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Pension Overview


December 2010
Safe Harbor

Note Regarding Forward-Looking Statements: Certain statements and information included in this
presentation are "forward-looking statements" under the Federal Private Securities Litigation Reform
Act of 1995 including statements relating to estimated pension expense and contributions for 2011.
Accordingly, these forward-looking statements should be evaluated with consideration given to the
many risks and uncertainties that could cause actual results and events to differ materially from those
in the forward-looking statements. Important factors that could cause such differences include, among
others, the adequacy of actuarial assumptions and estimates; macroeconomic factors, including
market volatility, that affect our investment returns, discount rates, costs and funding requirements; the
impact of new pension regulations; actual withdrawal liability and funding levels of multi-employer
plans; and a change in the level of pension contributions resulting from, among other things, a change
in expected free cash flow levels. Our expectations are also subject to the risks described in our filings
with the Securities and Exchange Commission (SEC). The risks included here and in our SEC filings
are not exhaustive. New risks emerge from time to time and it is not possible for management to
predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we
undertake no obligation to publicly update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise.




                                                                Proprietary and Confidential                 2
Contents

 Purpose of Overview                                                        Page 4

 Plan Overview / Recent Changes                                             Page 5

 Accounting Fundamentals                                                    Page 6

 Pension Funded Status                                                      Page 10

 Pension Investment Strategies and Results                                  Page 18

 Pension Contribution Requirements                                          Page 23

 Pension Expense                                                            Page 27

 Pension Equity Charges                                                     Page 41

 Conclusions                                                                Page 44




                                             Proprietary and Confidential             3
Purpose of Overview

  ►Provide clarity to the main components and drivers of pension expense:
   generally and specific to Ryder’s continuing operations

  ►Provide insight into the factors which create funding requirements: generally
   and specific to Ryder

  ►Provide information on Ryder’s U.S. pension funding status, pension asset
   returns and asset allocation strategies

  ►Provide information on estimated future cash funding requirements

  ►Provide information on estimated 2011 pension costs, go-forward sensitivity
   guides and drivers of changes in 2011 pension costs

  ►Provide information on equity charges as a result of under-funded status




                                                 Proprietary and Confidential      4
Plan Overview / Recent Changes
►Ryder historically offered defined-benefit pension benefits in the U.S., U.K, and
 Canada. Substantially all employees, except U.S. drivers and warehouseman,
 were covered under the plans. The majority of the employees covered by the
 plans are in Fleet Management Solutions and Central Support Services.
►Effective 1/1/08, U.S. pension plans were frozen for participants who did not
 meet certain grandfathering criteria. Approximately 70% of the active
 participants ceased accruing benefits under the plan.
►Effective 1/1/10, the Canadian pension plan was frozen for participants who did
 not meet certain grandfathering criteria. Approximately 70% of the then active
 participants ceased accruing benefits under the plan.
►Effective 3/31/10, the U.K. pension plan was frozen for all participants.
►The freeze of the pension plans minimizes volatility in earnings.
►Impacted employees participate in new enhanced defined contribution plans.
►Reductions in pension expense associated with the freeze of the plans are
 generally being offset by costs associated with the new enhanced defined
 contribution plans.

                                                  Proprietary and Confidential       5
Accounting Fundamentals
Accounting Fundamentals

 Guiding literature – FASB Accounting Standards Codification (ASC) Topic 715,
    “Compensation – Retirement Benefits”

 Delayed Recognition - changes in pension obligation and the value of net assets
    are recognized in earnings systematically and gradually over future periods

 Net Reporting of Expense - consequences of events and transactions
    (compensation element, interest cost, investment return) are recorded as a
    single net expense

 Offsetting of Assets and Liabilities - value of pension assets and liabilities to
    participants (funded status) shown net on the balance sheet

 Assumptions-Based Expense Calculation - discount rate, pension earnings rate,
    salary progression rate, retirement and mortality rate.




                                                   Proprietary and Confidential      7
Accounting Fundamentals
                        Pension Assumptions

Discount Rate - rate that discounts expected future cash benefit payments to a
present value.
    ► Rate determined from models that match the expected benefit payments underlying the
      liability to coupons and maturities from a hypothetical portfolio of high quality corporate
      bonds.
    ► Rate considered in determining 2011 pension expense of our primary U.S. Plan is
      5.70% vs. 6.20% in 2010. Average rate for international plans is 5.55% vs. 5.93% in
      2010.


Pension Earnings Rate - long-term expected rate of return on assets based on
asset allocation, current returns and expected reinvestment rates.
    ► Rate considered in determining 2011 pension expense for our primary U.S. Plan is
      7.60% vs. 7.65% in 2010. Average rate for international plans is 6.75% vs. 7.04% in
      2010.
    ► Rate includes impact of investment management and other fees.




                                                         Proprietary and Confidential               8
Accounting Fundamentals
                        Pension Assumptions
Salary Progression Rate – annual rate of growth based on expected compensation
until retirement, including all salary increase components (merit, promotion, equity,
overtime and inflation).
    ► Rate used to produce our 12/31/2010 pension liability valuation and 2011 pension
      expense, for our primary U.S. plan, remained at 4.0% based on actuarial review of
      historical experience.
    ► Assumption less significant now that plans are frozen with limited active participants (i.e.
      assumption only relevant for grandfathered participants).


Retirement and Mortality Rate – retirement rate based on actual plan experience;
mortality rate based on standard actuarial tables.
    ► Mortality assumptions used to produce our 12/31/2010 pension liability valuation and
       2011 pension expense, for our primary U.S. plan, were unchanged from prior year.




                                                        Proprietary and Confidential             9
Pension Funded Status
Funded Status
                          Ryder System, Inc. and Subsidiaries
                   Funded Status and Balance Sheet Impact of Pension
 (Dollars in millions)
                                                                   2010                 2009          2008
 Projected benefit obligations (PBO) at 12/31                 $   1,744.2               1,603.6      1,477.5
 Fair value of Plan assets at 12/31                               1,428.8               1,282.9        975.5
 Funded status                                                $     (315.4)               (320.7)     (502.0)

 Non-current asset                                            $       20.6                  10.6         5.2
 Current liability                                                    (3.0)                 (2.7)       (2.5)
 Non-current liability                                              (333.1)               (328.6)     (504.7)
 Funded status                                                $     (315.4)               (320.7)     (502.0)

 Unrecognized net actuarial loss *                            $       658.5                  638.4     750.3

 Actuarial Assumptions U.S. Plan:
  Discount Rate                                                     5.70%                  6.20%      6.25%
  Salary Progression Rate                                           4.00%                  4.00%      4.00%

* Actuarial losses are amortized to earnings over the average remaining service life of active participants or the
 average remaining life expectancy of inactive participants if all or almost all of the plan’s participants are
 inactive.

                                                                    Proprietary and Confidential                  11
Funded Status


                          Consolidated Funded Status


  (Dollars in millions)
                                            2010                  2009       2008
  U.S. Qualified Plan                   $   (288.2)               (287.8)    (465.2)
  U.S. Non Qualified Plan                    (39.6)                (37.1)     (36.8)
  International Plans                         12.4                    4.2       0.0
  Total Consolidated Funded Status      $   (315.4)                (320.7)   (502.0)
                Percent Funded              82%                    80%       66%




                                              Proprietary and Confidential             12
Funded Status

                             U.S. Qualified Pension Plan

                                                12/31/10                  12/31/09                      12/31/08
  (Dollars in millions)
                                                                 (1)
  Fair Value of Assets (FVA)                    $ 1,077.8                $          963.1               $   747.7
                                                                 (2)
  PV of Liability (PBO)                          1,366.0                   1,250.9                        1,212.9
  Funded Status                                 $ (288.2)                $  (287.8)                     $  (465.2)
          Percent Funded                          79%                      77%                            62%


    (1)   Actual return on plan assets was approximately 12% for 2010.

    (2)   Discount rate was 5.70% at 12/31/10 (6.20% at 12/31/09 and 6.25% at 12/31/08).




                                                                         Proprietary and Confidential                13
Funded Status

                                  Pension Assets
  Pension assets are measured at the end of each reporting year (12/31)
      ► Point-in-time valuation
      ► Reflects fair market value
      ► Not market-related (smoothed) value which is another accepted method



  The fair market value of pension assets changes from year to year as a
  result of the following items:
      ► Actual returns earned on plan assets
      ► Contributions to the plan
      ► Benefit payments to retirees
      ► Payment of plan expenses




                                                   Proprietary and Confidential   14
Funded Status

                               Pension Liabilities
Projected Benefit Obligation (PBO) measures the present value of expected
future benefit payments to plan participants including future salary increases
    ► Point-in-time valuation (year-end unless interim assessment required)
    ► Based on service to date of valuation
    ► Based on selected discount rate

The discount rate is based on actuarial models that match expected timing of
expected benefit payments to coupons and maturities from a hypothetical
portfolio of high quality (Aa or better) corporate bonds at the end of each
reporting year (December 31).

Future benefit payments are based on current plan provisions and are
impacted by the following assumptions:
    ► Retirement age
    ► Mortality, Disability, Turnover, etc.
    ► Salary progression rate



                                                     Proprietary and Confidential   15
Funded Status
                    Historical Consolidated Funded Status
             140




             120
  % Funded




             100
                                                                        100
                    96
                                                           93


              80                             83                                                         82
                                   80                                                            80
                                                    78
                           74

                                                                                       66
              60
                   2001   2002    2003      2004   2005   2006        2007          2008        2009   2010

              Note: All years as of 12/31
                                                                 Proprietary and Confidential                 16
Funded Status
            Historical Funded Status - U.S. Qualified Plan Only
            140



            120
 % Funded




            100
                  100                                                100
                                                          97

                                            87
             80                   83               81
                                                                                                      79
                           77                                                                  77


             60                                                                      62



             40
                  2001   2002    2003      2004   2005   2006       2007           2008       2009   2010

             Note: All years as of 12/31
                                                               Proprietary and Confidential                 17
Pension Investment Strategies and Results
Pension Investment Strategies & Results

  The purpose of the pension fund is to accumulate sufficient assets to
  meet the Plan’s future payment obligations (liabilities).

  Ryder’s Investment Committee oversees the asset management and
  investment activities of our North American pension plans.
  Responsibilities include:
      ► Establishing and maintaining a broad asset allocation strategy
      ► Building investment structure within asset classes to ensure diversification
      ► Retaining and monitoring investment managers
      ► Evaluating performance of plans

  Assets are accumulated largely through investment returns; investment
  returns are maximized through asset allocation; asset allocation is
  structured to produce the required long-term returns within a risk-
  controlled framework.

  Allocation of assets is largely a function of the time horizon for future
  liability payments and expected return/risk characteristics for the various
  asset classes. Investment allocations are subject to change at any time.
                                                       Proprietary and Confidential    19
Pension Investment Strategies & Results
                                     Asset Allocation Strategy
 Ryder’s U.S. pension asset allocation and approved targets are as follows:
                                                            12/31/10                 12/31/09
                                                           Allocation               Allocation                  Target*
    U.S. Equity                                               47%                      48%                       40%

    Non-U.S. Equity                                            20%                      15%                      20%

    U.S. Fixed Income                                          26%                      27%                      30%

    Alternative Investments (fund of funds)                     2%                       2%                      10%

    Cash**                                                      5%                       8%                       0%
                                                              100%                     100%                     100%


    * Asset allocation targets are approved and managed by the Ryder Investment Committee. In November 2010, the
    Committee approved a shift in targets whereby U.S. Equity was reduced from 45% to 40% and Alternative Investments was
    increased from 5% to 10%. We expect to reallocate the investments by the end of the first quarter of 2011.


    ** We made a voluntary pension contribution at the end of December 2010 of $50 million, which was allocated to the target
    asset classes in January 2011. We made voluntary pension contributions at the end of December 2009 of $85 million, which
    were allocated to the target asset classes in January 2010.




                                                                                 Proprietary and Confidential                   20
Pension Investment Strategies & Results
                         U.S. Qualified Pension Plan Asset Return History
                   25                                                                                         25


                   15                                                                                         15
Asset Return (%)




                                                                                                                    Asset Return (%)
                                                                                              7.65% 7.60%
                    5                                                                               6.7%      5


                    -5                                                                                        -5


                   -15                                                                                        -15


                   -25                                                                                        -25


                   -35                                                                                        -35
                         2002   2003   2004   2005   2006   2007   2008       2009          2010       2011
                                 Annual Actual Asset Return
                                 Current Expected Long Term Return on Assets
                                 Rolling 15-Year Compound Annual Return

                                                                     Proprietary and Confidential                                      21
Current Expected Long-Term Return on Assets


Long-term return assumptions are based on:
    ► Actuarial review of asset allocation strategy
    ► Long-term expected asset returns
    ► Investment management and other fees paid using plan assets



2011 expected return decreased to 7.60% from 7.65% in 2010. The downward
adjustment was driven by:
    ► Lower expected asset return for each class of investment compared to 2010
    ► Partially offset by a 5% change in target allocation of plan assets from U.S. Equity to
       Alternative Investments, which have a higher expected return




                                                         Proprietary and Confidential           22
Pension Contribution Requirements
Pension Contribution
   Annual U.S. cash contribution requirements were historically determined
   under Employee Retirement Income Security Act (ERISA).
   In 2006, the Pension Protection Act (PPA) was passed which amended
   ERISA for the purpose of strengthening pension funding and helping the
   Pension Benefit Guarantee Corporation (PBGC) remain solvent.
   Below is a summary of the contribution and PBGC premium requirements
   under PPA:
       ► Minimum Funding Requirements - sufficient contributions to cover normal
          costs for the period and the amount to amortize funding shortfalls (if liability
          exceeds assets) over 7 years.
            ●   Additional contribution requirements if funded status falls below certain thresholds
                and plan considered “at-risk” (80% for 1/1/2011 and later). “At-risk” status is
                determined based on the prior year funded percentage.
            ●   Based on the current pension assumptions, the U.S. Qualified Plan is expected to be
                at “at-risk” on 1/1/2012 (not at-risk from 2013 to 2015). The “at-risk” status would
                trigger an additional funding requirement of approximately $3 million in 2012.

       ► PBGC premium – a flat dollar amount (per participant) for U.S. Plan PLUS a
          variable premium per participant when U.S. Plan is less than 100% funded
          (under PPA, no exemptions).


                                                                                                       24
Pension Contribution
   For 2010 funding purposes, Ryder used the same elections as used in 2009:
       ► Smoothed assets
       ► Smoothed discount rate
       ► Smoothing should produce more stable contribution requirements

   Contribution requirements are influenced primarily by the following factors:
       ► Funded status
       ► Actual return on plan assets
       ► Discount rate applied to expected plan payouts – based on corporate bond
         yield curve
       ► Salary growth, retirement age and turnover
       ► Mortality – table issued by IRS and updated every year

   The Internal Revenue Code allows annual contributions greater than PPA
   minimum funding requirements, thus a range of contributions is possible.
   However, under current PPA “credit balance” rules, excess contributions in
   a current period may not be totally available for determining future
   contribution requirements.




                                                                                    25
Pension Contribution
Under PPA minimum funding rules and based on current market assumptions,
Ryder will be required to make significant contributions in the next five years.
However, no contributions are required for the U.S. Qualified Plan during 2011 due
to a voluntary $50M contribution made in December 2010. In general, Ryder may
elect to make voluntary contributions earlier than required and in amounts greater
than the minimum requirements.
The following table presents Ryder’s estimated funding requirements:
                                                   Minimum Contribution
                                                                     (1),(2)
                                                    Requirements
                                                       ($ in millions)
   Present value over 5 years
                                 (3)
         U.S. Qualified Plan                                 $ 302
   2011 Calendar Year
         U.S. Qualified Plan                                 $   0
         Global                                              $ 15
                              (4),(5)
   1/1/2011 PPA Funded Status                                 75%
   (1) US Qualified Plan Contributions based on a discount rate of 6.30% and return on assets of 7.65%.
   (2) The level of future contributions will change based on actual discount rate and plan asset performance.
   (3) U.S. Qualified Plan undiscounted by year: 2011: $0: 2012: $102M; 2013: $83M; 2014: $79M; 2015: $76M; 2012
   includes estimated $3M additional funding requirement triggered by "at-risk" status.
   (4) Estimated without adjustment to assets for credit balance.
   (5) Funded status < 80% in 2011 would trigger "at-risk" status for 2012. The estimated 2011 payments required to
   avoid "at-risk" status for 2012 are approximately $130M. At the present time, such payments are not being
   contemplated by Ryder.


                                                                                Proprietary and Confidential          26
Pension Expense
Pension Expense
           Consolidated Pension Expense History
(Dollars in millions)
                                           2010              2009                   2008
 Service cost                          $     15.2        $       21.0                 25.2
 Interest cost                               96.1                93.0                 92.5
 Expected return on plan assets             (93.1)              (74.9)              (120.6)
 Settlement/Curtailment loss (gain)           1.5                 0.1                 (3.6)
 Recognized net actuarial loss               19.0                24.0                  5.9
 Amortization of prior service credit        (2.3)               (2.2)                (2.5)
Pension expense, excluding union plans       36.5                61.0                 (3.2)
Union-administered plans                      5.2                 5.2                  4.9
Net pension expense                    $     41.7        $       66.2                  1.7
U.S. Actuarial Assumptions:
   Discount rate                            6.20%              6.25%                 6.35%
   Salary progression rate                  4.00%              4.00%                 4.00%
   Expected return on plan assets           7.65%              7.90%                 8.40%
   Gain and loss amortization in years          26                 27                    28




                                                     Proprietary and Confidential             28
Pension Expense

                   Detail of Consolidated Pension
                           Expense History

                                 Years Ended December 31:

  (Amounts in millions)
                                 2010         2009                  2008
  U.S. Qualified Plan        $     30.7   $      47.7                        (8.9)
  U.S. Non Qualified Plan           3.1           3.2                         3.3
  International Plans               2.7          10.1                         2.4
  Union Administered Plans          5.2           5.2                         4.9
  Net Pension Expense        $     41.7   $      66.2                        1.7




                                              Proprietary and Confidential           29
Pension Expense

                                 Service Cost

(Amounts in millions)                        2010      2009
                                                                            • Service cost is
Company-administered plans:                                                   determined as the
                                                                              actuarial present value of
 Service cost                            $  15.2     $ 21.0                   benefits for employee
 Interest cost                              96.1       93.0                   service during the period
 Expected return on plan assets            (93.1)     (74.9)                • Amount is impacted by:
 Settlement/Curtailment loss                 1.5        0.1                        1) Discount Rate
 Recognized net actuarial loss              19.0       24.0
                                                                                   2) Number of
 Amortization of prior service credit       (2.3)      (2.2)                          employees
Pension expense, excluding union plans      36.5       61.0                        3) Expected lives /
Union-administered plans                     5.2        5.2                           retirement period
Net pension expense                      $ 41.7      $ 66.2                           of employees




                                                    Proprietary and Confidential                          30
Pension Expense

                                Interest Cost

(Amounts in millions)                        2010          2009

                                                                                   • Interest cost represents
Company-administered plans:                                                          the increase in the
 Service cost                            $  15.2         $ 21.0                      projected benefit
 Interest cost                              96.1           93.0                      obligation due to the
 Expected return on plan assets            (93.1)         (74.9)                     passage of time
 Settlement/Curtailment loss                 1.5            0.1                    • Amount is measured
 Recognized net actuarial loss              19.0           24.0                      by accrual of interest
                                                                                     cost at assumed
 Amortization of prior service credit       (2.3)          (2.2)                     discount rate
Pension expense, excluding union plans      36.5           61.0
Union-administered plans                     5.2            5.2
Net pension expense                      $ 41.7          $ 66.2




                                                    Proprietary and Confidential                              31
Pension Expense

                        Expected Return on Assets

(Amounts in millions)                        2010       2009               • Return on Plan assets
                                                                             represents the assumed
Company-administered plans:                                                  change in the fair value of
                                                                             Plan assets during the
 Service cost                            $  15.2      $ 21.0                 year, after considering plan
 Interest cost                              96.1        93.0                 contributions and
 Expected return on plan assets            (93.1)      (74.9)                distributions
 Settlement/Curtailment loss                 1.5         0.1               • Average long-term U.S.
 Recognized net actuarial loss              19.0        24.0                 expected rate of return of:
 Amortization of prior service credit       (2.3)       (2.2)                2001          9.25%
Pension expense, excluding union plans      36.5        61.0                 2002          8.75%
Union-administered plans                     5.2         5.2                 2003-2007     8.50%
                                                                             2008          8.40%
Net pension expense                      $ 41.7       $ 66.2                 2009          7.90%
                                                                             2010          7.65%




                                                    Proprietary and Confidential                      32
Pension Expense

                        Settlement/Curtailment Loss

(Amounts in millions)                        2010       2009
                                                                           • Settlement loss recognized in
Company-administered plans:                                                  2010 upon election by a
 Service cost                            $  15.2      $ 21.0                 number of Canadian
                                                                             employees to receive a lump-
 Interest cost                              96.1        93.0                 sum payment
 Expected return on plan assets            (93.1)      (74.9)                      (1) For 2010, lump-sum
 Settlement/Curtailment loss                 1.5         0.1                       payments were greater
 Recognized net actuarial loss              19.0        24.0                       than service and interest
 Amortization of prior service credit       (2.3)       (2.2)                      cost and triggered
                                                                                   settlement accounting
Pension expense, excluding union plans      36.5        61.0
                                                                                   (2) Recognized
Union-administered plans                     5.2         5.2                       proportionate amount of
Net pension expense                      $ 41.7       $ 66.2                       unrecognized loss
                                                                           • Loss recognized in 2009
                                                                             upon amendment to freeze
                                                                             U.K. plan effective 3/31/2011




                                                    Proprietary and Confidential                           33
Pension Expense

                            Actuarial Gain / Loss
                                                                        • Actuarial gains or losses
                                                                          include changes in pension
(Amounts in millions)                        2010    2009                 assets or obligations
                                                                          resulting from experience
                                                                          different than that assumed
Company-administered plans:                                               or changes in assumptions
 Service cost                            $  15.2    $ 21.0
 Interest cost                              96.1      93.0              • G/L recognized over time
 Expected return on plan assets            (93.1)    (74.9)             • G/L recognition is subject to
 Settlement/Curtailment loss                 1.5       0.1                a “corridor” which is
 Recognized net actuarial loss              19.0      24.0                generally 10% of the greater
                                                                          of pension obligations or
 Amortization of prior service credit       (2.3)     (2.2)               assets
Pension expense, excluding union plans      36.5      61.0
Union-administered plans                     5.2       5.2              • Corridor at 12/31/10 was
                                                                          $174 million
Net pension expense                      $ 41.7     $ 66.2
                                                                        • For U.S. and U.K. plans,
                                                                          gains and losses are
                                                                          recognized over average
                                                                          remaining life expectancy of
                                                                          plan participants, in light of
                                                                          plan freeze


                                                    Proprietary and Confidential                     34
Pension Expense

                             Prior Service Credit

(Amounts in millions)                        2010      2009

Company-administered plans:                                                   • Prior service credit
 Service cost                            $  15.2    $ 21.0                      represents the cost of
                                                                                retroactive benefit
 Interest cost                              96.1       93.0
                                                                                reductions made in a
 Expected return on plan assets            (93.1)     (74.9)                    Plan amendment
 Settlement/Curtailment loss                 1.5        0.1
                                                                              • Recognized over the
 Recognized net actuarial loss              19.0       24.0                     anticipated future service
 Amortization of prior service credit       (2.3)      (2.2)                    period of employees
Pension expense, excluding union plans      36.5       61.0                     affected
Union-administered plans                     5.2        5.2
Net pension expense                      $ 41.7     $ 66.2




                                                    Proprietary and Confidential                         35
Union-Administered Pension Plans
► Ryder participates in 12 multi-employer pension (MEP) plans that provide benefits to
  employees covered by collective bargaining agreements as follows:

  Pension Fund                       Employees   Pension Fund                          Employees
  IAM National                          449      Central Pennsylvania                      12
  Western Conference Teamsters          250      New England Teamsters                     18
  Local 701                             145      Local 11                                  21
  IAM Motor City                         84      IBT 710                                   13
  Central States                         35      Local 272                                 15
  Auto Industries                        30      Cleveland Bakers and Teamsters            3


► The annual net pension cost of the plans is equal to the annual contribution which was $5.2
  million in 2010.

► If any MEP plan fails to meet certain minimum funding requirements, we could be required
  to make additional contributions up to 10% of current requirements.

► Employers participating in MEP plans can elect to withdraw from the plans, contingent upon
  labor union consent, and be subject to a withdrawal obligation based on the plan’s
  unfunded vested benefits. Based on the most recent available plan information, we estimate
  our withdrawal obligation to be approximately $29 million. We have no intention of taking
  any such action at this time.

                                                        Proprietary and Confidential               36
Pension Expense


         Sensitivity Analysis - U.S. Qualified Pension Plan
                                              2010                                      Pension                 Projected
                                           Assumption         Change                    Expense              Benefit Obligation

  Expected Long-Term Return on Assets        7.65%      +/-     0.25%           -/+    $     2     Million

  Actual 2010 Asset Returns vs. Expected     7.65%      +/-     0.25%           -/+    $ 0.3       Million

  Contributions at beginning of year                    +     $ 50 Million        -    $     4     Million

  Discount Rate                              6.20%      +       0.25%             -    $ 0.5       Million    -    $ 36    Million

  Discount Rate                              6.20%       -      0.25%            +     $ 0.3       Million   +     $ 36    Million

  Salary Progression Rate                    4.00%      +/-     0.25%           +/-    $ 0.1       Million   +/-   $   1   Million




                                                                        Proprietary and Confidential                                 37
Pension Expense

     2011 Expectations - Consolidated Pension Expense


                                 Years Ended December 31:


  (Amounts in millions)      Estimate            Actual             Actual
                              2011                2010               2009
  U.S. Qualified Plan        $    25.0                  30.7           47.7
  U.S. Non Qualified Plan          3.4                   3.1            3.2
  International Plans             (0.6)                  2.7           10.1
  Union Administered Plans         5.2                   5.2            5.2
  Net Pension Expense        $    33.0                  41.7           66.2




                                     Proprietary and Confidential             38
Pension Expense
             Drivers of the Change in 2011 Consolidated
                           Pension Expense
  (Amounts in millions)
  2010 Pension Expense                                                                $   42

     Higher than Assumed Return on Assets in 2010                                         (7)
     Benefit of 2010 Voluntary Pension Contributions                                      (4)
     Benefit of 2010 Plan Freeze                                                          (3)
     Lower Discount Rate                                                                   3
     Lower Expected Return Assumption                                                      1
     Other                                                                                 1

  2011 Estimated Pension Expense                                                      $   33




                                                       Proprietary and Confidential             39
Pension Expense

          2011 Expectations - U.S. Qualified Pension Plan
                                         Years Ended December 31:
                                     Estimate                  Actual            Actual
 (Amounts in millions)                 2011                     2010              2009

 U.S. Qualified Pension Plan
   Service cost                      $    12.5                           11.6       12.8
   Interest cost                          76.5                           75.9       73.7
   Expected return on plan assets        (79.4)                         (71.2)     (57.2)
   Net amortization                       15.4                           14.4       18.4
 Pension expense (income)            $    25.0                           30.7       47.7

 Actuarial Assumptions:
    Discount rate                        5.70%                          6.20%      6.25%
    Salary progression rate              4.00%                          4.00%      4.00%
    Expected return on plan assets       7.60%                          7.65%      7.90%



                                         Proprietary and Confidential                       40
Pension Equity Charges
Pension Equity Charges

  The funded status of a defined benefit plan is recognized in the balance
  sheet.
      ► Funded Status = Fair value of plan assets compared to PBO
      ► Overfunded Plan → Balance sheet asset
      ► Underfunded Plan → Balance sheet liability
      ► Year-end (December 31 for Ryder) calculation in conjunction with actuarial
         valuation


  Certain changes in funded status are recognized through other
  comprehensive income.
      ► Relates to actuarial gains/losses and prior service costs/credits that arise during
        the period but are not recognized in pension expense
      ► Changes are recognized net of tax
      ► Accumulated changes in other comprehensive income are presented within
        shareholders’ equity




                                                       Proprietary and Confidential           42
Pension Equity Charges

 Negative asset returns and a declining interest rate environment have led to
 significant unrecognized actuarial losses. Following is a summary of
 cumulative pension equity charges:

                           Cumulative Equity           Annual Charge /
                Year           Charge                     (Benefit)
                2006            $201                        ($20)
                2007            $148                        ($53)
                2008            $480                        $332
                2009            $412                        ($68)
                2010            $423                        $11

 The higher equity charge in 2010 reflects the impact of a lower discount rate
 partially offset by higher than expected pension asset returns.

 Global revolving credit facility includes a covenant to maintain a ratio of debt
 to consolidated tangible net worth, as defined, of less than or equal to 300%.
       ► Pension equity charge is included in debt covenant calculation.
       ► Ratio at 12/31/10 was 189% and Ryder continues to be in compliance with the debt covenant.




                                                            Proprietary and Confidential              43
Conclusions
Conclusions

  Ryder has frozen U.S. and Canadian pension plans to most active
  employees and U.K. pension plan to all employees.

  Pension expense is sensitive to expected long-term asset returns versus
  actual returns as well as interest rate changes.
        ► Difference between actual and expected asset returns and the impact of
           interest rate changes are required to be amortized in order to smooth
           recognition of gains and losses

  Plan cash contributions can lower pension expense.

  Pension expense for all plans (especially our primary U.S. plan) is
  expected to decrease in 2011 vs. 2010.
        ► Driven by impact of 2010 asset returns that were above
           assumed return rates as well as 2010 pension contributions




                                                     Proprietary and Confidential   45
Conclusions

  Minimum pension funding requirements are manageable relative to total
  cash generated.

  At year end 2010, the plans were 82% funded of accounting basis. The
  funded status is negative $315M.

  Underfunded status results in a charge to equity (cumulative $423M at
  12/31/10).

  Pension charge to equity in 2010 does not affect earnings or current
  compliance with the debt covenant.




                                              Proprietary and Confidential   46
Request pension whitepaper-10

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Request pension whitepaper-10

  • 2. Safe Harbor Note Regarding Forward-Looking Statements: Certain statements and information included in this presentation are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995 including statements relating to estimated pension expense and contributions for 2011. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and uncertainties that could cause actual results and events to differ materially from those in the forward-looking statements. Important factors that could cause such differences include, among others, the adequacy of actuarial assumptions and estimates; macroeconomic factors, including market volatility, that affect our investment returns, discount rates, costs and funding requirements; the impact of new pension regulations; actual withdrawal liability and funding levels of multi-employer plans; and a change in the level of pension contributions resulting from, among other things, a change in expected free cash flow levels. Our expectations are also subject to the risks described in our filings with the Securities and Exchange Commission (SEC). The risks included here and in our SEC filings are not exhaustive. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Proprietary and Confidential 2
  • 3. Contents Purpose of Overview Page 4 Plan Overview / Recent Changes Page 5 Accounting Fundamentals Page 6 Pension Funded Status Page 10 Pension Investment Strategies and Results Page 18 Pension Contribution Requirements Page 23 Pension Expense Page 27 Pension Equity Charges Page 41 Conclusions Page 44 Proprietary and Confidential 3
  • 4. Purpose of Overview ►Provide clarity to the main components and drivers of pension expense: generally and specific to Ryder’s continuing operations ►Provide insight into the factors which create funding requirements: generally and specific to Ryder ►Provide information on Ryder’s U.S. pension funding status, pension asset returns and asset allocation strategies ►Provide information on estimated future cash funding requirements ►Provide information on estimated 2011 pension costs, go-forward sensitivity guides and drivers of changes in 2011 pension costs ►Provide information on equity charges as a result of under-funded status Proprietary and Confidential 4
  • 5. Plan Overview / Recent Changes ►Ryder historically offered defined-benefit pension benefits in the U.S., U.K, and Canada. Substantially all employees, except U.S. drivers and warehouseman, were covered under the plans. The majority of the employees covered by the plans are in Fleet Management Solutions and Central Support Services. ►Effective 1/1/08, U.S. pension plans were frozen for participants who did not meet certain grandfathering criteria. Approximately 70% of the active participants ceased accruing benefits under the plan. ►Effective 1/1/10, the Canadian pension plan was frozen for participants who did not meet certain grandfathering criteria. Approximately 70% of the then active participants ceased accruing benefits under the plan. ►Effective 3/31/10, the U.K. pension plan was frozen for all participants. ►The freeze of the pension plans minimizes volatility in earnings. ►Impacted employees participate in new enhanced defined contribution plans. ►Reductions in pension expense associated with the freeze of the plans are generally being offset by costs associated with the new enhanced defined contribution plans. Proprietary and Confidential 5
  • 7. Accounting Fundamentals Guiding literature – FASB Accounting Standards Codification (ASC) Topic 715, “Compensation – Retirement Benefits” Delayed Recognition - changes in pension obligation and the value of net assets are recognized in earnings systematically and gradually over future periods Net Reporting of Expense - consequences of events and transactions (compensation element, interest cost, investment return) are recorded as a single net expense Offsetting of Assets and Liabilities - value of pension assets and liabilities to participants (funded status) shown net on the balance sheet Assumptions-Based Expense Calculation - discount rate, pension earnings rate, salary progression rate, retirement and mortality rate. Proprietary and Confidential 7
  • 8. Accounting Fundamentals Pension Assumptions Discount Rate - rate that discounts expected future cash benefit payments to a present value. ► Rate determined from models that match the expected benefit payments underlying the liability to coupons and maturities from a hypothetical portfolio of high quality corporate bonds. ► Rate considered in determining 2011 pension expense of our primary U.S. Plan is 5.70% vs. 6.20% in 2010. Average rate for international plans is 5.55% vs. 5.93% in 2010. Pension Earnings Rate - long-term expected rate of return on assets based on asset allocation, current returns and expected reinvestment rates. ► Rate considered in determining 2011 pension expense for our primary U.S. Plan is 7.60% vs. 7.65% in 2010. Average rate for international plans is 6.75% vs. 7.04% in 2010. ► Rate includes impact of investment management and other fees. Proprietary and Confidential 8
  • 9. Accounting Fundamentals Pension Assumptions Salary Progression Rate – annual rate of growth based on expected compensation until retirement, including all salary increase components (merit, promotion, equity, overtime and inflation). ► Rate used to produce our 12/31/2010 pension liability valuation and 2011 pension expense, for our primary U.S. plan, remained at 4.0% based on actuarial review of historical experience. ► Assumption less significant now that plans are frozen with limited active participants (i.e. assumption only relevant for grandfathered participants). Retirement and Mortality Rate – retirement rate based on actual plan experience; mortality rate based on standard actuarial tables. ► Mortality assumptions used to produce our 12/31/2010 pension liability valuation and 2011 pension expense, for our primary U.S. plan, were unchanged from prior year. Proprietary and Confidential 9
  • 11. Funded Status Ryder System, Inc. and Subsidiaries Funded Status and Balance Sheet Impact of Pension (Dollars in millions) 2010 2009 2008 Projected benefit obligations (PBO) at 12/31 $ 1,744.2 1,603.6 1,477.5 Fair value of Plan assets at 12/31 1,428.8 1,282.9 975.5 Funded status $ (315.4) (320.7) (502.0) Non-current asset $ 20.6 10.6 5.2 Current liability (3.0) (2.7) (2.5) Non-current liability (333.1) (328.6) (504.7) Funded status $ (315.4) (320.7) (502.0) Unrecognized net actuarial loss * $ 658.5 638.4 750.3 Actuarial Assumptions U.S. Plan: Discount Rate 5.70% 6.20% 6.25% Salary Progression Rate 4.00% 4.00% 4.00% * Actuarial losses are amortized to earnings over the average remaining service life of active participants or the average remaining life expectancy of inactive participants if all or almost all of the plan’s participants are inactive. Proprietary and Confidential 11
  • 12. Funded Status Consolidated Funded Status (Dollars in millions) 2010 2009 2008 U.S. Qualified Plan $ (288.2) (287.8) (465.2) U.S. Non Qualified Plan (39.6) (37.1) (36.8) International Plans 12.4 4.2 0.0 Total Consolidated Funded Status $ (315.4) (320.7) (502.0) Percent Funded 82% 80% 66% Proprietary and Confidential 12
  • 13. Funded Status U.S. Qualified Pension Plan 12/31/10 12/31/09 12/31/08 (Dollars in millions) (1) Fair Value of Assets (FVA) $ 1,077.8 $ 963.1 $ 747.7 (2) PV of Liability (PBO) 1,366.0 1,250.9 1,212.9 Funded Status $ (288.2) $ (287.8) $ (465.2) Percent Funded 79% 77% 62% (1) Actual return on plan assets was approximately 12% for 2010. (2) Discount rate was 5.70% at 12/31/10 (6.20% at 12/31/09 and 6.25% at 12/31/08). Proprietary and Confidential 13
  • 14. Funded Status Pension Assets Pension assets are measured at the end of each reporting year (12/31) ► Point-in-time valuation ► Reflects fair market value ► Not market-related (smoothed) value which is another accepted method The fair market value of pension assets changes from year to year as a result of the following items: ► Actual returns earned on plan assets ► Contributions to the plan ► Benefit payments to retirees ► Payment of plan expenses Proprietary and Confidential 14
  • 15. Funded Status Pension Liabilities Projected Benefit Obligation (PBO) measures the present value of expected future benefit payments to plan participants including future salary increases ► Point-in-time valuation (year-end unless interim assessment required) ► Based on service to date of valuation ► Based on selected discount rate The discount rate is based on actuarial models that match expected timing of expected benefit payments to coupons and maturities from a hypothetical portfolio of high quality (Aa or better) corporate bonds at the end of each reporting year (December 31). Future benefit payments are based on current plan provisions and are impacted by the following assumptions: ► Retirement age ► Mortality, Disability, Turnover, etc. ► Salary progression rate Proprietary and Confidential 15
  • 16. Funded Status Historical Consolidated Funded Status 140 120 % Funded 100 100 96 93 80 83 82 80 80 78 74 66 60 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Note: All years as of 12/31 Proprietary and Confidential 16
  • 17. Funded Status Historical Funded Status - U.S. Qualified Plan Only 140 120 % Funded 100 100 100 97 87 80 83 81 79 77 77 60 62 40 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Note: All years as of 12/31 Proprietary and Confidential 17
  • 19. Pension Investment Strategies & Results The purpose of the pension fund is to accumulate sufficient assets to meet the Plan’s future payment obligations (liabilities). Ryder’s Investment Committee oversees the asset management and investment activities of our North American pension plans. Responsibilities include: ► Establishing and maintaining a broad asset allocation strategy ► Building investment structure within asset classes to ensure diversification ► Retaining and monitoring investment managers ► Evaluating performance of plans Assets are accumulated largely through investment returns; investment returns are maximized through asset allocation; asset allocation is structured to produce the required long-term returns within a risk- controlled framework. Allocation of assets is largely a function of the time horizon for future liability payments and expected return/risk characteristics for the various asset classes. Investment allocations are subject to change at any time. Proprietary and Confidential 19
  • 20. Pension Investment Strategies & Results Asset Allocation Strategy Ryder’s U.S. pension asset allocation and approved targets are as follows: 12/31/10 12/31/09 Allocation Allocation Target* U.S. Equity 47% 48% 40% Non-U.S. Equity 20% 15% 20% U.S. Fixed Income 26% 27% 30% Alternative Investments (fund of funds) 2% 2% 10% Cash** 5% 8% 0% 100% 100% 100% * Asset allocation targets are approved and managed by the Ryder Investment Committee. In November 2010, the Committee approved a shift in targets whereby U.S. Equity was reduced from 45% to 40% and Alternative Investments was increased from 5% to 10%. We expect to reallocate the investments by the end of the first quarter of 2011. ** We made a voluntary pension contribution at the end of December 2010 of $50 million, which was allocated to the target asset classes in January 2011. We made voluntary pension contributions at the end of December 2009 of $85 million, which were allocated to the target asset classes in January 2010. Proprietary and Confidential 20
  • 21. Pension Investment Strategies & Results U.S. Qualified Pension Plan Asset Return History 25 25 15 15 Asset Return (%) Asset Return (%) 7.65% 7.60% 5 6.7% 5 -5 -5 -15 -15 -25 -25 -35 -35 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Annual Actual Asset Return Current Expected Long Term Return on Assets Rolling 15-Year Compound Annual Return Proprietary and Confidential 21
  • 22. Current Expected Long-Term Return on Assets Long-term return assumptions are based on: ► Actuarial review of asset allocation strategy ► Long-term expected asset returns ► Investment management and other fees paid using plan assets 2011 expected return decreased to 7.60% from 7.65% in 2010. The downward adjustment was driven by: ► Lower expected asset return for each class of investment compared to 2010 ► Partially offset by a 5% change in target allocation of plan assets from U.S. Equity to Alternative Investments, which have a higher expected return Proprietary and Confidential 22
  • 24. Pension Contribution Annual U.S. cash contribution requirements were historically determined under Employee Retirement Income Security Act (ERISA). In 2006, the Pension Protection Act (PPA) was passed which amended ERISA for the purpose of strengthening pension funding and helping the Pension Benefit Guarantee Corporation (PBGC) remain solvent. Below is a summary of the contribution and PBGC premium requirements under PPA: ► Minimum Funding Requirements - sufficient contributions to cover normal costs for the period and the amount to amortize funding shortfalls (if liability exceeds assets) over 7 years. ● Additional contribution requirements if funded status falls below certain thresholds and plan considered “at-risk” (80% for 1/1/2011 and later). “At-risk” status is determined based on the prior year funded percentage. ● Based on the current pension assumptions, the U.S. Qualified Plan is expected to be at “at-risk” on 1/1/2012 (not at-risk from 2013 to 2015). The “at-risk” status would trigger an additional funding requirement of approximately $3 million in 2012. ► PBGC premium – a flat dollar amount (per participant) for U.S. Plan PLUS a variable premium per participant when U.S. Plan is less than 100% funded (under PPA, no exemptions). 24
  • 25. Pension Contribution For 2010 funding purposes, Ryder used the same elections as used in 2009: ► Smoothed assets ► Smoothed discount rate ► Smoothing should produce more stable contribution requirements Contribution requirements are influenced primarily by the following factors: ► Funded status ► Actual return on plan assets ► Discount rate applied to expected plan payouts – based on corporate bond yield curve ► Salary growth, retirement age and turnover ► Mortality – table issued by IRS and updated every year The Internal Revenue Code allows annual contributions greater than PPA minimum funding requirements, thus a range of contributions is possible. However, under current PPA “credit balance” rules, excess contributions in a current period may not be totally available for determining future contribution requirements. 25
  • 26. Pension Contribution Under PPA minimum funding rules and based on current market assumptions, Ryder will be required to make significant contributions in the next five years. However, no contributions are required for the U.S. Qualified Plan during 2011 due to a voluntary $50M contribution made in December 2010. In general, Ryder may elect to make voluntary contributions earlier than required and in amounts greater than the minimum requirements. The following table presents Ryder’s estimated funding requirements: Minimum Contribution (1),(2) Requirements ($ in millions) Present value over 5 years (3) U.S. Qualified Plan $ 302 2011 Calendar Year U.S. Qualified Plan $ 0 Global $ 15 (4),(5) 1/1/2011 PPA Funded Status 75% (1) US Qualified Plan Contributions based on a discount rate of 6.30% and return on assets of 7.65%. (2) The level of future contributions will change based on actual discount rate and plan asset performance. (3) U.S. Qualified Plan undiscounted by year: 2011: $0: 2012: $102M; 2013: $83M; 2014: $79M; 2015: $76M; 2012 includes estimated $3M additional funding requirement triggered by "at-risk" status. (4) Estimated without adjustment to assets for credit balance. (5) Funded status < 80% in 2011 would trigger "at-risk" status for 2012. The estimated 2011 payments required to avoid "at-risk" status for 2012 are approximately $130M. At the present time, such payments are not being contemplated by Ryder. Proprietary and Confidential 26
  • 28. Pension Expense Consolidated Pension Expense History (Dollars in millions) 2010 2009 2008 Service cost $ 15.2 $ 21.0 25.2 Interest cost 96.1 93.0 92.5 Expected return on plan assets (93.1) (74.9) (120.6) Settlement/Curtailment loss (gain) 1.5 0.1 (3.6) Recognized net actuarial loss 19.0 24.0 5.9 Amortization of prior service credit (2.3) (2.2) (2.5) Pension expense, excluding union plans 36.5 61.0 (3.2) Union-administered plans 5.2 5.2 4.9 Net pension expense $ 41.7 $ 66.2 1.7 U.S. Actuarial Assumptions: Discount rate 6.20% 6.25% 6.35% Salary progression rate 4.00% 4.00% 4.00% Expected return on plan assets 7.65% 7.90% 8.40% Gain and loss amortization in years 26 27 28 Proprietary and Confidential 28
  • 29. Pension Expense Detail of Consolidated Pension Expense History Years Ended December 31: (Amounts in millions) 2010 2009 2008 U.S. Qualified Plan $ 30.7 $ 47.7 (8.9) U.S. Non Qualified Plan 3.1 3.2 3.3 International Plans 2.7 10.1 2.4 Union Administered Plans 5.2 5.2 4.9 Net Pension Expense $ 41.7 $ 66.2 1.7 Proprietary and Confidential 29
  • 30. Pension Expense Service Cost (Amounts in millions) 2010 2009 • Service cost is Company-administered plans: determined as the actuarial present value of Service cost $ 15.2 $ 21.0 benefits for employee Interest cost 96.1 93.0 service during the period Expected return on plan assets (93.1) (74.9) • Amount is impacted by: Settlement/Curtailment loss 1.5 0.1 1) Discount Rate Recognized net actuarial loss 19.0 24.0 2) Number of Amortization of prior service credit (2.3) (2.2) employees Pension expense, excluding union plans 36.5 61.0 3) Expected lives / Union-administered plans 5.2 5.2 retirement period Net pension expense $ 41.7 $ 66.2 of employees Proprietary and Confidential 30
  • 31. Pension Expense Interest Cost (Amounts in millions) 2010 2009 • Interest cost represents Company-administered plans: the increase in the Service cost $ 15.2 $ 21.0 projected benefit Interest cost 96.1 93.0 obligation due to the Expected return on plan assets (93.1) (74.9) passage of time Settlement/Curtailment loss 1.5 0.1 • Amount is measured Recognized net actuarial loss 19.0 24.0 by accrual of interest cost at assumed Amortization of prior service credit (2.3) (2.2) discount rate Pension expense, excluding union plans 36.5 61.0 Union-administered plans 5.2 5.2 Net pension expense $ 41.7 $ 66.2 Proprietary and Confidential 31
  • 32. Pension Expense Expected Return on Assets (Amounts in millions) 2010 2009 • Return on Plan assets represents the assumed Company-administered plans: change in the fair value of Plan assets during the Service cost $ 15.2 $ 21.0 year, after considering plan Interest cost 96.1 93.0 contributions and Expected return on plan assets (93.1) (74.9) distributions Settlement/Curtailment loss 1.5 0.1 • Average long-term U.S. Recognized net actuarial loss 19.0 24.0 expected rate of return of: Amortization of prior service credit (2.3) (2.2) 2001 9.25% Pension expense, excluding union plans 36.5 61.0 2002 8.75% Union-administered plans 5.2 5.2 2003-2007 8.50% 2008 8.40% Net pension expense $ 41.7 $ 66.2 2009 7.90% 2010 7.65% Proprietary and Confidential 32
  • 33. Pension Expense Settlement/Curtailment Loss (Amounts in millions) 2010 2009 • Settlement loss recognized in Company-administered plans: 2010 upon election by a Service cost $ 15.2 $ 21.0 number of Canadian employees to receive a lump- Interest cost 96.1 93.0 sum payment Expected return on plan assets (93.1) (74.9) (1) For 2010, lump-sum Settlement/Curtailment loss 1.5 0.1 payments were greater Recognized net actuarial loss 19.0 24.0 than service and interest Amortization of prior service credit (2.3) (2.2) cost and triggered settlement accounting Pension expense, excluding union plans 36.5 61.0 (2) Recognized Union-administered plans 5.2 5.2 proportionate amount of Net pension expense $ 41.7 $ 66.2 unrecognized loss • Loss recognized in 2009 upon amendment to freeze U.K. plan effective 3/31/2011 Proprietary and Confidential 33
  • 34. Pension Expense Actuarial Gain / Loss • Actuarial gains or losses include changes in pension (Amounts in millions) 2010 2009 assets or obligations resulting from experience different than that assumed Company-administered plans: or changes in assumptions Service cost $ 15.2 $ 21.0 Interest cost 96.1 93.0 • G/L recognized over time Expected return on plan assets (93.1) (74.9) • G/L recognition is subject to Settlement/Curtailment loss 1.5 0.1 a “corridor” which is Recognized net actuarial loss 19.0 24.0 generally 10% of the greater of pension obligations or Amortization of prior service credit (2.3) (2.2) assets Pension expense, excluding union plans 36.5 61.0 Union-administered plans 5.2 5.2 • Corridor at 12/31/10 was $174 million Net pension expense $ 41.7 $ 66.2 • For U.S. and U.K. plans, gains and losses are recognized over average remaining life expectancy of plan participants, in light of plan freeze Proprietary and Confidential 34
  • 35. Pension Expense Prior Service Credit (Amounts in millions) 2010 2009 Company-administered plans: • Prior service credit Service cost $ 15.2 $ 21.0 represents the cost of retroactive benefit Interest cost 96.1 93.0 reductions made in a Expected return on plan assets (93.1) (74.9) Plan amendment Settlement/Curtailment loss 1.5 0.1 • Recognized over the Recognized net actuarial loss 19.0 24.0 anticipated future service Amortization of prior service credit (2.3) (2.2) period of employees Pension expense, excluding union plans 36.5 61.0 affected Union-administered plans 5.2 5.2 Net pension expense $ 41.7 $ 66.2 Proprietary and Confidential 35
  • 36. Union-Administered Pension Plans ► Ryder participates in 12 multi-employer pension (MEP) plans that provide benefits to employees covered by collective bargaining agreements as follows: Pension Fund Employees Pension Fund Employees IAM National 449 Central Pennsylvania 12 Western Conference Teamsters 250 New England Teamsters 18 Local 701 145 Local 11 21 IAM Motor City 84 IBT 710 13 Central States 35 Local 272 15 Auto Industries 30 Cleveland Bakers and Teamsters 3 ► The annual net pension cost of the plans is equal to the annual contribution which was $5.2 million in 2010. ► If any MEP plan fails to meet certain minimum funding requirements, we could be required to make additional contributions up to 10% of current requirements. ► Employers participating in MEP plans can elect to withdraw from the plans, contingent upon labor union consent, and be subject to a withdrawal obligation based on the plan’s unfunded vested benefits. Based on the most recent available plan information, we estimate our withdrawal obligation to be approximately $29 million. We have no intention of taking any such action at this time. Proprietary and Confidential 36
  • 37. Pension Expense Sensitivity Analysis - U.S. Qualified Pension Plan 2010 Pension Projected Assumption Change Expense Benefit Obligation Expected Long-Term Return on Assets 7.65% +/- 0.25% -/+ $ 2 Million Actual 2010 Asset Returns vs. Expected 7.65% +/- 0.25% -/+ $ 0.3 Million Contributions at beginning of year + $ 50 Million - $ 4 Million Discount Rate 6.20% + 0.25% - $ 0.5 Million - $ 36 Million Discount Rate 6.20% - 0.25% + $ 0.3 Million + $ 36 Million Salary Progression Rate 4.00% +/- 0.25% +/- $ 0.1 Million +/- $ 1 Million Proprietary and Confidential 37
  • 38. Pension Expense 2011 Expectations - Consolidated Pension Expense Years Ended December 31: (Amounts in millions) Estimate Actual Actual 2011 2010 2009 U.S. Qualified Plan $ 25.0 30.7 47.7 U.S. Non Qualified Plan 3.4 3.1 3.2 International Plans (0.6) 2.7 10.1 Union Administered Plans 5.2 5.2 5.2 Net Pension Expense $ 33.0 41.7 66.2 Proprietary and Confidential 38
  • 39. Pension Expense Drivers of the Change in 2011 Consolidated Pension Expense (Amounts in millions) 2010 Pension Expense $ 42 Higher than Assumed Return on Assets in 2010 (7) Benefit of 2010 Voluntary Pension Contributions (4) Benefit of 2010 Plan Freeze (3) Lower Discount Rate 3 Lower Expected Return Assumption 1 Other 1 2011 Estimated Pension Expense $ 33 Proprietary and Confidential 39
  • 40. Pension Expense 2011 Expectations - U.S. Qualified Pension Plan Years Ended December 31: Estimate Actual Actual (Amounts in millions) 2011 2010 2009 U.S. Qualified Pension Plan Service cost $ 12.5 11.6 12.8 Interest cost 76.5 75.9 73.7 Expected return on plan assets (79.4) (71.2) (57.2) Net amortization 15.4 14.4 18.4 Pension expense (income) $ 25.0 30.7 47.7 Actuarial Assumptions: Discount rate 5.70% 6.20% 6.25% Salary progression rate 4.00% 4.00% 4.00% Expected return on plan assets 7.60% 7.65% 7.90% Proprietary and Confidential 40
  • 42. Pension Equity Charges The funded status of a defined benefit plan is recognized in the balance sheet. ► Funded Status = Fair value of plan assets compared to PBO ► Overfunded Plan → Balance sheet asset ► Underfunded Plan → Balance sheet liability ► Year-end (December 31 for Ryder) calculation in conjunction with actuarial valuation Certain changes in funded status are recognized through other comprehensive income. ► Relates to actuarial gains/losses and prior service costs/credits that arise during the period but are not recognized in pension expense ► Changes are recognized net of tax ► Accumulated changes in other comprehensive income are presented within shareholders’ equity Proprietary and Confidential 42
  • 43. Pension Equity Charges Negative asset returns and a declining interest rate environment have led to significant unrecognized actuarial losses. Following is a summary of cumulative pension equity charges: Cumulative Equity Annual Charge / Year Charge (Benefit) 2006 $201 ($20) 2007 $148 ($53) 2008 $480 $332 2009 $412 ($68) 2010 $423 $11 The higher equity charge in 2010 reflects the impact of a lower discount rate partially offset by higher than expected pension asset returns. Global revolving credit facility includes a covenant to maintain a ratio of debt to consolidated tangible net worth, as defined, of less than or equal to 300%. ► Pension equity charge is included in debt covenant calculation. ► Ratio at 12/31/10 was 189% and Ryder continues to be in compliance with the debt covenant. Proprietary and Confidential 43
  • 45. Conclusions Ryder has frozen U.S. and Canadian pension plans to most active employees and U.K. pension plan to all employees. Pension expense is sensitive to expected long-term asset returns versus actual returns as well as interest rate changes. ► Difference between actual and expected asset returns and the impact of interest rate changes are required to be amortized in order to smooth recognition of gains and losses Plan cash contributions can lower pension expense. Pension expense for all plans (especially our primary U.S. plan) is expected to decrease in 2011 vs. 2010. ► Driven by impact of 2010 asset returns that were above assumed return rates as well as 2010 pension contributions Proprietary and Confidential 45
  • 46. Conclusions Minimum pension funding requirements are manageable relative to total cash generated. At year end 2010, the plans were 82% funded of accounting basis. The funded status is negative $315M. Underfunded status results in a charge to equity (cumulative $423M at 12/31/10). Pension charge to equity in 2010 does not affect earnings or current compliance with the debt covenant. Proprietary and Confidential 46