Ryder System, Inc.

Good morning and welcome to the Rider System first quarter 2021 earnings release conference call. All lines are in a listen-only mode until after the presentation. Today's call is being recorded. If you have any objections, please disconnect at this time. I would now like to introduce you to Mr. 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 first quarter 2021 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 RIDER's filings with the Securities and Exchange Commission, which are available on RIDER's websites. 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 our first quarter results. We'll then review our updated outlook for 2021, as well as the meaningful progress that 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 our current environment. Overall, we're encouraged by the significant improvement in economic and freight conditions. The recovery for a great number of our customers has been stronger than anticipated, even just a few months ago. Accelerating growth trends in logistics and transportation outsourcing, particularly in e-commerce fulfillment and Rider Last Mile, continue to support long-term growth opportunities for Rider. We remain primarily focused on increasing returns in our business and are encouraged by the meaningful progress we've made towards reaching our target. While we are driving for higher returns, at the same time, we also continue to invest in innovative customer solutions such as Ridershare, our freight visibility and collaboration platform, and in our SCS and DTS ever better brand awareness campaign in support of our long-term strategic objectives. As customer awareness of supply chain resiliency continues to grow, so does the market demand for innovative technology and strategic partnerships. that can provide end-to-end logistics solutions with flexibility and scale. As a result, technology has moved to the forefront of supply chain sales discussions, resulting in a robust pipeline and record sales activity. First quarter earnings were higher than our forecast, driven by outperformance in FMS, primarily lease and rental, as well as better used vehicle sales results. In addition, We saw strong sales activity across all three business segments, and our multi-year maintenance cost savings initiative remains on track for this year's targeted savings of $30 million. We raised our full year EPS forecast to reflect our updated outlook. First quarter free cash flow was higher than prior year due to higher used vehicle sales proceeds and lower cash capital expenditures. Our full year free cash flow forecast remains unchanged, at $400 to $700 million. Assuming strong economic freight conditions continue with no change in tax policy, we now expect to achieve ROE of 12 to 13% in 2021, above our previous forecast due to stronger FMS performance. We believe we're well positioned to realize our 15% long-term ROE target in 2022. At this point, I'll turn it over to Scott to discuss our first quarter results and key trends that we saw in each business segment.