Ryder System, Inc.

Good morning, and welcome to the Rider Systems fourth quarter 2020 earnings release conference call. All lines are in a listen-only mode until after the presentation. Today's call is being recorded. If you have any objections, please disconnect at this time. I would now like to introduce Mr. Bob Brunn, Senior Vice President, Investor Relations, Corporate Strategy, and New Product Strategy for Rider. Mr. Brunn, you may begin.

Thanks very much. Good morning and welcome to RIDER's fourth quarter 2020 earnings conference call. I'd like to remind you that during this presentation, you'll hear some forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive, market, political, and regulatory factors. More detailed information about these factors and a reconciliation of each non-GAAP financial measure to the nearest GAAP measure is contained in this morning's earnings release, earnings call presentation, and in Ryder's filings with the Securities and Exchange Commission, which are available on Ryder's website. Presenting on today's call are Robert Sanchez, Chairman and Chief Executive Officer, and Scott Parker, Executive Vice President and Chief Financial Officer. Additionally, John Diaz, President of Global Fleet Management Solutions, and Steve Sensing, President of Global Supply Chain Solutions and Dedicated Transportation, are on the call today and available for questions following the presentation. At this time, I'll turn the call over to Robert.

Good morning, everyone, and thanks for joining us. On our call this morning, we'll provide an overview of 2020 and review our fourth quarter results. We'll then discuss our outlook for 2021 and review the progress we're making on actions to achieve our ROE target. Following our prepared remarks, we'll open the call for questions. With that, let's turn to an overview of 2020. We're encouraged to see economic and freight conditions continue to improve, which is benefiting all areas of our business. Market awareness of the importance of supply chain reliability has increased as a result of the pandemic. We believe that accelerating trends in the areas such as e-commerce fulfillment, last mile delivery of big and bulky goods, and onshoring and nearshoring will continue to support growth opportunities, especially in our supply chain and dedicated businesses. We made important progress on our actions to achieve target returns and expect that to continue in 2021. Despite the numerous challenges faced in 2020, we remain focused on investing in innovative customer solutions and branding that support our long-term strategic objectives. In the second quarter, we launched RiderShare, our freight visibility and collaboration platform, and are encouraged by the traction we've already seen with nearly 2 million shipments tracked to date with supply chain and dedicated customers. In the third quarter, we launched a brand awareness campaign communicating riders' broad range of logistics capabilities, which has resulted in an increase in sales leads and website activity. We also launched Rider Ventures, our corporate venture capital fund focused on investing in disruptive technologies that is intended to help bring new and innovative products to our customers. Full year 2020 earnings were negatively impacted by the depreciation from prior residual value estimate changes in COVID-19. These headwinds were partially offset by higher lease results and lower maintenance costs. The depreciation impact is expected to decline going forward, and vehicle residual value estimates are set at or near historic lows. Supply chain automotive activity was impacted by COVID-19 but has recovered. Rental and used vehicle sales were also impacted and continue to improve. During 2020, we generated record free cash flow of $1.6 billion due to lower capital spending, and our leverage was reduced to within our target range as of year end. While 2020 presented unprecedented challenges, I am extremely proud of the many ways in which the Rider team supported our customers and our community safely and efficiently. Although we still have work ahead of us, I'm confident that Rider is well positioned for 2021. At this point, I'll turn it over to Scott to discuss fourth quarter results. and key trends that we saw in each of our business segments.