RYDER SYSTEM INC
For the period ended Jun 30, 2024. Filed Jul 25, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 25, 2024
R$266.39-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-23.
0000085961-24-000078
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-25.
0000085961-24-000138
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 207 previous paragraphs and 213 current paragraphs.
142 unchanged; 53 reworded; 14 added; 11 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 38 previous and 39 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Total revenue was$3.2 billion in the second quarter of 2024, ascompared to $2.9 billion in the prior year, and $6.3 billion in the six months ended June 30, 2024, as compared to $5.8 billion in the prior year, primarily reflecting higher operating revenue and higher subcontracted transportation. Operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation) increased 10% in the second quarter of 2024 and 8% in thesix months ended June 30, 2024, reflecting recent acquisitions and contractual revenue growth in FMS and SCS, partially offset by lower commercial rental revenue in FMS.
Current report
EBT increased to$178 million and $292 millionin thesecond quarter andsix months ended June 30, 2024, respectively, largely reflecting a 2023 one-time, non-cash $188 million currency translation adjustment loss related to the FMS U.K. exit, partially offset by lower comparable EBT (a non-GAAP measure). Comparable EBT decreased 21% and 24% in thesecond quarter andsix months ended June 30, 2024, respectively, primarilydue to decreased commercial rental results and reduced gains on used vehicles sold in FMS, partially offset byhigher ChoiceLease results in FMS and SCS earnings.
Current report
Services gross margin increased 18% in the second quarter and increased 27% for the six months ended June 30, 2024 reflecting increased pricing in SCS. Services gross margin for the six months ended June 30, 2024, also reflects the prior year SCS asset impairment charge.
Current report
(1) Represents percentage change compared to prior year period in average sales proceeds on used vehicle sales using constant currency.
Current report
Currency Translation Adjustment Loss
Current report
Refer to Note 10, "Accumulated Other Comprehensive Loss" for a discussion on the Currency translation adjustment loss.
Current report
Our effective tax rate on continuing operations was 29.1% in the second quarter of 2024, compared to 140.8% in the prior year, and 27.7% for the six months ended June 30, 2024, compared to 50.0% in the prior year. The higher effective tax rate in the prior year is primarily due to the second quarter 2023 one-time, nondeductible cumulative currency translation adjustment loss from the FMS U.K. business exit. Our comparable tax rate, which excludes the impact of the prior year currency translation adjustment loss, was 29.0% in the second quarter of 2024, and 27.4% for the six months ended June 30, 2024, consistent with the respective prior year periods.
Current report
FMS EBT decreased 26% in the second quarter and 35% in the six months ended June 30, 2024, reflecting lower gains on used vehicle sales compared to elevated levels in the prior year and lower commercial rental results, partially offset by higher ChoiceLease performance and benefits from maintenance cost savings initiatives. Lower gains on used vehicle sales reflect a 27% and 19% decrease in used truck and tractor pricing, respectively, in the second quarter of 2024 and a 28% and 27% decrease in used truck and tractor pricing, respectively, in the six months ended June 30, 2024. Rental power fleet utilization decreased to 69% in the second quarter and 68% in the six months ended June 30, 2024, as compared to 75% in both the second quarter and the six months ended June 30, 2023. The average power fleet was 11% smaller in the second quarter of 2024 and 12% smaller in the six months ended June 30, 2024.
Current report
SCS EBT increased 13% in the second quarter of 2024 and 61% in the six months ended June 30, 2024, primarily reflecting stronger automotive performance. For the six months ended June 30, 2024, SCS EBT also increased due to a prior year $30 million asset impairment charge.
Current report
Total CSS costs increased 4% in the second quarter of 2024, primarily due to higher professional fees and lower investment income partially offset by strategic marketing investments made in the prior year. Total CSS costs were consistent with the prior year period for the six months ended June 30, 2024.
Current report
Unallocated CSS costs increased 16% in the second quarter of 2024, primarily reflecting higher professional fees and lower investment income. Unallocated CSS costs for the six months ended June 30, 2024, were consistent with the prior year.
Current report
Free cash flow (a non-GAAP measure) increased to $71 million for the six months ended June 30, 2024, compared to $16 million in 2023, reflecting reduced capital expenditures partially offset by lower cash from operating activities and proceeds from sales of used vehicles and property.
Current report
Gross capital expenditures decreased to $1.3 billion for the six months ended June 30, 2024, compared to $1.8 billion in 2023, primarily reflecting reduced investments in the ChoiceLease fleet due to lower sales activity.
Current report
•our expectations regarding recent acquisitions, including Cardinal Logistics;
Removed paragraphs (11)
Previous report
Total revenue increased 5% in the first quarter of 2024 due to higher operating revenue, partially offset by lower fuel revenue. Operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation) increased 6% in the first quarter of 2024, reflecting recent acquisitions and contractual revenue growth partially offset by lower commercial rental revenue in FMS.
Previous report
EBT and comparable EBT (a non-GAAP measure) decreased in the first quarter of 2024, primarily due to lower gains on used vehicles sold and lower commercial rental results in FMS. These decreases were partially offset by favorable comparisons to 2023, due to a prior year $30 million asset impairment charge in SCS.
Previous report
Services gross margin and gross margin as a percentage of revenue increased in the first quarter of 2024, primarily due to the prior year SCS asset impairment and increased pricing in SCS.
Previous report
Our effective tax rate on continuing operations was 25.4% in the first quarter of 2024 compared to 30.5% in the prior year. The prior year effective income tax rate was impacted by tax charges related to the exit of our U.K. FMS operations. The comparable effective tax rate on continuing operations was consistent with prior year.
Previous report
FMS EBT decreased 45% in the first quarter of 2024, primarily from lower gains on used vehicle sales compared to elevated levels in the prior year as well as weaker rental demand, partially offset by ChoiceLease results and maintenance cost savings initiatives. Lower gains on used vehicle sales reflect a 30% and 34% decrease in used truck and tractor pricing, respectively, partially offset by higher volumes. Rental power fleet utilization decreased to 66% from 75% in the first quarter of the prior year, on a 13% smaller average power fleet.
Previous report
SCS EBT grew to $64 million in the first quarter of 2024, due to a prior year $30 million asset impairment charge. The increase was also due to stronger automotive performance and recent acquisitions.
Previous report
Total CSS costs decreased 3% in the first quarter of 2024, primarily due to prior year strategic investments in marketing. Unallocated CSS slightly decreased in the first quarter of 2024 reflecting lower professional fees.
Previous report
Free cash flow (a non-GAAP measure) declined to $13 million for the three months ended March 31, 2024, compared to $101 million in 2023, primarily reflecting lower proceeds from sales of property and revenue earning equipment.
Previous report
Gross capital expenditures decreased to $716 million for the three months ended March 31, 2024, primarily reflecting lower investments in commercial rental.
Previous report
Note: Amounts may not be additive due to rounding.
Previous report
Note: Amounts may not be additive due to rounding.
Reworded paragraphs (53)
Previous wording
We operate in highly competitive markets. Our customers select us based on numerous factors, including service quality, price, technology and service offerings. As an alternative to using our services, customers may choose to provide these services for themselves, or may choose to obtain similar or alternative services from other third-party vendors. Our customer base includes enterprises operating in a variety of industries including food and beverage service, transportation and logistics, retail and consumer goods, automotive, industrial, housing, technology, and business and personal services.
Current wording
We operate in highly competitive markets. Our customers select us based on numerous factors, including service quality, price, technology and service offerings. As an alternative to using our services, customers may choose to provide these services for themselves, or may choose to obtain similar or alternative services from other third-party vendors. Our customer base includes enterprises operating in a variety of industries including food and beverage service, retail and consumer goods, transportation and logistics, automotive, industrial, housing, technology, and business and personal services.
Previous wording
•Diluted EPS from continuing operations of $1.89 in the first quarter of 2024 compared to $2.95 in prior year
Current wording
•Diluted EPS from continuing operations of $2.83 in the second quarter of 2024 compared to $(0.39) in prior year, which reflected a non-cash FMS U.K. business exit charge
Previous wording
•Comparable EPS (a non-GAAP measure) from continuing operations of $2.14 in the first quarter of 2024, as compared to $2.81 in prior year, reflecting weaker market conditions in used vehicle sales and rental, partially offset by higher Supply Chain Solutions (SCS) and ChoiceLease results
Current wording
•Comparable EPS (a non-GAAP measure) from continuing operations of $3.00 in the second quarter of 2024, as compared to $3.61 in prior year, reflecting weaker market conditions in rental and used vehicle sales, partially offset by higher results in contractual lease, supply chain and dedicated transportation businesses
Previous wording
•Total revenue of $3.1 billion in the first quarter of 2024, compared to $3.0 billion in prior year
Current wording
•Total revenue of $3.2 billion in the second quarter of 2024, compared to $2.9 billion in prior year
Previous wording
•Operating revenue (a non-GAAP measure) of $2.5 billion in the first quarter of 2024, up 6%, reflecting recent acquisitions and contractual revenue growth, partially offset by lower commercial rental revenue in Fleet Management Solutions (FMS)
Current wording
•Operating revenue (a non-GAAP measure) of $2.6 billion in the second quarter of 2024, up 10%, reflecting recent acquisitions
Previous wording
•Adjusted Return on Equity (ROE) (a non-GAAP measure) of 17% for the trailing twelve months ended March 31, 2024
Current wording
•Adjusted Return on Equity (ROE) (a non-GAAP measure) of 16% for the trailing twelve months ended June 30, 2024
Previous wording
•Net cash provided by operating activities from continuing operations of $526 million and free cash flow (a non-GAAP measure) of $13 million in the three months ended March 31, 2024
Current wording
•Net cash provided by operating activities from continuing operations of $1.1 billion and free cash flow (a non-GAAP measure) of $71 million in the six months ended June 30, 2024
Previous wording
During the three months ended March 31, 2024, market conditions for used vehicle sales and commercial rental continued to weaken. We continue to benefit, though, from favorable secular trends in logistics and transportation solutions, including supply chain disruptions. These secular trends provide long-term growth opportunities for our SCS and Dedicated Transportation Solutions (DTS) business segments. In addition, the integration of our recent acquisitions (IFS Holdings, LLC, a holding company for Impact Fulfillment Services, LLC (IFS), in the fourth quarter of 2023, and CLH Parent Corporation (Cardinal Logistics) during the first quarter of 2024) are in line with our expectations.
Current wording
During the three and six months ended June 30, 2024, market conditions for used vehicle sales and commercial rental remained weak. We also experienced a slowdown in sales activity across all business segments from the freight cycle and general economic uncertainty. We continue to benefit, though, from favorable long-term secular trends in logistics and transportation solutions, including supply chain disruptions. These secular trends provide long-term growth opportunities for our Supply Chain Solutions (SCS) and Dedicated Transportation Solutions (DTS) business segments.
Previous wording
In our FMS business, used vehicle pricing declined from the prior year. Our commercial rental operations are seasonal and the lowest revenue of the year is typically generated in the first quarter due to lower market demand. We generally decrease the size of the rental fleet during the first quarter of each year to mitigate the seasonal effect of lower demand and utilization; however, we experienced lower than expected rental demand and rental utilization was 66% for the three months ended March 31, 2024, as compared to 75% in the prior year comparative period. We anticipate that market conditions, including a freight recessionary environment, will remain weak through most of 2024 for used vehicle sales and rental with gradual improvements expected towards the second half of the year. Our maintenance cost savings initiatives continue to benefit earnings and our lease pricing initiatives are delivering improved portfolio returns. We expect to continue to realize incremental earnings benefits as our remaining portfolio is renewed at higher returns.
Current wording
In our Fleet Management Solutions (FMS) business, rental demand and used vehicle pricing declined from the prior year. We anticipate that market conditions, including a freight recessionary environment, will remain weak through most of 2024 for rental and used vehicle sales with gradual improvements expected later in the year. Our maintenance cost savings initiatives continue to benefit earnings, and our lease pricing initiatives are delivering improved portfolio returns. We expect to continue to realize incremental earnings benefits as our remaining portfolio is renewed at higher returns.
Previous wording
In our SCS business, outsourcing trends in warehousing and distribution continue. The acquisition of IFS as well as brokerage and logistics business from the acquisition of Cardinal Logistics drove total revenue and operating revenue (a non-GAAP measure) growth in the first three months of 2024. The dedicated business from the Cardinal Logistics acquisition drove operating revenue growth in DTS and we expect this acquisition to significantly benefit DTS revenue for the remainder of 2024. SCS and DTS contract sales activity slowed during the first quarter of 2024, consistent with a weaker freight environment.
Current wording
In our SCS business, outsourcing trends in warehousing and distribution continue. The acquisition of IFS as well as brokerage and logistics business from the acquisition of Cardinal Logistics drove total SCS revenue and operating revenue (a non-GAAP measure) growth in the first half of 2024. The dedicated business from the Cardinal Logistics acquisition drove operating revenue growth in DTS, and we expect this acquisition to significantly benefit DTS revenue for the remainder of 2024.
Previous wording
While we are experiencing positive momentum in our businesses, other unknown effects from extended higher fuel prices, inflationary cost pressures, labor interruptions, extended disruptions in vehicle and vehicle part production and the higher interest rate environment may negatively impact demand for our business, financial results and significant judgments and estimates.
Current wording
While we are experiencing positive momentum in our businesses, other unknown effects from inflationary cost pressures, labor interruptions, extended disruptions in vehicle and vehicle part production and the higher interest rate environment may negatively impact demand for our business, financial results and significant judgments and estimates.
Previous wording
Services revenue represents all the revenue associated with our SCS and DTS business segments, including subcontracted transportation and fuel, as well as SelectCare revenue associated with our FMS business segment. Services revenue increased 12% in the first quarter of 2024, due to increases in DTS and SCS revenue primarily driven by recent acquisitions.
Current wording
Services revenue represents all the revenue associated with our SCS and DTS business segments, including subcontracted transportation and fuel, as well as SelectCare and fleet support services associated with our FMS business segment. Services revenue increased 19% in the second quarter and 15% in the six months ended June 30, 2024, due to increases in DTS and SCS revenue primarily driven by recent acquisitions.
Previous wording
Cost of services represents the direct costs related to services revenue and is primarily comprised of salaries and employee-related costs, subcontracted transportation (purchased transportation from third parties), fuel, equipment and maintenance costs. Cost of services increased 8% in the first quarter of 2024, from growth in revenue and also reflecting a prior year $30 million SCS asset impairment charge.
Current wording
Cost of services represents the direct costs related to services revenue and is primarily comprised of salaries and employee-related costs, subcontracted transportation (purchased transportation from third parties), fuel, vehicle liability costs and maintenance costs. Cost of services increased 19% in thesecond quarter of 2024 reflecting higher revenue. Cost of services increased 14% for the six months ended June 30, 2024, reflecting higher revenue and a prior year, first quarter $30 million SCS asset impairment charge.
Previous wording
Lease & related maintenance and rental revenue represent revenue from our ChoiceLease and commercial rental product offerings within our FMS business segment. Revenue decreased 4% in the first quarter of 2024, primarily due to lower rental demand, which was partially offset by ChoiceLease growth.
Current wording
Lease & related maintenance and rental revenue represent revenue from our ChoiceLease and commercial rental product offerings within our FMS business segment. Revenue decreased 3% in the second quarter and 4% in the six months ended June 30, 2024, reflecting lower rental demand partially offset by ChoiceLease growth.
Previous wording
Cost of lease & related maintenance and rental represents the direct costs related to Lease & related maintenance and rental revenue and are comprised of depreciation of revenue earning equipment, maintenance costs (primarily repair parts and labor), and other costs such as licenses, insurance and operating taxes. Cost of lease & related maintenance and rental excludes interest costs from vehicle financing, which are reported within "Interest expense" in our Condensed Consolidated Statements of Earnings. Cost of lease & related maintenance and rental decreased 1% in the first quarter of 2024, primarily reflecting lower maintenance costs due to a younger vehicle fleet and maintenance cost savings initiatives partially offset by increased costs on a larger fleet.
Current wording
Cost of lease & related maintenance and rental represents the direct costs related to Lease & related maintenance and rental revenue and are comprised of depreciation of revenue earning equipment, maintenance costs (primarily repair parts and labor), and other costs such as licenses, insurance and operating taxes. Cost of lease & related maintenance and rental excludes interest costs from vehicle financing, which are reported within "Interest expense" in our Condensed Consolidated Statements of Earnings. Cost of lease & related maintenance and rental decreased 3% in the second quarter and 2% in the six months ended June 30, 2024, reflecting lower operating costs on a 12% smaller average commercial rental fleet, lower maintenance costs on a younger fleet and maintenance cost savings initiatives.
Previous wording
Lease & related maintenance and rental gross margin decreased in the first quarter of 2024, primarily due to lower rental demand. Lease & related maintenance and rental gross margin percentage decreased to 29% in the first quarter of 2024, primarily due to lower rental utilization.
Current wording
Lease & related maintenance and rental gross margin decreased in the second quarter and the six months ended June 30, 2024, primarily due to lower rental demand. Lease & related maintenance and rental gross margin percentage decreased in the six months ended June 30, 2024, primarily due to lower rental utilization.
Previous wording
Fuel services revenue represents fuel services provided to our FMS customers. Fuel services revenue decreased 18% in the first quarter of 2024, primarily reflecting lower fuel prices passed through to customers and a lower volume of gallons sold.
Current wording
Fuel services revenue represents fuel services provided to our FMS customers. Fuel services revenue decreased 8% in the second quarter and 13% in the six months ended June 30, 2024, reflecting fewer gallons sold. The decrease in the six months ended June 30, 2024, also reflects lower fuel prices passed through to customers.
Previous wording
Cost of fuel services includes the direct costs associated with providing our customers with fuel. These costs include fuel, salaries and employee-related costs of fuel island attendants and depreciation of our fueling facilities and equipment. Cost of fuel services decreased 19% in the first quarter of 2024, as a result of lower fuel prices and a lower volume of gallons sold.
Current wording
Cost of fuel services includes the direct costs associated with providing our customers with fuel. These costs include fuel, salaries and employee-related costs of fuel island attendants, and depreciation of our fueling facilities and equipment. Cost of fuel services decreased 8% in the second quarter and 14% in the six months ended June 30, 2024, as a result of fewer gallons sold. The decrease in the six months ended June 30, 2024, also reflects lower fuel prices passed through to customers.
Previous wording
Fuel services gross margin and gross margin as a percentage of revenue was consistent in the first quarter of 2024, compared to prior year. Fuel is largely a pass-through to customers for which we realize minimal changes in margin during periods of steady market fuel prices. However, fuel services margin is impacted by sudden increases or decreases in market fuel prices during a short period of time, as customer pricing for fuel is established based on current market fuel costs. Fuel services gross margin for the first quarter of 2024, was not significantly impacted by these price change dynamics as fuel prices fluctuated during the period.
Current wording
Fuel services gross margin in the second quarter and the six months ended June 30, 2024, was consistent with the prior year. Fuel services gross margin as a percentage of revenue was in line with the prior year for the second quarter of 2024 and increased in the six months ended June 30, 2024. Fuel is largely a pass-through to customers for which we realize minimal changes in margin during periods of steady market fuel prices. However, fuel services margin is impacted by sudden increases or decreases in market fuel prices during a short period of time, as customer pricing for fuel is established based on current market fuel costs. Fuel services gross margin for the second quarter and six months ended June 30, 2024, was not significantly impacted by these price change dynamics as fuel prices fluctuated during the periods.
Previous wording
SG&A expenses increased 4% in the first quarter of 2024. The increase in SG&A expenses in the first quarter of 2024 primarily reflects increased expenses from recent acquisitions partially offset by lower marketing expenses reflecting prior year strategic investments. SG&A expenses as a percentage of total revenue remained at 12% for the first quarter of 2024.
Current wording
SG&A expenses increased 7% in the second quarter of 2024 and 6% in thesix months ended June 30, 2024. The increase in the second quarter and six months ended June 30, 2024, primarily reflects the impact from recent acquisitions partially offset by lower marketing costs due to strategic investments made in the prior year. SG&A expenses as a percentage of total revenue remained at 12% for the second quarter and for the six months ended June 30, 2024.
Previous wording
Non-operating pension costs, net include the amortization of net actuarial loss and prior service cost, interest cost and expected return on plan assets components of pension and postretirement benefit costs.
Current wording
Non-operating pension costs, net include the amortization of net actuarial loss and prior service cost, interest cost and expected return on plan assets components of pension and postretirement benefit costs, as well as any significant charges for settlements or curtailments if recognized.
Previous wording
Used vehicle sales, net includes gains or losses from sales of used vehicles, selling costs associated with used vehicles and write-downs of vehicles held for sale to fair market values (referred to as "valuation adjustments"). Used vehicle sales, net decreased in the first quarter of 2024, due to lower pricing of used vehicles partially offset by higher volumes.
Current wording
Used vehicle sales, net includes gains or losses from sales of used vehicles, selling costs associated with used vehicles and write-downs of vehicles held for sale to fair market values (referred to as "valuation adjustments"). Used vehicle sales, net decreased in the second quarter and six months ended June 30, 2024, due to lower proceeds per unit on sales of used vehicles partially offset by higher volumes.
Previous wording
Average proceeds per unit decreased in the first quarter of 2024. The following table presents the average used vehicle proceeds per unit changes, using constant currency, compared to the prior year:
Current wording
Average proceeds per unit decreased in the second quarter and for the six months ended June 30, 2024. The following table presents the average used vehicle pricing changes for North America compared to the prior year:
Previous wording
Interest expense increased 42% in the first quarter of 2024, reflecting increased debt borrowings to fund recent acquisitions, as well as, higher market interest rates on new debt issuances and refinancing.
Current wording
Interest expense increased 33% in the second quarter and 37% for the six months ended June 30, 2024, reflecting higher market interest rates on new debt issuances and refinancings, as well as increased debt borrowings to fund recent acquisitions and share repurchases.
Previous wording
Miscellaneous income, net consists of investment income on securities used to fund certain benefit plans, interest income, gains on sales of operating property, foreign currency transaction remeasurement and other non-operating items. Miscellaneous income, net decreased to $15 million in the first quarter of 2024, primarily due to lower gains on sales of properties.
Current wording
Miscellaneous income, net consists of investment income, interest income, gains on sales of operating property, foreign currency transaction remeasurement and other non-operating items. Miscellaneous income, net decreased to $4 million in the second quarter of 2024, primarily due to lower gains on sales of properties as well as lower investment income. Miscellaneous income, net decreased to $19 million for the six months ended June 30, 2024, due to lower gains on sales of properties.
Previous wording
Vehicles acquired from Cardinal Logistics are included in FMS revenue earning equipment. Our FMS segment leases these vehicles and also provides maintenance services to our DTS segment. EBT related to inter-segment equipment and services on these acquired vehicles billed to DTS drove the increase in DTS equipment contribution in the first quarter of 2024. This increase was partially offset by lower gains on sales of used vehicles.
Current wording
Vehicles acquired from Cardinal Logistics are included in FMS revenue earning equipment. Our FMS segment leases these vehicles and also provides maintenance services to our DTS segment. EBT related to inter-segment equipment and services on these acquired vehicles billed to DTS drove the increase in DTS equipment contribution in the second quarter and six months ended June 30, 2024.
Previous wording
(1)For the three months ended March 31, 2024 and 2023, rental revenue from lease customers in place of a lease vehicle represented 35% and 37% of commercial rental revenue, respectively.
Current wording
(1)For the three months ended June 30, 2024 and 2023, rental revenue from lease customers in place of a lease vehicle represented 30% and 35% of commercial rental revenue, respectively. For the six months ended June 30, 2024 and 2023, rental revenue from lease customers in place of a lease vehicle represented 33% and 36% of commercial rental revenue, respectively.
Previous wording
FMS total revenue decreased 3% in the first quarter of 2024, due to lower fuel costs passed through to customers and lower operating revenue (a non-GAAP measure excluding fuel). FMS operating revenue decreased 1% in the first quarter of 2024, due to lower commercial rental revenue, largely offset by higher ChoiceLease revenue, including the inter-segment lease revenue with DTS from the Cardinal Logistics acquisition.
Current wording
FMS total revenue increased 1%in the second quarter of 2024 due to higher operating revenue (a non-GAAP measure excluding fuel services revenue). FMS total revenue decreased 1% in the six months ended June 30, 2024, due to lower fuel services revenue passed through to customers partially offset by higher operating revenue. FMS operating revenue increased 2% in the second quarter of 2024 and remained consistent inthesix months ended June 30, 2024, due to higher ChoiceLease revenue, including the inter-segment lease revenue with DTS from the Cardinal Logistics acquisition. The increase in FMS operating revenue in both periods was partially offset by lower rental demand.
Previous wording
SCS total revenue increased 8% in the first quarter of 2024, reflecting increased operating revenue (a non-GAAP measure excluding subcontracted transportation and fuel) and higher subcontracted transportation costs passed through to customers. SCS operating revenue increased 11% in the first quarter of 2024, driven primarily by recent acquisitions.
Current wording
SCS total revenue increased 14% in the second quarter of 2024 and 11% in the six months ended June 30, 2024, primarily as a result of higher operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation) and higher subcontracted transportation costs passed through to customers. SCS operating revenue increased 14% in the second quarter of 2024 and 12% for the six months ended June 30, 2024, driven primarily by recent acquisitions. SCS operating revenue in the second quarter of 2024 also benefited from organic growth across all industry verticals.
Previous wording
The following table summarizes the components of the change in revenue on a percentage basis versus the prior years:
Current wording
Thefollowing table summarizes the components of the change in revenue on a percentage basis versus the prior years:
Previous wording
DTS total revenue increased 24% in the first quarter of 2024, primarily due to higher operating revenue (a non-GAAP measure excluding subcontracted transportation and fuel). DTS operating revenue increased 33% in the first quarter of 2024, due to the Cardinal Logistics acquisition.
Current wording
DTS total revenue increased 44% in the second quarter of 2024 and 34% for the six months ended June 30, 2024, primarily due to higher operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation). DTS operating revenue increased 48% in the second quarter of 2024 and 40% in the six months ended June 30, 2024, due to the Cardinal Logistics acquisition.
Previous wording
DTS EBT decreased 38% in the first quarter of 2024, due to Cardinal Logistics' acquisition integration and other related costs, as well as higher insurance costs.
Current wording
DTS EBT increased 10% in the second quarter of 2024, due to improved operating performance partially offset by Cardinal Logistics' acquisition integration and other related costs. DTS EBT decreased 12% for the six months ended June 30, 2024, primarily due to Cardinal Logistics' acquisition integration and other related costs.
Previous wording
Net cash provided by operating activities from continuing operations were $526 million for the three months ended March 31, 2024, compared to $478 million in the prior year period, primarily reflecting lower working capital needs. Net cash used in investing activities from continuing operations increased to $810 million for the three months ended March 31, 2024, compared with $377 million in 2023, reflecting the acquisition of Cardinal and lower proceeds from sales of property and revenue earning equipment. Net cash provided by financing activities from continuing operations increased to $316 million for the three months ended March 31, 2024, compared with cash used of $126 million in 2023, primarily reflecting higher borrowing needs.
Current wording
Net cash provided by operating activities from continuing operations were $1.1 billion for the six months ended June 30, 2024, compared to $1.2 billion in the prior year period, primarily reflecting higher working capital needs. Net cash used in investing activities from continuing operations increased to $1.3 billion for the six months ended June 30, 2024, compared with $1.2 billion in 2023, reflecting the acquisition of Cardinal Logistics and decreased cash proceeds from sales of used vehicles and property, partially offset by lower cash paid for capital expenditures. Net cash provided by financing activities from continuing operations increased to $194 million for the six months ended June 30, 2024, compared with cash used of $57 million in 2023, primarily reflecting higher borrowing needs.
Previous wording
Cash and cash equivalents totaled $234 million as of March 31, 2024. As of March 31, 2024, $131 million was held outside the U.S. and is available to fund operations. Our intention is to permanently reinvest the earnings of our foreign subsidiaries, with the exception of our non-operating U.K. subsidiary where the assertion was removed in 2021. Federal, state and foreign income taxes, withholding taxes and the tax impact of foreign currency exchange gains or losses were considered on the remaining U.K. undistributed earnings as of March 31, 2024, and there was no impact to deferred taxes.
Current wording
Cash and cash equivalents totaled $164 million as of June 30, 2024. As of June 30, 2024, $80 million was held outside the U.S. and is available to fund operations. Our intention is to permanently reinvest the earnings of our foreign subsidiaries, with the exception of our non-operating U.K. subsidiary where the assertion was removed in 2021. Federal, state and foreign income taxes, withholding taxes and the tax impact of foreign currency exchange gains or losses were considered on the remaining U.K. undistributed earnings as of June 30, 2024, and there was no impact to deferred taxes.
Previous wording
In February 2024, we issued two tranches of unsecured medium-term notes with aggregate principal amounts of $350 million and $550 million, bearing annual interest of 5.30% and 5.38%, respectively, and maturing on March 15, 2027 and March 15, 2029, respectively. Refer to Note 8, "Debt," in the Notes to Condensed Consolidated Financial Statements for additional information on our global revolving credit facility, trade receivables financing program, medium-term notes, and asset-backed financing obligations.
Current wording
Refer to Note 8, "Debt," in the Notes to Condensed Consolidated Financial Statements for additional information on our global revolving credit facility, trade receivables financing program, medium-term notes and asset-backed financing obligations.
Previous wording
In accordance with our funding philosophy, we attempt to align the aggregate average remaining re-pricing life of our debt with the aggregate average remaining re-pricing life of our vehicle assets. We utilize both fixed-rate and variable-rate debt to achieve this alignment and generally targeta mix of 20% - 40% variable-rate debt as a percentage of total debt outstanding. The variable-rate portion of our total debt (including notional value of swap agreements) was 18% and 16% as of March 31, 2024 and December 31, 2023, respectively.
Current wording
In accordance with our funding philosophy, we attempt to align the aggregate average remaining re-pricing life of our debt with the aggregate average remaining re-pricing life of our vehicle assets. We utilize both fixed-rate and variable-rate debt to achieve this alignment and generally targeta mix of 20% - 40% variable-rate debt as a percentage of total debt outstanding. The variable-rate portion of our total debt (including notional value of swap agreements) was 16% as of both June 30, 2024 and December 31, 2023.
Previous wording
Our debt-to-equity ratio was 246% and 232% as of March 31, 2024 and December 31, 2023, respectively. The debt-to-equity ratio represents total debt divided by total equity.
Current wording
Our debt-to-equity ratio was 245% and 232% as of June 30, 2024 and December 31, 2023, respectively. The debt-to-equity ratio represents total debt divided by total equity.
Previous wording
In February 2024 and 2023, our board of directors declared a quarterly cash dividend of $0.71 and $0.62 per share of common stock, respectively.
Current wording
In July 2024, our board of directors declared a quarterly cash dividend of $0.81 per share of common stock, an increase of 14% compared to $0.71 per share of common stock paid since July 2023.
Previous wording
The following table provides a reconciliation of GAAP Earnings from continuing operations before income taxes (EBT), Earnings from continuing operations, and Earnings from continuing operations per common share — Diluted (Diluted EPS) to comparable EBT, comparable earnings, and comparable EPS. Certain items included in EBT, Earnings from continuing operations, and Diluted EPS have been excluded from our comparable EBT, comparable earnings and comparable diluted EPS measures. The following table lists a summary of these items, which are discussed in more detail throughout our MD&A and within the Notes to Condensed Consolidated Financial Statements:
Current wording
The following table provides a reconciliation of GAAP earnings before taxes (EBT), earnings, and earnings per diluted share (Diluted EPS) from continuing operations to comparable EBT, comparable earnings, and comparable EPS. Certain items included in EBT, earnings, and Diluted EPS from continuing operations have been excluded from our comparable EBT, comparable earnings and comparable EPS measures. The following table lists a summary of these items, which are discussed in more detail throughout our MD&A and within the Notes to Condensed Consolidated Financial Statements:
Previous wording
(1)The effective tax rate on continuing operations and comparable tax rate are based on EBT and comparable EBT, respectively, found above.
Current wording
(1)The effective tax rate on continuing operations and comparable tax rate are based on EBT and comparable EBT, respectively, found on the previous table.
Showing the first 40 of 53 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
(3)Represents total debt divided by total equity.
Current report — wording carried from elsewhere
In February 2024, we issued two tranches of unsecured medium-term notes with aggregate principal amounts of $350 million and $550 million, bearing annual interest of 5.30% and 5.38%, respectively, and maturing on March 15, 2027 and March 15, 2029, respectively. In May 2024, we issued an unsecured medium-term note with aggregate principal amount of $300 million, bearing annual interest of 5.50%, and maturing on June 1, 2029.
Current report — wording carried from elsewhere
(1)Refer to Note 13, "Other Items Impacting Comparability," in the Notes to Condensed Consolidated Financial Statements for additional information.
Current report — wording carried from elsewhere
◦Regulatory changes affecting pension estimates, accruals and expenses.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
(1)Non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section of this MD&A for reconciliations of the most comparable GAAP measure to the non-GAAP financial measure and the reasons why management believes this measure is important to investors.