RYDER SYSTEM INC

1. GENERAL

Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements include the accounts of Ryder System, Inc. (Ryder), all entities in which Ryder has a controlling voting interest (subsidiaries), and variable interest entities (VIE) where Ryder is determined to be the primary beneficiary in accordance with generally accepted accounting principles in the United States (GAAP). Ryder is deemed to be the primary beneficiary if we have the power to direct the activities that most significantly impact the entity's economic performance and we share in the significant risks and rewards of the entity. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the accounting policies described in our 2024 Annual Report on Form 10-K and should be read in conjunction with the consolidated financial statements and notes thereto. The year-end Condensed Consolidated Balance Sheet data was derived from our audited financial statements, but does not include all disclosures required by GAAP. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair statement have been included and the disclosures herein are adequate. The operating results for interim periods are not necessarily indicative of the results that can be expected for a full year.

We report our financial performance based onthree business segments: (1) Fleet Management Solutions (FMS), which provides full service leasing, commercial rental and vehicle maintenance services; (2) Supply Chain Solutions (SCS), which provides fully integrated port-to-door logistics solutions; and (3) Dedicated Transportation Solutions (DTS), which provides turnkey transportation solutions, including dedicated vehicles, professional drivers, management and administrative support. Dedicated transportation services provided as part of an operationally integrated, multi-service supply chain solution to SCS customers are primarily reported in the SCS business segment.

2. RECENT ACCOUNTING PRONOUNCEMENTS

In December 2023, the FASB issued Accounting Standard Update (ASU) No. 2023-09, Income Taxes (Topic 740). The amendments require disclosure of specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. The standard is effective beginning with the December 2025 annual financial statements. This ASU does not impact our consolidated financial position, results of operations or cash flows.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). The amendments provide for more detailed disaggregation of expenses. The standard is effective beginning with the December 2027 annual financial statements and interim periods thereafter, with early adoption permitted. We are currently evaluating the disclosure impact of the adoption of this update. This ASU does not impact our consolidated financial position, results of operations or cash flows.

3. SEGMENT REPORTING

Our primary measurement of segment financial performance, defined as segment "Earnings from continuing operations before income taxes" (Segment EBT), includes an allocation of costs from Central Support Services (CSS) and excludes Non-operating pension costs, net, intangible amortization expense, and certain other significant items that are not representative of our business operations and vary from period to period. The objective of the Segment EBT measurement is to provide clarity on the profitability of each business segment and, ultimately, to hold leadership of each business segment accountable for their allocated share of CSS costs. CSS represents those costs incurred to support all business segments, including information technology, finance, marketing, human resources, legal, and safety. These costs are allocated based on various methods, including resource utilization, personnel supported and utilization-related metrics. Certain costs are not attributable to any segment and remain unallocated in CSS, including costs for investor relations, public affairs and certain executive compensation. Segment results are not necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented.

Our FMS segment leases revenue earning equipment and provides fuel, maintenance and other ancillary services to the SCS and DTS segments. Inter-Segment EBT allocated to SCS and DTS includes earnings related to equipment used to provide services to SCS and DTS customers. Segment EBT related to inter-segment equipment and services billed to SCS and DTS customers

(Equipment Contribution) are included in both FMS and the segment that served the customer and then eliminated upon consolidation (presented as “Eliminations”).

The following table sets forth financial information regularly provided and reviewed by our Chair and Chief Executive Officer (our Chief Operating Decision Maker), to analyze financial performance, make strategic decisions and allocate resources. The table also provides a reconciliation between Segment EBT and Earnings from continuing operations before income taxes(in millions):

(1)Represents the intercompany revenues in our FMS business segment and Inter-Segment EBT.

(2)Other segment items for each reportable segment include indirect costs and also include Equipment Contribution for SCS and DTS.

(3)Included within "Selling, general and administrative expenses" in our Condensed Consolidated Statements of Earnings.

(4)Refer to Note 14, "Employee Benefit Plans," for further discussion.

The following tables sets forth additional segment items for the periods presented(in millions):

(1)Depreciation expense totaling $7 million in 2025 and $7 million in 2024 associated with CSS assets was allocated to business segments based upon estimated and planned asset utilization.

(2)Primarily includes operating lease ROU assets amortization.

(3)Interest expense was primarily allocated to the FMS segment since such borrowings were used principally to fund the purchase of FMS revenue earning equipment..

4. REVENUE

Disaggregation of Revenue

The following tables disaggregate our revenue recognized by primary geographical market by our reportable business segments, by FMS product line and by SCS industry.

Primary Geographical Markets

Product Line

Our FMS revenue disaggregated by product line is as follows:

Industry

Our SCS business segment included revenue from the following industries:

Lease & Related Maintenance and Rental Revenue

The non-lease revenue from maintenance services related to our ChoiceLease product is recognized in "Lease & related maintenance and rental revenue" in the Condensed Consolidated Statements of Earnings. We recognized $250 million and $243 million for the three months ended March 31, 2025 and 2024.

Deferred Revenue

The following table includes the changes in deferred revenue due to the collection and deferral of cash or the satisfaction of our performance obligation under the contract:

Contracted Not Recognized Revenue

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (contracted not recognized revenue). Contracted not recognized revenue was $3.2 billion as of March 31, 2025, and primarily includes deferred revenue and amounts for ChoiceLease that will be recognized as revenue in future periods as we provide maintenance services to our customers.

5. RECEIVABLES, NET

The following table provides a reconciliation of our allowance for credit losses and other:

6. REVENUE EARNING EQUIPMENT, NET

Residual Value Estimate Changes

We periodically review and adjust, as appropriate, the estimated residual values of existing revenue earning equipment for the purposes of recording depreciation expense. Reductions in estimated residual values will increase depreciation expense over the remaining useful life of the vehicle. Conversely, an increase in estimated residual values will decrease depreciation expense over the remaining useful life of the vehicle. Our review of the estimated residual values of revenue earning equipment is based on vehicle class (i.e., generally subcategories of trucks, tractors and trailers by weight and usage), historical and current market prices, third-party expected future market prices, expected lives of vehicles, and expected sales in the wholesale or retail markets, among other factors. A variety of factors, many of which are outside of our control, could cause residual value estimates to differ from actual used vehicle sales pricing, such as changes in supply and demand of used vehicles; volatility in market conditions; changes in vehicle technology; competitor pricing; regulatory requirements; wholesale market prices; customer requirements and preferences; and changes in underlying assumption factors. We have disciplines related to the management and maintenance of our vehicles designed to manage the risk associated with the residual values of our revenue earning equipment. In the three months ended March 31, 2025, we made an immaterial adjustment to certain vehicles' estimated residual values based on this review.

Used Vehicle Sales and Valuation Adjustments

Revenue earning equipment held for sale is stated at the lower of carrying amount or fair value less costs to sell. Losses on vehicles held for sale for which carrying values exceeded fair value, which we refer to as "valuation adjustments," are recognized at the time they are deemed to meet the held-for-sale criteria and are presented within "Used vehicle sales, net" in the Condensed Consolidated Statements of Earnings. For revenue earning equipment held for sale, we stratify our fleet by vehicle type (trucks, tractors and trailers), weight class, age and other relevant characteristics and create classes of similar assets for analysis purposes. For revenue earning equipment held for sale, fair value was determined based upon recent market prices obtained from our own sales experience for each class of similar assets and vehicle condition, if available, or third-party market pricing. In addition, we also consider expected declines in market prices, as well as forecasted sales channel mix (retail/wholesale) when valuing the vehicles held for sale.

The following table presents our assets held for sale that are measured at fair value on a nonrecurring basis and considered a Level 3 fair value measurement:

The table above reflects only the portion where net book values of revenue earnings equipment held for sale exceeded fair values and valuation adjustments were recorded. The net book value of assets held for sale that were less than fair value was $131 million and $118 million as of March 31, 2025 and December 31, 2024, respectively.

The components of "Used vehicle sales, net" were as follows:

7. ACCRUED EXPENSES AND OTHER LIABILITIES

8. LEASES

The components of revenue from leases were as follows:

(1)Lease income related to commercial rental includes both fixed and variable lease income. Variable lease income is approximately 14% of total commercial rental income based on management's internal estimates..

The components of net investment in sales-type leases, which are included in "Receivables, net" and "Sales-type leases and other assets" in the Condensed Consolidated Balance Sheets, were as follows:

9. DEBT

(1)Asset-backed U.S. obligations are financing transactions backed by a portion of our revenue earning equipment.

(2)Interest rate swaps included in "Other non-current liabilities" within the Condensed Consolidated Balance Sheets. The notional amount of interest rate swaps designated as fair value hedges was $500 million as of both March 31, 2025 and December 31, 2024.

(3)The unsecured medium-term notes bear semi-annual interest.

The fair value of total debt (excluding finance lease and asset-backed U.S. obligations) was approximately $7.6 billion as of both March 31, 2025 and December 31, 2024. For publicly traded debt, estimates of fair value were based on market prices. For other debt, fair value was estimated based on a model-driven approach using rates currently available to us for debt with similar terms and remaining maturities. The fair value measurements of our publicly traded debt and our other debt were classified within Level 2 of the fair value hierarchy.

Debt Proceeds and Repayments

The following table summarizes our debt proceeds and repayments in 2025:

(1)Proceeds from medium-term notes presented net of discount and issuance costs.

Debt proceeds were used to repay maturing debt and for general corporate purposes. If the unsecured medium-term notes are downgraded below investment grade following, or as a result of, a change in control, the note holders can require us to repurchase all or a portion of the notes at a purchase price equal to 101% of principal value plus accrued and unpaid interest.

Credit Arrangements

Our borrowing capacity under the revolving credit facility and trade receivables financing program was as follows:

(1)As of March 31, 2025 and December 31, 2024, includes borrowings of $20 million for both periods, and letters of credit outstanding of $78 million and $99 million, respectively.

Subsequent Events

In April 2025, we amended and restated our corporate revolving credit facility, which supports U.S. and Canadian commercial paper programs, with a syndicate ofeleven incumbent lending institutions. The facility's committed borrowing capacity was increased to $1.6 billion and it now expires in April 2030. The credit facility is primarily used for general corporate purposes and can also be used to issue up to $150 million in letters of credit. As of March 31, 2025, there wereno letters of credit outstanding against the facility.

In April 2025, we extended the trade receivables financing program for an additional year to April 2026.

10. SHARE REPURCHASE PROGRAMS

We currently maintaintwo share repurchase programs approved by our board of directors. The first program authorizes management to repurchase up to 2 million shares of common stock issued to employees under our employee stock plans since August 31, 2023, under an anti-dilutive program (the "2023 Anti-Dilutive Program"). The second program grants management discretion to repurchase up to 2 million shares of common stock over a period oftwo years under a discretionary share repurchase program (the "October 2024 Discretionary Program"). Share repurchases under both programs can be made from time to time using our working capital and other borrowing sources. Shares are repurchased under open-market transactions and trading plans established pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934. The timing and actual number of shares repurchased are subject to market conditions, legal requirements and other factors, including balance sheet leverage, availability of acquisitions and stock price.

The discretionary share repurchase programs are designed to provide management with capital structure flexibility while concurrently managing objectives related to balance sheet leverage, acquisition opportunities, and shareholder returns. The anti-dilutive share repurchase programs are designed to mitigate the dilutive impact of shares issued under our employee stock plans. Shares are retired upon repurchase.

The following table provides the activity for shares repurchased and retired:

(1)Program commenced October 2023 and expires October 2025.

(2)Program commenced October 2024 and expires October 2026.

Amounts in the table may not be additive due to rounding.

11. ACCUMULATED OTHER COMPREHENSIVE LOSS

Comprehensive income presents a measure of all changes in shareholders' equity except for changes resulting from transactions with shareholders in their capacity as shareholders. The following summary sets forth the change in each component of Accumulated other comprehensive loss, net of tax (AOCI):

12. EARNINGS PER SHARE

The following table presents the calculation of basic and diluted earnings per common share from continuing operations:

Note: Amounts in the table may not recalculate due to rounding of earnings and share.

13. SHARE-BASED COMPENSATION PLANS

We generally grant share-based awards in the first quarter of each year during our annual equity award process. The vesting conditions for the awards granted were consistent with prior year. The following table is a summary of the awards granted in the first quarter of 2025 and 2024:

14. EMPLOYEE BENEFIT PLANS

Components of net pension expense for defined benefit pension plans were as follows:

Non-operating pension costs, net include theamortization 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. We also maintain other postretirement benefit plans that are not reflected in the table above as the amount of postretirement benefit expense for such plans was not material for any period presented.

In April 2025, we executed a bulk annuity contract with a Canadian insurance company that will enable us to settle $42 million of our $59 million Canadian pension benefit obligations. This annuity transaction secured future pension benefits to certain pension plan members. We currently maintain all administrative responsibilities for the annuity payments to these pension plan members. The remaining $17 million of Canadian pension benefit obligations will be settled by issuing lump sum payments to pension plan members. Both the bulk annuity contract and the lump sum payments will be funded using Canadian pension plan assets. The bulk annuity transaction will have no impact on our financial position or statement of earnings until administrative responsibilities related to the annuity payments are transferred to the Canadian insurance company. The bulk annuity contract administrative transfer and lump sum payments to pension plan members are both targeted to occur in 2026.

15. CONTINGENCIES AND OTHER MATTERS

We are a party to various claims, complaints and proceedings arising in the ordinary course of our continuing business operations, including those relating to commercial and employment claims, environmental matters, risk management matters (e.g., vehicle liability, workers' compensation, etc.) and administrative assessments primarily associated with operating taxes. We have established loss provisions for matters in which losses are probable and can be reasonably estimated. We believe that the resolution of these claims, complaints and legal proceedings will not have a material effect on our condensed consolidated financial statements.

Our estimates regarding potential losses and materiality are based on our judgment and assessment of the claims utilizing currently available information. Although we will continue to reassess our estimated liability based on future developments, our objective assessment of the legal merits of such claims may not always be predictive of the outcome and actual results may vary from our current estimates.

Securities Litigation Relating to Residual Value Estimates

As previously disclosed, between June 2020 and February 2021, five shareholder derivative complaints were filed against certain of our current and former officers and directors (the "Derivative Cases"). The Derivative Cases were generally based on the allegations set forth in the previously filed securities class action, which was dismissed with prejudice in November 2024 following a settlement. In September 2023, the parties to the Derivative Cases reached an agreement in principle to resolve the Derivative Cases in exchange for certain specified corporate reforms. On March 26, 2025, the court approved the settlement, and all of the Derivative Cases have now been dismissed with prejudice. We expect that the settlement amount of plaintiffs' attorneys'

fees and expenses in connection with the settlement of the Derivative Cases will be covered by insurance, and accordingly is not material to our financial position or results of operations.

16. SUPPLEMENTAL CASH FLOW INFORMATION