Dear Ryder Shareholder:

For more than 80 years Ryder people have been working behind the scenes to make other companies more successful. Today, we manage critical fleet, dedicated transportation, and supply chain functions for more than 50,000 companies that make the products you use every day.

Even with this significant base of existing customers, Ryder has plenty of room to grow. That’s because we primarily operate in the very large North American trucking and logistics market and 90 percent of our market hasn’t taken advantage of outsourcing yet.

Over the past few years, we’ve made good progress on our strategy to penetrate the non-outsourced transportation and logistics markets. This focus on growth allows us to leverage a number of secular trends that are making it increasingly difficult for companies to manage fleets and supply chains on their own. These trends include:

  • Higher purchase prices for new trucks;
  • A shortage of qualified drivers and maintenance technicians;
  • Higher cost and complexity to maintain new vehicle engine technologies;
  • Increasing compliance requirements related to new environmental and safety regulations; and
  • Rapidly changing global supply chains, including near-shoring trends.

Growing our business is key to delivering increasing returns for shareholders over time. We have a strong ability to leverage new revenue streams to drive higher earnings through increased utilization of our network of more than 800 vehicle maintenance facilities, IT infrastructure, and other shared overheads. Realizing the operating leverage in earnings that is available in our business model is a cornerstone of our strategic growth efforts.

Operating Revenue

Up 6%

Lease Fleet

Up 6,800 Vehicles

Comparable EPS

Up 10%

Record Results in Weaker Market Conditions

In 2015, our team handled some challenging market conditions and delivered another year of record performance. We grew full-year operating revenue by 6% to a new record with continued growth in contractual product lines across all three business segments. We also reached a new high in comparable earnings, with a double-digit increase from the record performance we delivered in 2014, demonstrating the operating leverage available in our business model.

I’d like to highlight the progress we made during 2015 in key areas that we have been focused on over the past several years:

  • Accelerate revenue growth

    We delivered strong operating revenue of 6%, reaching a record level for 2015.
  • Grow revenue in all product lines

    We increased operating revenue in all three business segments: Fleet Management Solutions grew 6%, Dedicated Transportation Solutions grew 8%, and Supply Chain Solutions increased 5% for the year.
  • Continue to grow the full service lease fleet

    We delivered our fourth consecutive year of lease fleet growth, with an increase of 6,800 vehicles, more than double the growth of 3,200 vehicles in 2014. This far exceeded our initial full-year forecast of 4,000 vehicles, and resulted in the highest growth our largest product line has achieved in more than a decade.
  • Achieve double-digit earnings growth

    We grew comparable earnings from continuing operations by 10% in 2015. While Fleet Management Solutions drove overall earnings, I want to recognize our Supply Chain Solutions organization for delivering a 21% increase in pre-tax earnings in 2015.
  • Deliver record earnings per share

    We increased comparable earnings per share from continuing operations to a record $6.13, topping our previous record of $5.58 in 2014.
  • Make strategic investments to drive growth

    We launched new systems to increase the accuracy and convenience of our customer-facing technologies, developed new products and services, increased marketing lead generation programs, and enhanced our sales force with industry specialists. We also executed the mid-year launch of our On-Demand Maintenance product – an industry-first offering that’s attracting customers from outside of our existing customer base.

In addition, our sound business processes and effective capital management enabled us to deliver a higher return on capital spread of 140 basis points.

Committed to Long-term Growth

We enter 2016 well positioned for continued growth and progress toward our strategic objective to penetrate non-outsourced markets and, in doing so, we expect to deliver increasing shareholder returns over the long term. The strong contractual sales and robust new deal pipeline we saw through year end across all three business segments reflect the increased effectiveness of our sales and marketing efforts and the ongoing benefits of secular trends that favor outsourcing. We see great opportunity to further our progress in 2016, and we remain committed to the five strategic priorities that we established several years ago.

  1. 1. Attracting the Best People in the Industry

    • In 2015, Forbes Magazine ranked Ryder 62nd on their list of “America’s Best Employers,” based on their random survey of 20,000 employees of large U.S. companies.
    • In 2016, we will continue to engage with existing and prospective employees through surveys and other means to further the effectiveness of our employee recruiting and retention effort as a competitive advantage for Ryder. This will include emphasis on key in-demand positions such as drivers and technicians. We will also continue our successful focus on hiring veterans, building on a commitment that has resulted in the hiring of more than 3,700 U.S. military veterans since 2011.
  2. 2. Delivering on the Promise to Our Customers

    • Fleet Management Solutions – We have developed a new “Fleet Uptime” metric which, combined with initiatives to increase productivity in our maintenance operations, will enable our team to further optimize our customers’ fleet performance by keeping their vehicles on the road and supporting their businesses.
    • Dedicated Transportation Solutions – We will continue to heighten customer satisfaction by building on the on-time delivery performance improvements we made in 2015.
    • Supply Chain Solutions – We will further enhance Ryder’s reputation for “Best Execution” by leveraging our LEAN expertise to continuously improve customer-supporting operations.
  3. 3. Innovating with New Solutions

    • Over the past few years we successfully launched a natural gas vehicle offering, a new On-Demand Maintenance product, and our automated fleet optimization tool called Ryder TranSync. We entered a number of new industry sectors, for example, targeting Healthcare opportunities and bringing new efficiencies to the Oil & Gas industry.
    • In 2016, we will continue to build the customer base for these offerings with the benefit of focused go-to-market strategies. We also continue to innovate with new offerings across our business segments aimed at leveraging disruptive technology and creating new services and capabilities to make it easier for customers to do business with Ryder.
  4. 4. Developing the Best Technology in the Industry

    • Our IT organization has developed and launched new systems in each of our three business segments to support customers with technologies that increase our joint ability to manage their operations with more precision, efficiency, and flexibility.
    • In 2016, we will continue to develop and launch high impact projects, including initiatives to: automate and enhance the customer experience related to back-office support operations; optimize the efficiency of Transportation Management decisions; and enhance the customer experience related to and several web-based customer offerings.
  5. 5. Growing Our Business

    • In 2016, we will build on the record sales and growth we achieved last year. Our enhanced sales and marketing capabilities have led to record sales through the conversion of many customers who are new to outsourcing.
    • We enter the year with very strong momentum in our contractual product lines and a well-established collaborative selling culture. That increased collaboration has produced significant wins over the past two years by diving deeper into our customers’ needs and guiding them toward additional and higher value offerings across our business segments.

The Road Ahead

We anticipate weaker market conditions for our transactional rental and used vehicle sales businesses in 2016. However, the impact of these areas of softness is expected to be offset by continued strength in our contractual product lines, driven by strong secular trends that favor outsourcing. In our largest product line, full service lease, we anticipate significant fleet growth of 3,500 vehicles this year. This would represent the Company’s fifth consecutive year of organic lease fleet growth. Our supply chain and dedicated transportation businesses are expected to deliver double-digit earnings improvement, driven by new sales activity. We also expect to realize benefits from effective asset management execution and cost-reduction actions taken earlier in the year.

These factors are expected to result in record revenue for Ryder, as well as higher earnings across all of our contractual businesses in 2016. This momentum, and the benefits of new products, gives us many reasons for excitement about our prospects for long-term growth.

In addition, our counter-cyclical business model is expected to generate positive free cash flow in 2016. Given this increase in free cash flow, we forecast our leverage ratio to significantly decline during the year, giving us increased balance sheet flexibility. In view of these expectations, we anticipate resuming anti-dilutive share repurchases in the second half of the year.

In closing, I want to thank you for investing in Ryder’s business and allowing our team to continue to collaborate, innovate, execute, and grow our great company. Our team of more than 33,000 employees appreciates your support, and we look forward to sharing the rewards of our progress with you on the road ahead.

Sincerely, Robert Sanchez Signature Robert Sanchez Chairman and CEO

This letter includes the following non-GAAP financial metrics: Operating revenue, segment operating revenue, comparable earnings from continuing operations, comparable earnings per share from continuing operations and return on capital. For a reconciliation of these non-GAAP financial measures, see pages 33, 36, 38 and 55 - 57 of the accompanying Annual Report on Form 10-K.