Investigation of Ryder System, Inc.

Ryder System, Inc. (R) Accused of Misleading Shareholders 

Between 2011 and 2016, Ryder overstated the residual values of certain assets between $10 million and $40 million, allowing the Company to record smaller depreciation expense on those assets each year, artificially inflating Ryder’s earnings.  Ryder’s upward adjustments over those six years totaled in a cumulative benefit of $158 million, or $1.92 per share. After years of touting the residual value of its vehicles and potential earnings growth, on October 30, 2019, Ryder revealed ” residual value estimates likely exceeded the expected future values that would be realized upon the sale of power vehicles in fleet.” Consequently, the Company significantly lowered the residual values for all its vehicles and incurred $177 million in additional depreciation expense in third quarter 2019. Then, on February 13, 2020, Ryder reported that its significant reductions to the residual value of its fleet resulted in a total of $357 million in depreciation expense in 2019 and a loss of $58 million in the sale of used vehicles. On this news, Ryder’s stock declined 20% over the next two trading days, closing at $40.12 per share.

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