Ryder System, Inc.

Good morning and welcome to the Rider System fourth 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 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 2021 earnings conference call. I'd like to remind you that during this presentation, you'll hear some forward-looking statements within the meeting 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 website. Presenting on today's call are Robert Sanchez, Chairman and Chief Executive Officer, and John Diaz, Executive Vice President and Chief Financial Officer. Additionally, Tom Havens, 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. With that, I'll turn it over to Robert.

Good morning, everyone, and thanks for joining us. I'm very proud of the results that we generated in 2021. and I'm excited to share the significant progress we've made, as well as the opportunities ahead of us. I'll begin the call by providing you with a strategic update. John will then take you through our strong fourth quarter results, which exceeded our expectations again this quarter. We'll then shift our focus to our outlook, including the increases that we've made to our long-term ROE and FMS returns targets. We'll also review our 2022 forecast. Let's begin on slide four. We recently completed two acquisitions consistent with our capital allocation strategy to drive growth in supply chain. On January the 1st, 2022, we completed the acquisition of Whiplash, which is expected to add approximately $480 million to 2022 supply chain total revenue. This acquisition expands our e-fulfillment network with scalable e-commerce and omni-channel fulfillment solutions supported by proven operating and technology platforms. On November 1st, 2021, we completed the acquisition of Midwest Warehouse and Distribution System, which is expected to add approximately $135 million in supply chain total annual revenue, and will expand our offering in multi-client warehousing. Both acquisitions are expected to be accretive to 2022 earnings. Unprecedented challenges impacting labor, supply chain, and truck production are providing us with additional growth opportunities because they help drive companies to make long-term outsourcing decisions. In 2021, we had record new contract wins in supply chain and dedicated, which we expect will contribute to long-term profitable growth. FMS is also benefiting as companies are looking to source truck capacity in this extremely tight market. We generated record ROE of 21% in 2021, reflecting strong demand in pricing and used vehicle sales and rental, as well as benefits from our multi-year lease pricing and maintenance cost savings initiatives. We continue to implement price increases in supply chain and dedicated to address labor and supply chain challenges, and customers have generally been amenable to these adjustments. 2021 free cash flow was strong at $1.1 billion. Higher capital expenditures were partially offset by $400 million in capital spending that was deferred due to OEM delivery delays. Free cash flow also reflects higher used vehicle sales proceeds. Strong operating results and cash flow generation further strengthened our balance sheet, resulting in leverage being below target. Based on our outlook and consistent with our capital allocation strategy, we intend to enter into a new $300 million accelerated share repurchase program. After completing this program, we still expect to have capacity for acquisitions and the existing share repurchase programs. I'll turn the call over to John now to cover our fourth quarter results.