    Net earnings                                                                        $       4.90                                      5.71                             (14 )%
                                                                                                                                                                                

Business Description

Ryder System, Inc. is a FORTUNE 500(R) commercial fleet management, dedicated transportation, and supply chain solutions company. Ryder’s stock (R ) is a component of the Dow Jones Transportation Average and the Standard & Poor’s 500 Index. The Company’s financial performance is reported in the following three, inter-related business segments:

-- Fleet Management Solutions - Ryder’s FMS business segment provides a broad range of services to help businesses of all sizes, across virtually every industry, deliver for their customers. From leasing, maintenance, and fueling, to commercial rental and used vehicle sales, customers rely on Ryder’s expertise to help them lower their costs, redirect capital to other parts of their business, and focus on what they do best - so they can grow.

-- Dedicated Transportation Solutions - Ryder’s DTS business segment combines the best of Ryder’s leasing and maintenance capability with the safest and most professional drivers in the industry. With a dedicated transportation solution, Ryder helps customers increase their competitive position, reduce risk, and integrate their transportation needs with their overall supply chain.

-- Supply Chain Solutions - Ryder’s SCS business segment optimizes logistics networks to make them more responsive and able to be leveraged as a competitive advantage. Globally-recognized brands in the automotive, consumer goods, food and beverage, healthcare, industrial, oil and gas, technology, and retail industries rely on Ryder’s leading-edge technologies and world-class logistics engineers to help them deliver the goods that consumers use every day.

Notations

Earnings Before Tax (EBT): Ryder’s primary measurement of business segment financial performance, earnings before tax (EBT), allocates Central Support Services to each business segment and excludes restructuring and other items, as well as non-operating pension costs.

Capital Expenditures: In Ryder’s business, capital expenditures are generally used to purchase revenue earning equipment (trucks, tractors, and trailers) primarily to support the full service lease product line and secondarily to support the commercial rental product line within Ryder’s FMS business segment. The level of capital required to support the full service lease product line varies directly with customer contract signings for replacement vehicles and growth. These contracts are long-term agreements that result in ongoing revenues and cash flows to Ryder, typically over a three- to ten-year term. The commercial rental product line utilizes capital for the purchase of vehicles to replenish and expand the Company’s fleet available for shorter-term use by contractual or occasional customers.

For more information on Ryder System, Inc., visit http://investors.ryder.com /">http://investors.ryder.com / .

Note Regarding Forward-Looking Statements:

Certain statements and information included in this news release are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995, including our expectations regarding market trends, earnings performance, revenue in our business segments, fleet size, performance in our product lines, demand and pricing trends in commercial rental and used vehicle sales, return on capital spread, free cash flow, capital expenditures, anticipated resumption of our share repurchase program and the impact and adequacy of steps we have taken to address our cost structure, including workforce reductions. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward-looking statements. Important factors that could cause such differences include, among others, lower than expected lease sales, decreases in commercial rental demand or poor acceptance of rental pricing, our ability to return out of service vehicles to the fleet, availability of rental vehicles to meet demand and availability of labor to maintain our fleet at normalized levels, worsening of market demand for used vehicles impacting current pricing and our anticipated proportion of retail versus wholesale sales, lack of customer demand for on-demand maintenance, higher than expected maintenance costs from newer engine technology or due to lower than expected benefits from maintenance initiatives and a newer fleet, setbacks or uncertainty in the economic market, decreases in freight demand or volumes, poor operational execution particularly with start-ups and new product launches, our ability to obtain adequate profit margins for our services, our inability to maintain current pricing levels due to soft economic conditions, slower than expected economic recovery in the U.K., business interruptions or expenditures due to severe weather or natural occurrences, competition from other service providers and new entrants, customer retention levels, loss of key customers, driver and technician shortages resulting in higher procurement costs and turnover rates, unexpected bad debt reserves or write-offs, changes in customers’ business environments that will limit their ability to commit to long-term vehicle leases, a decrease in credit ratings, increased debt costs, adequacy of accounting estimates, reserves and accruals particularly with respect to pension, taxes, depreciation, insurance and revenue, sudden or unusual changes in fuel prices, unanticipated currency exchange rate fluctuations, our ability to manage our cost structure, and the risks described in our filings with the Securities and Exchange Commission. The risks included here are not exhaustive. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Note Regarding Non-GAAP Financial Measures: This news release includes certain non-GAAP financial measures as defined under SEC rules, including:

Comparable Earnings Measures, including comparable earnings from continuing operations, comparable earnings per share from continuing operations (as well as forecasts), comparable earnings before income tax and comparable tax rate. Additionally, our adjusted return on average capital (ROC) and adjusted return on capital spread (ROC spread) measures are calculated based on comparable earnings items.

Operating Revenue Measures, including operating revenue and operating revenue growth excluding foreign exchange for Ryder and its business segments, and segment EBT as a percentage of operating revenue.

Cash Flow Measures, including total cash generated and free cash flow.

Refer to Appendix - Non-GAAP Financial Measure Reconciliations at the end of the tables following this press release for reconciliations of the non-GAAP financial measures contained in this release to the nearest GAAP measure. Additional information regarding non-GAAP financial measures as required by Regulation G and Item 10(e) of Regulation S-K can be found in our most recent Form 10-K, Form 10-Q and our Form 8-K filed as of the date of this release with the SEC, which are available at http://investors.ryder.com .

Conference Call and Webcast Information:

Ryder’s earnings conference call and webcast is scheduled for Thursday, February 2, 2017, from 11:00 a.m. to 12:00 noon Eastern Time. Speakers will be Chairman and Chief Executive Officer Robert Sanchez, and Executive Vice President and Chief Financial Officer Art Garcia.

-- To join the conference call live: Begin 10 minutes prior to the conference by dialing the audio phone number 1-877-419-6593 (outside U.S. dial 1-719-325-4754) using the Passcode: Ryder and Conference Leader: Bob Brunn. Then, access the presentation via the Net Conference website at https://pgi.webcasts.com/starthere.jsp?ei=1131261.

-- To access audio replays of the conference and view a presentation of Ryder’s earnings results: Dial 1-888-203-1112 (outside U.S. dial 1-719-457-0820), then use the replay Passcode: 8485992 and view the presentation by visiting the Investors area of Ryder’s website at http://investors.ryder.com . A podcast of the call will also be available online within 24 hours after the end of the call at http://investors.ryder.com .

                                                                                                                                   RYDER SYSTEM, INC. AND SUBSIDIARIES
                                                                                                                             CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED
                                                                                                                                Periods ended December 31, 2016 and 2015
                                                                                                                                 (In millions, except per share amounts)
                                                                                                                                                                        
                                                                                                                                     Three Months                                                                                                     Twelve Months
                                                                                            ----------------------------------------------------------------------------------------------                     ------------------------------------------------------------------------------------------
                                                                                                            2016                                   2015                                                     2016                                 2015
                                                                                            -------------------------------------                     ------------------------------------                     -------------------------------------                     --------------------------------
                                                                                                                                                                                                                                                                          
Lease and rental revenues                                                                         $   801.8                                                    810.6                                                 $ 3,171.0                                              3,121.6
Services revenue                                                                                      806.4                                                    746.4                                                   3,152.3                                              2,912.1
Fuel services revenue                                                                                 121.0                                 115.8                                  463.7                             538.3  
                                                                                            ------------------------------------                      -------------- --------------------                      ------------------------------------                      ---------- --------------------
  Total revenues                                                                                    1,729.2                               1,672.7                                6,787.0                           6,571.9  
                                                                                            ------------------------------------                      -------------- --------------------                      ------------------------------------                      ---------- --------------------
                                                                                                                                                                                                                                                                          
Cost of lease and rental                                                                              568.6                                                    553.2                                                   2,234.3                                              2,153.5
Cost of services                                                                                      666.3                                                    621.0                                                   2,603.0                                              2,413.2
Cost of fuel services                                                                                 117.0                                                    111.8                                                     448.3                                                519.8
Other operating expenses*                                                                              27.5                                                     28.2                                                     113.5                                                117.1
Selling, general and administrative expenses                                                          210.2                                                    219.9                                                     842.7                                                844.5
Loss (gains) on used vehicles, net*                                                                    32.0                                                    (17.7 )                                                    (1.0 )                                              (99.9 )
Interest expense                                                                                       35.2                                                     35.6                                                     147.8                                                150.4
Miscellaneous income, net                                                                              (2.1 )                                                   (5.1 )                                                   (13.1 )                                              (10.2 )
Restructuring and other charges, net                                                                    5.1                                  14.2                                    5.1                              14.2  
                                                                                            ------------------------------------                      -------------- --------------------                      ------------------------------------                      ---------- --------------------
                                                                                                    1,660.0                               1,561.1                                6,380.6                           6,102.7  
                                                                                            ------------------------------------                      -------------- --------------------                      ------------------------------------                      ---------- --------------------
                                                                                                                                                                                                                                                                          
Earnings from continuing operations before income taxes                                                69.2                                                    111.7                                                     406.4                                                469.2
Provision for income taxes                                                                             19.9                                  35.8                                  141.7                             163.2  
                                                                                            ------------------------------------                      -------------- --------------------                      ------------------------------------                      ---------- --------------------
Earnings from continuing operations                                                                    49.3                                                     75.9                                                     264.6                                                306.0
(Loss) earnings from discontinued operations, net of tax                                               (1.1 )                                                    0.3                                   (2.2 )                                               (1.2 )
                                                                                            ------------------------------------                      -------------- --------------------                      ------------------------------------                      ---------- --------------------
Net earnings                                                                                      $    48.2                                  76.2                              $   262.5                             304.8  
                                                                                            ======= ======= ====================                      ============== ====================                      ======= ======= ====================                      ========== ====================
                                                                                                                                                                                                                                                                          
Earnings (loss) per common share - Diluted
  Continuing operations                                                                           $    0.92                                                     1.42                                                 $    4.94                                                 5.73
  Discontinued operations                                                                             (0.01 )                                                   0.01                                  (0.04 )                           (0.02 )
                                                                                            ------------------------------------                      -------------- --------------------                      ------------------------------------ -------------------- ---------- --------------------
  Net earnings                                                                                    $    0.91                                  1.43                              $    4.90           5.71  
                                                                                            ======= ======= ====================                      ============== ====================                      ======= ======= ==================== ==================== ========== ====================
                                                                                                                                                                                                                                                                          
Earnings per share information - Diluted
  Earnings from continuing operations                                                             $    49.3                                                     75.9                                                 $   264.6                                                306.0
  Less: Distributed and undistributed earnings allocated to unvested                                   (0.2 )                                                   (0.2 )                                                    (0.8 )                                               (0.9 )
  stock
                                                                                            --------------  --------------------                      -------------- --------------------                      --------------  --------------------                      ---------- --------------------
  Earnings from continuing operations available to common stockholders                            $    49.1                                  75.7                              $   263.8                             305.1  
                                                                                            ======= ======= ====================                      ============== ====================                      ======= ======= ====================                      ========== ====================
                                                                                                                                                                                                                                                                          
Weighted-average shares outstanding - Diluted                                                          53.4                                  53.3                                   53.4                              53.3  
                                                                                            ====================================                      ============== ====================                      ====================================                      ========== ====================
                                                                                                                                                                                                                                                                          
  EPS from continuing operations                                                                  $    0.92                                                     1.42                                                 $    4.94                                                 5.73
  Non-operating pension costs                                                                          0.09                                                     0.05                                                      0.33                                                 0.21
  Restructuring and other charges, net                                                                 0.06                                                     0.19                                                      0.06                                                 0.19
  Professional fees                                                                          --                                           --                                            --                                                 0.04
  Tax law changes                                                                            --                                           --                                            --                                                (0.04 )
  Pension-related adjustments                                                                --                        --                                   0.09                             (0.01 )
                                                                                            ------------------------------------                      -------------- --------------------                      ------------------------------------                      ---------- --------------------
  Comparable EPS from continuing operations **                                                    $    1.07                                  1.66                              $    5.42                              6.13  
                                                                                            ======= ======= ====================                      ============== ====================                      ======= ======= ====================                      ========== ====================
                                                                                                                                                                                                                                                                                     
* Losses from fair value adjustments on our used vehicles were
reclassified from "Other operating expenses" to "Loss (gains) on
used vehicles, net" for the periods presented.
** Non-GAAP financial measure. A reconciliation of GAAP EPS from
continuing operations to comparable EPS from continuing operations
is set forth in this table.
Note: Amounts may not be additive due to rounding.
                                                                 RYDER SYSTEM, INC. AND SUBSIDIARIES
                                                               CONSOLIDATED BALANCE SHEETS - UNAUDITED
                                                                        (Dollars in millions)
                                                                                                         
                                                                                                   December 31,                                     December 31,
                                                                                                       2016                                             2015
                                                                                       ------------------------------------                     --------------------
                                                                                                                                                 
Assets:
  Cash and cash equivalents                                                                $     58.8                                                           60.9
  Other current assets                                                                        1,042.8                                                        1,037.4
  Revenue earning equipment, net                                                              8,147.7                                                        8,184.7
  Operating property and equipment, net                                                         745.9                                                          715.0
  Other assets                                                                                  907.3                                       954.6
                                                                                       -----------------------------------                      --------------------
                                                                                           $ 10,902.5                                    10,952.6
                                                                                       ===== ======== ====================                      ====================
                                                                                                                                                 
Liabilities and shareholders’ equity:
  Current liabilities                                                                      $    952.7                                                        1,045.7
  Total debt                                                                                  5,391.3                                                        5,502.6
  Other non-current liabilities (including deferred income taxes)                             2,506.2                                                        2,417.1
  Shareholders’ equity                                                                        2,052.3                                     1,987.1
                                                                                       -----------------------------------                      --------------------
                                                                                           $ 10,902.5                                    10,952.6
                                                                                       ===== ======== ====================                      ====================
                                              SELECTED KEY RATIOS AND METRICS
                                                               
                                                                    December 31,                          December 31,
                                                                        2016                                  2015
                                                                    ------------                      --------------------
                                                                                                       
Debt to equity                                                              263%                                      277%
Effective interest rate (average cost of debt)                              2.7%                                      2.9%
                                                                                               Twelve months ended December 31,
                                                                                      ----------------------------------------------------------------------------------------
                                                                                                     2016                                2015
                                                                                      -----------------------------------                     --------------------------------
                                                                                                                                               
Cash provided by operating activities from continuing operations                          $ 1,601.1                                              1,441.8
Free cash flow *                                                                              193.7                                               (727.7 )
Capital expenditures paid                                                                   1,905.2                                              2,668.0
                                                                                                                                               
Capital expenditures (accrual basis)                                                      $ 1,762.9                                              2,696.1
Less: Proceeds from sales (primarily revenue earning equipment)                              (421.3 )                                             (427.5 )
                                                                                      ------------  --------------------                      ---------- --------------------
  Net capital expenditures                                                                $ 1,341.6                           2,268.6  
                                                                                      ===== ======= ====================                      ========== ====================
                                                   Twelve months ended December 31,
                                                            -----------------------------------------------------
                                                               2016              2015
                                                            ----------                      --------------------
                                                                                             
Return on average shareholders’ equity                           12.8%                                     16.1%
Return on average assets                                          2.4%                                      2.9%
Adjusted return on capital *                                      4.8%                                      5.8%
Weighted average cost of capital                                  4.3%                                      4.4%
Return on capital spread **                                       0.5%                                      1.4%
* Non-GAAP financial measure. See reconciliation of the non-GAAP
elements of this calculation reconciled to the corresponding GAAP
measures included in the Appendix - Non-GAAP Financial Measures
section at the end of this release.
** Non-GAAP financial measure. Adjusted return on capital spread is
calculated as the difference of the adjusted return on capital and
the weighted average cost of capital.
Note: Amounts may not be additive due to rounding.
                                                                                                                                                           RYDER SYSTEM, INC. AND SUBSIDIARIES
                                                                                                                                                    BUSINESS SEGMENT REVENUE AND EARNINGS - UNAUDITED
                                                                                                                                                        Periods ended December 31, 2016 and 2015
                                                                                                                                                                  (Dollars in millions)
                                                                                                                                                                                    
                                                                                                                                    Three Months                                                                                                                                   Twelve Months
                                                                              ------------------------------------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------------------------------------
                                                                                            2016                             2015                     B(W)                                         2016                             2015                       B(W)
                                                                              ---------------------------------                     -----------------------------                     ---------------                      ---------------------------------                     -----------------------------                     --------------------
                                                                                                                                                                                                                                                                                                                                    
Total Revenue:
 Fleet Management Solutions:
  Full service lease                                                            $   655.2                                             624.6                                                        5%                        $ 2,573.6                                           2,406.7                                                             7%
  Contract maintenance                                                               48.4                           48.9                                   (1)%                            199.9                          192.5                                          4%
                                                                              --------------------------------                      ------- --------------------                      ---------------                      --------------------------------                      ------- --------------------                      --------------------
   Contractual revenue                                                              703.7                                             673.5                                                        4%                          2,773.6                                           2,599.2                                                             7%
  Commercial rental                                                                 210.3                                             245.3                                                     (14)%                            846.3                                             940.0                                                          (10)%
  Contract-related maintenance                                                       59.9                                              59.6                                                        1%                            249.8                                             229.2                                                             9%
  Other                                                                              18.4                                              21.0                                                     (12)%                             78.0                                              77.6                                                             1%
  Fuel services revenue                                                             159.5                          152.2                                     5%                            608.5                          699.6                                       (13)%
                                                                              --------------------------------                      ------- --------------------                      ---------------                      --------------------------------                      ------- --------------------                      --------------------
   Total Fleet Management Solutions                                               1,151.7                                           1,151.6                                           --%                          4,556.2                                           4,545.7                                                --%
 Dedicated Transportation Solutions                                                 256.9                                             232.4                                                       11%                          1,020.9                                             895.5                                                            14%
 Supply Chain Solutions                                                             430.2                                             392.5                                                       10%                          1,637.9                                           1,547.8                                                             6%
 Eliminations                                                                      (109.6 )                                          (103.8 )                                                    (6)%                           (428.0 )                                          (417.1 )                                                         (3)%
                                                                              --------------------------------                      ------- --------------------                      ---------------                      --------------------------------                      ------- --------------------                      --------------------
   Total revenue                                                                $ 1,729.2                        1,672.7                                     3%                        $ 6,787.0                        6,571.9                                          3%
                                                                              === ======= ====================                      ======= ====================                      ===============                      === ======= ====================                      ======= ====================                      ====================
                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                    
Operating Revenue: *
 Fleet Management Solutions                                                     $   992.3                                             999.4                                                      (1)%                        $ 3,947.7                                           3,846.0                                                             3%
 Dedicated Transportation Solutions                                                 193.1                                             187.6                                                        3%                            774.3                                             714.5                                                             8%
 Supply Chain Solutions                                                             352.7                                             322.1                                                        9%                          1,352.1                                           1,256.3                                                             8%
 Eliminations                                                                       (71.2 )                                           (67.3 )                                                    (6)%                           (283.2 )                                          (255.7 )                                                        (11)%
                                                                              --------------------------------                      ------- --------------------                      ---------------                      --------------------------------                      ------- --------------------                      --------------------
   Operating revenue                                                            $ 1,466.9                        1,441.7                                     2%                        $ 5,790.9                        5,561.1                                          4%
                                                                              === ======= ====================                      ======= ====================                      ===============                      === ======= ====================                      ======= ====================                      ====================
                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                    
Business segment earnings:
 Earnings from continuing operations
 before income taxes:
  Fleet Management Solutions                                                    $    64.4                                             123.5                                                     (48)%                        $   370.8                                             462.1                                                          (20)%
  Dedicated Transportation Solutions                                                 15.3                                              11.1                                                       38%                             63.6                                              45.8                                                            39%
  Supply Chain Solutions                                                             26.4                                              23.8                                                       11%                            105.6                                              93.8                                                            13%
  Eliminations                                                                      (13.0 )                                           (12.1 )                                                    (8)%                            (50.1 )                                           (47.2 )                                                         (6)%
                                                                              --------------------------------                      ------- --------------------                      ---------------                      --------------------------------                      ------- --------------------                      --------------------
                                                                                     93.1                                             146.3                                                     (36)%                            489.8                                             554.5                                                          (12)%
 Unallocated Central Support Services                                               (10.8 )                                           (15.6 )                                                     31%                            (40.9 )                                           (48.5 )                                                          16%
 Non-operating pension costs                                                         (8.0 )                                            (4.8 )                                                   (66)%                            (29.7 )                                           (19.2 )                                                        (55)%
 Restructuring and other, net                                                        (5.1 )                                           (14.2 )                                                      NM                            (12.7 )                                           (17.6 )                                                           NM
                                                                              --------------------------------                      ------- --------------------                      ---------------                      --------------------------------                      ------- --------------------                      --------------------
 Earnings from continuing operations before income taxes                             69.2                                             111.7                                                     (38)%                            406.4                                             469.2                                                          (13)%
 Provision for income taxes                                                          19.9                           35.8                                    44%                            141.7                          163.2                                         13%
                                                                              --------------------------------                      ------- --------------------                      ---------------                      --------------------------------                      ------- --------------------                      --------------------
 Earnings from continuing operations                                            $    49.3                           75.9                                  (35)%                        $   264.6                          306.0                                       (14)%
                                                                              === ======= ====================                      ======= ====================                      ===============                      === ======= ====================                      ======= ====================                      ====================
                                                                                                                                                                                                                                                                                                                                    
* Non-GAAP financial measure. See reconciliation of GAAP total
revenue to operating revenue in the Appendix - Non-GAAP Financial
Measures section at the end of this release.
Note: Amounts may not be additive due to rounding.
                                                                                                                      RYDER SYSTEM, INC. AND SUBSIDIARIES
                                                                                                                   BUSINESS SEGMENT INFORMATION - UNAUDITED
                                                                                                                   Periods ended December 31, 2016 and 2015
                                                                                                                             (Dollars in millions)
                                                                                                                                                   
                                                                                                                       Three Months                                                                                           Twelve Months
                                                                                      -------------------------------------------------------------------------------                     ------------------------------------------------------------------------------------
                                                                                          2016         2015          B(W)                               2016         2015            B(W)
                                                                                      -------------                     -------                      ---------------                      -------------                     -------                      --------------------
                                                                                                                                                                                                                                                          
Fleet Management Solutions
                                                                                                                                                                                                                                                          
FMS total revenue                                                                        $ 1,151.7                      1,151.6                      --%                         $ 4,556.2                      4,545.7                           --%
Fuel services revenue(a)                                                                   (159.5)                      (152.2)                                   5%                           (608.5)                      (699.6)                                     (13)%
                                                                                      -------------                     -------                      ---------------                      -------------                     -------                      --------------------
FMS operating revenue *                                                                  $   992.3                        999.4                                 (1)%                         $ 3,947.7                      3,846.0                                        3%
                                                                                      ==== =======                      =======                      ===============                      ==== =======                      =======                      ====================
                                                                                                                                                                                                                                                          
Segment earnings before income taxes                                                     $    64.4                        123.5                                (48)%                         $   370.8                        462.1                                     (20)%
                                                                                      ==== =======                      =======                      ===============                      ==== =======                      =======                      ====================
                                                                                                                                                                                                                                                          
FMS earnings before income taxes as % of FMS total revenue                                    5.6%                        10.7%                                                                   8.1%                        10.2%
                                                                                      =============                     =======                                                           =============                     =======
                                                                                                                                                                                                                                                          
FMS earnings before income taxes as % of FMS operating revenue *                              6.5%                        12.4%                                                                   9.4%                        12.0%
                                                                                      =============                     =======                                                           =============                     =======
                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                          
Dedicated Transportation Solutions
                                                                                                                                                                                                                                                          
DTS total revenue                                                                        $   256.9                        232.4                                  11%                         $ 1,020.9                        895.5                                       14%
Subcontracted transportation                                                                (36.6)                       (18.4)                                  99%                           (143.5)                       (61.2)                                      134%
Fuel (a)                                                                                    (27.2)                       (26.5)                                   3%                           (103.1)                      (119.9)                                     (14)%
                                                                                      -------------                     -------                      ---------------                      -------------                     -------                      --------------------
DTS operating revenue *                                                                  $   193.1                        187.6                                   3%                         $   774.3                        714.5                                        8%
                                                                                      ==== =======                      =======                      ===============                      ==== =======                      =======                      ====================
                                                                                                                                                                                                                                                          
Segment earnings before income taxes                                                     $    15.3                         11.1                                  38%                         $    63.6                         45.8                                       39%
                                                                                      ==== =======                      =======                      ===============                      ==== =======                      =======                      ====================
                                                                                                                                                                                                                                                          
DTS earnings before income taxes as % of DTS total revenue                                    6.0%                         4.8%                                                                   6.2%                         5.1%
                                                                                      =============                     =======                                                           =============                     =======
                                                                                                                                                                                                                                                          
DTS earnings before income taxes as % of DTS operating revenue *                              7.9%                         5.9%                                                                   8.2%                         6.4%
                                                                                      =============                     =======                                                           =============                     =======
                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                          
Supply Chain Solutions
                                                                                                                                                                                                                                                          
SCS total revenue                                                                        $   430.2                        392.5                                  10%                         $ 1,637.9                      1,547.8                                        6%
Subcontracted transportation                                                                (61.3)                       (54.9)                                  12%                           (224.1)                      (226.9)                                      (1)%
Fuel (a)                                                                                    (16.2)                       (15.5)                                   5%                            (61.7)                       (64.6)                                      (4)%
                                                                                      -------------                     -------                      ---------------                      -------------                     -------                      --------------------
SCS operating revenue *                                                                  $   352.7                        322.1                                   9%                         $ 1,352.1                      1,256.3                                        8%
                                                                                      ==== =======                      =======                      ===============                      ==== =======                      =======                      ====================
                                                                                                                                                                                                                                                          
Segment earnings before income taxes                                                     $    26.4                         23.8                                  11%                         $   105.6                         93.8                                       13%
                                                                                      ==== =======                      =======                      ===============                      ==== =======                      =======                      ====================
                                                                                                                                                                                                                                                          
SCS earnings before income taxes as % of SCS total revenue                                    6.1%                         6.1%                                                                   6.4%                         6.1%
                                                                                      =============                     =======                                                           =============                     =======
                                                                                                                                                                                                                                                          
SCS earnings before income taxes as % of SCS operating revenue *                              7.5%                         7.4%                                                                   7.8%                         7.5%
                                                                                      =============                     =======                                                           =============                     =======
                                                                                                                                                                                                                                                          
* Non-GAAP financial measure. A reconciliation of (1) GAAP total
revenue to operating revenue for each business segment (FMS, DTS
and SCS) and (2) segment earnings before taxes (EBT) as % of
segment total revenue to segment EBT as % of segment operating
revenue for each business segment is set forth in this table.
Note: Amounts may not be additive due to rounding.
(a) Includes intercompany fuel sales from FMS to DTS and SCS.
                                                                                                            RYDER SYSTEM, INC. AND SUBSIDIARIES
                                                                                                         BUSINESS SEGMENT INFORMATION - UNAUDITED
                                                                                                                KEY PERFORMANCE INDICATORS
                                                                                                                  
                                                                 Three months ended                                        Twelve months ended
                                                                    December 31,                                              December 31,                                                                     2016/2015
                                                        -------------------------------------                     -------------------------------------                     -------------------------------------------------------------------------------
                                                                                                                                            Three                Twelve
                                                          2016                         2015                         2016                         2015                            Months                                   Months
                                                        -------                      -------                      -------                      -------                      ---------------                      -------------------- --------------------
                                                                                                                                                                                                                                       
Full service lease
 Average fleet count                                    136,500                      131,100                      134,400                      128,800                                   4%                                                             4%
 End of period fleet count                              136,500                      131,800                      136,500                      131,800                                   4%                                                             4%
 Miles/unit per day change - % (a)                         1.4%                         1.3%                         2.2%                         0.1%
                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                       
Commercial rental
 Average fleet count                                     37,800                       43,200                       39,200                       42,400                                (13)%                                                           (8)%
 End of period fleet count                               37,800                       42,100                       37,800                       42,100                                (10)%                                                          (10)%
 Rental utilization - power units                         77.3%                        77.6%                        74.7%                        76.5%                          (30) bps                                                    (180) bps
 Rental rate change - % (b)                                2.8%                         2.6%                         0.5%                         3.3%
                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                       
Customer vehicles under
 contract maintenance
 Average fleet count                                     49,200                       45,500                       49,200                       43,300                                   8%                                                            14%
 End of period fleet count                               49,000                       46,700                       49,000                       46,700                                   5%                                                             5%
                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                       
Customer vehicles under
 on-demand maintenance (c)
 Fleet serviced during the period                         7,900                        7,200                       21,000                       20,000                                  10%                                                             5%
                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                       
DTS
 Average fleet count (d)                                  8,100                        7,900                        8,200                        7,700                                   3%                                                             6%
 End of period fleet count(d)                             8,200                        7,900                        8,200                        7,900                                   4%                                                             4%
                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                       
SCS
 Average fleet count (d)                                  7,400                        6,500                        7,200                        6,300                                  14%                                                            14%
 End of period fleet count(d)                             7,600                        6,900                        7,600                        6,900                                  10%                                                            10%
                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                       
Used vehicle sales (UVS)
 Average UVS inventory                                    7,500                        6,900                        8,400                        6,100                                   9%                                                            38%
 End of period fleet count                                7,500                        8,000                        7,500                        8,000                                 (6)%                                                           (6)%
 Used vehicles sold                                       4,500                        4,500                       18,300                       17,900                      --%                                                             2%
 UVS pricing change - % (e)
  Tractors                                                (17)%                         (5)%                        (14)%                           6%
  Trucks                                                  (14)%                           5%                         (3)%                           9%

Notes:

(a)   Represents the percentage change compared to prior year period in
                         miles driven per vehicle per workday on US lease power units.
(b)                      Represents percentage change compared to prior year period in
                         average global rental rate per day on power units using constant
                         currency.
(c)                      Comprised of the number of vehicles serviced under on-demand
                         maintenance agreements. Vehicles included in the end of period count
                         may have been serviced more than one time during the respective
                         period.
(d)                      These vehicle counts are also included within the average fleet
                         counts for full service lease, commercial rental and contract
                         maintenance.
(e)                      Represents percentage change compared to prior year period in
                         average sales proceeds on used vehicle sales using constant currency.

RYDER SYSTEM, INC. AND SUBSIDIARIES

APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED

This press release and accompanying tables include "non-GAAP financial measures" as defined by SEC rules. As required by SEC rules, we provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP.

Specifically, the following non-GAAP financial measures are included in this presentation:

      Non-GAAP Financial Measure            Comparable GAAP Measure               Reconciliation in Section Entitled
-------------------------------------- -------------------- ------------------------------------- -------------------- ------------------------------------
Operating Revenue Measures:                                    
-------------------------------------- -------------------- ------------------------------------- -------------------- ------------------------------------
    Operating Revenue                    Total Revenue                           Appendix - Non-GAAP Financial
                                                                                                                       Measure Reconciliations
    FMS Operating Revenue                                   FMS Total Revenue                                          Business Segment Information -
                                                                                                                       Unaudited
                                                                                                                        
    DTS Operating Revenue                                   DTS Total Revenue
    SCS Operating Revenue                SCS Total Revenue                      
-------------------------------------- -------------------- ------------------------------------- -------------------- ------------------------------------
                                         Total Revenue                           Appendix - Non-GAAP Financial
    Operating Revenue Growth                                                                                           Measure Reconciliations
    Excluding Foreign Exchange
-------------------------------------- -------------------- ------------------------------------- -------------------- ------------------------------------
                                                            FMS EBT as a % of FMS Total Revenue                        Business Segment Information -
    FMS EBT as a % of FMS Operating                                                                                    Unaudited
    Revenue
                                                            DTS EBT as a % of DTS Total Revenue
    DTS EBT as a % of DTS Operating
    Revenue
                                         SCS EBT as a % of SCS Total Revenue    
    SCS EBT as a % of SCS Operating
    Revenue
-------------------------------------- -------------------- ------------------------------------- --------------------
Comparable Earnings Measures:                                  
-------------------------------------- -------------------- ------------------------------------- -------------------- ------------------------------------
                                         Earnings Before Income Tax and          Appendix - Non-GAAP Financial
    Comparable Earnings Before                              Effective Tax Rate from                                    Measure Reconciliations
    Income Tax and Comparable Tax                           Continuing
    Rate                                                    Operations
-------------------------------------- -------------------- ------------------------------------- -------------------- ------------------------------------
    Comparable Earnings                  Earnings from Continuing Operations     Appendix - Non-GAAP Financial
                                                                                                                       Measure Reconciliations
-------------------------------------- -------------------- ------------------------------------- -------------------- ------------------------------------
                                         EPS from Continuing Operations          Consolidated Condensed Statements of
    Comparable EPS and Comparable                                                                   Earnings - Unaudited
    EPS Forecast                                            EPS Forecast from Continuing                               Appendix
                                                            Operations                                                 - Non-GAAP Financial
                                                                                                                       Measure Reconciliations (Forecast)
-------------------------------------- -------------------- ------------------------------------- -------------------- ------------------------------------
                                         Not Applicable. However, non-GAAP       Appendix - Non-GAAP Financial
    Adjusted Return on Average Capital                      elements of the calculation                                Measure Reconciliations
    (ROC) and Adjusted ROC                                  have been
    Spread                                                  reconciled to the corresponding GAAP
                                                            measures.
                                                            A numerical reconciliation of
                                                            net earnings to adjusted net
                                                            earnings
                                                            and average total debt and average
                                                            shareholders’
                                                            equity to adjusted average
                                                            total capital is provided.
-------------------------------------- -------------------- ------------------------------------- -------------------- ------------------------------------
Cash Flow Measures:                                            
-------------------------------------- -------------------- ------------------------------------- -------------------- ------------------------------------
                                         Cash Provided by Operating Activities   Appendix - Non-GAAP Financial
    Total Cash Generated and Free                                                                                      Measure Reconciliations
    Cash Flow
-------------------------------------- -------------------- ------------------------------------- -------------------- ------------------------------------
                                                                                                          RYDER SYSTEM, INC. AND SUBSIDIARIES
                                                                                           APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED
                                                                                                                 (Dollars in millions)
                                                                                                                        
OPERATING REVENUE RECONCILIATION                                                       Three months ended                                                                                        Twelve months ended
                                                                                          December 31,                                                                                              December 31,
                                                      ------------------------------------------------------------------------------------                     ---------------------------------------------------------------------------------------
                                                                     2016                             2015                                                 2016                               2015
                                                      ----------------------------------                     -----------------------------                     ----------------------------------                     --------------------------------
                                                                                                                                                                                                                       
Total revenue                                            $ 1,729.2                                           1,672.7                                              $ 6,787.0                                              6,571.9
Fuel                                                        (164.3 )                                          (157.7 )                                               (628.5 )                                             (722.7 )
Subcontracted transportation                                 (97.9 )                                           (73.3 )                                               (367.6 )                                             (288.1 )
                                                      ---------------------------------                      ------- --------------------                      ---------------------------------                      ---------- --------------------
Operating revenue *                                      $ 1,466.9                        1,441.7                           $ 5,790.9                           5,561.1  
                                                      ==== ======= ====================                      ======= ====================                      ==== ======= ====================                      ========== ====================
OPERATING REVENUE GROWTH EXCLUDING
FOREIGN EXCHANGE RECONCILIATION
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Fourth Quarter                                                                                                    Year-to-Date
                           ------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------------------------------------------------
                             2016 vs 2015                     Growth excl                                            2016 vs 2015                             Growth excl
                                Growth                           Fx Impact (a)                          Fx*                                Growth                             Fx Impact (a)                                Fx*
                           ---------------                      -------------                      -----------                      -------------------- --------------- --------------------                      ------------- --------------------                      --------------------
                                                                                                                                                                                                                                                                            
RSI Total Revenue                       3%                               (2)%                               5%                                                        3%                                                    (1)%                                                             4%
RSI Operating Revenue*                  2%                               (1)%                               3%                                                        4%                                                    (1)%                                                             5%
FMS Total Revenue          --%                               (2)%                               2%                                           --%                                                    (1)%                                                             1%
FMS Operating Revenue*                (1)%                               (2)%                               1%                                                        3%                                                    (1)%                                                             4%
SCS Total Revenue                      10%                               (2)%                              12%                                                        6%                                                    (2)%                                                             8%
SCS Operating Revenue*                  9%                               (2)%                              11%                                                        8%                                                    (1)%                                                             9%
Full Service Lease Revenue              5%                               (1)%                               6%                                                        7%                                                    (1)%                                                             8%
Commercial Rental Revenue            (14)%                                 1%                            (13)%                                                     (10)%                                                      1%                                                           (9)%
TOTAL CASH GENERATED/FREE CASH FLOW                                                                Twelve months ended December 31,
RECONCILIATION
--------------------------------------------------------------------                      ----------------------------------------------------------------------------------
                                                                                                         2016                                2015
                                                                                          -----------------------------------                     --------------------------------
                                                                                                                                                   
Net cash provided by operating activities from continuing operations                          $ 1,601.1                                              1,441.8
Proceeds from sales (primarily revenue earning equipment) (b)                                     421.3                                                427.5
Collections on direct finance leases and other items (b)                                           76.5                              71.0  
                                                                                          ----------------------------------                      ---------- --------------------
Total cash generated *                                                                          2,098.8                                              1,940.3
Purchases of property and revenue earning equipment (b)                                        (1,905.2 )                                           (2,668.0 )
                                                                                          ----------------------------------                      ---------- --------------------
Free cash flow **                                                                             $   193.7                            (727.7 )
                                                                                          ===== ======= ====================                      ========== ====================
                                                                                                                                                   
Memo:
Net cash (used in) provided by financing activities                                              (185.9 )                                              731.5
Net cash used in investing activities                                                          (1,405.8 )                                           (2,161.4 )

Notes:

(a)   FX impact was calculated by dividing the results for the current and
                         prior year periods by the exchange rates in effect on
                         December
                         31, 2015, which was the last day of the prior year period, rather
                         than the actual exchange rates in effect as of
                         December 31,
                         2016.
(b)                      Included in cash flows from investing activities.
*Non-GAAP financial measure.
** Non-GAAP financial measure. We refer to the net amount of cash
generated from operating activities and investing activities
(excluding changes in restricted cash and acquisitions) from
continuing operations as "free cash flow". We calculate free cash
flow as the sum of net cash provided by operating activities and net
cash provided by the sale of revenue earning equipment and operating
property and equipment, collections on direct finance leases and
other cash inflows from investing activities, less purchases of
property and revenue earning equipment.
Note: Amounts may not be additive due to rounding.
                                                                RYDER SYSTEM, INC. AND SUBSIDIARIES
                                                 APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED
                                                                       (Dollars in millions)
                                                   
ADJUSTED RETURN ON CAPITAL RECONCILIATION                                                            Twelve months ended December 31,
-------------------------------------------------                      --------------------------------------------------------------------------------------
                                                                                        2016                                  2015
                                                                       ---------------------------------------                     --------------------------------
                                                                                                                                    
Net earnings (12-month rolling period)                                        $    262.5                                                304.8
 + Restructuring and other items                                                    12.6                                                 17.6
 + Income taxes                                                                    141.6                             163.6  
                                                                       --------------------------------------                      ---------- --------------------
 Adjusted earnings before income taxes                                             416.7                                                486.0
 + Adjusted interest expense (a)                                                   148.0                                                150.6
 - Adjusted income taxes (b)                                                      (198.2 )                                             (224.0 )
                                                                       --------------------------------------                      ---------- --------------------
  = Adjusted net earnings for ROC (numerator) [A]                             $    366.5                             412.6  
                                                                       ======== ======== ====================                      ========== ====================
                                                                                                                                    
Average total debt                                                            $  5,549.5                                              5,177.0
Average off-balance sheet debt                                                       1.5                                                  1.5
Average shareholders’ equity                                                     2,052.4                                              1,894.9
Adjustment to equity (c)                                                             1.7                              10.8  
                                                                       --------------------------------------                      ---------- --------------------
Adjusted average total capital (denominator) [B]                              $  7,605.0                           7,084.2  
                                                                       ======== ======== ====================                      ========== ====================
                                                                                                                                    
Adjusted ROC * [A]/[B]                                                               4.8 %                                                5.8 %
                                                                       ======================================                      ========== ====================

Notes:

(a)   Represents reported interest expense plus imputed interest on
                         off-balance sheet obligations.
(b)                      Represents provision for income taxes plus income taxes on
                         restructuring and other items and adjusted interest expense.
(c)                      Represents the impact to equity of items to arrive at comparable
                         earnings.
* Non-GAAP financial measure. Non-GAAP elements of the calculation
have been reconciled to the corresponding GAAP measures. A numerical
reconciliation of net earnings to adjusted net earnings and average
total debt and average shareholders’ equity to adjusted average
total capital is set forth in this table.
Note: Amounts may not be additive due to rounding.
                                                                                      RYDER SYSTEM, INC. AND SUBSIDIARIES
                                                                       APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED
                                                                                    (In millions, except per share amounts)
                                                                                                                                                          
COMPARABLE EARNINGS/EARNINGS BEFORE
INCOME TAX/TAX RATE RECONCILIATION
---------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  
                                                                                                                                                                         2016
                                                                                                                                         ---------------------------------------------------------------------
                                                                                         Consolidated Statements of                                                                        Twelve
                                                                                             Earnings Line Item                            Three Months                                    Months
                                                                                         --------------------------                      ----------------                     --------------------------------
                                                                                                                                                                               
Earnings from continuing operations before income taxes                                                                                        $    69.2                           406.4
Non-operating pension costs                                                                         SG&A                                             8.0                            29.7
Pension-related adjustments                                                                         SG&A                                  --                             7.7
Restructuring and other charges (recoveries), net                                                   SG&A                                             5.1                             5.1  
                                                                                                                                         ----------------                     ---------- --------------------
Comparable earnings from continuing operations before income taxes*                                                                                 82.3                           448.8  
                                                                                                                                         ----------------                     ---------- --------------------
                                                                                                                                                                               
Provision for income taxes                                                                                                                        (19.9)                          (141.7 )
Income tax effects of non-GAAP adjustments**                                                                                                       (4.9)                           (16.7 )
                                                                                                                                         ----------------                     ---------- --------------------
Comparable provision for income taxes**                                                                                                           (24.8)                          (158.5 )
                                                                                                                                         ----------------                     ---------- --------------------
                                                                                                                                                                               
Earnings from continuing operations                                                                                                                 49.3                           264.6
Non-operating pension costs                                                                         SG&A                                             4.7                            17.4
Pension-related adjustments                                                                         SG&A                                  --                             4.8
Restructuring and other charges (recoveries), net                                                   SG&A                                             3.5                             3.5  
                                                                                                                                         ----------------                     ---------- --------------------
Comparable earnings from continuing operations*                                                                                                $    57.5                           290.4  
                                                                                                                                         ======= =======                      ========== ====================
                                                                                                                                                                               
Tax rate on continuing operations                                                                                                                  28.8%                            34.9                    %
                                                                                                                                         ----------------                     ---------- --------------------
Income tax effects of non-GAAP adjustments**                                                                                                        1.3%                             0.4                    %
                                                                                                                                         ----------------                     ---------- --------------------
Comparable tax rate on continuing operations**                                                                                                     30.1%                            35.3                    %
                                                                                                                                         ================                     ========== ====================
* Non-GAAP financial measure.
** The comparable provision for income taxes is computed using the
same methodology as the GAAP provision for income taxes. Income tax
effects of non-GAAP adjustments are calculated based on the
statutory tax rates of the jurisdictions to which the non-GAAP
adjustments relate.
Note: Amounts may not be additive due to rounding.
                                                                                                                                     2015
                                                                                                                                         -------------------------------------------------------------------------
                                                                                         Consolidated Statements of                                                       Twelve
                                                                                             Earnings Line Item                            Three Months                                      Months
                                                                                         --------------------------                      ----------------                     ------------------------------------
                                                                                                                                                                               
Earnings from continuing operations before income taxes                                                                                        $   111.7                               469.2
Non-operating pension costs                                                                         SG&A                                             4.8                                19.2
Pension-related adjustments                                                                         SG&A                                  --                                (0.5 )
Restructuring and other charges (recoveries), net                                                   SG&A                                            14.2                                14.2
Professional fees                                                                                   SG&A                                  --                                 3.8  
                                                                                                                                         ----------------                     -------------- --------------------
Comparable earnings from continuing operations before income taxes*                                                                                130.8                               506.0  
                                                                                                                                         ----------------                     -------------- --------------------
                                                                                                                                                                               
Provision for income taxes                                                                                                                        (35.8)                              (163.2 )
Income tax effects of non-GAAP adjustments**                                                                                                       (6.2)                               (13.3 )
Tax law change                                                                           Provision for income taxes                       --                                (2.1 )
                                                                                                                                         ----------------                     -------------- --------------------
Comparable provision for income taxes**                                                                                                           (41.9)                              (178.6 )
                                                                                                                                         ----------------                     -------------- --------------------
                                                                                                                                                                               
Earnings from continuing operations                                                                                                                 75.9                               306.0
Non-operating pension costs                                                                         SG&A                                             2.8                                11.0
Pension-related adjustments                                                                         SG&A                                  --                                (0.3 )
Restructuring and other charges (recoveries), net                                                   SG&A                                            10.4                                10.4
Acquisition related adjustment                                                                      SG&A                                           (0.3)                      --
Professional fees                                                                                   SG&A                                  --                                 2.4
Tax law change                                                                           Provision for income taxes                       --                                (2.1 )
                                                                                                                                         ----------------                     -------------- --------------------
Comparable earnings from continuing operations*                                                                                                $    88.8                               327.3  
                                                                                                                                         ======= =======                      ============== ====================
                                                                                                                                                                               
Tax rate on continuing operations                                                                                                                  32.0%                                34.8                    %
                                                                                                                                         ----------------                     -------------- --------------------
Income tax effects of non-GAAP adjustments**                                                                                                        0.1%                                 0.5                    %
                                                                                                                                         ----------------                     -------------- --------------------
Comparable tax rate on continuing operations**                                                                                                     32.1%                                35.3                    %
                                                                                                                                         ================                     ============== ====================
* Non-GAAP financial measure.
** The comparable provision for income taxes is computed using the
same methodology as the GAAP provision for income taxes. Income tax
effects of non-GAAP adjustments are calculated based on the
statutory tax rates of the jurisdictions to which the non-GAAP
adjustments relate.
Note: Amounts may not be additive due to rounding.
                                              RYDER SYSTEM, INC. AND SUBSIDIARIES
                               APPENDIX - NON-GAAP FINANCIAL MEASURE RECONCILIATIONS - UNAUDITED
                                                                                      
COMPARABLE EARNINGS PER SHARE FORECAST
RECONCILIATION
-------------------------------------------------------------------
                                                                                                           
                                                                      First Quarter                             Full Year
Comparable earnings per share from continuing operations forecast:*       2017                                    2017
                                                                    ----------------                      --------------------
 EPS from continuing operations                                       $0.74 to $0.84                            $4.78 to $5.08
 Non-operating pension costs                                                   $0.08                                     $0.32
                                                                    ----------------                      --------------------
 Comparable EPS from continuing operations forecast*                  $0.82 to $0.92                            $5.10 to $5.40
                                                                    ================                      ====================
                                                                                                           
Note: Amounts may not be additive due to rounding.
TOTAL CASH GENERATED/FREE CASH FLOW                                   
FORECAST RECONCILIATION
--------------------------------------------------------------------
                                                                                           
                                                                                               2017 Forecast
                                                                                          ----------------------
Net Cash Provided by Operating Activities from Continuing Operations                               $      1,700
Proceeds from sales (primarily revenue earning equipment) (1)                                               390
Collections of direct finance leases and other (1)                                                           80
                                                                                          ----------------------
    Total cash generated*                                                                                 2,170
                                                                                           
Capital expenditures (1)                                                                                (1,920)
                                                                                          ----------------------
    Free cash flow **                                                                              $        250
                                                                                          ========== ==========
                                                                                           
Memo:
 Net cash used in financing activities                                                             $        250
 Net cash used in investing activities                                                             $      1,450
(1) Included in cash flows from investing activities.
 
* Non-GAAP financial measure.
** Non-GAAP financial measure. We refer to the net amount of cash
generated from operating activities and investing activities
(excluding changes in restricted cash and acquisitions) from
continuing operations as "free cash flow". We calculate free cash
flow as the sum of net cash provided by operating activities and net
cash provided by the sale of revenue earning equipment and operating
property and equipment, collections on direct finance leases and
other cash inflows from investing activities, less purchases of
property and revenue earning equipment.

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SOURCE: Ryder System, Inc."> <Property FormalName="PrimaryTwitterHandle" Value="@Rydersysteminc

Ryder System, Inc. 
Contacts: Media: 
David Bruce, 305-500-4999 
or 
Investor Relations: 
Bob Brunn, 305-500-4053


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