Ryder System, Inc.

Good morning and welcome to the Rider System third quarter 2022 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 and Corporate Strategy for Rider. Mr. Brunn, you may begin.

Thanks very much. Good morning and welcome to Rider's third quarter 2022 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 all 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, let me turn it over to Robert.

Good morning, everyone, and thanks for joining us. I'm very pleased with this quarter's record earnings, which reflects growth in all three business segments. I'm also excited to update you on the significant progress we continue to make on our strategy to increase core earnings and create long-term shareholder value. I'll begin the call by providing you with a strategic update. John will then take you through our third quarter results, which exceeded our expectations again this quarter. We'll then discuss our outlook and review how we position the business to deliver on our targets over the long term. Let's start on slide four. Secular trends, including recent supply chain disruptions and labor challenges, are continuing to drive companies to pursue long-term transportation and logistics outsourcing solutions. As a result of these trends in our initiatives, strong sales momentum has continued, and we've realized record contractual sales activity year to date, which positions us well for future revenue growth. We're also pleased to report that the lease fleet in North America returned to growth this quarter, despite ongoing OEM delivery delays. Our two recent supply chain acquisitions, Whiplash and Midwest Warehouse and Distribution System, continue to perform well and were accretive to earnings. These acquisitions support our strategy to accelerate growth in our asset-light supply chain business. Whiplash significantly grows our e-fulfillment network with scalable e-commerce and omni-channel fulfillment solutions, and Midwest expands our multi-client warehousing offering. During the quarter, we also acquired Baton, a tech startup which we initially invested in through Rider Ventures, our corporate venture capital fund. This acquisition is expected to enhance our product and technology development capabilities. We're excited about the value that this can create for Rider customers as we build out a suite of products that focus on optimizing transportation and supply chain networks. We generated strong return on equity of 30% for the trailing 12 months, which is above our target and reflects our initiatives and strong market conditions in FMS. We successfully executed on our actions to return supply chain and dedicated to their high single digit earnings targets, resulting in segment earnings growth of approximately 190 and 150% respectively. These significant increases in earnings primarily reflect pricing adjustments to address unusually high labor costs that began in mid-2021 and the benefits from profitable new business. We increased our full year 2022 return on equity forecast by one percentage point to 26% to 27% and also increased our full year 2022 comparable EPS forecast. These increases reflect higher results than used vehicle sales and rentals. We completed our $300 million ASR in September, retiring 4 million shares at an average price of $74.47, and have existing board authorization for a 2 million share discretionary program and a 2.5 million share anti-dilutive program. Our strong balance sheet continues to provide us with the capacity to pursue targeted acquisitions and investments, as well as return capital to shareholders. We increased our full year 2022 free cash flow forecast by $50 million to $800 to $900 million to reflect higher expected used vehicle proceeds. The cash flow forecast also includes deferred capital expenditures of approximately $200 million due to OEM delivery delays and $350 million in expected proceeds from the previously announced exit of our UK business. We continue to develop and implement customer-facing technologies to differentiate our services and drive profitable growth. As we've been doing for some time now, we would like to highlight one of those technologies on today's call. This quarter we're highlighting RiderGuide, an innovative customer-facing platform that is bringing significant value to our FMS customers. RiderGuide is a proprietary platform that empowers fleet managers and drivers to engage with Rider services in a fully digital way. We currently have more than 12,000 active users per month. We're seeing strong growth in usage with a 24% increase in active users compared to last year. Rider Guide is focused on delivering a completely digital end-to-end experience for servicing vehicles from pre-scheduling appointments, self-check-in upon arrival at the maintenance shop, and tracking the real-time progress of vehicles through service completion, all within the RiderGuide platform. Bringing real-time and reliable visibility to our customers during two of the most critical customer touchpoints, namely the in-shop experience and the roadside service experience, has been a key area of focus for RiderGuide. For example, our new digital roadside experience allows drivers to pinpoint their exact location for faster and more reliable deployment of service and enables interactive real-time progress updates for drivers and fleet managers as we get our customers back on the road. We believe RiderGuide creates a new standard for best-in-class fleet management. Our ongoing investments in this technology, combined with our expertise and infrastructure, enables us to provide an industry-leading solution that makes it easier for customers to do business with Rider. I'll turn the call over to John now to cover third quarter results.