UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF FLORIDA 

KEY WEST POLICE & FIRE PENSION 

FUND, on behalf of itself and all others 

similarly situated, 

Plaintiff, 

v. 

RYDER SYSTEM, INC., ROBERT E. 

SANCHEZ, ART A. GARCIA, and SCOTT 

T. PARKER, 

Defendants. 

Civil Action No. 1:20-cv-22109-KMW

CLASS ACTION 

AMENDED COMPLAINT FOR 

VIOLATIONS OF THE FEDERAL 

SECURITIES LAWS 

JURY TRIAL DEMANDED 

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TABLE OF CONTENTS 

I. INTRODUCTION .............................................................................................................. 1

II. JURISDICTION AND VENUE ......................................................................................... 8

III. PARTIES ............................................................................................................................ 9

Lead Plaintiffs ......................................................................................................... 9

Defendants ............................................................................................................ 10

IV. SUMMARY OF THE FRAUD ........................................................................................ 11

The Success of Ryder’s Business Depended on the Prompt Sale of Its Used 

Trucks Through Its Used Truck Sales Division .................................................... 11

GAAP Required Ryder to Accurately Report the Residual Values and 

Depreciation Expenses of Its Vehicles During the Reporting Periods They Were 

Generating Revenue .............................................................................................. 12

Ryder Faced a Serious Competitive Threat from Its Chief Rival, Penske, and 

Manipulated Its Residual Values to Compete on Lease Pricing and Overstate 

Profits .................................................................................................................... 17

Costly Problems with the MaxxForce Reduced-Emissions Engines Drastically 

Reduced the Vehicles’ Market Value and Ryder’s Ability to Sell Them ............. 22

Ryder Witnessed a Sharp Decline in the Demand for, and Sales Prices of, Used 

Vehicles................................................................................................................. 27

Ryder Executives Controlled the Prices and Residual Values of Ryder’s Entire 

Fleet from Its Miami Headquarters ....................................................................... 29

During the Class Period, Ryder Saw that Its Vehicles’ Resale Values Were Far 

Below their Residual Values, But Ryder Increased Residual Values, Understated 

Depreciation Expense and Overstated Net Income .............................................. 31

Ryder Maintained Excessively High Prices on Its Vehicles in a Futile Attempt to 

Avoid Recognizing the Losses from Sales Below the Inflated Residual Values . 43

During the Class Period, Ryder’s Used Truck Inventory Ballooned, a Red Flag 

that Price Discounts and Serious Decreases in Residual Values Were Necessary 45

V. THE TRUTH EMERGES ................................................................................................. 48

VI. DEFENDANTS’ MATERIALLY FALSE AND MISLEADING STATEMENTS AND 

OMISSIONS ..................................................................................................................... 53

The Second Quarter of 2015 ................................................................................. 53

The Third Quarter of 2015 .................................................................................... 56

The Fourth Quarter of 2015 and Full Year 2015 .................................................. 60

The First Quarter of 2016 ..................................................................................... 65

The Second Quarter of 2016 ................................................................................. 68

The Third Quarter of 2016 .................................................................................... 71

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The Fourth Quarter of 2016 and Full Year 2016 .................................................. 73

The First Quarter of 2017 ..................................................................................... 76

The Second Quarter of 2017 ................................................................................. 78

The Third Quarter of 2017 .................................................................................... 80

The Fourth Quarter of 2017 and Full Year 2017 .................................................. 81

The First Quarter of 2018 ..................................................................................... 84

The Second Quarter of 2018 ................................................................................. 87

The Third Quarter of 2018 .................................................................................... 89

The Fourth Quarter of 2018 and Full Year 2018 .................................................. 91

The First Quarter of 2019 ..................................................................................... 93

The Second Quarter of 2019 ................................................................................. 94

The Third Quarter of 2019 .................................................................................... 96

VII. LOSS CAUSATION ......................................................................................................... 98

VIII. ADDITIONAL ALLEGATIONS OF DEFENDANTS’ SCIENTER .............................. 98

IX. CLASS ACTION ALLEGATIONS ............................................................................... 124

X. INAPPLICABILITY OF STATUTORY SAFE HARBOR ........................................... 125

XI. PRESUMPTION OF RELIANCE .................................................................................. 126

XII. CAUSES OF ACTION ................................................................................................... 127

COUNT I .................................................................................................................................... 127

COUNT II ................................................................................................................................... 129

XIII. PRAYER FOR RELIEF ................................................................................................. 129

XIV. JURY DEMAND ............................................................................................................ 130

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Lead Plaintiffs the State of Alaska, Alaska Permanent Fund; the City of Fort Lauderdale 

General Employees’ Retirement System; and the City of Plantation Police Officers Pension Fund 

(“Lead Plaintiffs”) bring this securities class action on behalf of all persons or entities that 

purchased shares of Ryder common stock between July 23, 2015 and February 13, 2020, inclusive 

(the “Class Period”). Lead Plaintiffs’ claims arise under Sections 10(b) and 20(a) of the Securities 

Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5, promulgated thereunder. Lead 

Plaintiffs assert these claims against Ryder and certain of the Company’s current and former senior 

executives (collectively, “Defendants”). Lead Plaintiffs, by and through their counsel, allege the 

following upon information and belief, except as to those allegations concerning Lead Plaintiffs, 

which are alleged upon personal knowledge. Lead Plaintiffs’ information and belief are based 

upon, inter alia, counsel’s investigation, which included review and analysis of: (a) regulatory 

filings made by Ryder System, Inc. (“Ryder” or the “Company”) with the U.S. Securities and 

Exchange Commission (“SEC”); (b) press releases, presentations, and media reports issued and 

disseminated by the Company; (c) analyst and media reports concerning Ryder; (d) transcripts of 

Ryder’s investor conference calls; (e) other public information regarding the Company; and (f) 

interviews with Ryder former employees (referred to herein as “FEs”). 

I. INTRODUCTION 

1. The action arises from Defendants’ materially false and misleading statements and 

omissions concerning Ryder’s financial performance and the value of its core assets. Ryder is a 

global provider of transportation and supply chain management solutions. The Company operates 

through three segments: Fleet Management Solutions (FMS); Dedicated Transportation Solutions 

(DTS); and Supply Chain Solutions (SCS). The FMS segment is a key driver of Ryder’s business 

and accounts for over 60 percent of the Company’s revenue. FMS provides leasing, commercial 

rental, and contract or transactional maintenance services of trucks, tractors and trailers. As part 

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of Ryder’s truck-leasing model, Ryder assigns so-called “residual values” to its trucks for 

depreciation purposes (i.e., the value at which Ryder believes it will be able to sell the vehicles at 

the end of their useful lives) and then sells those vehicles at the end of their useful lives. This case 

concerns how Defendants artificially inflated Ryder’s vehicle fleet’s residual values in order to 

knowingly or recklessly understate depreciation expense, overstate profits, increase incentive 

compensation, and make highly-lucrative insider sales of Ryder stock at artificially inflated stock 

prices. 

2. Ryder has the largest commercial vehicle fleet in North America. Most of Ryder’s 

assets, as a vehicle-leasing company, are tied up in its revenue-earning equipment, which primarily 

consists of Ryder’s fleet of commercial trucks and tractors. According to the Company’s 2019 

Form 10-K filed on February 27, 2020, of Ryder’s $14.76 billion in total assets, approximately 

$10.43 billion were associated with Ryder’s revenue-earning equipment. As would be revealed 

by Defendants’ later corrective disclosures, the valuation of the Company’s revenue-earning 

equipment was critical to the Company’s finances. Because Ryder’s revenue-earning equipment 

is such a large share of the Company’s assets, any notable movements in the fleet’s value could 

result in earnings swings of tens and hundreds of millions of dollars. 

3. The residual values of Ryder’s vehicles were critical to almost all aspects of 

Ryder’s core business, as a vehicle’s residual value is a key component of the price of the lease 

that Ryder offered to consumers. As the name suggests, a vehicle’s “residual value” is the value 

that is left over at the end of the lease term. The amount by which the vehicle’s original value 

declines over the term of the lease—as represented between the difference between the vehicle’s 

value at the start of the lease and its residual value—is the vehicle’s depreciation. Over the term 

of the lease, a Ryder customer pays, on a monthly basis, a portion of the value of that depreciation. 

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Therefore, if Ryder increases the residual value of its vehicles, then the amount of depreciation on 

the vehicles declines mathematically, which lowers the monthly payments on the lease and makes 

the lease more competitive compared to Ryder’s competition in the marketplace. Thus, by inflating 

the residual values, and maintaining them at their inflated rates, Ryder not only understated its 

depreciation expense and inflated its earnings, it also drove its leasing business during the Class 

Period. 

4. For each year between 2011 and 2016, Ryder adjusted the residual values of certain 

assets upwards between $10 million and $40 million. Since increasing its assets’ residual values 

enabled Ryder to decrease the incremental depreciation charge it recorded on these assets each 

year, this had the effect of increasing Ryder’s earnings on a dollar-for-dollar basis. 

5. Ryder has—until recently—understated the depreciation on is vehicle fleet for 

accounting purposes, which caused a significant overstatement of adjusted net income prior to 

2019. In total, Ryder’s upward adjustments resulted in a cumulative benefit of $158 million, or 

$1.92 per share, over this six-year span. However, in addition to Ryder upwardly adjusting its 

residual values, it also failed to make downward adjustments to the residual values as the market 

for used Ryder vehicles plummeted, which overstated its earnings by hundreds of millions of 

dollars during the Class Period. 

6. When Ryder finally made the necessary and belated reductions to its residual values 

in the third and fourth quarters of 2019, it disclosed that the financial impact of its reduced residual 

value estimates was more than $1 billion. At the time Ryder made these adjustments, it blamed 

two causes: (i) increased maintenance costs on vehicles with new, defective emissions technology; 

and (ii) the fact that Ryder would be selling its used vehicles into a “down market” for used trucks. 

However, Defendants were well aware of, or recklessly disregarded, that, starting in mid-2015 and 

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continuing throughout the Class Period, Ryder experienced increased maintenance costs from the 

lower-emissions vehicles and that Ryder was already in the throes of a sharp and prolonged 

downturn in the market for used vehicles. 

7. Indeed, as Ryder’s data showed, by the end of 2015, the used vehicle market had 

collapsed due to over-supply and decreased demand. In addition, in 2010, the U.S. Environmental 

Protection Agency (“EPA”) passed a set of historic emissions regulations meant to substantially 

lower the amount of air pollution caused by large, commercial vehicles. The new emissions 

requirements wreaked havoc on the commercial truck and tractor industry, as vehicle 

manufacturers experimented with and installed new, unreliable technology into their engines and 

exhaust systems in a rush to meet the standards. The new exhaust systems, incorporated into the 

Navistar International MaxxForce engines, substantially raised the maintenance costs for tractors. 

Moreover, because these vehicles’ maintenance costs were so high and the technology so 

unreliable, there was very little demand for these vehicles at the end of their useful lives, which 

drastically lowered their eventual sales prices (and their residual values). 

8. Ryder internally set a goal of selling its used vehicles within 90 days of the vehicle 

entering Ryder’s Used Truck Centers (“UTCs”). Vehicles that remained unsold for more than six 

months presented a serious financial problem for Ryder, as they would continue to depreciate, 

become more and more unsellable, and require costly maintenance and upkeep as they effectively 

“rotted” on the sales lots. 

9. The number of Ryder used vehicles available for sale increased dramatically 

between 2015 and 2016, rising to 8,000 at the end of the fourth quarter of 2015, up from 5,500 

units in the prior year, a 45% increase. An internal Ryder document from August 2016 also shows 

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that Ryder had a significant number of unsold vehicles that exceeded Ryder’s 90-day threshold, 

including a large number of vehicles equipped with the MaxxForce engine. 

10. As numerous senior former Ryder managers and executives recounted, starting in 

2015, they knew that it was necessary for Ryder to drastically reduce its vehicles’ residual values 

and used vehicle sales prices. According to those former Ryder employees: 

a. By 2015, it was “loud and clear” that Ryder’s used truck sales were 

declining; 

b. Ryder’s vehicle values were “upside down” by 2015 and it was “completely 

obvious” that Ryder’s residual value estimates likely exceeded the expected 

future values that would be realized upon the sale of power vehicles in their 

fleet, with the residual values being overstated by approximately 30%; and 

c. For the vehicles with the MaxxForce engines, their values were easily 

overstated by 50%, and the MaxxForce vehicles comprised approximately 

40% of the fleet during the years they were used. 

11. In 2015/2016, there were discussions internally at Ryder of the need for a writedown, as the vehicle values had depreciated much lower than expected. Ryder managers wondered 

internally how they were going to show a profit when the vehicles were eventually sold if Ryder 

did not write them down. However, according to former executives, at that time, Ryder “had no 

interest in writing down whatsoever.” Ryder executives at the Company’s Miami headquarters 

controlled the used truck pricing and the vehicles’ residual values and they resisted internal calls 

to reduce the residual values to their correct amounts. 

12. Several former employees recounted that they repeatedly raised to more senior 

executives, including Defendants Sanchez, Garcia and Cooke, the need for Ryder to lower its 

residual values or used vehicle sales prices in order to move the ballooning inventory, and to reflect 

the new market reality, but they were repeatedly rebuffed because Ryder did not want to “bite the 

bullet.” 

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13. Indeed, despite the pronounced negative developments and trends in the used 

vehicle sales market, throughout the Class Period, Defendants misstated Ryder’s true financial 

condition by overstating the residual value of its vehicle fleet, which caused the Company to record 

smaller depreciation expenses on those assets each year, and artificially inflated Ryder’s earnings. 

Defendants misrepresented to investors that Ryder’s financial results “benefited from lower 

depreciation associated with increased residual values” and that the Company had been 

“conservative” in establishing the residual values of its vehicles. While Ryder kept increasing the 

expected residual value of its trucking fleet, the actual amount Ryder was receiving from sales of 

its used trucks fell sharply starting in 2015. 

14. When asked publicly about the residual values of the Company’s trucks during 

Ryder’s July 27, 2016 earnings call, Chairman and Chief Executive Officer (“CEO”), Defendant 

Robert Sanchez, falsely stated that “I wouldn’t envision an increase or decrease in residual values 

out over the next four, five years.” 

15. Similarly, during an industry conference on November 8, 2016, former Ryder Chief 

Financial Officer (“CFO”) Defendant Art Garcia falsely stated that the decline in used truck prices 

would not “result in us changing residual [values] right now.” And, later, during a February 16, 

2018 earnings call, in response to an analyst’s question about expected depreciation, Garcia 

responded that, based on Ryder’s expectations for used truck pricing, depreciation will be at “a 

lower level than what we had seen this year.” Then, during an October 26, 2018 Ryder earnings 

call, Defendant Sanchez falsely assured investors that, with respect to the Company’s accounting 

treatment of its residual values, Ryder “keep[s] the residuals in the middle of the fairway as best 

we can.” 

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16. These and similar statements during the Class Period about consistent or increased 

residuals values, were misleading because Defendants knew or recklessly disregarded that the 

residual values that Ryder assigned to its trucking fleet were grossly overstated. This had the 

intended effect of allowing the Company to record smaller depreciation expenses, artificially 

inflated Ryder’s earnings in violation of Generally Accepted Accounting Principles (“GAAP”), 

and, in turn, artificially inflated Ryder’s stock price. The Company’s inflated earnings boosted 

the executives’ incentive compensation and allowed them to sell millions of dollars of their 

personally-held Ryder stock at artificially-inflated prices during the Class Period. 

17. Ryder continued this deceptive behavior until shortly after its CFO, Defendant 

Garcia, left Ryder in April 2019. It was almost immediately apparent to his successor (who came 

to Ryder from outside the Company) that Ryder needed to significantly reduce its residual values 

and increase depreciation expense. 

18. The truth began to emerge just months later, on July 30, 2019, when the Company 

sharply reduced its full-year 2019 earnings forecast and management indicated that the majority 

of the lowered guidance reflected Ryder’s weaker valuations of its tractors. In response to these 

disclosures, Ryder’s stock price fell 10%, from $59.32 per share to $53.38 per share, as investors 

began to learn of the long-term negative impact of Ryder’s devalued used vehicle fleet. 

19. Then, on October 29, 2019, the Company dropped a bombshell on the market and 

disclosed that it was reducing its residual value estimates by $844 million. Defendants admitted 

to investors that “management concluded that our residual value estimates likely exceeded the 

expected future values that would be realized upon the sale of power vehicles in our fleet.” 

Specifically, the Company significantly lowered the residual values for all its vehicles and incurred 

$177 million in additional depreciation expense in the third quarter of 2019; reduced its residual 

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value estimates for the entire second half of 2019 by $289 million; and reduced its residual value 

estimates for the period from the second half of 2019 through 2024-2025 by an extraordinary $844 

million in total. In response to these disclosures, Ryder’s stock price fell sharply, by more than 

12% over two trading days, from $55.12 per share to $48.44 per share. As J.P. Morgan reported 

on October 29, Ryder’s taking this “big bath” on its residual values “confirms Ryder was overearning by a significant amount in prior years based on the $844mm cumulative write-down.” 

20. Then, on February 13, 2020, Ryder shocked investors further by reporting that the 

financial toll of Ryder’s residual value manipulation in fact now exceeded $1 billion.1 In response 

to the February 13, 2020 disclosure, Ryder’s stock price fell by 23% over three trading days, from 

$50.19 per share to $38.45 per share. 

21. As a result of Defendants’ violations of the securities laws through their material 

artificial inflation of the Ryder vehicles’ residual values and overstatement of Ryder’s income 

during the Class Period, Lead Plaintiffs and other Ryder investors suffered significant financial 

harm. 

II. JURISDICTION AND VENUE 

22. The claims asserted herein arise under Sections 10(b) and 20(a) of the Exchange 

Act (15 U.S.C. §§ 78j(b) and 78t(a)), and Rule 10b-5 promulgated thereunder (17 C.F.R. § 

240.10b-5). This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. 

§§ 1331 and 1337 and Section 27 of the Exchange Act (15 U.S.C. § 78aa). 

1

 Specifically, the Company reported that, as a result of the significant reductions to the residual value of 

its fleet, it had incurred a total of $357 million in depreciation expense for 2019 (instead of $289 million) 

plus a loss of approximately $59 million on the sale of used vehicles. The Company also announced that, 

for 2020, it expected to incur another $25 million in depreciation expense on its fleet due to the reductions 

in residual value (bringing the depreciation increase to $275 million for 2020) plus an additional $20 million 

estimated loss on used vehicle sales. This brought the cumulative negative financial impact disclosed 

through February 13, 2020 to $1.021 billion ($357 million + $59 million + $275 million + $20 million + 

$130 million (2021) + $180 million (2022-225)). 

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23. Venue is proper in this District pursuant to Section 27 of the Exchange Act (15 

U.S.C. § 78aa) and 28 U.S.C. § 1391(b). Ryder maintains its headquarters in Miami, Florida, 

which is situated in this District, conducts substantial business in this District, and many of the 

acts and conduct that constitute the violations of law complained of herein, including 

dissemination to the public of materially false and misleading information, occurred in and/or were 

issued from this District. In connection with the acts alleged in this Complaint, Defendants, 

directly or indirectly, used the means and instrumentalities of interstate commerce, including, but 

not limited to, the mails, interstate telephone communications, and the facilities of the national 

securities markets. 

III. PARTIES 

Lead Plaintiffs 

24. Lead Plaintiff the State of Alaska is a constitutionally-established permanent fund 

managed by the state-owned corporation Alaska Permanent Fund Corporation on behalf of the 

citizens of Alaska. As of June 30, 2020, Alaska Permanent Fund held over $65 billion in assets. 

As reflected in its certification previously filed with the Court (ECF No. 22-3), Alaska purchased 

a significant amount of Ryder shares during the Class Period and suffered substantial losses as a 

result of the violations of the federal securities laws alleged in this Action. 

25. Lead Plaintiff the City of Fort Lauderdale General Employees’ Retirement System 

(“Plantation Police”) is a defined benefit pension plan that provides retirement benefits to eligible 

employees of the City of Fort Lauderdale. As of March 31, 2020, Fort Lauderdale managed 

approximately $590 million in assets on behalf of over 2,100 members. As reflected in its 

certification previously filed with the Court (ECF No. 22-3), Fort Lauderdale purchased a 

significant amount of Ryder shares during the Class Period and suffered substantial losses as a 

result of the violations of the federal securities laws alleged in this Action. 

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26. Lead Plaintiff the City of Plantation Police Officers Pension Fund is a definedbenefit pension plan that is administered by its Board of Trustees and provides retirement benefits 

to City of Plantation police officers and their beneficiaries. As of the end of 2019, Plantation 

Police managed more than $170 million in assets on behalf of nearly 300 active, inactive, and 

retired participants and beneficiaries. As reflected in its certification previously filed with the 

Court (ECF No. 22-3), Plantation Police purchased a significant amount of Ryder shares during 

the Class Period and suffered substantial losses as a result of the violations of the federal securities 

laws alleged in this Action. 

27. As indicated in Lead Plaintiffs’ previously-filed certifications, Lead Plaintiffs 

purchased Ryder common stock at artificially-inflated prices during the Class Period and suffered 

damages as a result of the violations of the federal securities laws alleged herein. 

Defendants 

28. Defendant Ryder is incorporated in Florida and maintains its corporate 

headquarters at 11690 N.W. 105th Street, Miami, Florida. The Company’s common stock trades 

on an efficient market, the New York Stock Exchange (“NYSE”), under ticker symbol “R.” As of 

January 31, 2020, Ryder had over 53 million shares of common stock outstanding, owned by 

hundreds or thousands of investors. 

29. Defendant Robert E. Sanchez (“Sanchez”) has served as Ryder’s CEO since 

January 2013 and as Chairman of Ryder’s Board since May 2013. 

30. Defendant Art A. Garcia (“Garcia”) served as Executive Vice President and CFO 

of Ryder from December 2010 until April 5, 2019, and then served as a Special Advisor to the 

CEO until April 30, 2019. 

31. Defendant Dennis C. Cooke (“Cooke”) served as President of Ryder’s Global Fleet 

Management Solutions segment from 2012 until 2019. Prior to that role, Cooke had served as 

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Senior Vice President and Chief of Operations for Ryder’s Fleet Management Solutions segment 

in the United States and Canada since 2011. 

32. Defendants Sanchez, Garcia, and Cooke are collectively referred to hereinafter as 

the “Officer Defendants.” The Officer Defendants, because of their positions with Ryder, 

possessed the power and authority to control the contents of the Company’s reports to the SEC, 

press releases, and presentations to securities analysts, money and portfolio managers, and 

institutional investors. Each of the Officer Defendants was provided with copies of the Company’s 

reports and press releases alleged herein to be misleading prior to, or shortly after, their issuance 

and had the ability and opportunity to prevent their issuance or cause them to be corrected. 

Because of their positions and access to material non-public information available to them, each 

of the Officer Defendants knew that the adverse facts specified herein had not been disclosed to, 

and were being concealed from, the public, and that the positive representations which were being 

made were then materially false and/or misleading. 

IV. SUMMARY OF THE FRAUD 

The Success of Ryder’s Business Depended on the Prompt Sale of Its Used 

Trucks Through Its Used Truck Sales Division 

33. Ryder is a global provider of transportation and supply chain management products, 

including truck leasing. As noted above, the Company operates through three segments: Fleet 

Management Solutions (FMS); Dedicated Transportation Solutions (DTS); and Supply Chain 

Solutions (SCS). 

34. Through Ryder’s FMS segment, the Company provides full-service leasing and 

leasing with flexible maintenance options, commercial rental, and contract or transactional 

maintenance services of trucks, tractors and trailers. The FMS segment accounts for over 60% of 

the Company’s revenue and it operates in the United States, Canada and Europe. The FMS 

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segment has five principal components: (1) ChoiceLease (2) Commercial Rental; (3) SelectCare; 

(4) Fuel Services; and (5) Used Vehicles. Ryder’s FMS segment’s financial performance is 

principally dependent on (1) demand for truck rentals and leases; and (2) the residual value of its 

vehicles. 

35. The ChoiceLease program is Ryder’s largest, accounting for over 50% of FMS 

revenue and over 30% of Ryder’s total revenue. ChoiceLease “provides customers with vehicles, 

maintenance services, supplies, and related equipment necessary for operation of the vehicles 

while our customers furnish and supervise their own drivers and exercise control over the 

vehicles.” Commercial Rental provides short-term vehicle rentals to customers who need to 

supplement their private fleet of vehicles. SelectCare provides “maintenance services to customers 

who do not choose to lease vehicles from [Ryder].” 

36. The vehicles that Ryder leases to consumers typically have a useful life of 

approximately seven to eight years. Once the long-term lease on a Ryder vehicle ends, or after the 

vehicle reaches its useful life, Ryder sells the vehicle through its Used Truck Centers (“UTCs”). 

The Used Vehicles segment sells Ryder’s used vehicles, including from one of its 51 retail sales 

centers throughout North America and through its website www.Usedtrucks.Ryder.com. 

37. It is important for Ryder to sell its vehicles promptly, because the longer that Ryder 

holds on to a vehicle on one if its lots, the more it will depreciate, which increases the likelihood 

that its value will fall below the residual value that Ryder has internally set for it. If Ryder is 

unable to sell the vehicle at a favorable price, it will need to incur a loss from the sale, which has 

a negative impact on Ryder’s earnings. 

GAAP Required Ryder to Accurately Report the Residual Values and 

Depreciation Expenses of Its Vehicles During the Reporting Periods They 

Were Generating Revenue 

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38. Compliance with Generally Accepted Accounting Principles (“GAAP”) is a 

fundamental obligation of publicly-traded companies like Ryder. GAAP is the official standard 

for accounting accepted by the SEC and it is primarily promulgated by the Financial Accounting 

Standards Board (“FASB”) and American Institute of Certified Public Accountants (“AICPA”), 

whose standards are referred to as “Accounting Standards Codification” (“ASC”). In addition, the 

FASB has issued guidance in the form of FASB Concept Statements (“FASCON”), which set the 

objectives, qualitative characteristics, and other concepts used in the development of GAAP and 

which reflect the underlying basis and framework for the promulgation of accounting standards. 

39. The accounting profession recognizes GAAP as the conventions, rules, and 

procedures necessary to define accepted accounting practices at a particular time. SEC Regulation 

S-X (17 C.F.R. § 210.4-01(a)(1)) provides that financial statements filed with the SEC that are not 

presented in accordance with GAAP will be presumed to be misleading, despite footnotes or other 

disclosures. 

40. Under GAAP, financial elements such as assets, liabilities, revenues, and expenses 

must be recorded pursuant to the “accrual” method of accounting. The objective of accrual 

accounting is to reflect transactions within the financial reporting periods to which their component 

costs and associated revenues relate. Specifically, FASCON No. 6, Elements of Financial 

Statements (“FASCON 6”), provides: 

Accrual accounting uses accrual, deferral, and allocation procedures whose goal is 

to relate revenues, expenses, gains, and losses to periods to reflect an entity’s 

performance during a period instead of merely listing its cash receipts and outlays. 

Thus, recognition of revenues, expenses, gains, and losses and the related 

increments or decrements in assets and liabilities--including matching of costs and 

revenues, allocation, and amortization--is the essence of using accrual accounting 

to measure performance of entities. The goal of accrual accounting is to account in 

the periods in which they occur for the effects on an entity of transactions and other 

events and circumstances, to the extent that those financial effects are recognizable 

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and measurable.2

41. Central to accrual accounting is the “matching principle,” which requires that 

companies report expenses3 in the same period as the revenues to which the expenses relate (as 

opposed to when cash is actually received or paid out). Under the matching principle, recognizing 

revenue or expenses at the wrong time may distort an entity’s financial results relative to GAAP 

and depict an improper statement of financial position for the business at any given point in time. 

42. In its Class Period SEC filings, Ryder referred to the assets4 that primarily 

contributed to its reported revenue as “revenue-earning equipment.” Such equipment was 

comprised of vehicles and operating property and equipment (e.g., trucks, tractors, and trailers). 

Throughout the Class Period, the reported value of Ryder’s revenue-earning equipment constituted 

the majority of its assets. 

43. Under GAAP’s matching principle, Ryder was required to recognize expenses 

associated with its revenue-earning equipment in the same reporting periods that revenue 

generated by such equipment was recognized. One such expense was depreciation. Depreciation 

refers to a reduction in the value of an asset with the passage of time, due in particular to wear and 

tear. Accordingly, Ryder was required to reduce the carrying value of its revenue-earning 

equipment by recognizing depreciation expense during the reporting periods that such equipment 

was expected to provide economic benefits to the Company. 

44. ASC 360, Property, Plant, and Equipment (“ASC 360”), provides that depreciation 

expense on assets recognized and reported by companies in financial statements “shall be 

2

 FASCON 6, para. 145. 

3

 FASCON 6 defines expenses as “outflows or other using up of assets or incurrences of liabilities (or a 

combination of both) from delivering or producing goods, rendering services, or carrying out other activities 

that constitute the entity’s ongoing major or central operations.” (FASCON 6, para. 80; footnote omitted). 

4

 FASCON 6 defines assets as “probable future economic benefits obtained or controlled by a particular 

entity as a result of past transactions or events.” (FASCON 6, para. 25; footnote omitted). 

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determined based on the asset’s useful life.”5 ASC 360 further states that GAAP “require[s] that 

this cost be spread over the expected useful life of the facility in such a way as to allocate it as 

equitably as possible to the periods during which services are obtained from the use of the 

facility.”6

45. In its financial statements, Ryder stated that the reported depreciation expense on 

its revenue-earning equipment was based on the straight-line method. Using the straight-line 

method to compute depreciation expense for a given year is done by subtracting an asset’s 

estimated salvage value, otherwise known as residual value, from its cost,7 and dividing the 

remaining amount by the number of years such asset is expected to be used (i.e., its useful life). 

46. As the reported value of Ryder’s revenue-earning equipment constituted the 

majority of its assets during the Class Period, and its depreciation expense was reported to be 

greater than $1 billion in each year during such period, the assumptions used to compute 

depreciation expense for such equipment – specifically the useful lives and residual values of such 

equipment – were critical to the propriety of the Company’s reported financial results. 

47. To that end, the Company explained in its SEC filings that “[r]eductions in [its] 

residual values ... or useful lives [would] result in an increase in depreciation expense over the life 

of the equipment,”8 and, therefore, would reduce the Company’s reported earnings. In fact, the 

Company reported in its 2018 Form 10-K that “[b]ased on the mix of revenue earning equipment 

at December 31, 2018, a 10% decline in expected vehicle residual values would increase 

5

 ASC 360-10-35-3. 

6

 ASC 360-10-35-4; footnote added. FASCON No. 5, Recognition and Measurement in Financial 

Statements of Business Enterprises (“FASCON 5”), similarly requires that depreciation expense be 

“allocated by systematic and rational procedures to the periods during which the related assets are expected 

to provide benefits.” (FASCON 5, para. 86). 

7

 Ryder reported that its revenue earning equipment was initially recorded at cost inclusive of vendor 

rebates. (Ryder’s 2018 Form 10-K, p. 82). 

8

 Ryder’s 2018 Form 10-K, p. 53. 

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depreciation expense in 2019 by approximately $123 million,”9 an amount that would have 

constituted approximately one-third of its reported 2018 earnings from continuing operations 

before tax.10

48. Ryder described the residual value of its revenue-earning equipment as “the price 

at which we ultimately expect to dispose of revenue-earning equipment.”11 In view of the 

foregoing, the residual values used by the Company in its computation of depreciation expense on 

its revenue-earning equipment were required to be based on the most accurate and timely 

information the Company had at the time such residual value estimates were made in order for the 

financial results reported in its SEC filings to comply with GAAP. 

49. During the Class Period, the Company stated in its SEC filings that it “review[ed] 

residual values and useful lives of revenue-earning equipment on an annual basis or more often if 

deemed necessary.”12 In addition to such claimed annual reviews, Ryder further disclosed that it 

had a process to “monitor market trends throughout the year and assess residual values of vehicles 

expected to be sold in the near term.”13 As a result of this process, the Company explained that it 

“may adjust residual values for [its] vehicles.”14

50. Although such statements would have led investors to believe that the Company 

had a reliable process for arriving at accurate and timely estimates of residual values that were 

used to compute and report depreciation expense (and the reported earnings such expense directly 

impacted), this was not the case. Instead, as discussed in more detail below, throughout the Class 

9

 Ryder’s 2018 Form 10-K, p. 53. 

10 In its 2018 Form 10-K, Ryder reported earnings from continuing operations before tax for the year 2018 

of approximately $374 million. (Ryder’s 2018 Form 10-K, p. 74). 

11 Ryder’s 2018 Form 10-K, p. 53. 

12 Ryder’s 2018 Form 10-K, p. 53. 

13 Ryder’s 2018 Form 10-K, p. 53. 

14 Ryder’s 2018 Form 10-K, p. 53. 

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Period, Defendants misrepresented Ryder’s true financial condition by overstating the residual 

value of its trucking fleet (i.e., revenue-earning equipment), which allowed the Company to record 

lower depreciation expense on those assets each year, and artificially inflated Ryder’s earnings. 

51. Further, Ryder overstated the net book value of its revenue-generating equipment 

in its SEC filings by recording lower-than-required depreciation expense during the economic life 

of its revenue-earning equipment, and failing to reduce the net book value of such equipment by 

way of impairment.15 ASC 360 requires that equipment which is intended to be “held and used” 

(which applied to the majority of Ryder’s revenue generating equipment throughout the Class 

Period), must be tested for recoverability when a company is aware of indications that the 

equipment’s carrying amount may not be recoverable by comparing the carrying value of such 

equipment to its fair value.16,17 As the carrying value of Ryder’s revenue-generating equipment 

was inflated due to the recognition of lower-than-required depreciation expense by way of 

overstated residual values, the fair value of the Company’s revenue generating equipment was 

lower than such carrying value, meaning that such equipment was impaired. Accordingly, a test 

for impairment of Ryder’s revenue generating equipment in accordance with GAAP would have 

resulted in the recognition of an impairment loss(es) by Ryder which would have reduced the net 

book value of such equipment to its fair value during the Class Period. 

Ryder Faced a Serious Competitive Threat from Its Chief Rival, Penske, and 

Manipulated Its Residual Values to Overstate Income and Compete on Lease 

Pricing 

15 ASC 360 defines impairment as “the condition that exists when the carrying amount of a long-lived asset 

(asset group) exceeds its fair value.” (ASC 360-10-20). 

16 ASC 360-10-35-17 & 21. 

17 GAAP defines fair value as “the price that would be received to sell an asset or paid to transfer a liability 

in an orderly transaction between market participants at the measurement date.” (ASC 820-10-20). 

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52. In 2015 and 2016, Ryder faced steep competition for truck leasing from its chief 

rival, Penske. On May 11, 2016, Key Banc Capital Markets reported on “channel commentary” it 

gathered from conversations with Ryder employees. The comments emphasized how competitive 

the truck leasing environment was at the time. The comments included that “Competition is 

aggressive out there; we have to fight for customers”; “There’s a lot of trucks available out there, 

which is definitely hurting us a bit”; “It’s tough to raise prices right now when we are trying to 

grow and competition is tough”; and “Margins are definitely getting squeezed; higher overhead, 

but tough to make up for it on the price front.” 

53. During Ryder’s March 8, 2016 conference call, an analyst asked Defendant 

Sanchez, “Who are your competitors, and what is your market share?” Sanchez responded, “On 

the truck leasing side ... Penske Truck Leasing is our biggest competitor. We’re about similar 

size. We’re about 28%, they’re about 25% of the market. The rest of the market is really made 

up of small, local competitors.” Ryder’s other, smaller competitors include Idealease and 

PacLease. 

54. The market understood that Ryder’s success was critically dependent on how 

competitive its leasing program was with Penske’s. In their September 1, 2017 analyst report, 

market analysts at Stephens wrote that while there was “[p]otential for a [r]ebound in [Ryder’s] 

[c]ommercial [r]ental [b]usiness,” Stephens “believe[d] there are a couple items to watch on the 

competitive landscape” as “Penske Truck Leasing (PTL) seems to be pursuing a more aggressive 

growth strategy.” 

55. During the Class Period, Ryder artificially inflated the residual value of its vehicle 

fleet in order to compete with Penske and inflate earnings. As Ryder has disclosed in its annual 

Form 10-Ks filed with the SEC, “[c]hanges in residual values ... impact the overall 

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competitiveness of our full service lease product line” because “estimated sales proceeds are a 

significant component of the overall price of the lease.” As Ryder’s 2016 Form 10-Ks further 

explained: 

Substantially all of our FMS lease and maintenance services and our DTS and SCS 

services are provided under contractual arrangements with our customers. The 

pricing structure for our lease and contract maintenance business is based on certain 

assumptions regarding capital costs, our ability to acquire equipment at competitive 

rates from our suppliers, maintenance expense over the life of the contract, 

particularly in light of new engine technologies, residual values, productivity, and 

the mix of fixed and variable costs, many of which are derived from historical data 

and trends. 

56. The residual value of a vehicle represents its anticipated selling price at the end of 

the lease, and the residual value determines the price of the lease itself. Understanding this begins 

with a basic definition of residual value. “Residual” means the part of something left over after 

some of it has been taken away. This applies to vehicle leases in the sense that, when a lessee 

leases a vehicle, the lessee is paying for that portion of the vehicle’s value that he or she uses up. 

57. As with a new car, a new Ryder vehicle’s value drops once it is sold or leased and 

driven off the lot, and that loss is known as depreciation. The longer a vehicle is driven, and the 

more miles added to the odometer, the greater the depreciation amount will be. This depreciation 

is what is being “taken away” from the vehicle’s new value. 

58. A Ryder vehicle’s residual value is an estimate of the dollar amount the vehicle will 

be worth at the end of the lease term. This estimate comes from Ryder, who holds the lease 

contract. Ryder calculates its depreciation expense by subtracting the residual value from the 

present value of its trucks and dividing that number by the number of years in the trucks’ useful 

lives. An increase in the residual value of the Company’s trucks enables it to decrease the 

incremental depreciation expense recorded on those assets. Thus, the higher the residual value 

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that Ryder assigns to its fleet, the less depreciation expense the Company must record, which has 

the effect of increasing Ryder’s earnings on a dollar-for-dollar basis. 

59. Two simple examples are helpful to illustrate how residual value impacts lease 

pricing. First, assume a consumer leased a Ryder vehicle with a manufacturer’s suggested retail 

price (“MSRP”) of $20,000 for a three-year lease term, and this vehicle had a 60% residual value. 

That would mean the vehicle was projected to be worth 60% of the original MSRP at the end of 

the lease (60% of $20,000 is $12,000). The difference between the price of the vehicle and its 

residual value is what makes up much of the consumer’s lease payment. A consumer’s lease 

payment would be based on the difference between the selling price ($20,000) and the residual 

value ($12,000). This $8,000 difference would be divided over the consumer’s 36-month lease — 

$8,000 divided by 36 months nets the consumer a base monthly payment of $222. Taxes, interest 

and other fees and maintenance costs would be added to this base payment to give the consumer 

its overall payment: 

Example 1: 

MSRP: $20,000 

Residual value: 60% 

60% of $20,000 = $12,000 

Selling price: $20,000 

Selling price minus residual value: $20,000 - $12,000 = $8,000 

(This $8,000 is the depreciation amount and is the basis for the consumer’s lease) 

Lease length: 36 months 

$8,000 divided by 36 months = $222.22 per month base payment (before taxes, fees, etc.) 

60. If one assumes that the vehicle the consumer had decided to lease had a lower, 45% 

residual value instead of 60%, then the consumer’s $20,000 vehicle would be projected to lose 

$11,000 of its value, reducing the residual value from $12,000 to $9,000. The consumer’s cost 

would jump from $8,000 spread out over his or her lease to $11,000. Here is how that would look: 

Example 2: 

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MSRP: $20,000 

Residual value: 45% 

45% of $20,000 = $9,000 

Selling price: $20,000 

Selling price minus residual value: $20,000 - $9,000 = $11,000 

(This $11,000 is the depreciation amount and is the basis for the consumer’s lease) 

$11,000 divided by 36 months = $305.55 per month (before taxes, fees, etc.) 

61. As these two examples show, a higher residual value results in a lower depreciation 

amount and lower monthly payments (Example 1). Conversely, a lower residual value results in 

a higher depreciation amount and higher monthly payments (Example 2). 

62. Accordingly, when Ryder increased (or artificially maintained) the residual values 

of its leased vehicles, this lowered its monthly lease rates and made its leases more competitive 

with other companies’ leases, including Penske’s. However, as this scheme became divorced from 

the actual market prices for Ryder used vehicles, and market prices in fact fell, Ryder would be 

caught with vehicles whose inflated residual values result in a loss when sold, a negative financial 

“hit” to earnings, and a negative impact on Ryder’s share price. 

63. Moreover, when Ryder finally disclosed to investors the need to reduce the residual 

value of its fleet by $844 million in October 2019, Ryder and Defendant Sanchez admitted that the 

need to reduce the residual values would be tied to an increase in lease rates, which would hurt 

Ryder’s competitiveness going-forward. Ryder’s slide deck from its October 29, 2019 investor 

presentation stated that the “Key ROC [Return on Capital] Improvement Actions” that it was 

taking included “Increased lease rates on all power vehicles by reducing priced residual 

assumptions.” 

64. FE 1 was a Ryder Inside Account Manager from before the start of the Class Period 

through the end of 2017. He managed corporate full service lease accounts in the mid-Atlantic 

region and marketed financial solutions, operating lease packages and ongoing maintenance 

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services to corporate customers. FE 1 stated that, during his time at Ryder, the Company was 

focused on being competitive in the market and that Ryder used a formula to develop the terms of 

its truck leases. As he stated, elements of Ryder’s lease price formula are the amount of 

depreciation in the truck lease, the amount of the operations and maintenance cost, as well as profit. 

He explained that the depreciation amounts determine the lease price and market competitiveness. 

He stated that a leasing company like Ryder has no actual control over the need to maintain the 

trucks, so Ryder instead modified the amount of depreciation in its leases (which, as discussed 

above, is tied to the residual values of the trucks) to make the terms of the truck leases more 

attractive to consumers. However, as FE 1saw, and as discussed in more detail below, when the 

leases expired, Ryder was left with thousands of trucks that it could not sell because they were 

internally overvalued. 

65. As FE 1 explained, the establishment of unrealistically high residual values was 

used by Ryder to improve the competitiveness of their lease and rental pricing vis-à-vis the other 

leasing companies (Penske, Idealease, PacLease). FE 1 explained that this was done to try to 

achieve unrealistic lease and rental sales goals but that, at the end of the truck lease, Ryder would 

be left with returned trucks that had unrealistic depreciation still attached to them. As FE 1 said, 

the remaining depreciation would be far higher than the true market value of the truck and so the 

truck would suffer a loss when sold. He said that this game of presenting unrealistic sales revenue 

forecasts to Wall Street was used to try to drive the stock value up with little regard for the fact 

that earnings would suffer later on as a result of overvaluation of assets, which would ultimately 

require a loss on the sale of the trucks, a corresponding write down and ultimately an earnings loss 

and drop in stock value. 

Costly Problems with the MaxxForce Reduced-Emissions Engines Drastically 

Reduced the Vehicles’ Market Value and Ryder’s Ability to Sell Them 

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66. During the Class Period, Ryder incurred significant increased costs due to problems 

with vehicles with engines designed to comply with emissions-reduction requirements. This 

included numerous issues with the Navistar International MaxxForce engine. Navistar 

International introduced its MaxxForce 11-liter and MaxxForce 13-liter diesel engines in 2008, 

specifically designed for its International brand heavy trucks.

67. Navistar used exhaust gas recirculation (“EGR”) technology instead of selective 

catalytic reduction (“SCR”) technology to comply with U.S. emissions rules that took effect in 

2010, but the EGR setups were plagued with problems. The technology failed to meet federal 

emissions standards, and after other truck makers used SCR technology to control emissions, 

Navistar eventually launched a new lineup of engines that employed SCR setups. 

68. During 2010-2012 as Navistar tried to “perfect” its EGR-only technology, many 

trucking companies with MaxxForce-powered units experienced repeated breakdowns and engine 

failures. Navistar’s International trucks and MaxxForce engines also had numerous recalls and 

dozens of service bulletins during this time, which led to increased downtime, repair costs, and 

lost profits for the companies operating the trucks. The overall problems with the engine were 

worsened by the fact that, due to the unique MaxxForce wiring harness, MaxxForce-powered 

trucks could not be cost-effectively retrofitted with a non-MaxxForce engine. 

69. Overall, the MaxxForce engines tarnished Navistar’s reputation; sales plunged; and 

Navistar lost almost half its market share as costs soared and losses climbed. In May 2019, 

Navistar settled a federal class-action lawsuit related to its MaxxForce engines in the U.S. District 

Court for the Northern District of Illinois for $135 million. The case was filed on behalf of truck 

owners and lessees alleging that Navistar, Inc. and Navistar International, Inc. sold or leased 2011-

2014 model year vehicles equipped with certain MaxxForce 11- or 13-liter diesel engines equipped 

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with a defective EGR emissions system. The $135 million settlement provides class members 

with up to $2,500 per truck, or up to a $10,000 rebate off a new truck, depending on months of 

ownership or lease, or the option to seek up to $15,000 per truck in out-of-pocket damages caused 

by the alleged defect. 

70. Not including this latest settlement, Navistar also paid more than $2 billion in 

warranty costs to cover reliability and fuel-economy problems with the trucks, and it wrote off 

almost $500 million to cover used trucks it repurchased from angry customers and resold at a loss, 

which was on top of the $700 million development cost of the engines. 

71. The existence of the significant performance issues with the MaxxForce engine are 

reflected in its poor valuation in the industry. The National Automobile Dealers Association 

(“NADA”) Official Commercial Truck Guide reflects a nearly $19,000 deduction in value for 2011 

International ProStar+ trucks with the MaxxForce engine. Data from major auction companies 

like Ritchie Brother’s Auctions also reflect the lower auction prices for similar vehicles with the 

MaxxForce engines, versus those without. 

72. Former Ryder employees discussed the serious problems they witnessed with 

Ryder’s ownership and leasing of vehicles with MaxxForce engines. For example, FE 2 was a 

Ryder Vehicle Sales Representative from before the Class Period to December 2019. As a vehicle 

sales representative, FE 2worked with the other functional groups at Ryder, including sales, 

marketing, operations, and asset management, to meet sales projections and maximize proceeds 

while providing high level customer service. FE 2 stated that a decline in Ryder’s sales began in 

approximately 2015 because of emissions restrictions based on the new trucks and tractors. FE 2 

stated that the emissions filters for the exhaust systems and engines of these vehicles made them 

“a mess” and caused “bugs” in the engines that lowered their fuel efficiency and harmed the 

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engines which cost $10,000 and more depending on the size of the vehicle. Ryder’s UTC 

customers did not want trucks with emissions filters built in, yet Ryder was trying to sell them, 

and this caused a decline in sales. 

73. FE 3 was a Vehicle Sales Center Manager from before the start of the Class Period 

until July 2019. As a sales manager, FE 3 dealt with the sales of the used vehicles, including 

reporting customer feedback to his managers. He was responsible for managing Ryder’s business 

operations covering multi-million dollar assets for the East Region. He also led planning processes 

including marketing, budgeting, forecasting and long range planning. FE 3 recounted that the 

market was consistently declining while he was at Ryder (from before the Class Period to July 

2019) because of the new emissions requirements for the trucks. FE 3 said that Ryder saw the 

trucks with the new technologies coming down the pipeline in small amounts on the used truck 

side around 2010-2012, and things went downhill from there. The prices for repairs on these trucks 

were “sky-high,” and the parts were expensive. FE 3 said that the used truck market was never 

the same since those new trucks entered it. The new trucks also cut his export sales by more than 

half. In the past, on average, he would make 4-5 export sales per month to Nigeria or El Salvador. 

But this dropped to approximately one sale per month because of the emissions technology in 

around 2011/2012. 

74. FE 4, a Director of Asset Management Canada from 2011 to 2018, explained that 

every month for the last couple years of his tenure at the Company, he delivered the same basic 

message about the MaxxForce issues to senior management at Ryder, including Executive Vice 

President and Chief Sales Officer John Gleason. FE 4 oversaw the entire used truck sales operation 

across Canada. FE 4 reported that Ryder was increasingly pushing Navistar International to take 

back its MaxxForce trucks, but with limited success. He stated that he twice lined up 250 tractors 

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to go back to Navistar International but if he was lucky, he got 35 or 50 taken back. Particularly 

troubling for Ryder was the fact that Navistar International often claimed that Ryder’s trucks were 

not in returnable condition because of scrapes or damage, as Navistar International was “100% 

looking for any excuse not to take the trucks back.” Compounding these issues even further, FE 

4 reported that on the customer-facing side, Ryder had record numbers of Maxxforce customers 

say they were breaking their leases because they could not work with the trucks. FE 4 stated that 

as a result Ryder took a lot of leased and rented vehicles back early, yet there was no way they 

could rent them again or sell them for the residual value that was on the books. Indeed, some of 

the vehicles went out for lease on four or five year terms, but a lot of them did not make it to their 

lease term, and in general Ryder was trying to sell them sooner than they had originally intended. 

FE 4 stated that nobody wanted to buy them and people walked right by them. 

75. FE 5 was a Director of Used Vehicles Sales from May 2018 to September 2018 

who previously worked for Navistar. FE 5 worked at Ryder’s corporate headquarters in Miami 

and focused on used truck pricing. As part of his role, he participated in pricing team meetings, 

during which Ryder’s vehicles’ condition versus their value was discussed. FE 5 stated that, 

especially in 2015 when the MaxxForce trucks worked their way up into reports on the used truck 

industry, it became apparent that the values had declined. The value of the trucks went from 

$60,000 to $20,000 in a matter of weeks or months. The trucks took quite a depreciation hit; they 

went from being worth a lot to being worth nothing. FE 5 explained that, in order to maintain the 

Diesel Particulate Filter (“DPF”) in the MaxxForce engines, a company would need to put these 

filters in a kiln and bake them at high temperatures in order to remove the soot from the filter. 

However, Ryder did not have that process in place, nor did it have it in its maintenance plan for 

the used truck department, which meant the motor in those vehicles was running on soot. FE 5 

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explained that Ryder had quite a few of these vehicles in their stock and that it was apparent in the 

used truck department that there was an issue and concerns; however, Ryder had no answers for 

the problem. 

76. FE 12 was a Vehicle Sales Representative from 2016 to 2018 and a Sales Manager 

from 2018 to May 2019. In his role, FE 12 was focused on used vehicle pricing and managing 

assets to create solutions for customers’ lease and rental needs. FE 12 stated that the newer 

emissions requirements added additional costs to the trucks. He said that the emission issues were 

mainly with International units and that, in 2012, those issues occurred across the board mainly 

because of the DPF tank and filter. As FE 12 related, these trucks with the new technology had 

problems and, therefore, were more difficult to sell. From 2012 on, FE 12 saw that the 

maintenance prices of the trucks were frequently high. He stated that, because of how the DPF 

filter ran with the MaxxForce engine, more times than not, the engine would almost seize up. It 

was therefore tough for Ryder to sell those units, as customers would treat MaxxForce as “lemon” 

products. FE 12 stated that Ryder had a lot of these trucks in its inventory, as the main trucks 

Ryder sold were International and Freightliner. 

Ryder Witnessed a Sharp Decline in the Demand for, and Sales Prices of, Used 

Vehicles 

77. By late 2015, including because of the new emissions technology, the market for 

used vehicles, and especially tractors, weakened drastically. As Defendant Sanchez, Ryder’s CEO, 

recently acknowledged: “Following the mid-2015 peak [in used vehicle prices], tractor proceeds 

declined sharply through 2017 to below our accounting residuals as supply entered the market and 

the freight environment slowed.” 

78. FE 6 was a Vehicles Sales Manager from before the Class Period to September 

2016. He also served on Ryder’s Asset Management Board. He was responsible for selling the 

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used off-lease vehicles/equipment, and the Asset Management Board was responsible for the 

pricing of the vehicles and for changing the values of the vehicles. FE 6 stated that the market for 

used trucks and trailers was challenging and took a huge hit in 2015. In his words, “the market” 

“got it hard.” 

79. FE 4 recounted that, by 2015, it was “loud and clear” that trucks sales were 

declining. Ryder suddenly went from making money on used sales to losing money. 

80. FE 1 stated that, in 2015 or 2016, Ryder needed to make a push to sell the used 

trucks by starting a new, internal sales division within Ryder at its Alpharetta Georgia office that 

hired 40 to 50 people to try and sell Ryder used trucks by phone and online. That department had 

not existed just two years earlier, as Ryder had previously sold its used trucks through a wholesaler. 

FE 1 stated that, based on a conversation with a current Ryder truck salesperson, as of 2020, the 

number of Ryder employees in its inside sales group had increased to 90 total, which included 40 

lead generation specialists, 21 sales people (who sell trucks by phone), six managers, one director 

of sales, and others. 

81. FE 7 was a Senior Business Development Manager from 2016 to March 2019. In 

that role, FE 7 was responsible for the development of profitable new customer business within 

his assigned sales territory. FE 7 stated that during his time at Ryder (2016 through early 2019), 

the demand for used trucks was “really bad.” He said that as a result, Ryder had trucks on its 

balance sheet whose prices were excessively high and Ryder could not sell them. Accordingly, 

there was a large surplus of trucks just sitting available for sale. When he moved to Ryder’s 

Alpharetta Georgia office, he also noticed that Ryder had hired upwards of 80 people to its used 

truck sales division. In his words, Ryder was “hiring so much to try and move that inventory.” 

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82. FE 8 was a Rental Management Trainee at Ryder from 2015 to 2017 and a Location 

Rental Manager from 2017 to November 2018. In his roles, FE 8 was responsible for assisting 

the Senior Rental Manager from the Northwest Business Unit in day to day operations to maximize 

revenue and increase customer retention.18 FE 8 stated that, in the three years he was at Ryder 

(2015 to 2018), the used vehicle sales did not make a profit. He stated that the CEO would have 

a video call every quarter and would state that used vehicle sales are still down and that people 

were not buying used trucks. 

Ryder Executives Controlled the Prices and Residual Values of Ryder’s Entire 

Fleet from Its Miami Headquarters

83. Despite the sharp decline in the demand and market prices for Ryder vehicles, the 

executives at Ryder headquarters repeatedly pushed back against efforts by Ryder management 

and employees to reduce the sales prices of Ryder vehicles or their residual values. Indeed, the 

pricing and valuation of the Ryder trucks was a centralized, top-down process centered at Ryder 

headquarters in Miami that left very little to no discretion to specific Ryder retail offices across 

the country. 

84. Multiple former employees recounted that the setting of residual values was 

performed by a small group of Ryder executives called asset managers, with the ultimate decisionmaking done at Ryder’s corporate headquarters in Miami, Florida: 

a. FE 8 stated that typically depreciation was handled by the Ryder “asset 

managers” along with people at corporate; 

b. FE 6 served on the Asset Management Board, which was responsible for the 

pricing of the vehicles and for changing the values of the vehicles. He said 

18 FE 8 was responsible for, among other things, the overall profitability of Ryder’s rental product line, 

specifically achieving both revenue and margin plans, forecasting monthly, quarterly and annual results 

accurately and timely, and analyzing and interpreting performance through multiple financial reports and 

metrics. FE 8 was also responsible for maximizing utilization of vehicles, controlling operational costs, 

and planning marketing strategies. 

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that there were only four sales managers in the United States on the Board.19 

He added that the managers on the Asset Management Board met quarterly 

in a conference room in Miami with the asset managers and the Vice 

President, Eugene Tangney. FE 6 described Tangney as the top of the food 

chain in asset management. 

c. FE 10 was a Vehicle Sales Manager from before the Class Period to 2017, 

a Bailment Supervisor from 2017 to 2019, and Senior Logistics Analyst from 

2019 to February 2020. He was closely involved with vehicle pricing and 

participated in weekly and monthly conference calls with Ryder executives 

during which vehicle valuation and depreciation were discussed. FE 10 said 

that he was on weekly and monthly phone calls during which valuations and 

depreciation were discussed, and the C-suite was on the phone call. He 

added that “they saw all the reports we had.” He stated that discussions on 

the calls included what units were coming up, their prices, where they were 

coming from, where they were going, what they were selling for and who 

they were trying to sell to. He said the information about a truck went from 

the repair shop to the district managers and then to the area manager and the 

regional managers and eventually the directors and CEO. He specifically 

related that all of the C-suite level individual defendants were in “all those 

meetings” and “Robert Sanchez for sure ... I heard his voice on many phone 

calls.” 

d. FE 9 stated that Sanchez and other executives “had to” have received reports 

on valuation and depreciation in order to run the business. The VP of Sales 

Tangney had to know this information and he was “always” in meetings with 

Sanchez. 

e. FE 4 stated that the pricing department in Miami was behind the calculation 

of residual values. 

85. More specifically, FE 9, a former Ryder Vehicle Sales Representative from 

November 2016 through April 2019, worked in UTC sales during his 2.5 years at the Company. 

As a Vehicle Sales Representative, FE 9 was responsible for, among other things, evaluating used 

vehicles for a pricing determination. He stated that he and his manager did not have control over 

the pricing of the vehicles they sold. When a truck came to the UTC for sale, the sales 

representatives at the UTC filled out a checklist evaluation of the vehicle, took pictures, and sent 

19 The Asset Management Board consisted of the Used Vehicle Manager, the four Directors of Asset 

Management, the four field asset managers, and four vehicle sales managers (including FE 6). 

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them to corporate headquarters in Miami. Also, upon sale of a vehicle, depending on the amount 

of discount a customer wanted, the director of sales for the region would make the determination 

on the vehicle’s sales price. If the percentage of the requested discount was too high, the decision 

then went to the Vice President of Vehicle Sales, Eugene Tangney. 

86. FE 9 stated that the individuals approving the sales price of a vehicle would have 

to know the depreciation on the vehicle in order to approve a price. As he explained, those 

approving a sale cannot give an informed answer on the deal if they do not know all of the facts, 

including how much depreciation has occurred and how much value is left on the vehicle. The 

chain of approval for individual deals ended with Tangney and Tangney spoke with Sanchez often. 

During the Class Period, Ryder Saw that Its Vehicles’ Resale Values Were Far 

Below their Residual Values, But Ryder Increased Residual Values, 

Understated Depreciation Expense and Overstated Net Income

87. As Ryder only admitted through a series of partial corrective disclosures in 2019 

and early 2020, during the Class Period, Ryder overstated the residual values of its entire fleet and 

thereby understated its depreciation expense by more than a billion dollars. This overstated 

Ryder’s net income during the Class Period. 

88. The impact of Ryder’s residual value calculations on its financial statements can be 

seen by contrasting the way the same industry trends in used truck prices impacted its financial 

statements as compared with its competitors. For example, in Ryder competitor Paccar’s Form 

10-K for the fiscal year ended December 31, 2016, Paccar admitted: “A higher volume of used 

truck sales increased operating lease, rental and other revenues by $3.2 million. Depreciation and 

other expenses increased by $5.2 million due to higher volume and impairments of used trucks 

reflecting lower used truck prices.”20 This stands in contrast to Ryder’s Form 10-K disclosures for 

20 https://www.sec.gov/Archives/edgar/data/75362/000119312517050405/d283100d10k.htm accessed 9-

29-2020 at page 20 

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the same fiscal year, which stated that depreciation expense increased 6% in 2016 and increased 

7% in 2015 but that “[t]he increases in both years were partially offset by $35 million and $40 

million, respectively, from increases in residual values.” 

89. As shown by this one example, the same used truck price trends, which should have 

impacted Ryder and its competitors in a uniform manner, put upward pressure on Paccar’s and 

Ryder’s depreciation expense, yet also inexplicably increased Ryder’s residual values. 

90. Despite the sharp decline in used vehicle prices starting in 2015, Ryder adjusted 

residual values and depreciable lives upward from 2011 through 2016, and benefited handsomely 

in 2017 and 2018 from the overstated residual values and understated depreciation expense. Table 

1 below shows the impact of Ryder’s increases in residual values on the Company’s pretax income 

for the years 2011-2016, with each year’s “Cumulative benefit” relative to 2010 ($ in millions):

2016 2015 2014 2013 2012 2011 

Benefit from changes in 

residual values and useful 

lives 

$35 $40 $25 $30 $18 $10 

Cumulative benefit (2011 – 

2016) 

$158 $123 $83 $58 $28 $10 

% of adjusted pre-tax income 35.2% 24.3% 17.9% 14.8% 8.8% 3.5%

Cumulative benefit, after tax, 

per share 

$1.92 $1.50 $1.02 $0.72 $0.36 $0.13

Table 1. 

91. As Table 1 shows, the percentage contribution of Ryder’s scheme to increase 

residual values made an increasingly large contribution to Ryder’s adjusted pre-tax income from 

2011 through 2016. 

92. In 2017, Ryder made miniscule reductions in its residual value assumptions, before 

it finally took in 2019 a $357 million increase in depreciation that eliminated Ryder’s second half 

2019 earnings and also reported a $58 million loss resulting from the sale of used vehicles (for a 

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total impact of $415 million). As shown in Table 2 below, in 2017, pretax income was still inflated 

by $154 million, or 41.7%, relative to 2010. Similarly, in 2018, pretax income was also inflated 

by $75 million, or 18.5%, relative to 2010 ($ in millions): 

2019 2018 2017 

Benefit from changes in residual 

values and useful lives* ($415) ($79) ($4) 

Cumulative benefit (2011 - 2019) ($443) $75 $154 

% of adjusted pre-tax income -789.7% 18.5% 41.7%

Cumulative benefit, after tax, per 

share ($6.78) $1.14 $1.89 

Table 2.

93. Beginning in mid-2015 at the latest, however, Ryder’s changes to its residual values 

far exceeded the actual used sales prices that Ryder obtained in the market for its used 

vehicles. During Ryder’s October 29, 2019 earnings conference call, Ryder disclosed the below 

chart identifying its “Used Tractor Sales Price History” from 1999 through 2018: 

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94. As shown by the above graphic, Ryder’s used tractor sales price as a percentage of 

their original cost had declined from approximately 130% in 2015 to approximately 110% in 2016, 

a 15% decline (130% - 110% / 130% = 15%). This sharp price decline, as well as those that 

followed in subsequent years, were not fully reflective of the full actual decline in Ryder’s tractors’ 

values because Ryder internally resisted calls to reduce the prices of its vehicles further in order 

to sell them off, and instead held onto the vehicles to avoid the significant financial hit from their 

sales. Nevertheless, despite even the sharp 15% decline in Ryder’s used tractor sales prices in 

2016, as set forth above, rather than decrease the residual value of its fleet, Ryder increased its 

residual values by $35 million in 2016. 

95. When Ryder finally reduced its residual value estimates by $844 million in the third 

quarter of 2019, Defendant Sanchez attributed it to how: (i) the residual values of the vehicles have 

“been negatively impacted by maintenance costs on the early model years of the post-2010 

emissions technology”; and (ii) “these vehicles as they come off lease are now expected to be sold 

in a down market at below price levels.” However, by mid-2015, Ryder already knew of these 

two negative developments and that it needed to adjust downward its vehicles’ residual values at 

that time as a result. Its failure to do so was a violation of GAAP. 

96. As also shown in the above graphic, the used tractor sales price as a percentage of 

the original cost continued to decline in 2017 from approximately 130% in 2015 to approximately 

85% in 2017, a 35% decline from 2015 (130% - 85% / 130% = 35%). Again, despite this even 

sharper decline in used vehicle sale prices in 2017 (compared to the high of 2015), as set forth 

above, Ryder decreased the residual value of its fleet by a miniscule $4 million in 2017. 

97. The decline in used tractor sale prices continued and only worsened, falling in 2018 

from approximately 130% in 2015 to approximately 80% in 2018, a 38.5% decline from 2015 

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(130% - 80% / 130% = 38.5%). Again, despite this continued decline in used vehicle sale prices 

in 2018 (compared to the high of 2015), as set forth above, Ryder decreased the residual value of 

its fleet by a mere $79 million in 2018. 

98. As Ryder’s subsequent admissions make clear, the $79 million residual value 

reduction in 2018 was woefully inadequate. When Ryder disclosed in the third quarter of 2019 

the need for drastic residual value reductions, Ryder based it on the decline in used tractor sale 

prices in the third quarter of 2019. But that third quarter 2019 “decline” was simply a return to the 

same prices that Ryder was obtaining for its tractors in 2018, as shown by this graphic from 

Ryder’s October 29, 2019 earnings conference call presentation: 

99. In explaining the above slide during Ryder’s October 29, 2019 earnings call, 

Defendant Sanchez claimed that “we started seeing softening market conditions for used tractors” 

in June 2019 and those conditions “continued to worsen in the third quarter [of 2019]” and “[t]his 

triggered a review and lowering of residual value estimates on power vehicles.” But the mere blip 

of an increase and decrease in used tractor prices in late 2018/early 2019, which resulted in those 

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prices returning to Ryder’s first quarter 2018 prices, was not the first trigger of Ryder’s need to reevaluate its residual values. In reality, it was the sharp, consistent decline in prices from the 2015 

peak, which Ryder experienced starting in mid-2015 and continuing throughout the Class Period, 

and whose extraordinary size comports with the actual $844 million decrease in residual value 

estimates that Ryder finally made in the third quarter of 2019 (rather than the paltry $75 million 

adjustment it took in 2018, when its tractors were at the identical market values as in the third 

quarter of 2019), as well as the total, more than $1 billion financial impact it later more fully 

disclosed in February 2020. 

100. As set forth in Table 2 above, the $357 million adjustment made in the second half 

of 2019, as well as the $58 million loss recorded in 2019 on sales of used vehicles, entirely wiped 

out the financial benefits of increased residual values that Ryder had reported through 

2018. Allocating just that additional $415 million ($357 million adjustment + $58 million loss on 

sales of used vehicles) to the years between mid-2015 to 2018 on a pro rata basis results in the 

below estimates of Ryder’s true pretax earnings. Based on that analysis, Ryder’s estimated pretax 

earnings peaked at $408.3 million in 2015, or approximately 19.3% below Ryder’s reported 

adjusted pretax income figure. As shown in the Table below, if the residual values were correctly 

estimated by the Company from mid-2015 through 2019, and the resulting depreciation expense 

was correctly accounted for by Ryder in its income statement, the GAAP-based adjusted pretax 

income ($ in millions) would have been significantly diminished amounts in 2015 through 2018 

compared to what Ryder actually reported in its financial statements: 

2019 2018 2017 2016 2015 

Ryder’s reported adjusted 

pretax income $56.1 $406.5 $369.7 $448.8 $506.0 

Add (subtract) share of 

additional depreciation 

(mid-2015 to 2019) 

$254.5 ($146.7) ($212.2) ($212.9) ($97.7)

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Estimated adjusted pretax 

income $310.6 $259.8 $157.5 $235.9 $408.3 

Change to Ryder's reported 

adjusted pretax income 453.7% -36.1% -57.4% -47.4% -19.3%

Table 3.

101. Ryder repeatedly claimed to investors that it applied a “five-year rolling average” 

to calculate its residual values and depreciation expense, suggesting to investors that it employed 

a rigid mathematical formula to which Ryder held itself. Instead, the “five-year rolling average” 

was a convenient excuse for Ryder to use what it knew to be excessively high residual values, and 

Ryder only followed it when it was convenient for its purposes. 

102. Ryder in fact claimed in its Forms 10-K that it reviewed its residual values and 

depreciation expense annually, in order to ensure that they accurately reflected “historical market 

price changes, current and expected future market price trends, expected life of vehicles included 

in the fleet and extent of alternative uses for leased vehicles[.]” According to Ryder’s Forms 10-

K, Ryder set its residual values through a review of a variety of factors, not blind adherence to a 

supposed five-year rolling average: 

Depreciation and Residual Value Guarantees. We periodically review and adjust 

the residual values and useful lives of revenue earning equipment of our FMS 

business segment as described in Note 1, “Summary of Significant Accounting 

Policies — Revenue Earning Equipment, Operating Property and Equipment, and 

Depreciation” in the Notes to Consolidated Financial Statements. Reductions in 

residual values (i.e., the price at which we ultimately expect to dispose of revenue 

earning equipment) or useful lives will result in an increase in depreciation expense 

over the life of the equipment. . . . 

We review residual values and useful lives of revenue earning equipment on an 

annual basis or more often if deemed necessary for specific groups of our revenue 

earning equipment. Reviews are performed based on vehicle class, generally 

subcategories of trucks, tractors and trailers by weight and usage. Our annual 

review is established with a long-term view considering historical market price 

changes, current and expected future market price trends, expected life of vehicles 

included in the fleet and extent of alternative uses for leased vehicles (e.g., rental 

fleet, and DTS and SCS applications). As a result, future depreciation expense rates 

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are subject to change based upon changes in these factors. While we believe that 

the carrying values and estimated sales proceeds for revenue earning equipment are 

appropriate, there can be no assurance that deterioration in economic conditions or 

adverse changes to expectations of future sales proceeds will not occur, resulting in 

lower gains or losses on sales. 

103. Despite these claims of periodic review and adjustment of residual values, and 

hidden from investors, Ryder senior management and executives knew during the Class Period 

that the market for Ryder used vehicles had fallen sharply, that the new emissions vehicles had 

materially greater maintenance costs, and that Ryder was overstating its residual values. The 

executives repeatedly brought those serious concerns to their superiors (who were involved in the 

most senior discussions to set the residual values), but their concerns were recklessly ignored and 

pushed aside. For example: 

a. FE 6, a Vehicle Sales Manager in the Asset Management Division from 

before the Class Period to September 2016 and also a member of Ryder’s 

Asset Management Board, reported that “the values of the equipment were 

completely off” and “it was pretty clear that they needed to write-down the 

equipment.” Despite the general recognition that the vehicles in Ryder’s 

fleet were overvalued, FE 6 said that everyone in upper management, 

including Tangney and Defendants Sanchez and Garcia pushed back on not 

writing down the used vehicles. 

b. FE 6 added that the value of all vehicles and the depreciation of the 

vehicles were determined at the quarterly Asset Management Board 

meetings.21 According to FE 6, there was talk of the need for a writedown in 2015/2016, as the values had depreciated much lower than 

expected on the back end. The managers wondered how they were going 

to show a profit if Ryder did not write them down and were always raising 

concerns. However, Ryder “had no interest in writing down whatsoever” 

while FE 6 was there. Eugene Tangney (the Director of Asset 

Management), Marlene Daubar (Vehicle Sales Operations Manager at 

Ryder Transportation) and Linda Williams (the Director of Fleet Sales) 

were involved in the decisions to not adjust the values. 

c. FE 10 stated that senior management, including Defendants Sanchez and 

Garcia, participated in weekly and monthly phone calls which discussed 

Ryder’s vehicles’ valuations and depreciation. FE 10 stated that he “heard 

21 FE 6 did not believe that the reports generated at the meetings had a name, but that he is sure the reports 

went to Ryder’s senior executives. 

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[Defendant Sanchez’s] voice on many phone calls” and that, at these 

meetings, FE 10 would “scream until [he] was blue in the face” that Ryder’s 

vehicles were overpriced. He also stated that he expressed these complaints 

directly to Defendants Sanchez and Garcia at these meetings, as they 

respected his opinion because he met his quotas and was known for doing 

more than the average salesperson. 

d. FE 10 stated that he witnessed pushback from Sanchez and Garcia “all the 

time” in response to these complaints and said that their excuses included 

that the Company did not want to lose money on the trucks, and that the 

Company could not afford to lower the prices. It was FE 10’s view that the 

Company overpriced its trucks far above their true residual values, and FE 

10 reported that used vehicle salespeople had to obtain clearance from field 

asset managers repeatedly for sales prices because the vehicles were 

regularly selling at least 10% below their listed value. 

e. FE 4 worked at Ryder in Toronto from October 2010 to September 2018. 

His last role was director of asset management Canada and he was in charge 

of 1,250 vehicles across Canada. His role had two components: ensuring 

the assets were depreciating as they should, and selling the vehicles. He 

was also a member of the pricing committee and any deal that was slightly 

“off spec” would come across his desk so that he could make sure the 

residuals were correct. FE 4 explained that the residuals were never 

adjusted during the course of the lease, and they should have been. He 

recounted that he knew it would be a disaster and there were some deals 

where he tried to increase the depreciation to level things out, but he did not 

have much success doing that. Instead, FE 4 received a lot of pushback 

from sales, and in particular from John Gleason22 (Vice President of Sales), 

Defendant Dennis Cooke (President), and Chris Fairey (Vice President of 

Sales for Canada). 

f. FE 4 stated that deals would come across his desk that he would deny and 

change the residual number and then he would get overridden by Gleason’s 

group in Miami. He said that, during his time at Ryder, he was “raising red 

flags like crazy.” He was involved in business planning and any time Ryder 

set business plans he could never get the Company to agree to put down the 

losses that he thought were a more accurate number. He kept 

communicating to others that Ryder’s residuals were unrealistic. 

g. FE 4 said that Ryder had internal reports memorializing residuals and 

depreciation, and that Ryder executives tracked proceeds historically and 

met quarterly to assess the status of the fleet valuation and pricing. FE 4 

stated that the top executives were “100%” receiving these reports, and that 

22 John Gleason is Executive Vice President & Chief Sales Officer at Ryder. 

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FE 4 sat with other executives, including CFO Garcia every month to talk 

about them. 

h. FE 4 stated that he also told the finance group at the Company that they 

should be writing the trucks down because there was no way Ryder could 

get rid of them at the losses they had on the business plan, but was told to 

sit on the inventory. FE 4 reported that management, including Gleason 

and Cooke, “kicked his teeth in” every month where he gave them “all kinds 

of statistics on what wasn’t selling, the issues with MaxxForce, and how the 

residuals were making pricing a problem.” He also reported that Gleason 

would often tell FE 4 that he “just had to have his people push harder to 

sell.” 

i. When FE 4 left in September 2018 there was no indication that Ryder was 

planning to bite the bullet and take the necessary write down. On the last 

conference call he was on, he was getting beat up for not making sales, and 

he told the other Ryder executives (including Gleason and Cooke), “This 

isn’t going away. We’re holding these trucks so they’re just losing value.” 

FE 4 stated that the lack of transparency was “strange.” The used vehicles 

salespeople were told, “Don’t make excuses, go out there and sell,” and 

Ryder would not acknowledge the reality that the trucks were unsellable. 

FE 4 said that he kept wondering when they were going to “bite the bullet.” 

104. FE 4 stated that Ryder overshot on its residuals “big time.” Ryder wanted to secure 

more leasing deals, and higher residuals brought down the leasing price. FE 4 added that all of 

the directors of asset management had the same problems regarding the higher residuals and 

subsequent sale of those vehicles, and FE 4 spoke about it with all of them constantly. He 

described it as a “disaster” and “a very tough time.” 

105. FE 4 stated that how much Ryder was overstating the residual values varied by 

equipment type. For the MaxxForce vehicles, they were easily overstated by 50%. The 

MaxxForce vehicles made up about 40% of the fleet during the years they were used. The rest of 

the fleet was probably overvalued by 20% plus. 

106. When FE 4 would push back internally on a high residual amount, the salespeople 

would take it to the U.S. executives and say, “We really need this to get the deal,” and it would get 

approved by Tangney or Gleason. FE 4 stated that Tangney knew there would be an issue with 

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the sales of these vehicles down the line because of the high residuals. FE4 said, “He knew exactly 

what was happening.” And in ’s FE 4 group, they were “bewildered.” FE 4’s superior, who was 

on FE 4’s side regarding the residuals and depreciation, knew FE 4 was right, but his superior 

could not get the executives to listen, and his superior left the week after FE 4 did. 

107. FE 6 stated that, since 2015, the internal value set by Ryder for the vehicles was 

too high because the vehicles had depreciated. He said that, the new emissions technology 

(including the MaxxForce engine) increased the maintenance costs of the vehicles, and that, 

starting in 2015, such costs were far higher for those vehicles. As a result, FE 6 did not believe 

that the depreciation amounts on the vehicles was correct. As FE 6 explained, the residual value 

at the end of the trucks’ useful life was not what they had expected. 

108. Specifically, FE 6 stated that Ryder’s trucks have 7-8 years on their leases before 

the Company sells them. The trucks with the new emissions technology came out in 2009, and 

these trucks started coming off lease in 2015, and FE 6 believed that a lot of the values were 

upside down at that time. He added that the business for the used vehicles changed significantly 

in 2015 and had been rocky ever since. 

109. As FE 6 further explained, in 2015, the values were starting to be upside down 

across the board; “the values of stuff just dropped so fast because of the maintenance issues on the 

trucks”; and it was “completely obvious” that Ryder’s residual value estimates likely exceeded the 

expected future values that would be realized upon the sale of power vehicles in their fleet. He 

explained that Ryder was not properly writing down its equipment in order to get rid of it, so the 

values on the rear end were not worth what Ryder thought they would be. FE 6 said that the 

vehicles were worth 20-40% less than what Ryder thought they were worth. 

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110. FE 6 estimated that the residual values were overstated by approximately 30%, and 

that it was substantial and applied to all of Ryder’s trucks and trailers. Class 8 vehicles (the large 

tractors) were the biggest issue and had depreciated more, yet Class 8 is the bread and butter of 

the business. Further, FE 6 explained that Ryder was aware of the reasons their vehicles’ pricing 

was dropping so fast, as they “had maintained the truck for seven years, and it cost an arm and a 

leg [to maintain the vehicles].” 

111. FE 6 believes that in 2015, the Company was talking about making changes but 

they were not sure what they were going to do. But by the time he left Ryder in 2016, Ryder still 

had not made the changes to the residual values. He added that employees like himself always 

thought the values were way too high, but the Company did not change anything. The sales 

managers were always raising concerns; they were in the field and could see that the values of the 

used vehicles were too high; and it was “pretty apparent.” However, the pushback on the values 

came from the top. FE 6 stated that Ryder should have taken a write-down sooner but that Ryder 

waited until the market basically crashed to take the huge write-down. 

112. FE 5 is a former Director of Used Vehicle Sales at Ryder from May 2018 through 

September 2018. He said that it was evident to him when he started at the Company that its residual 

value estimates exceeded the expected future values that would be realized upon the sale of power 

vehicles in their fleet. He stated that he brought this up directly to his superior, the Marc Thibeau. 

FE 5 recounted that Ryder understood that the Company would suffer a loss on the sale of its overvalued vehicles when they would be sold. However, he emphasized that, at the time, Ryder was 

highly engaged in a “beat Penske mentality.” After FE 5 voiced his concerns on the way that 

Ryder was selling vehicles and recognizing revenue, and they were dismissed, it became apparent 

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that his relationship with the Company was not going to last. In his words, “They were acting with 

disregard for their investment community.” 

Ryder Maintained Excessively High Prices on Its Vehicles in a Futile Attempt 

to Avoid Recognizing the Losses from Sales Below the Inflated Residual 

Values 

113. Numerous former Ryder employees also stated that they repeatedly brought to 

Ryder executives’ attention, throughout the Class Period, that Ryder was trying to sell its used 

vehicles at market prices that far exceeded their true value. However, again, these serious concerns 

were repeatedly cast aside by Ryder’s most senior executives, who kept the list prices for the 

vehicles consistently high. 

114. FE 9 stated that the pricing of Ryder vehicles was “a lot” higher than competitors 

and there was nothing average salespeople could do about it. He stated that the used vehicles 

averaged between 300,000 and 700,000 miles on the odometer and were always overpriced even 

if they had 700,000 miles on the odometer. 

115. When FE 9 began working for Ryder, his office sold 50-60 trucks a month. 

However, this eventually drastically declined. He stated that the quotas were set at about 30 

vehicles a month, but by the time he left in 2019, his office was only selling 15-20 per month. He 

stated that sales were falling and there was a lot of pressure on offices to sell or offices would 

close. However, the quoted prices stayed consistently overpriced. 

116. FE 10 stated that Ryder always overpriced the sales price of its used trucks, 

constantly pricing them above the market value or above what they were worth. Ryder had what 

was called an “ask and take” system for selling its trucks. The Company always wanted to receive 

90% of the price it was asking, and that’s the lowest price it would take. Anything that was sold 

below 90% of the asking price required approval from the Field Asset Manager (“FAM”), and 

anything under 85% to 80% required approval from both the FAM and Director of Asset 

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Management. FE 10 said that Ryder was overpricing its trucks because he would look up Penske 

and DHL rates and found the same trucks for a fraction of Ryder’s prices, as much as $10,000 less. 

FE 10 compared Ryder’s sales process to trying to sell a sedan with 200,000 miles on it at 

Lamborghini prices. 

117. FE 10 stated that Ryder always thought trucks were worth more than they were, 

and recalled constantly having the conversation with UTC salespeople in other locations about the 

issue of constant overpricing. FE 10 said he constantly complained about the overpricing and 

need to adjust the sales matrix because, as a salesperson, he wanted to be able to sell trucks and 

receive a monthly bonus. This was tough when the trucks were never fairly priced and were not 

at a competitive level with competitors’ pricing models. This was a countrywide issue for UTC 

and he surmised that vehicles were overpriced by $5,000 per $10,000 per vehicle. The Company 

told the salespeople that the demand for trucks in the market was not there anymore, and this was 

said by managers and directors and he heard it in one-on-one meetings. 

118. FE 3 said that pricing was not an issue in his early years at the Company, but it 

started becoming an issue when the newer trucks came on the market. He said that, “We were way 

out of whack with the other market; we were constantly getting beat with pricing a lot.” He 

continued that “The pricing, I personally think, was way off,” and he said that he would get a lot 

of feedback from customers about pricing. 

119. FE 11 was a Vehicle Sales Manager from before the Class Period to December 

2015. FE 11 was responsible for selling previously-leased vehicles, including working to keep 

Ryder’s pricing competitive in the pre-owned vehicle market. FE 11 stated that customers would 

always tell Ryder that the pricing on their trucks was extremely high. He said that the high prices 

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had always been the case, that when the value of the trucks does not match the pricing, it is difficult 

to sell the vehicles, and that his lot stayed full due to the pricing. 

120. FE 12 stated that the pricing numbers came from the people above him at Ryder. 

For the Used Sales Fleet, there was a President, two Vice Presidents, and regional managers who 

worked together on the quarterly numbers that they needed to meet. FE 12 would say that the 

fleet was overvalued by 30-50%, especially the box trucks. 

121. FE 5 was part of the pricing team meetings, during which they would have round 

table discussions based on conditions. There was a process in place to price assets based on their 

condition and specifications. However, it was an old, antiquated system. Part of ’s FE 5 job was 

to look at how to improve it, and it was going to take a major overhaul that he does not think Ryder 

was prepared to make to improve the system. The pricing team meetings included all of the senior 

management team from Ryder’s Used Truck division, asset managers, the Fleet Department, and 

Operations. Thibeau chaired these meetings, and he was the highest-ranking employee in the 

meetings. 

122. FE 5 said, “I knew I needed to leave on the first week of the job.” “Their pricing 

was out of line; their approach to pricing was redundant; they were trying to find ways to add 

values to trucks to create some values to the trucks, and it just wasn’t there.” 

During the Class Period, Ryder’s Used Truck Inventory Ballooned, a Red Flag 

that Price Discounts and Serious Decreases in Residual Values Were 

Necessary 

123. FE 4 said that as of February 2016, Ryder had a large number of vehicles with high 

residual values that should have been written down. As a result, Ryder ended up with a 

significantly oversized used vehicle fleet. FE 4 explained that while usually Ryder liked to get rid 

of its vehicles within six months, he estimated that by 2018, 20% of its inventory had been siting 

for over a year “rotting away.” As he recounted, Ryder’s inventory grew because it could not sell 

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the vehicles and the Company did not want to send the vehicles that were not selling to auction 

and thereby realize the losses. The trucks were fully advertised, there was just no demand. The 

trucks were simply sitting there going down in value, and Ryder would let employees send them 

to auction only in small portions. For example, Ryder would say, “Okay. This month you can send 

ten to auction.” At other times, FE 4 said that when he was pushing management to sell the 

vehicles and take the hit, he was told to sit on inventory. 

124. As FE 6 also recounted, Ryder was sitting on vehicles for extended periods because 

it would not write them down or sell them at a lower price. Vehicles were sitting on the Ryder lots 

for 180-365 days, whereas the target is typically only 90-180 days. Anything past 180 days is a 

problem, and many trucks were sitting on the lots for over six months, and there were probably 

6,000-10,000 used vehicles sitting at any time. FE 6 stated that the large number of vehicles sitting 

on the lot for an extended time beginning in 2015 was significantly different than it had been in 

the past and that “it got worse and worse and worse.” 

125. According to FE 9, vehicles sat on the lot for more than 180 days, and vehicles that 

were not sold would develop “lot rot” if they sat for long periods and their engines were not run 

regularly. Ryder would also not hire personnel to periodically run the vehicles and they would 

deteriorate as a result. FE 9 stated that the Company “no doubt” should have taken a write down 

of the residual values sooner because the pricing was too high, sales had fallen off, and by the time 

Ryder incurred additional depreciation expenses the Company had been putting depreciation on 

the books and were failing to cover depreciation costs through sales. 

126. FE 1 likewise stated that Ryder accumulated a large number of trucks because it 

could not sell them, and it also avoided selling them, in order to avoid taking the financial hit from 

selling them at a price below the trucks’ residual value. As he explained, when a customer finishes 

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its lease and the truck is still worth something, Ryder would typically try to sell it. However, since 

the Company was overvaluing the trucks, Ryder would have taken a significant loss if they did try 

to sell them. As a result, Ryder would instead try to find another consumer to whom to lease the 

same used truck. FE 1 stated that, in 2015, Ryder faced an “astronomical” amount of used trucks, 

such that Ryder would not allow anyone to lease new trucks to customers. Ryder had a list of all 

the used trucks available and would send to him spreadsheets that were pages long. There was a 

“surplus of equipment” and he recalled one spreadsheet in particular that had 2,500-3,500 units of 

used trucks on it. When asked if CEO Sanchez saw these spreadsheets, FE 1 stated he was sure 

that he would have. FE 1 said that Ryder wanted its salespeople to go down the list and find a 

used piece of equipment to try and lease it to a consumer before it leased out a new piece of 

equipment. This would supposedly “delay any pain” so that the Company could avoid taking the 

losses. 

127. FE 5 stated that Ryder’s aging inventory for used trucks sales was very, very high. 

In addition, the trucks would come into used truck sales “as ready to go,” but in reality, they still 

had a lot of work to be done on them to prepare them for sale. 

128. As Ryder disclosed, as of February 12, 2016, its units held for sale at the end of the 

fourth quarter of 2015 had increased to 8,000, up from 5,500 units held for sale in the prior year, 

a 45% increase. Sequentially from the third quarter of 2015, the units held for sale had increased 

by 1,900 units in a single quarter. This was a red flag to Defendants that the used vehicle market 

had suffered a dramatic downturn. 

129. As of August 2016, as reflected in a Ryder internal document that was sent 

anonymously to Plaintiffs’ counsel, there were at least 1,000 Ryder trucks available for sale that 

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had been at the Ryder Used Truck Centers (“UTCs”) for six months or more. Of those, more than 

300 had been at the UTC for a year or more. 

130. In addition, as of August 2016, there were at least 1,980 Ryder tractors available 

for sale that had been at the Ryder UTCs for six months or more. Of those, more than 450 had 

been at a UTC for a year or more. 

131. Moreover, as of August 2016, more than 400 of the Ryder tractors available for 

sale, or in process to be sold, were equipped with the International MaxxForce engines, which 

experienced repeated costly breakdowns and engine failures. 

132. By February 2017, the total Ryder units held for sale was still extremely high at 

7,500 units, but this figure excluded 1,200 lease vehicles being “prepared for sale.” Including 

those vehicles resulted in an increase of 700 vehicles versus the prior year. 

133. By February 2019, Ryder still had 6,900 units held for sale, which had increased 

by 900 units over the past year, and which was still 25% higher than the 5,500 units held for sale 

in 2014. By the end of the fourth quarter in 2019, Ryder’s used vehicles inventory was 9,400 

vehicles, an increase of 71% versus 2015. 

V. THE TRUTH EMERGES 

134. The full truth about Ryder’s overstated residual values was not revealed until the 

end of the Class Period on February 13, 2020, and was disclosed to investors on a piecemeal basis 

through a series of partial corrective disclosures, as explained below. 

135. First, on July 30, 2019, the Company reported earnings before tax for the second 

quarter of 2019 in its FMS business segment of $57.7 million compared to $72.9 million the prior 

year period, driven by lower used vehicle sales results which had declined from the prior year as 

a result of higher valuation adjustments of $10.4 million on a larger inventory and higher 

depreciation of $7.6 million due to residual value changes. As a result, Ryder reduced its earnings 

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per share forecast for 2019 to a range of $4.80 to $5.10, as compared to its prior forecasted range 

of $5.28 to $5.58. 

136. Although the Company did not quantify the impact of used vehicle prices on its 

2019 outlook, management indicated that the majority of the lowered guidance reflected weaker 

tractor valuations. As Deutsche Bank wrote on July 30, 2019 in an analyst report entitled “Good 

operating Q[uarter], but used truck prices sting”: “Ryder can’t seem to shake the impact of weaker 

used truck prices, which is something that is taking longer to recover than we had previously 

expected[.]” In response to Ryder’s disclosures, the Company’s stock price declined 10%, from 

$59.32 per share on July 29, 2019 to $53.38 per share on July 30, 2019, on unusually high volume 

of more than 1.4 million shares traded. This decline was statistically significant at the 99% 

confidence level or greater. 

137. Analysts immediately commented on this disclosure, with J.P. Morgan reporting 

on July 30, 2019 that “[v]ersus our model, FMS was weaker than expected, as used vehicle results 

and higher bad debt weighed on performance, partially offset by a solid topline and operating beat 

at DTS during the quarter.” Wolfe Research similarly reported the same day that its 2019 “EPS 

estimate was already below the low-end of R’s [Ryder’s] guidance, but the magnitude of today’s 

cut is worse than we expected.” 

138. Thereafter, on October 29, 2019, the Company shocked the market with the 

bombshell disclosure that it was decreasing its residual value estimates by more than $840 million. 

That day, Defendants disclosed to investors that “management concluded that our residual value 

estimates likely exceeded the expected future values that would be realized upon the sale of power 

vehicles in our fleet.” On that day’s conference call with investors, Defendant Sanchez admitted 

that, “[f]ollowing the mid-2015 peak [in used tractor prices], tractor proceeds declined sharply 

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through 2017 to below our accounting residuals as supply entered the market and the freight 

environment slowed.” As a result, Ryder significantly lowered the residual value estimates for all 

vehicles and incurred $177 million in additional depreciation expense in the third quarter of 2019, 

and reduced its residual value estimates for the second half of 2019 by $289 million and 2020 by 

$250 million. All told, Ryder disclosed a cumulative reduction of its residual values covering the 

period from the second half of 2019 through 2024-25 in the total amount of $844 million, as 

reflected in the slide below from Ryder’s October 29, 2019 investor presentation: 

139. As SunTrust Robinson Humphrey summarized on October 29, 2019, “The total 

impact of the revised residual values as reflected in higher depreciation expense is estimated to be 

$289M or $3.96/share in 2H19 and $250M or $3.50/share in 2020. ... Overall this change results 

in earlier recognition of depreciation in 2019 and 2020 that would have been recognized in 2021 

or later years under its prior estimate.” 

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140. Ryder also reported a third quarter 2019 adjusted loss of ($1.49) that was well 

below consensus of +$1.49 and the guidance range of $1.45-$1.60, which was primarily driven by 

the increase in depreciation expense. 

141. In response to Ryder’s disclosures, the Company’s stock price fell by more than 

12% over two trading days, from a closing price of $55.12 per share on October 28, 2019 to first 

a closing price of $52.12 on October 29, 2019, and then to a closing price of $48.44 per share on 

October 30, 2019, on unusually high trading volume of more than 2 million shares on October 29, 

and more than 1.4 million shares on October 30. The declines on October 29 and 30, 2019 were 

each individually statistically significant at the 99% confidence level or greater. 

142. Analysts were shocked by Defendants’ disclosure. Analysts at Wolfe Research 

wrote that even though “expectations were low heading into the report . . . the impact in 3Q was 

much bigger than expected (huge understatement) and C20 estimates need to come down 

materially.” J.P. Morgan similarly reported on October 30, 2019 that Ryder took a “big bath” that 

“confirms Ryder was over-earning by a significant amount in prior years based on the $844mm 

cumulative write-down.” 

143. Finally, on February 13, 2020, during the trading day, Ryder further shocked 

investors by reporting that the financial toll of Ryder’s residual value manipulation now in fact 

exceeded $1 billion. Specifically, Ryder disclosed that, as a result of the significant reductions to 

the residual value of its fleet, it had incurred a total of $357 million in depreciation expense for 

2019 (instead of $289 million) plus a loss of approximately $59 million on the sale of used 

vehicles. The Company also announced that, for 2020, it expected to incur another $25 million in 

depreciation expense on its fleet due to the reductions in residual value (on top of the alreadydisclosed $250 million increased depreciation expense for 2020) plus an additional $20 million 

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estimated loss on used vehicle sales. This brought the cumulative negative financial impact of 

Ryder’s residual value manipulation to $1.021 billion ($357 million + $59 million + $275 million 

+ $20 million + $130 million (2021) + $180 million (2022-225)). 

144. In response to these disclosures, Ryder’s stock price fell sharply by 23% over three 

trading days, from a closing price of $50.19 per share on February 12, 2020, to a closing price of 

$45.01 on February 13, 2020, to a closing price of $40.12 on February 14, 2020, and a closing 

price of $38.45 on February 18, 2020, on unusually high trading volume of more than 1.9 million 

shares on February 13, more than 2.5 million shares on February 14, and more than 1.7 million 

shares on February 18. The declines on February 13, 14, and 18, 2020 were each individually 

statistically significant at the 99% confidence level or greater. 

145. Analysts reacted harshly. SunTrust Robinson Humphrey reported on February 13, 

2020 that “[f]ollowing the 4Q EPS miss and much lower-than-expected 2020 EPS guidance, we 

expect the stock to be down today. We had hoped the company cleared the decks in 3Q after 

significantly lowering EPS expectations following its residual value changes.” Analysts at 

SunTrust Robinson Humphrey also reported the same day that “We are certainly frustrated as this 

marks the third consecutive quarter of meaningful EPS estimate revisions. . . . We are lowering 

our 2020 and 2021 EBITDA estimates to $2.24B and $2.30B, respectively (from $2.40B and 

$2.43B).” J.P. Morgan reported that “[t]he trajectory of used vehicle prices remains the key 

determinant of near term performance in our view considering the additional drag in 4Q19 and 

continued loss on sale in 2020 are indicative that last quarter’s ‘big bath’ and write-down of 

residual values did not completely clear the deck.” J.P Morgan also reported on February 13, 2020 

that “Management’s 2020 forecast assumptions include a 2H20 recovery common to the transports 

group, but headwinds from used vehicle prices and commercial rental remain specific to Ryder.” 

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146. In its February 28, 2020 analyst report, Pacific Square Research described Ryder 

as “paying the price for years of underpricing its leases to drive growth” with a depreciation 

methodology that had “Gone Awry” and “introduce[d] a significant distortion into earnings.” 

Further, Pacific Square Research stated that “[w]hat is shocking to us is that Ryder continued to 

adjust residual values and depreciable lives upward from 2011-2016 as if management assumed 

the good times would never end. It was the new normal for then – until it wasn’t.” Similarly, in 

its August 3, 2020 analyst report, Pacific Square Research reported that “[t]he Company blames a 

continuing, unexpected and seemingly impossible-to-predict decline in the selling prices for used 

equipment . . . [t]he trouble is, repeatedly raising residual values – as Ryder did from 2011-2016 

– is just another form of borrowing from the future. In our view, it represents a cosmetic boost that 

benefits earnings in the short term, at the expense of future earnings.” 

147. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline 

in the market value of the Company’s common stock, Lead Plaintiffs and other Class members 

have suffered significant losses and damages. 

VI. DEFENDANTS’ MATERIALLY FALSE AND MISLEADING STATEMENTS 

AND OMISSIONS 

148. Throughout the Class Period, Defendants made numerous materially false and 

misleading statements and omissions concerning the residual value of Ryder’s truck fleet and the 

level of depreciation of those assets, which artificially inflated Ryder’s net earnings, 

comprehensive income and additional financial metrics. These materially false and misleading 

statements and omissions are set forth below by financial quarter. 

The Second Quarter of 2015 

149. On July 23, 2015, Ryder issued a press release entitled “Ryder Reports Record 

Second Quarter 2015 Results” that announced its financial and operating results for the quarter 

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ended June 30, 2015 (the “Second Quarter 2015 Press Release”). Ryder filed the Second Quarter 

2015 Press Release with the SEC on Form 8-K and Defendant Garcia signed the 8-K (the “Second 

Quarter 2015 Form 8-K”). The Second Quarter 2015 Press Release and Second Quarter 2015 

Form 8-K reported a comparable EPS from Continuing Operations of $1.65, an EPS from 

Continuing operations of $1.61, and $86.2 million in GAAP Earnings for the three months ended 

June 30, 2015. 

150. Ryder’s Second Quarter 2015 Press Release stated further that the Company’s fullservice lease results benefited from “lower depreciation associated with increased residual values.” 

Defendants’ statement that Ryder’s lease results benefited from “lower depreciation associated 

with increased residual values” was materially false and misleading because, at that time, Ryder’s 

vehicles’ residual values had materially decreased and its depreciation expense had materially 

increased, yet the Company failed to make the necessary adjustments to its residual values or 

depreciation expense. 

151. Ryder’s reported financial metrics and statements were materially misstated in the 

manner set forth in ¶¶91-92, because Ryder failed to correctly reduce the residual values of its fleet 

vehicles or increase its depreciation expense. This resulted in a material overstatement of its net 

earnings, earnings per share, and residual values, as well as an understatement in depreciation 

expense. 

152. On August 7, 2015, Ryder filed its Form 10-Q for the quarter ended June 30, 2015 

with the SEC, which Defendants Sanchez and Garcia signed (the “Second Quarter 2015 Form 10-

Q”). The Second Quarter 2015 Form 10-Q contained the following financial metrics, each of 

which was either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands)

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Cost of lease and rental $531,308 Understated 

Gains on vehicles, net $33,237 Overstated 

Earnings from continuing 

operations before income 

taxes

$133,447 Overstated 

Provision for income taxes $47,530 Overstated 

Earnings from continuing 

operations

$85,917 Overstated 

Net earnings $85,159 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$1.61 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$1.59 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $85,159 Overstated 

Comprehensive income $111,333 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$707,886 Overstated 

Total assets $10,638,264 Overstated 

Retained earnings $1,544,047 Overstated 

Total shareholders’ equity $1,913,439 Overstated 

Total liabilities and 

shareholders’ equity

$10,638,264 Overstated 

Consolidated Statement of Cash Flows (Six months ended June 30, 2015)

Net earnings $137,948 Overstated 

Depreciation expense $546,699 Understated 

Gains on used vehicle sales, 

net

$62,816 Overstated 

153. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92, because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had significantly underreported its 

depreciation expenses during the Class Period. This resulted in a material overstatement of its net 

earnings, the value of its operating property and equipment, its total assets, retained earnings, and 

total shareholders’ equity. 

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154. Thereafter, in Ryder’s Second Quarter 2015 Form 10-Q, Defendants reported that 

the Company’s lease and rental gross margin within its FMS business segment increased 10% in 

the second quarter of 2015 to $247.7 million and attributed the increase in margin, in part, to 

“benefits from improved residual values.” The Company also reported that earnings before tax in 

its FMS business segment increased 8% in the second quarter of 2015 to $122.5 million and stated 

that these “[r]esults benefited from $10.0 million of lower depreciation in the second quarter of 

2015” due, in part, to “residual value policy changes.” 

155. The statements set forth above were materially false and misleading because, at that 

time, Ryder’s vehicles’ residual values had materially decreased and its depreciation expense had 

materially increased, yet the Company failed to make the necessary adjustments to its residual 

values or depreciation expense. 

156. On July 23, 2015, Defendants held a conference call with investors and analysts to 

discuss Ryder’s financial results for the second quarter of 2015 (the “Second Quarter 2015 

Earnings Call”). During the Second Quarter 2015 Earnings Call, Defendant Sanchez falsely 

assured investors that the headwind the Company faced in its FMS business from a decline in used 

vehicle sales “is being offset on the earnings line by the improvements that we’ve seen in 

depreciation expense also.” 

157. Defendant Sanchez’s statement in ¶156 above was materially false and misleading 

because, at that time, Ryder’s vehicles’ residual values had materially decreased and its 

depreciation expense had materially increased, yet the Company failed to make the necessary 

adjustments to its residual values or depreciation expense. 

The Third Quarter of 2015 

158. On September 10, 2015, Defendants participated in the RBC Capital Markets 

Global Industrials Conference. During the conference, Defendant Garcia stated that “we’ve been 

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benefiting from the solid used truck environment because of an increase in residuals, which helped 

bring down depreciation expense, which more than offset any gains headwind that we saw.” 

Defendant Garcia stated further that “we probably haven’t raised our residuals fast enough” and 

“we’ve been kind of conservative in that.” 

159. Defendant Garcia’s statements were materially false and misleading because, at that 

time, Ryder’s vehicles’ residual values had materially decreased and its depreciation expense had 

materially increased, yet the Company failed to make the necessary adjustments to its residual 

values or depreciation expense. As described in Section IV.G., Ryder was not “kind of 

conservative” in establishing the residual values of its fleet, which were artificially inflated by 

hundreds of millions of dollars. 

160. On October 22, 2015, the Company issued a press release entitled “Ryder Reports 

Record Third Quarter 2015 Results” announcing its financial and operating results for the quarter 

ended September 30, 2015 (the “Third Quarter 2015 Press Release”). Ryder filed the Third 

Quarter 2015 Press Release for the three months ended September 30, 2015 with the SEC on Form 

8-K, which was signed by Defendant Garcia (the “Third Quarter 2015 Form 8-K”). The Third 

Quarter 2015 Press Release and Third Quarter 2015 Form 8-K reported a comparable EPS from 

Continuing Operations of $1.74, an EPS from Continuing Operations of $1.70, GAAP Earnings 

of $90.8 million, and Comparable Earnings of $93.3 million. 

161. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92 because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. This resulted in a material overstatement of its net earnings and earnings 

per share. 

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162. On October 22, 2015, Ryder also filed with the SEC its Form 10-Q for the quarter 

ended September 30, 2015, which was signed by Defendants Sanchez and Garcia (the “Third 

Quarter 2015 Form 10-Q”). The Third Quarter 2015 Form 10-Q contained the following financial 

metrics, each of which was either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings

Cost of lease and rental $550,541 Understated 

Gains on vehicles, net $29,294 Overstated 

Earnings from continuing 

operations before income 

taxes

$139,900 Overstated 

Provision for income taxes $49,089 Overstated 

Earnings from continuing 

operations

$90,811 Overstated 

Net earnings $90,619 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$1.71 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$1.69 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $90,619 Overstated 

Comprehensive income $52,332 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$712,169 Overstated 

Total assets $10,820,186 Overstated 

Retained earnings $1,612,744 Overstated 

Total shareholders’ equity $1,952,064 Overstated 

Total liabilities and 

shareholders’ equity

$10,820,186 Overstated 

Consolidated Statement of Cash Flows (Nine months ended September 30, 2015)

Net earnings $228,567 Overstated 

Depreciation expense $838,100 Understated 

Gains on used vehicle sales, 

net

$92,110 Overstated 

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163. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92, because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. In fact, as set forth in ¶¶90-92, Ryder significantly underreported its 

depreciation expenses during the Class Period. This resulted in a material overstatement of its net 

earnings, the value of its operating property and equipment, its total assets, retained earnings, and 

total shareholders’ equity. 

164. Also in Ryder’s Third Quarter 2015 Form 10-Q, Ryder reported that the Company’s 

lease and rental gross margin within its FMS business segment increased 8% in the third quarter 

of 2015 to $252.3 million and attributed the increase in margin, in part, to “benefits from improved 

residual values.” The Company also reported that earnings before tax in its FMS business segment 

increased 5% in the third quarter of 2015 to $126.4 million and stated that results benefited from 

$10.0 million of lower depreciation due to “residual value policy changes.” The Company also 

reported that revenue “[r]esults benefited from $10.0 million and $30.0 million of lower 

depreciation in the three and nine months ended September 30, 2015, respectively, due to residual 

value policy changes implemented January 1, 2015, driven by higher sales proceeds realized on 

used vehicles, as well as growth in average lease and rental fleet size.” 

165. These statements were materially false and misleading because, at that time, 

Ryder’s vehicles’ residual values had materially decreased and its depreciation expense had 

materially increased, yet the Company failed to make the necessary adjustments to its residual 

values or depreciation expense. 

166. On October 22, 2015, Defendants also held a conference call with investors to 

discuss Ryder’s third quarter 2015 financial results (the “Third Quarter 2015 Conference Call”). 

During the Third Quarter 2015 Conference Call, Defendant Sanchez assured investors that the 

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Company would realize a “benefit in depreciation due to higher residual values using our five-year 

rolling average methodology. We are currently conducting our annual residual value analysis and 

will provide an earnings benefit on this on our fourth quarter earnings call.” 

167. During the same conference call, in response to an analyst’s question whether, 

despite “gains on sales down in the order of magnitude of $30 million” for the following year, 

“you think you can offset most of that with residual value benefit?” Defendant Sanchez responded 

that “if you think about a price decline in that 5% to 10% range, gains are going to drop let’s say 

roughly $30 million . . . And what we’re saying is that in that environment we would expect our 

residual value uptick to probably offset the decline that’s going to occur in 2016.” 

168. Defendant Sanchez’s statements were materially false and misleading because, at 

that time, Ryder’s vehicles’ residual values had materially decreased and its depreciation expense 

had materially increased, yet the Company failed to make the necessary adjustments to its residual 

values or depreciation expense. 

The Fourth Quarter of 2015 and Full Year 2015 

169. On November 3, 2015, Defendants presented at the Goldman Sachs Industrial 

Conference. During the conference, an analyst asked Defendant Sanchez, “So if you have the 

environment where used trucks sales prices are coming down, can residual values still go up in 

that environment?” To which Defendant Sanchez responded “Well, they can because of the way 

we calculate our residual values . . . Obviously we step back and take a look at it and make sure 

that we're still selling vehicles below -- still selling vehicles above where our residual values are 

going to be set.” 

170. On November 10, 2015, Defendants participated in the Robert W. Baird & Co. 

Industrials Conference. During the conference, Defendant Sanchez explained that Ryder 

determines the residual value of its vehicles based on a rolling five-year average of Ryder’s used 

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truck sales prices and “as used truck pricing has really gone up we’ve been lagging in that just 

because you don’t want to overshoot the residual values.” Defendant Sanchez assured investors 

that “even in this environment I would expect that a five-year rolling average is going to cause an 

increase in residual values which is a benefit to depreciation expense” and “[s]o you kind of view 

used truck gains headwinds primarily offset by depreciation policy benefit.” 

171. The next day, on November 11, 2015, Defendants participated in the Stephens Fall 

Investment Conference. During the conference, Defendant Garcia falsely stated that, for 2016, 

Defendants “still would expect there to be a positive from residual values despite a declining 

environment [for used truck prices] here in the last few months.” Defendant Garcia also told 

investors that even though used truck prices were declining, “we’re still saying there’s still an 

opportunity to raise residuals in light of that.” 

172. The statements set forth in ¶¶169-71, above, were materially false and misleading 

because, at that time, Ryder’s vehicles’ residual values had materially decreased and its 

depreciation expense had materially increased, yet the Company failed to make the necessary 

adjustments to its residual values or depreciation expense. Specifically, it was materially 

misleading for Defendant Sanchez to state that “[o]bviously we step back and take a look at 

[residual values] and make sure that we're still selling vehicles below -- still selling vehicles above 

where our residual values are going to be set” when in fact, Ryder’s vehicles were almost 

universally selling below their listed residual values, as described by FE 10 in ¶116. 

173. On February 2, 2016, the Company issued a press release entitled “Ryder Reports 

Record Fourth Quarter and Full-Year 2015 Results, and Provides 2016 Forecast” announcing 

Ryder’s financial and operating results for the fourth quarter and full year ended December 31, 

2015 (the “Fourth Quarter 2015 Press Release”). Ryder filed the Fourth Quarter 2015 Press 

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Release with the SEC on Form 8-K, which was signed by Defendant Garcia (the “Fourth Quarter 

2015 Form 8-K”). The Fourth Quarter 2015 Press Release and Fourth Quarter 2015 Form 8-K 

reported Comparable EPS from Continuing Operations of $1.66, EPS from Continuing Operations 

of $1.42, GAAP earnings of $75.9 million, and Comparable Earnings of $88.8 million. 

174. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92, because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. This resulted in a material overstatement of its net earnings and earnings 

per share. 

175. The Fourth Quarter 2015 Press Release and Fourth Quarter 2015 Form 8-K also 

stated that Ryder’s full-service lease results benefited from “lower depreciation associated with 

increased residual values.” 

176. This statement was also materially false and misleading because, at that time, 

Ryder’s vehicles’ residual values had already materially decreased and its already depreciation 

expense had already materially increased, yet the Company failed to make the necessary 

adjustments to its residual values or depreciation expense. 

177. Ryder filed its Form 10-K for the year ended December 31, 2015 with the SEC on 

February 12, 2016, which was signed by Defendants Sanchez and Garcia (the “2015 Form 10-K”). 

The 2015 Form 10-K contained the following financial metrics, each of these which was either 

understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands) (Full year 2015)

Cost of lease and rental $2,153,450 Understated 

Gains on vehicles, net $117,809 Overstated 

Earnings from continuing 

operations before income 

taxes

$469,215 Overstated 

Provision for income taxes $163,226 Overstated 

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Earnings from continuing 

operations

$305,989 Overstated 

Net earnings $304,768 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$5.78 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$5.73 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $304,768 Overstated 

Comprehensive income $212,303 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$714,970 Overstated 

Total assets $10,967,809 Overstated 

Retained earnings $1,667,080 Overstated 

Total shareholders’ equity $1,987,111 Overstated 

Total liabilities and 

shareholders’ equity

$10,967,809 Overstated 

Consolidated Statement of Cash Flows

Net earnings $304,768 Overstated 

Depreciation expense $1,139,922 Understated 

Gains on used vehicle sales, 

net

$117,809 Overstated 

178. For the reasons set forth herein, the financial metrics set forth above in ¶177 were 

materially misstated in the manner set forth in ¶¶90-92, because Ryder failed to correctly reduce 

the residual values of its fleet vehicles or increase its depreciation expense. In fact, as set forth in 

¶¶90-92, Ryder had significantly underreported its depreciation expenses during the Class Period. 

This resulted in a material overstatement of its net earnings, the value of its operating property and 

equipment, its total assets, retained earnings, and total shareholders’ equity. 

179. In Ryder’s 2015 Form 10-K filed with the SEC on February 12, 2016, Ryder 

reported that the Company’s lease and rental gross margin within its FMS business segment 

increased 7% in 2015 to $968 million and attributed the increase in margin, in part, to “benefits 

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from improved vehicle residual values.” The 2015 Form 10-K also stated that full-service lease 

results benefited from “lower depreciation associated with increased residual values.” The 2015 

Form 10-K also stated that depreciation expense increased 8% in 2015, “partially offset by $40 

million . . . from changes in residual values.” 

180. These statements were materially false and misleading because, at that time, 

Ryder’s vehicles’ residual values had already materially decreased and its depreciation expense 

had already materially increased, yet the Company failed to make the necessary adjustments to its 

residual values or depreciation expense. 

181. On February 2, 2016, Ryder held a conference call with investors to discuss fourth 

quarter 2015 and full year 2015 earnings (the “Fourth Quarter 2015 Conference Call”). During 

the Fourth Quarter 2015 Conference Call, Defendant Sanchez falsely stated that “[s]ignificant 

increases in used vehicle pricing over the past five years will benefit depreciation rates in 2016, as 

these results are blended into our vehicle residual calculation,” and that “[t]hese benefits will 

partially offset lower expected gains on used vehicles sold.” After describing the headwinds from 

used vehicle sales and the forecasted decline in used vehicle pricing, Defendant Sanchez assured 

investors that “I feel really good about our ability to respond quickly to them.” 

182. Also during the Fourth Quarter 2015 Conference Call, in response to an analyst’s 

question about how the “expected decline in the used truck pricing” would impact the depreciation 

benefit going forward, Defendant Sanchez stated that “[i]f we had a type of bleak environment, as 

we’ve painted here, you would be in a situation probably 2017 where things would be flat . . . in 

terms of depreciation. So there wouldn’t be depreciation policy movement one way or the other.” 

183. Defendants Sanchez’s statements set forth in ¶¶181-82, above, were materially 

false and misleading because, at that time, Ryder’s vehicles’ residual values had already materially 

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decreased and its depreciation expense had already materially increased, yet the Company failed 

to make the necessary adjustments to its residual values or depreciation expense. 

The First Quarter of 2016 

184. On February 11, 2016, Defendants participated in the BB&T Transportation 

Services Conference. During the conference, Defendant Sanchez assured investors that “[w]e 

don’t have a situation where we’ve got a bunch of vehicles that are at high residual values [and] 

have to be written down.” 

185. This statement was materially false and misleading because, at that time, Ryder’s 

vehicles’ residual values had already materially decreased and its depreciation expense had already 

materially increased, yet the Company failed to make the necessary adjustments to its residual 

values or depreciation expense. In addition, Ryder in fact did have a large number of vehicles that 

are at high residual values that needed to be written down. Specifically, since Ryder had at least 

300 Ryder trucks and 450 tractors available for sale that had been at the Ryder Used Truck Centers 

for a year or more as of August 2016, those 300 trucks and 450 tractors had already been at the 

Used Truck Centers for at least six months as of February 2016 and they needed to be written 

down. 

186. On April 26, 2016, the Company issued a press release entitled “Ryder Reports 

Record First Quarter 2016 Results” announcing its financial and operating results for the quarter 

ended March 31, 2016 (the “First Quarter 2016 Press Release”). Ryder filed the First Quarter 2016 

Press Release with the SEC on Form 8-K and signed by Defendant Garcia (the “First Quarter 2016 

Form 8-K”). The First Quarter 2016 Press Release and First Quarter 2016 Form 8-K reported 

Comparable EPS from Continuing Operations of $1.12, GAAP EPS from Continuing Operations 

of $1.05, Comparable Earnings of $60.1 million, and GAAP Earnings of $56.2 million. The First 

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Quarter 2016 Press Release and First Quarter 2016 Form 8-K also stated that the Company’s fullservice lease results benefited from “lower depreciation associated with increased residual values.” 

187. These statements and financial metrics were materially misstated in the manner set 

forth in ¶¶90-92, because Ryder failed to correctly reduce the residual values of its fleet vehicles 

or increase its depreciation expense. This resulted in a material overstatement of its net earnings 

and earnings per share. 

188. On April 26, 2016, Ryder filed its Form 10-Q for the quarter ended March 31, 2016 

with the SEC, which was signed by Defendants Sanchez and Garcia (the “First Quarter 2016 Form 

10-Q”). The First Quarter 2016 Form 10-Q contained the following financial metrics, each of 

which was either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands)

Cost of lease and rental $552,490 Understated 

Gains on vehicles, net $19,129 Overstated 

Earnings from continuing 

operations before income 

taxes

$88,708 Overstated 

Provision for income taxes $32,523 Overstated 

Earnings from continuing 

operations

$56,185 Overstated 

Net earnings $55,794 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$1.05 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$1.04 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $55,794 Overstated 

Comprehensive income $74,193 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$717,444 Overstated 

Total assets $11,054,530 Overstated 

Retained earnings $1,700,816 Overstated 

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Total shareholders’ equity $2,045,318 Overstated 

Total liabilities and 

shareholders’ equity

$11,054,530 Overstated 

Consolidated Statement of Cash Flows

Net earnings $55,794 Overstated 

Depreciation expense $287,170 Understated 

Gains on used vehicle sales, 

net

$19,129 Overstated 

189. For the reasons set forth herein, the financial metrics set forth above in ¶188 were 

materially misstated in the manner set forth in ¶¶90-92, because Ryder failed to correctly reduce 

the residual values of its fleet vehicles or increase its depreciation expense. In fact, as set forth in 

¶¶90-92, Ryder had significantly underreported its depreciation expenses during the Class Period. 

This resulted in a material overstatement of its net earnings, the value of its operating property and 

equipment, its total assets, retained earnings, and total shareholders’ equity. 

190. In the First Quarter 2016 Form 10-Q, Ryder also reported that the Company’s lease 

and rental gross margin within its FMS business segment increased 2% in the first quarter of 2016 

to $215.3 million and attributed the increase in margin, in part, to “benefits from improved residual 

values.” The Company also stated that “[f]ull service lease and commercial rental results benefited 

from approximately $9 million of lower depreciation in the first quarter of 2016 due to residual 

value changes implemented January 1, 2016.” 

191. In the Investor Presentation that accompanied Ryder’s first quarter 2016 earnings 

call (“First Quarter 2016 Investor Presentation”), Ryder also stated that “Lease results benefited 

from fleet growth and vehicle residual value benefits.” 

192. The financial metrics and statements set forth above in ¶¶190-91 were materially 

misstated in the manner set forth in ¶¶90-92, because Ryder failed to correctly reduce the residual 

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values of its fleet vehicles or increase its depreciation expense. This resulted in material 

overstatement of its net earnings and margins. 

The Second Quarter of 2016 

193. On May 19, 2016, Defendants held a conference call with analysts and investors as 

part of Ryder’s 2016 Investor Day. During the conference call, Dennis Cooke, Ryder’s President 

of Global Fleet Management Solutions, stated that Ryder is “the largest retailer of used trucks in 

the industry, and so we have a higher residual as a result.” 

194. Also during the conference call, in response to an analyst’s question about whether 

Ryder expected the residual value to be flat over the next few years given the drop in used truck 

pricing, Defendant Garcia stated “[y]es.” 

195. These statements were materially false and misleading when made because, at that 

time, Ryder’s vehicles’ residual values had already materially decreased and its depreciation 

expense had already materially increased, yet the Company failed to make the necessary 

adjustments to its residual values or depreciation expense. In addition, Ryder had a large number 

of vehicles that were at high residual values and needed to be written down, as discussed in Section 

IV.I.. 

196. On July 27, 2016, the Company issued a press release entitled “Ryder Reports 

Second Quarter 2016 Results” announcing its financial and operating results for the quarter ended 

June 30, 2016 (the “Second Quarter 2016 Press Release”). The Second Quarter 2016 Press Release 

was filed with the SEC on Form 8-K and signed by Defendant Garcia (the “Second Quarter 2016 

Form 8-K”). The Second Quarter 2016 Press Release and Second Quarter 2016 Form 8-K reported 

GAAP EPS from Continuing Operations of $1.38, Comparable EPS from Continuing Operations 

of $1.56, GAAP Earnings of $116.8 and Comparable (non-GAAP) Earnings of $132.0 million. 

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197. The Second Quarter 2016 Press Release also reported that earnings before tax in 

the FMS business segment were $111.2 million in the second quarter of 2016, down 9% compared 

with $122.5 million in the same period of 2015, driven, in part, by lower results in used vehicle 

sales. However, the Second Quarter 2016 Press Release also stated that the Company’s fullservice lease and commercial rental results “benefited from lower depreciation associated with 

increased residual values.” 

198. These statements and financial metrics were materially misstated in the manner set 

forth in ¶¶90-92, because Ryder failed to correctly reduce the residual values of its fleet vehicles 

or increase its depreciation expense. This resulted in a material overstatement of its net earnings 

and earnings per share. 

199. On July 27, 2016, Ryder filed its Form 10-Q for the quarter ended June 30, 2016 

with the SEC, which was signed by Defendants Sanchez and Garcia (the “Second Quarter 2016 

Form 10-Q”). The Second Quarter 2016 Form 10-Q contained the following financial metrics, 

each of which was either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands)

Cost of lease and rental $555,302 Understated 

Losses on used vehicles, net $12,000 Understated 

Earnings from continuing 

operations before income 

taxes

$116,779 Overstated 

Provision for income taxes $42,737 Overstated 

Earnings from continuing 

operations

$74,042 Overstated 

Net earnings $73,750 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$1.39 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$1.38 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $73,750 Overstated 

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Comprehensive income $35,431 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$741,022 Overstated 

Total assets $11,136,127 Overstated 

Retained earnings $1,736,839 Overstated 

Total shareholders’ equity $2,047,098 Overstated 

Total liabilities and 

shareholders’ equity

$11,136,127 Overstated 

Consolidated Statement of Cash Flows (Six months ending June 30, 2016)

Net earnings $129,544 Overstated 

Depreciation expense $581,043 Understated 

Gains on used vehicle sales, 

net

$31,129 Overstated (loss) 

200. In the Second Quarter 2016 Form 10-Q, Ryder also reported that earnings before 

tax in its FMS business segment decreased 9% in the second quarter of 2016 and stated that “[f]ull 

service lease and commercial rental results benefited from approximately $9 million of lower 

depreciation in the second quarter and $17 million in the first half of 2016 due to residual value 

changes implemented January 1, 2016.” 

201. The financial metrics set forth above in ¶¶199-200 were materially misstated in the 

manner set forth in ¶¶90-92, because Ryder failed to correctly reduce the residual values of its fleet 

vehicles or increase its depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had 

significantly underreported its depreciation expenses during the Class Period. This resulted in a 

material overstatement of its net earnings, the value of its operating property and equipment, its 

total assets, retained earnings, and total shareholders’ equity. 

202. On July 27, 2016, Ryder also held a conference call with investors to discuss the 

Company’s second quarter 2016 earnings (the “Second Quarter 2016 Conference Call”). During 

the Second Quarter 2016 Conference Call, Defendant Sanchez stated that based on “what we’re 

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seeing in the current marketplace, . . . I wouldn’t envision an increase or decrease in residual values 

out over the next four, five years.” 

203. This statement was materially false and misleading at that time, Ryder’s vehicles’ 

residual values had already materially decreased and its depreciation expense had already 

materially increased, yet the Company failed to make the necessary adjustments to its residual 

values or depreciation expense. In addition, Ryder in fact did have a large number of vehicles that 

were at high residual values and needed to be written down. 

The Third Quarter of 2016 

204. On October 25, 2016, the Company issued a press release entitled “Ryder Reports 

Third Quarter 2016 Results” announcing its financial and operating results for the quarter ended 

September 30, 2016 (the “Third Quarter 2016 Press Release”). The Third Quarter 2016 Press 

Release was filed with the SEC on Form 8-K and signed by Defendant Garcia (the “Third Quarter 

2016 Form 8-K”). The Third Quarter 2016 Press Release and Third Quarter 2016 Form 8-K 

reported GAAP EPS from Continuing Operations of $1.59, Comparable EPS (non-GAAP) from 

Continuing Operations of $1.67, GAAP Earnings of $131.7 million and Comparable (non-GAAP) 

Earnings of $138.9 million. 

205. The Third Quarter 2016 Press Release and Third Quarter 2016 Form 8-K also 

reported that earnings before tax in the FMS business segment were $112.3 million in the third 

quarter of 2016, down 11% compared with $126.4 million in the same period of 2015, driven, in 

part, by lower results in used vehicle sales. However, the press release stated that the Company’s 

full-service lease and commercial rental results “benefited from lower depreciation associated with 

increased residual values.” 

206. These statements and financial metrics were materially misstated in the manner set 

forth in ¶¶90-92, because Ryder failed to correctly reduce the residual values of its fleet vehicles 

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or increase its depreciation expense. This resulted in a material overstatement of its net earnings 

and earnings per share. 

207. On October 25, 2016, Ryder also filed its quarterly report with the SEC on Form 

10-Q, which was signed by Defendants Sanchez and Garcia and reported the Company’s financial 

and operating results for the quarter ended September 30, 2016 (the “Third Quarter 2016 Form 10-

Q”). The Third Quarter 2016 Form 10-Q contained the following financial metrics, each of which 

was either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings

Cost of lease and rental $557,901 Understated 

Gains on vehicles, net $1,873 Overstated 

Earnings from continuing 

operations before income 

taxes

$131,698 Overstated 

Provision for income taxes $46,560 Overstated 

Earnings from continuing 

operations

$85,138 Overstated 

Net earnings $84,752 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$1.60 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$1.59 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $84,752 Overstated 

Comprehensive income $69,960 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$740,375 Overstated 

Total assets $11,108,773 Overstated 

Retained earnings $1,795,445 Overstated 

Total shareholders’ equity $2,097,041 Overstated 

Total liabilities and 

shareholders’ equity

$11,108,773 Overstated 

Consolidated Statement of Cash Flows (Nine months ending September 30)

Net earnings $214,296 Overstated 

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Depreciation expense $878,173 Understated 

Gains on used vehicle sales, 

net

$33,002 Overstated 

208. In the Third Quarter 2016 Form 10-Q, Ryder also reported that earnings before tax 

in its FMS business segment decreased 11% in the third quarter of 2016 driven, in part, by lower 

results in used vehicle sales but stated that “[f]ull service lease and commercial rental results 

benefited from approximately $9 million of lower depreciation in the third quarter and $26 million 

in the nine months ended September 30, 2016, due to residual value changes implemented January 

1, 2016.” 

209. These financial metrics and statements set forth above in ¶¶207-08 were materially 

misstated in the manner set forth in ¶¶90-92, because Ryder failed to correctly reduce the residual 

values of its fleet vehicles or increase its depreciation expense. In fact, as set forth in ¶¶90-92, 

Ryder had significantly underreported its depreciation expenses during the Class Period. This 

resulted in a material overstatement of its net earnings, the value of its operating property and 

equipment, its total assets, retained earnings, and total shareholders’ equity. 

The Fourth Quarter of 2016 and Full Year 2016 

210. On November 8, 2016, Defendants participated in the Stephens Fall Investor 

Conference. During the conference, Defendant Garcia stated that the decline in used truck prices 

that the Company has experienced “will not result in us changing residuals right now.” 

211. This statement was materially false and misleading because, at that time, Ryder’s 

vehicles’ residual values had already materially decreased and its depreciation expense had already 

materially increased, yet the Company failed to make the necessary adjustments to its residual 

values or depreciation expense. In addition, Ryder in fact did have a large number of vehicles that 

were at high residual values and needed to be written down. 

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212. On February 2, 2017, the Company issued a press release entitled “Ryder Reports 

Fourth Quarter and Full-Year 2016 Results, and Provides 2017 Forecast” announcing its financial 

and operating results for the quarter ended September 30, 2016 (the “Fourth Quarter 2016 Press 

Release”). The Fourth Quarter 2016 Press Release was filed with the SEC on Form 8-K and signed 

by Defendant Garcia (the “Fourth Quarter 2016 Form 8-K”). The Fourth Quarter 2016 Press 

Release and Fourth Quarter 2016 Form 8-K reported GAAP EPS of $0.92, Comparable (NonGAAP) EPS of $1.07, EPS Earnings of $69.2 million, and Comparable (non-GAAP) Earnings of 

$82.3 million. 

213. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92, because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had significantly underreported its 

depreciation expenses during the Class Period. This resulted in a material overstatement of its net 

earnings and earnings per share. 

214. On February 14, 2017, Ryder filed its annual report on Form 10-K with the SEC, 

which was signed by Defendants Sanchez and Garcia and reported the Company’s financial and 

operating results for the year ended December 31, 2016 (the “2016 Form 10-K”). The 2016 Form 

10-K contained the following financial metrics, each of which was either understated or overstated, 

as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands) (Full year 2016)

Cost of lease and rental $2,234,284 Understated 

Gains on vehicles, net $972 Overstated 

Earnings from continuing 

operations before income 

taxes

$406,381 Overstated 

Provision for income taxes $141,741 Overstated 

Earnings from continuing 

operations

$264,640 Overstated 

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Net earnings $262,477 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$4.94 Overstated 

Earnings per common 

share—Diluted Net Earnings

$4.90 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $262,477 Overstated 

Comprehensive income $141,180 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$745,870 Overstated 

Total assets $10,902,454 Overstated 

Retained earnings $1,827,026 Overstated 

Total shareholders’ equity $2,052,275 Overstated 

Total liabilities and 

shareholders’ equity

$10,902,454 Overstated 

Consolidated Statement of Cash Flows

Net earnings $262,477 Overstated 

Depreciation expense $1,187,050 Understated 

Gains on used vehicle sales, 

net

$972 Overstated 

215. The 2016 Form 10-K also stated that depreciation expense increased 6% in 2016 

and increased 7% in 2015 and stated that “[t]he increases in both years were partially offset by $35 

million and $40 million, respectively, from increases in residual values.” The Company also stated 

that “[f]ull service lease and commercial rental results benefited from lower depreciation of $35 

million due to residual value changes implemented January 1, 2016.” 

216. The financial metrics set forth above in ¶¶214-215 were materially misstated in the 

manner set forth in ¶¶90-92, because Ryder failed to correctly reduce the residual values of its fleet 

vehicles or increase its depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had 

significantly underreported its depreciation expenses during the Class Period. This resulted in a 

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material overstatement of its net earnings, the value of its operating property and equipment, its 

total assets, retained earnings, and total shareholders’ equity. 

217. That same day, Defendants participated in the Stifel Transportation & Logistics 

Conference. During that conference, in response to an analyst’s question about whether the 

Company would be revisiting its residual values, Defendant Garcia stated that “most likely, it’s 

going to go down a little bit.” 

218. Defendant Garcia’s statement was materially false and misleading because, at that 

time, Ryder’s vehicles’ residual values had already materially decreased and its depreciation 

expense had materially increased, yet the Company failed to make the necessary adjustments to its 

residual values or depreciation expense valued at hundreds of millions of dollars. In addition, 

Ryder in fact did have a large number of vehicles that were at excessively high residual values and 

needed to be written down. 

The First Quarter of 2017 

219. On April 25, 2017, the Company issued a press release entitled “Ryder Reports 

First Quarter 2017 Results” announcing its financial and operating results for the quarter ended 

March 31, 2017 (the “First Quarter 2017 Press Release”). The First Quarter 2017 Press Release 

was filed with the SEC on Form 8-K and signed by Defendant Garcia (the “First Quarter 2017 

Form 8-K”). The First Quarter 2017 Press Release and First Quarter 2017 Form 8-K reported 

GAAP EPS of $0.71, Comparable (Non-GAAP) EPS of $0.82, EPS Earnings of $60.0 million, 

and Comparable (non-GAAP) Earnings of $69.4 million. 

220. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92, because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had significantly underreported its 

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depreciation expenses during the Class Period. This resulted in a material overstatement of its net 

earnings and earnings per share. 

221. On April 25, 2017, Ryder also filed its quarterly report with the SEC on Form 10-

Q, which was signed by Defendants Sanchez and Garcia and reported the Company’s financial 

and operating results for the quarter ended March 31, 2017 (the “First Quarter 2017 Form 10-Q”). 

The First Quarter 2017 Form 10-Q contained the following financial metrics, each of which was 

either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands)

Cost of lease and rental $578,762 Understated 

Gains on vehicles, net $780 Overstated 

Earnings from continuing 

operations before income 

taxes

$59,956 Overstated 

Provision for income taxes $21,677 Overstated 

Earnings from continuing 

operations

$38,279 Overstated 

Net earnings $38,149 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$0.72 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$0.71 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $38,149 Overstated 

Comprehensive income $58,955 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$754,307 Overstated 

Total assets $10,973,807 Overstated 

Retained earnings $1,829,114 Overstated 

Total shareholders’ equity $2,079,796 Overstated 

Total liabilities and 

shareholders’ equity

$10,973,807 Overstated 

Consolidated Statement of Cash Flows

Net earnings $38,149 Overstated 

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Depreciation expense $311,207 Understated 

Gains on used vehicle sales, 

net

$780 Overstated 

222. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92, because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had significantly underreported its 

depreciation expenses during the Class Period. This resulted in a material overstatement of its net 

earnings, the value of its operating property and equipment, its total assets, retained earnings, and 

total shareholders’ equity. 

The Second Quarter of 2017 

223. On July 26, 2017, the Company issued a press release entitled “Ryder Reports 

Second Quarter 2017 Results” announcing its financial and operating results for the quarter ended 

June 30, 2017 (the “Second Quarter 2017 Press Release”). The Second Quarter 2017 Press Release 

was filed with the SEC on Form 8-K and signed by Defendant Garcia (the “Second Quarter 2017 

Form 8-K”). The Second Quarter 2017 Press Release and Second Quarter 2017 Form 8-K reported 

GAAP EPS of $0.97, Comparable (non-GAAP) EPS of $1.00, GAAP Earnings of $80.7, and 

Comparable (non-GAAP) Earnings of $84.7 million. 

224. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92, because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had significantly underreported its 

depreciation expenses during the Class Period. This resulted in a material overstatement of its net 

earnings and earnings per share. 

225. On July 26, 2017, Ryder also filed its quarterly report on Form 10-Q with the SEC, 

which was signed by Defendants Sanchez and Garcia and reported the Company’s financial and 

operating results for the quarter ended June 30, 2017 (the “Second Quarter 2017 Form 10-Q”). 

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The Second Quarter 2017 Form 10-Q contained the following financial metrics, each of which was 

either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands)

Cost of lease and rental $578,389 Understated 

Losses on vehicles, net $15,322 Understated 

Earnings from continuing 

operations before income 

taxes

$80,692 Overstated 

Provision for income taxes $29,349 Overstated 

Earnings from continuing 

operations

$51,343 Overstated 

Net earnings $50,816 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$0.96 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$0.96 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $50,816 Overstated 

Comprehensive income $83,822 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$762,404 Overstated 

Total assets $11,124,784 Overstated 

Retained earnings $1,827,139 Overstated 

Total shareholders’ equity $2,106,099 Overstated 

Total liabilities and 

shareholders’ equity

$11,124,784 Overstated 

Consolidated Statement of Cash Flows (Six months ended June 30)

Net earnings $88,965 Overstated 

Depreciation expense $621,020 Understated 

Losses on used vehicle sales, 

net

$14,542 Understated 

226. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92, because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had significantly underreported its 

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depreciation expenses during the Class Period. This resulted in a material overstatement of its net 

earnings, the value of its operating property and equipment, its total assets, retained earnings, and 

total shareholders’ equity. 

The Third Quarter of 2017 

227. On October 25, 2017, the Company issued a press release entitled “Ryder Reports 

Third Quarter 2017 Results” announcing its financial and operating results for the quarter ended 

September 30, 2017 (the “Third Quarter 2017 Press Release”). The Third Quarter 2017 Press 

Release was filed with the SEC on Form 8-K and signed by Defendant Garcia (the “Third Quarter 

2017 Form 8-K”). The Third Quarter 2017 Press Release and Third Quarter 2017 Form 8-K 

reported GAAP EPS from Continuing Operations of $1.11, Comparable EPS from Continuing 

Operations of $1.33, GAAP Earnings of $94.2 million, and Comparable (non-GAAP) Earnings of 

$111.0 million. 

228. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92, because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had significantly underreported its 

depreciation expenses during the Class Period. This resulted in a material overstatement of its net 

earnings and earnings per share. 

229. On October 25, 2017, Ryder filed its quarterly report with the SEC on Form 10-Q, 

which was signed by Defendants Sanchez and Garcia and reported the Company’s financial and 

operating results for the quarter ended September 30, 2017 (the “Third Quarter 2017 Form 10-Q”). 

The Third Quarter 2017 Form 10-Q contained the following financial metrics, each of which was 

either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands)

Cost of lease and rental $588,626 Understated 

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Gains on vehicles, net $2,727 Overstated 

Earnings from continuing 

operations before income 

taxes

$94,343 Overstated 

Provision for income taxes $35,430 Overstated 

Earnings from continuing 

operations

$58,913 Overstated 

Net earnings $58,623 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$1.11 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$1.11 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $58,623 Overstated 

Comprehensive income $92,029 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$778,879 Overstated 

Total assets $11,258,974 Overstated 

Retained earnings $1,855,806 Overstated 

Total shareholders’ equity $2,175,064 Overstated 

Total liabilities and 

shareholders’ equity

$11,278,974 Overstated 

Consolidated Statement of Cash Flows (Nine months ended September 30)

Net earnings $147,588 Overstated 

Depreciation expense $932,772 Understated 

Losses on used vehicle sales, 

net

$11,815 Understated 

230. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92, because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had significantly underreported its 

depreciation expenses during the Class Period. This resulted in a material overstatement of its net 

earnings, the value of its operating property and equipment, its total assets, retained earnings, and 

total shareholders’ equity. 

The Fourth Quarter of 2017 and Full Year 2017 

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231. On February 16, 2018, the Company issued a press release entitled “Ryder Reports 

Fourth Quarter and Full-Year 2017 Results, and Provides 2018 Forecast” announcing its financial 

and operating results for the year ended December 31, 2017 (the “Fourth Quarter 2017 Press 

Release”). The Fourth Quarter 2017 Press Release was filed with the SEC on Form 8-K and signed 

by Defendant Garcia (the “Fourth Quarter 2017 Form 8-K”). The Fourth Quarter 2017 Press 

Release and Third Quarter 2017 Form 8-K reported GAAP EPS from Continuing Operations of 

$12.10 (includes one-time net benefit from 2017 tax reform), Comparable EPS (non-GAAP) from 

Continuing Operations of $1.37, GAAP Earnings of $78.8 million, and Comparable (non-GAAP) 

Earnings of $104.5 million. 

232. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92, because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had significantly underreported its 

depreciation expenses during the Class Period. This resulted in a material overstatement of its net 

earnings and earnings per share. 

233. On February 20, 2018, Ryder filed its Form 10-K for the year ended December 31, 

2017 with the SEC, which was signed by Defendants Sanchez and Garcia (the “2017 Form 10-

K”). The 2017 Form 10-K contained the following financial metrics, each of which was either 

understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands) (Full year 2017)

Cost of lease and rental $2,355,043 Understated 

Gains on vehicles, net $17,241 Understated 

Earnings from continuing 

operations before income 

taxes

$313,786 Overstated 

Provision for income taxes ($477,229) Benefit is understated 

Earnings from continuing 

operations

$791,015 Overstated 

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Net earnings $790,558 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$14.97 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$14.87 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $790,558 Overstated 

Comprehensive income $917,089 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$776,704 Overstated 

Total assets $11,452,231 Overstated 

Retained earnings $2,465,022 Overstated 

Total shareholders’ equity $2,835,016 Overstated 

Total liabilities and 

shareholders’ equity

$11,452,231 Overstated 

Consolidated Statement of Cash Flows

Net earnings $790,558 Overstated 

Depreciation expense $1,255,175 Understated 

Losses on used vehicle sales, 

net

$17,241 Understated 

234. Ryder’s 2017 Form 10-K also reported that “lease and rental gross margin . . . 

decreased 3% and gross margin as a percentage of revenue decreased to 30% in 2016, due to lower 

commercial rental demand, partially offset by lease fleet growth, as well as benefits from improved 

residual values.” The 2017 Form 10-K also stated that “ChoiceLease and commercial rental results 

benefited from lower depreciation of $35 million due to residual value changes implemented on 

January 1, 2016.” 

235. The statements and financial metrics set forth above in ¶¶233-34 were materially 

misstated in the manner set forth in ¶¶90-92, because Ryder failed to correctly reduce the residual 

values of its fleet vehicles or increase its depreciation expense. In fact, as set forth in ¶¶90-92, 

Ryder had significantly underreported its depreciation expenses during the Class Period. This 

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resulted in a material overstatement of its net earnings, the value of its operating property and 

equipment, its total assets, retained earnings, and total shareholders’ equity. 

236. On February 16, 2018, Ryder also held a conference call with investors to discuss 

the Company’s fourth quarter and full-year 2017 earnings (the “Fourth Quarter 2017 Conference 

Call”). During the Fourth Quarter 2017 Conference Call, an analyst asked “what is it that’s driving 

the change in residuals and the additional depreciation that you’re taking? Is it something specific 

with the vintage of equipment that you’re seeing? Or is it the expectation as you look out and the 

supply that’s coming into—potentially coming into the market here into ’18? If you can just give 

us a sense of maybe why some of the fundamentals seem a little bit better, but you are still dealing 

with the change in the residuals and the incremental depreciation.” Defendant Garcia responded 

that, based on Ryder’s expectations for used truck pricing, depreciation will be at “a lower level 

than what we had seen this year.” 

237. These statements were materially false and misleading because, at that time, 

Ryder’s vehicles’ residual values had materially decreased and its depreciation expense had 

materially increased, yet the Company failed to make the necessary adjustments to its residual 

values or depreciation expense. In addition, Ryder in fact did have a large number of vehicles that 

are at high residual values that needed to be written down. 

The First Quarter of 2018 

238. On February 22, 2018, Ryder presented at the Citi Global Industrials Conference. 

In his presentation, Defendants Sanchez stated, in touting the success of the Company despite some 

headwinds, that “[i]f you were to take out the negative impact of used trucks and depreciation, 

we’d be up 15% on an – from an earnings standpoint.” 

239. Defendant Sanchez’s statement was materially false and misleading because, at that 

time, Ryder’s vehicles’ residual values had already materially decreased and its depreciation 

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expense had already materially increased, yet the Company failed to make the necessary 

adjustments to its residual values or depreciation expense. In fact, as set forth in ¶¶90-92, Ryder 

had significantly underreported its depreciation expenses during the Class Period. Thus, it was 

not true that “[i]f you were to take out the negative impact of used trucks and depreciation, we’d 

be up 15% on an – from an earnings standpoint.” 

240. On April 24, 2018, the Company issued a press release entitled “Ryder Reports 

First Quarter 2018 Results” announcing its financial and operating results for the quarter ended 

March 31, 2018 (the “First Quarter 2018 Press Release”). The First Quarter 2018 Press Release 

was filed with the SEC on Form 8-K and signed by Defendant Garcia (the “First Quarter 2018 

Form 8-K”). The First Quarter 2018 Press Release and First Quarter 2018 Form 8-K reported 

GAAP EPS From Continuing Operations of $0.64, Comparable EPS (non-GAAP) from 

Continuing Operations of $0.91, GAAP Earnings of $48.1 million, and Comparable (non-GAAP) 

Earnings of $65.1 million. 

241. These financial metrics were materially misstated in the manner set forth in ¶¶90-

92, because Ryder failed to correctly reduce the residual values of its fleet vehicles or increase its 

depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had significantly underreported its 

depreciation expenses during the Class Period. This resulted in a material overstatement of its net 

earnings and earnings per share. 

242. On May 2, 2018, Ryder filed its Form 10-Q for the quarter ended March 31, 2018 

with the SEC, which was signed by Defendants Sanchez and Garcia (the “First Quarter 2018 Form 

10-Q”). The First Quarter 2018 Form 10-Q contained the following financial metrics, each of 

which was either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands)

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Cost of lease and rental $619,207 Understated 

Losses on vehicles, net $7,409 Understated 

Earnings from continuing 

operations before income 

taxes

$48,100 Overstated 

Provision for income taxes $14,168 Overstated 

Earnings from continuing 

operations

$33,932 Overstated 

Net earnings $33,505 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$0.64 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$0.63 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $33,505 Overstated 

Comprehensive income $51,003 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$790,476 Overstated 

Total assets $11,736,157 Overstated 

Retained earnings $2,468,005 Overstated 

Total shareholders’ equity $2,858,815 Overstated 

Total liabilities and 

shareholders’ equity

$11,736,157 Overstated 

Consolidated Statement of Cash Flows

Net earnings $33,505 Overstated 

Depreciation expense $336,745 Understated 

Gains on used vehicle sales, 

net

$7,409 Understated 

243. The financial metrics set forth above in ¶242 were materially misstated in the 

manner set forth in ¶¶90-92, because Ryder failed to correctly reduce the residual values of its fleet 

vehicles or increase its depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had 

significantly underreported its depreciation expenses during the Class Period. This resulted in a 

material overstatement of its net earnings, the value of its operating property and equipment, its 

total assets, retained earnings, and total shareholders’ equity. 

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244. On April 24, 2018, Ryder also held a conference call with investors to discuss first 

quarter 2018 earnings (the “First Quarter 2018 Conference Call”). During the First Quarter 2018 

Conference Call, in response to an analyst’s question about what the Company’s residual value 

adjustment would be for 2019, Defendant Garcia stated that “[i]t could be a little bit less than what 

it was this year” and guided analysts to “model[] in that $30 million to $40 million range.” 

Defendant Sanchez also assured investors during the First Quarter 2018 Conference Call that “the 

earnings in the rest of the business is going to more than offset the earnings headwind from used 

vehicle sales and depreciation.” 

245. These statements were materially false and misleading because, at that time, 

Ryder’s vehicles’ residual values had materially decreased and its depreciation expense had 

materially increased, yet the Company failed to make the necessary adjustments to its residual 

values or depreciation expense. In addition, Ryder in fact did have a large number of vehicles that 

were at high residual values and needed to be written down. 

The Second Quarter of 2018 

246. On July 25, 2018, the Company issued a press release entitled “Ryder Reports 

Second Quarter 2018 Results” announcing its financial and operating results for the quarter ended 

June 30, 2018 (the “Second Quarter 2018 Press Release”). The Second Quarter 2018 Press Release 

was filed with the SEC on Form 8-K and signed by Defendant Garcia (the “Second Quarter 2018 

Form 8-K”). The Second Quarter 2018 Press Release and Second Quarter 2018 Form 8-K reported 

a GAAP EPS from Continuing Operations of $0.82, a Comparable EPS (non-GAAP) from 

Continuing Operations of $1.42, GAAP Earnings of $98.3 million, and Comparable (non-GAAP) 

Earnings of $102.8 million. 

247. On July 25, 2018, Ryder also filed its Form 10-Q for the quarter ended June 30, 

2018 with the SEC, which was signed by Defendants Sanchez and Garcia (the “Second Quarter 

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2018 Form 10-Q”). The Second Quarter 2018 Form 10-Q contained the following financial 

metrics, each of which was either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands)

Cost of lease and rental $636,359 Understated 

Losses on vehicles, net $6,013 Understated 

Earnings from continuing 

operations before income 

taxes

$98,283 Overstated 

Provision for income taxes $54,764 Overstated 

Earnings from continuing 

operations

$43,519 Overstated 

Net earnings $42,258 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$0.80 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$0.80 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $42,258 Overstated 

Comprehensive income $4,861 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$823,893 Overstated 

Total assets $12,228,866 Overstated 

Retained earnings $2,580,262 Overstated 

Total shareholders’ equity $2,841,403 Overstated 

Total liabilities and 

shareholders’ equity

$12,228,866 Overstated 

Consolidated Statement of Cash Flows (Six months ended June 30)

Net earnings $75,763 Overstated 

Depreciation expense $681,285 Understated 

Losses on used vehicle sales, 

net

$13,422 Understated 

248. These financial metrics set forth above in ¶¶246-47 were materially misstated in 

the manner set forth in ¶¶90-92, because Ryder failed to correctly reduce the residual values of its 

fleet vehicles or increase its depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had 

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significantly underreported its depreciation expenses during the Class Period. This resulted in a 

material overstatement of its net earnings, earnings per share, the value of its operating property 

and equipment, its total assets, retained earnings, and total shareholders’ equity. 

249. On the same day, Ryder held a conference call with investors to discuss second 

quarter 2018 earnings (the “Second Quarter 2018 Conference Call”). During this call, in response 

to an analyst question asking if “there’s any renewed focus on accelerating the growth within DTS 

and SCS” “given some of the headwinds in recent years with some of the cyclical elements.” In 

response, Defendant Sanchez stated “you can look at ChoiceLease today as being more derisked 

than it has historically” as “we’ve lowered that residual to generally the current levels that we’re 

seeing today as opposed to using our normal rolling 5-year average.” 

250. This statement was materially false and misleading because, at that time, Ryder’s 

vehicles’ residual values had already materially decreased and its depreciation expense already 

had materially increased, yet the Company failed to make the necessary adjustments to its residual 

values or depreciation expense. ChoiceLease was nowhere near “derisked.” 

The Third Quarter of 2018 

251. On October 26, 2018, the Company issued a press release entitled “Ryder Reports 

Third Quarter 2018 Results” announcing its financial and operating results for the quarter ended 

September 30, 2018 (the “Third Quarter 2018 Press Release”). The Third Quarter 2018 Press 

Release was filed with the SEC on Form 8-K and signed by Defendant Garcia (the “Third Quarter 

2018 Form 8-K”). The Third Quarter 2018 Press Release and Third Quarter 2018 Form 8-K 

reported GAAP EPS from Continuing Operations of $1.69, Comparable EPS from Continuing 

Operations of $1.64, GAAP Earnings of $116.1, and Comparable (non-GAAP) Earnings of $117.6 

million. 

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252. On October 26, 2018, Ryder also filed its Form 10-Q for the quarter ended 

September 30, 2018 with the SEC, which was signed by Defendants Sanchez and Garcia (the 

“Third Quarter 2018 Form 10-Q”). The Third Quarter 2018 Form 10-Q contained the following 

financial metrics, each of which was either understated or overstated, as set forth in the chart 

below: 

Consolidated Statement of Earnings ($ in thousands)

Cost of lease and rental $649,407 Understated 

Losses on vehicles, net $3,012 Understated 

Earnings from continuing 

operations before income 

taxes

$116,140 Overstated 

Provision for income taxes $26,629 Overstated 

Earnings from continuing 

operations

$89,511 Overstated 

Net earnings $88,751 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$1.69 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$1.68 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $88,751 Overstated 

Comprehensive income $100,571 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$826,183 Overstated 

Total assets $12,684,305 Overstated 

Retained earnings $2,632,589 Overstated 

Total shareholders’ equity $2,918,398 Overstated 

Total liabilities and 

shareholders’ equity

$12,684,305 Overstated 

Consolidated Statement of Cash Flows (Nine months ended September 30)

Net earnings $164,514 Overstated 

Depreciation expense $1,028,491 Understated 

Losses on used vehicle sales, 

net

$16,434 Understated 

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253. The financial metrics set forth above in ¶¶251-52 were materially misstated in the 

manner set forth in ¶¶90-92, because Ryder failed to correctly reduce the residual values of its fleet 

vehicles or increase its depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had 

significantly underreported its depreciation expenses during the Class Period. This resulted in a 

material overstatement of its net earnings, earnings per share, the value of its operating property 

and equipment, its total assets, retained earnings, and total shareholders’ equity. 

254. On October 26, 2018, Defendants held a conference call with investors to discuss 

Ryder’s third quarter 2018 earnings (the “Third Quarter 2018 Conference Call”). During the Third 

Quarter 2018 Conference Call, Defendant Sanchez assured investors that, with respect to the 

Company’s accounting treatment of its residual values, Ryder “keep[s] the residuals in the middle 

of the fairway as best we can.” 

255. This statement was materially false and misleading because, at that time, Ryder’s 

vehicles’ residual values had already materially decreased and its depreciation expense had 

materially increased, yet the Company failed to make the necessary adjustments to its residual 

values or depreciation expense. In addition, Ryder’s residual values were grossly inflated, as 

evidenced by the Company’s later admissions and set forth in ¶¶134-47, and were in no way “in 

the middle of the fairway.” 

The Fourth Quarter of 2018 and Full Year 2018 

256. On February 14, 2019, the Company issued a press release entitled “Ryder Reports 

Record 2018 Revenue of $8.4 Billion, Up 15%; Strong Contractual Revenue Growth Drives 2019 

Earnings Forecast” announcing its financial and operating results for the year ended December 31, 

2018 (the “Fourth Quarter 2018 Press Release”). The Fourth Quarter 2018 Press Release was filed 

with the SEC on Form 8-K and signed by Defendant Garcia (the “Fourth Quarter 2018 Form 8-

K”). The Fourth Quarter 2018 Press Release and Fourth Quarter 2018 Form 8-K reported GAAP 

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EPS from Continuing Operations of $2.05, Comparable EPS (non-GAAP) from Continuing 

Operations of $1.82, GAAP Earnings of $111.3 million, and Comparable (non-GAAP) Earnings 

of $121.0 million. 

257. On February 21, 2019, Ryder filed its annual Form 10-K for the year ended 

December 31, 2018 with the SEC, which was signed by Defendants Sanchez and Garcia (the “2018 

Form 10-K”). The 2018 Form 10-K contained the following financial metrics, each of which was 

either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands) (Full year 2018)

Cost of lease and rental $2,566,257 Understated 

Losses on vehicles, net $21,739 Understated 

Earnings from continuing 

operations before income 

taxes

$373,861 Overstated 

Provision for income taxes $98,254 Overstated 

Earnings from continuing 

operations

$275,607 Overstated 

Net earnings $273,298 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$5.20 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$5.17 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $273,298 Overstated 

Comprehensive income $170,047 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$843,813 Overstated 

Total assets $13,051,084 Overstated 

Retained earnings $2,710,696 Overstated 

Total shareholders’ equity $2,910,327 Overstated 

Total liabilities and 

shareholders’ equity

$13,051,084 Overstated 

Consolidated Statement of Cash Flows

Net earnings $273,298 Overstated 

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Depreciation expense $1,394,964 Understated 

Gains on used vehicle sales, 

net

$21,739 Understated 

258. The financial metrics set forth above in ¶¶256-57 were materially misstated in the 

manner set forth in ¶¶90-92, because Ryder failed to correctly reduce the residual values of its fleet 

vehicles or increase its depreciation expense. In fact, as set forth in ¶, Ryder had significantly 

underreported its depreciation expenses during the Class Period. This resulted in a material 

overstatement of its net earnings, earnings per share, the value of its operating property and 

equipment, its total assets, retained earnings, and total shareholders’ equity. 

The First Quarter of 2019 

259. On April 30, 2019, the Company issued a press release entitled “Ryder Reports 

First Quarter 2019 Revenue of $2.2 Billion, Up 15%” announcing its financial and operating 

results for the quarter ended March 31, 2019 (the “First Quarter 2019 Press Release”). The First 

Quarter 2019 Press Release was filed with the SEC on Form 8-K and signed by CFO Parker (the 

“First Quarter 2019 Form 8-K”). The First Quarter 2019 Press Release and First Quarter 2019 

Form 8-K reported GAAP EPS from Continuing Operations to $0.87, Comparable EPS (nonGAAP) from Continuing Operations of $1.11, GAAP Earnings of $68.2 million, Comparable 

(non-GAAP) Earnings of $80.8 million. 

260. On May 9, 2019, Ryder filed its Form 10-Q for the quarter ended March 31, 2019 

with the SEC, which was signed by Defendant Sanchez and CFO Parker (the “First Quarter 2019 

Form 10-Q”). The First Quarter 2019 Form 10-Q contained the following financial metrics, each 

of which was either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings

Cost of lease and rental $664,289 Understated 

Losses on vehicles, net $8,217 Understated 

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Earnings from continuing 

operations before income 

taxes

$68,151 Overstated 

Provision for income taxes $22,261 Overstated 

Earnings from continuing 

operations

$45,890 Overstated 

Net earnings $45,316 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$0.86 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$0.86 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $45,316 Overstated 

Comprehensive income $66,532 Overstated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$871,524 Overstated 

Total assets $13,948,985 Overstated 

Retained earnings $2,343,857 Overstated 

Total shareholders’ equity $2,566,804 Overstated 

Total liabilities and 

shareholders’ equity

$13,948,985 Overstated 

Consolidated Statement of Cash Flows

Net earnings $45,316 Overstated 

Depreciation expense $377,357 Understated 

Losses on used vehicle sales, 

net

$8,217 Understated 

261. The financial metrics set forth above in ¶¶259-60 were materially misstated in the 

manner set forth in ¶¶90-92, because Ryder failed to correctly reduce the residual values of its fleet 

vehicles or increase its depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had 

significantly underreported its depreciation expenses during the Class Period. This resulted in a 

material overstatement of its net earnings, earnings per share, the value of its operating property 

and equipment, its total assets, retained earnings, and total shareholders’ equity. 

The Second Quarter of 2019 

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262. On July 30, 2019, the Company issued a press release entitled “Ryder Reports 

Record Second Quarter 2019 Revenue of $2.2 Billion, Up 7%” announcing its financial and 

operating results for the quarter ended June 31, 2019 (the “Second Quarter 2019 Press Release”). 

The Second Quarter 2019 Press Release was filed with the SEC on Form 8-K and signed by 

Defendant Parker (the “Second Quarter 2019 Form 8-K”). The Second Quarter 2019 Press Release 

and Second Quarter 2019 Form 8-K reported GAAP EPS from Continuing Operations of $1.43, 

Comparable EPS (non-GAAP) from Continuing Operations of $1.40, GAAP Earnings of $103.1 

million, and Comparable (non-GAAP) Earnings of $101.0 million. 

263. On July 30, 2019, Ryder also filed its Form 10-Q for the quarter ended June 31, 

2019 with the SEC, which was signed by Defendant Sanchez and CFO Parker (the “Second Quarter 

2019 Form 10-Q”). The Second Quarter 2019 Form 10-Q contained the following financial 

metrices, each of which was either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands)

Cost of lease and rental $687,540 Understated 

Losses on vehicles, net $18,140 Understated 

Earnings from continuing 

operations before income 

taxes

$103,069 Overstated 

Provision for income taxes $27,617 Overstated 

Earnings from continuing 

operations

$75,452 Overstated 

Net earnings $75,215 Overstated 

Earnings (loss) per common 

share—Basic Net Earnings

$1.43 Overstated 

Earnings (loss) per common 

share—Diluted Net Earnings

$1.43 Overstated 

Consolidated Statement of Comprehensive Income

Net earnings $72,215 Overstated 

Comprehensive income $66,245 Overstated 

Consolidated Balance Sheet

Operating property and $866,908 Overstated 

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equipment, net of 

accumulated depreciation

Total assets $14,522,054 Overstated 

Retained earnings $2,385,620 Overstated 

Total shareholders’ equity $2,607,706 Overstated 

Total liabilities and 

shareholders’ equity

$14,522,054 Overstated 

Consolidated Statement of Cash Flows (Six months ended June 30)

Net earnings $120,531 Overstated 

Depreciation expense $768,030 Understated 

Losses on used vehicle sales, 

net

$26,357 Understated 

264. The financial metrics set forth above in ¶¶262-63 were materially misstated in the 

manner set forth in ¶¶90-92, because Ryder failed to correctly reduce the residual values of its fleet 

vehicles or increase its depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had 

significantly underreported its depreciation expenses during the Class Period. This resulted in a 

material overstatement of its net earnings, the value of its operating property and equipment, its 

total assets, retained earnings, and total shareholders’ equity. 

The Third Quarter of 2019 

265. On October 29, 2019, the Company issued a press release entitled “Ryder Reports 

Third Quarter 2019 Revenue of $2.2 Billion, Up 3%; Earnings Impacted by Change in Residual 

Value Estimates” announcing its financial and operating results for the quarter ended September 

30, 2019 (the “Third Quarter 2019 Press Release”). The Third Quarter 2019 Press Release was 

filed with the SEC on Form 8-K and signed by Defendant Parker (the “Third Quarter 2019 Form 

8-K”). The Third Quarter 2019 Press Release and Third Quarter 2019 Form 8-K reported a GAAP 

EPS loss of $1.75, a Comparable (non-GAAP) loss of $1.49, GAAP Earnings loss of $91.3 million, 

and Comparable (non-GAAP) Earnings loss of $73.0 million. 

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266. On October 30, 2019, Ryder filed its Form 10-Q for the quarter ended September 

30, 2019 with the SEC, which was signed by Defendant Sanchez and CFO Parker (the “Third 

Quarter 2019 Form 10-Q”). The Third Quarter 2019 Form 10-Q contained the following financial 

metrics, each of which was either understated or overstated, as set forth in the chart below: 

Consolidated Statement of Earnings ($ in thousands)

Cost of lease and rental $877,767 Understated 

Losses on vehicles, net $22,734 Understated 

Earnings from continuing 

operations before income 

taxes

($91,260) Understated 

Provision for income taxes $278 Overstated 

Earnings from continuing 

operations

($91,538) Understated 

Net earnings ($91,455) Understated 

Earnings (loss) per common 

share—Basic Net Earnings

($1.75) Understated 

Earnings (loss) per common 

share—Diluted Net Earnings

($1.75) Understated 

Consolidated Statement of Comprehensive Income

Net earnings ($91,455) Understated 

Comprehensive income ($107,221) Understated 

Consolidated Balance Sheet

Operating property and 

equipment, net of 

accumulated depreciation

$891,689 Overstated 

Total assets $14,482,844 Overstated 

Retained earnings $2,262,356 Overstated 

Total shareholders’ equity $2,476,987 Overstated 

Total liabilities and 

shareholders’ equity

$14,482,844 Overstated 

Consolidated Statement of Cash Flows (Nine months ended September 31)

Net earnings $29,076 Overstated 

Depreciation expense $1,342,746 Understated 

Losses on used vehicle sales, 

net

$49,091 Understated 

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267. The financial metrics set forth above in ¶¶265-66 were materially misstated in the 

manner set forth in ¶¶90-92, because Ryder failed to correctly reduce the residual values of its fleet 

vehicles or increase its depreciation expense. In fact, as set forth in ¶¶90-92, Ryder had 

significantly underreported its depreciation expenses during the Class Period. This resulted in a 

material overstatement of its net earnings, earnings per share, the value of its operating property 

and equipment, its total assets, retained earnings, and total shareholders’ equity. 

VII. LOSS CAUSATION 

268. Defendants’ material misstatements and omissions complained of herein artificially 

inflated the market price of Ryder’s publicly traded common stock. The artificial inflation in 

Ryder’s stock price was removed when the facts and risks misstated and omitted by Defendants 

were revealed to the market. Such corrective information was disseminated to investors through 

public disclosures on July 30, 2019, October 29, 2019, and February 13, 2020. Each disclosure 

partially revealed relevant facts regarding the false and misleading nature of Defendants’ material 

misstatements concerning the residual value and depreciation of Ryder’s truck fleet. Each 

disclosure, more particularly described above, removed artificial inflation in the price of Ryder’s 

publicly traded stock, causing economic injury to Lead Plaintiffs and other members of the Class. 

VIII. ADDITIONAL ALLEGATIONS OF DEFENDANTS’ SCIENTER 

269. As alleged herein, numerous facts give rise to the strong inference that, throughout 

the Class Period, Ryder and the Officer Defendants knew or recklessly disregarded that their 

statements and omissions, as set forth in Section VI above were materially false and misleading 

when made. The information in this section summarizes certain of the allegations that detail the 

Officer Defendants’ scienter, and the cumulative knowledge of all members of Ryder’s senior 

management team, including the Officer Defendants, regarding the matters addressed herein is 

properly imputed to Ryder. 

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270. Defendants Admitted That They Saw a Sharp Decline in Resale Truck Values. 

Defendants have admitted that they had observed a steep decline in used tractor sales prices in late 

2015, which, according to FE 6, was the “bread and butter” of Ryder’s business. In its third quarter 

2019 earnings call, for example, Defendants’ accompanying company presentation contained the 

following chart, which, for the first time, detailed Ryder’s used sales price index from 1999-2018: 

271. Further, according to multiple former employees, Ryder’s senior executives tracked 

used vehicle sales proceeds historically and met quarterly to assess the status of the fleet’s 

valuation and pricing. FE 4, for example, reported that the head of the Asset Management Board, 

Eugene Tangney, stated that he escalated the Board’s findings on residual values directly to the 

CFO, Defendant Garcia. Moreover FE 6 reported that despite the fact that used vehicle prices 

were falling, upper management, including Defendant Garcia, pushed back on not writing down 

the used vehicle fleet. Thus, the Ryder management was aware of the precipitous decline in used 

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tractor pricing during the Class Period yet did not accurately modify the Company’s vehicles 

residual values to reflect these price changes. 

272. Ryder Altered Its Residual Value Accounting Methodologies Throughout the 

Class Period to Cover-up Its Fraud. Unbeknownst to investors, Ryder utilized its misleading 

five-year rolling average residual value methodology to retain the advantage of higher (but by then 

inaccurate) historical used truck and tractor sales pricing data from 2012-2015 which, according 

to Ryder’s own chart referenced above, had ”increased above historical levels.” Defendants did 

so even though they recognized that this methodology increasingly did not accurately reflect the 

Company’s vehicles’ actual residual value. 

273. In fact, early in the Class Period, Defendants reported earnings benefits due to the 

increase in residual values even as used vehicle pricing had fallen significantly. For example, in 

Ryder’s third quarter 2015 earnings call, Defendant Sanchez stated that while Ryder was “likely 

to see lower gains on sales due to pricing [in 2016] . . . we should see a benefit in depreciation due 

to higher residual values using our five-year rolling average methodology.” In another 

presentation to investors on September 10, 2015 at the RBC Capital Markets Global Industrials 

Conference, Defendant Garcia stated that “we probably haven’t raised our residuals fast enough” 

and “we’ve been kind of conservative in that.” 

274. By continuing to tout reliance on a five-year rolling average methodology, Ryder 

continued to benefit from historically high prices, which had a recurring positive impact on the 

Company’s reported financial results. However, and for reasons to be discussed in more detail 

below, the Company continued to value its vehicles significantly above the price the market was 

willing to pay, which rendered Ryder’s reported residual values misleading. 

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275. In the ongoing years, despite the almost complete collapse of used truck and tractor 

pricing, Defendants continued to mislead the market about the residual value of the Company’s 

fleet, and would only piecemeal recognize falling residual values when Ryder was finally forced 

to sell its overvalued vehicles. 

276. As multiple former employees would explain, Ryder inflated the residual values of 

its vehicles for a number of financially beneficial reasons–however any residual value inflation 

would become evident when the Company tried to sell the vehicle. Thus, instead of making fleetwide residual value adjustments, Ryder would take small charges in the anticipation of vehicle 

sales. However, these charges still did not properly account for the depreciation of the fleet’s 

vehicles, as Ryder continued to overstate the residual values of many of its vehicles, especially its 

older and MaxxForce vehicles as described in further detail in Section IV.D. 

277. As further evidence of Defendants’ scienter, by mid-2018, Ryder claimed to 

abandon its 5-year rolling price average to better capture “where [they were] seeing sales today.” 

Specifically, on July 25, 2018, during Ryder’s second quarter 2018 earnings call, Defendant 

Sanchez, in direct response to an analyst question, stated that: 

just so you know, w’'ve historically always used a 5-year rolling average to 

determine our residual value or our sales proceed at the end of the lease term. At 

the beginning of this year is when we switched and then said, rather than just do a 

rolling 5-year average, let’s just bring it to generally to where we’re seeing sales 

today. And we did that. That’s primarily a Class 8 issue. So we did that really 

across the tractor business. And so beginning of the year is when we started that. 

278. However, just over a year later in Ryder’s third quarter 2019 earnings call, 

Defendant Sanchez explained that “[e]ffective July 1, we further lowered our long-term view of 

residual values for vehicles expected to be sold starting in late 2021 to reflect more recent multiyear 

market trends in our outlook. This view now excludes the peak pricing year of 2015.” Wolf 

Research picked up on this, reporting that day (October 29, 2019) that, “R[yder] is now excluding 

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the 2014-15 peak in used truck pricing from its residual calculations and assuming a further 

significant reduction in near-term used truck prices from current levels.” But Defendants gave no 

explanation as to why, despite previously telling the market that it no longer used its 5-year rolling 

average methodology, any of its 2019 residual values supposedly had still included 2015 peak 

pricing. 

279. Ryder’s Reported Residual Values Incorporated Completely Unrealistic Used 

Vehicle Price Rebounds. Defendants were also aware that, given the precipitous decline in the 

prices of its used vehicle fleet, their reported residual values often assumed and required highly 

unrealistic used vehicle pricing rebounds to the “historically high” 2012-2015 levels to reflect 

Ryder’s reported residual values. For example, on February 16, 2018 at Ryder’s fourth quarter 

2017 earnings call, an analyst asked Defendant Sanchez if he could “quantify how much of an 

increased [price in used vehicle sales] to stem [the accelerated depreciation]? Is it 1%, 2% increase 

in used vehicle price? Is it 5%, 10%? Is there a way to kind of help quantify that?” Defendant 

Sanchez answered: “It’s probably, Kevin, about 10% to 15% up from where we are now. And 

that’s adjusting for inflation so as a percent of our vehicle investment.” However, even this number 

was grossly inadequate, as Ryder’s vehicles’ residual values were overstated by as much as 30%, 

according to FE 6. 

280. Defendants’ later corrective disclosures exposed just how unrealistic Defendants’ 

stated residual values had been. For example, when Defendants disclosed Ryder’s first major 

additional depreciation expense in the third quarter of 2019 to the tune of $177 million, reduced 

its residual value estimates for the entire second half of 2019 by $289 million, and reduced its 

residual value estimates for the period from the second half of 2019 through 2024-2025 by a 

shocking $844 million, Defendant Sanchez said that “[t]his [long-term view of residuals values] 

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now excludes the peak pricing year of 2015.” Analysts at Pacific Square Research, asked “When 

Does It Get Better?” and pointed out in their August 3, 2020 analyst report that Defendants, despite 

announcing another massive depreciation charge, informed the market that used vehicle pricing 

would still have to improve by 30% for tractors and 10% for trucks for their depreciation estimates 

to come to fruition. 

281. Ryder’s False Residual Value Accounting Resulted in Substantial Losses on Its 

Used Vehicle Sales. Strongly supporting the inference that Ryder significantly overstated its 

vehicles’ residual values is the fact that Ryder took increasingly larger losses on the sale of its used 

vehicles as the Class Period progressed. In 2015, Ryder sold its used vehicles for proceeds of 

approximately $100 million. The very next year, Ryder’s net sales fell almost 99% to only 

$972,000. In 2017, Ryder sold its vehicles at a loss of $17.24 million. In 2018, net used vehicles 

losses increased another 26%, to $21.74 million. And finally, in 2019, Ryder’s net loss on used 

vehicles increased 263% to $58.7 million. 

282. Internal Company reports showed, and former employees corroborated, that there 

were hundreds, and sometimes thousands of vehicles that remained unsold for much more than six 

months despite reaching the point of sale, whose residual values were never updated either as a 

matter of course or to reflect deteriorating market conditions. FE 6 reported that Ryder was sitting 

on vehicles for extended periods because Ryder would not write them down or sell them at the 

lower price. Specifically, FE 6 stated that “a lot” of trucks were sitting on the used truck lot for 

over six months,” noting how unusual this was, and stating that the larger number of vehicles 

sitting on the lot for an extended time in 2015 was significantly different than it had been in the 

past. 

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283. Ryder also attempted to realize the expected proceeds from its highly inflated 

residual values by selling the vehicles retail instead of wholesale but failed miserably. FE 4 

explained that Ryder was extending the leases on aging vehicles and converting them to short-term 

rentals without altering the residual value of the vehicles accordingly. As a result, Ryder could 

not sell its vehicles in the target numbers or at the target price and had to send increasingly large 

numbers of its vehicles to auction, often for “pennies on the dollar.” 

284. Ryder’s Residual Values Were Negatively Affected by the MaxxForce Emissions 

Scandal. Further inflating the Company’s vehicles’ residual values, Ryder refused to make timely 

appropriate adjustments to its vehicles’ residual values when faced with clear price-reducing 

circumstances, such as in the case of its MaxxForce vehicles (discussed above in Section IV.D.) 

or when maintenance costs for certain vehicle classes increased significantly. According to FE 4, 

the MaxxForce vehicles made up about 40% of the fleet during the years they were used and stated 

that Ryder started using MaxxForce vehicles in 2013 and 2014. FE 4 also stated that most of 

Ryder’s MaxxForce vehicles were returned by its clients and did not make it to the end of their 

lease, due to the myriad of technical defects with the engines, many of which made the tractors 

essentially unusable. 

285. However, FE 6 reported that because these vehicles incorporated purportedly 

innovative technology to meet the emissions standards and were expensive to maintain, on “the 

back-end” the “values were upside down because no one wanted to buy those vehicles and pay for 

that maintenance.” 

286. Ryder Increased Residual Values to Compete with Penske, Ryder’s Main 

Competitor. As explained above in Section IV.B., residual values in part determine the price of a 

vehicle’s lease. FE 1 explained that in order to compete with Penske, Ryder had to lower the 

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prices on its leases because it could not compete with its “more together and efficient” competitor. 

FE 1 further explained that the only way to lower the price of the lease in accordance with its 

pricing formula was to “fiddle with [] the depreciation numbers to make the trucks more 

competitive for the lease,” which was “fine until you have to go try and sell the trucks.” 

287. FE 6, a Vehicle Sales Manager in the Asset Management Division, reported that 

“the values of the equipment were completely off” and “it was pretty clear that they needed to 

write-down the equipment.” Despite the general recognition that the vehicles in Ryder’s fleet were 

overvalued, FE 6 said that everyone in upper management, including Tangney and Defendants 

Sanchez and Garcia pushed back on not writing down the used vehicles. Defendants’ knowledge 

of the inflated residual values and refusal to conduct a residual value write-down to maintain the 

lower prices of its leases strongly supports an inference of scienter. 

288. Ryder’s Manipulation of the Residual Values Had a Direct Impact on Reported 

Net Income. Ryder’s overstated residual values also significantly lowered its reported depreciation 

expenses and increased its reported earnings. As discussed above in Section IV.B., residual values 

are a key component in determining depreciation expense. Higher residual values lower 

depreciation expense by projecting a smaller financial loss from the future sale of the vehicle. 

Thus, by artificially inflating its vehicle fleet’s residual values, Ryder was able to minimize 

depreciation expenses throughout the Class Period. Depreciation expense is subtracted from 

income for the purposes of reporting net income, or earnings. Thus, Ryder was able to report 

significantly inflated earnings and earnings per share (key financial metrics) during the Class 

Period by artificially inflating its vehicle fleet’s residual values through its residual pricing 

methodology, despite recognizing the severe decline in vehicle pricing beginning in 2015 and the 

discrepancies between the used vehicles’ residual values and sale prices. The windfall to 

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Defendants was enormous. As of the time of the filing of this Complaint, Ryder has recognized 

over $868 million in additional depreciation charges across 2019 and 2020, $415 million of which 

came solely in 2019. 

289. Defendants Purposefully Delayed Selling Used Vehicles in Order to Avoid 

Taking Write-downs. Many of Ryder’s former employees explained that Ryder, as a matter of 

policy, would indefinitely hold onto used vehicles instead of selling them to avoid, or at the very 

least postpone, recording a loss on the sale of the vehicle. For example, FE 1 reported that the 

Company “held onto the inventory indefinitely instead of taking the steps to sell.” He further 

explained that the decision to sell each truck was dependent on the margin generated at the end of 

the lease. 

290. As a result of these factors, as discussed above in Section IV.I., Ryder’s used 

vehicle inventory ballooned during the Class Period. FE FE 6 stated that were probably 6,000 to 

10,000 used vehicles on the lot at any time, which was more than then Ryder had in the past, and 

that the problem got “worse and worse and worse” during the Class Period. 

291. This Case Bears Striking Resemblance to the Infamous Waste Management 

Accounting Scandal of the 1990s. Notably, Defendants’ conduct here has several striking 

similarities to another infamous accounting fraud case, the $1.7 billion Waste Management fraud 

of the mid-1990s. In the case of Waste Management, the SEC and plaintiff investors had alleged 

that the defendants used a number of misleading tactics to defer depreciation expenses, principally 

by extending the useful lives of Waste Management’s vehicles, overstating the vehicles’ (and 

shipping containers’) residual value, and “netting,” or the process of using one-time earned 

revenues to cover up past expenses. After years of manipulating the Company’s financials, the 

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Waste Management defendants revealed that their fraud had overstated Waste Management’s 

income by $1.7 billion over the course of a five-year period. 

292. Further, the SEC found that management “made unsupported changes to the 

estimated useful life or salvage value of one or more categories of vehicles, containers, or 

equipment, always resulting in a net reduction of depreciation expenses.” Moreover, the SEC 

found that management made “repeated unsupported changes in depreciation estimates” through 

“top-level adjustments.” 

293. Similarly, here Defendants repeatedly assigned its vehicles unsupported residual 

values to make its leases more competitive and to minimize recorded depreciation expense and 

maximize earnings. Specifically, FE 4 reported that Ryder was running vehicles longer and longer 

(in effect lengthening its useful lives but did not take a corresponding depreciation expense) to 

avoid having to sell the vehicles at a loss. Further, as FE 4, a member of the Ryder’s pricing 

committee reported, he was “raising red flags like crazy” with the committee, who repeatedly 

refused to lower the vehicles residual values. 

294. Further, the financial significance of the frauds is equally egregious. As of the time 

of the filing of this Complaint, Ryder has already admitted to more than $1 billion in reduced 

residual estimates and losses from used vehicle sales, much of which Ryder had previously claimed 

as income in the time leading up to the first corrective disclosure. 

295. The Departure of Defendant Garcia as CFO and the Speed at Which His 

Replacement Detected the Residual Value Overstatement Support a Strong Inference of 

Defendants’ Scienter. On September 25, 2018, Ryder announced that Defendant Art Garcia, 

Executive Vice President and CFO, would retire from the Company on April 30, 2019. Mr. Garcia 

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had had a 20-year career with Ryder and had acted as CFO since 2010. At the time of his departure 

Ryder did not have a new CFO lined up but embarked on a search for Garcia’s replacement. 

296. On March 27, 2019, Ryder named Scott Parker as the Company’s new CFO 

responsible for Ryder’s financial management functions including finance and audit, treasury, tax, 

accounting, corporate strategy, and investor relations. He formally joined Ryder on April 5, 2019. 

297. Then, just months later, Ryder began disclosing its lower used vehicle sales, the 

resulting negative impact on Ryder’s earnings, and the need to reduce its earnings per share 

forecast. On July 30, 2019, the Company reported earnings before tax for the second quarter of 

2019 in its FMS business segment of $57.7 million compared to $76.6 million the prior year period, 

driven by lower used vehicle sales results which had declined as a result of higher valuation 

adjustments of $10.4 million on a larger inventory and higher depreciation of $7.6 million due to 

residual value changes. As a result, Ryder reduced its earnings per share forecast for 2019 to a 

range of $4.80 to $5.10, as compared to its prior forecasted range of $5.28 to $5.58. Then, on 

October 29, 2019, the Company disclosed to investors that “management concluded that our 

residual value estimates likely exceeded the expected future values that would be realized upon 

the sale of power vehicles in our fleet.” As a result, Ryder significantly lowered the residual value 

estimates for all vehicles and incurred $177 million in additional depreciation expense in the third 

quarter of 2019. The next quarter, the Company announced that for the full year, it had incurred a 

total of $357 million in additional depreciation expense in 2019 from residual value estimated 

changes, over $310 million more than was predicted to the market just a year earlier. Similarly, 

Ryder warned investors, for the first time, that the Company expected to incur another $275 million 

in depreciation charges on its trucking fleet plus an additional $20 million estimated loss on used 

vehicle sales in 2020. 

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298. The short timeframe between (i) Parker becoming CFO after Garcia’s departure 

and (ii) Ryder publicly admitting to the need to lower the residual values of its vehicles, supports 

a strong inference that the disparity between the true residual values of Ryder’s vehicles, and the 

residual values Ryder reported to the market was so stark and obvious that it was apparent to 

Ryder’s executives, including Parker when he first joined the Company 

299. Defendants Made Repeated Reference to Depreciation Expense and Residual 

Values During Conference Calls with Investors. The Officer Defendants’ scienter is further 

supported by their repeated references to depreciation expenses and residual values during 

conference calls with investors, often in direct response to detailed analyst questions. As detailed 

above in Sections IV.G., VI, and below, Defendants repeatedly made false and misleading 

statements to the market concerning the then-current residual values of Ryder’s vehicle fleet, the 

associated depreciation expense, and the risk posed by further residual value deterioration and an 

increase in depreciation expense. 

300. On July 23, 2015, Defendants held a conference call with investors and analysts to 

discuss Ryder’s financial results for the second quarter of 2015 (the “Second Quarter 2015 

Earnings Call”). During the Second Quarter 2015 Earnings Call, Defendant Sanchez assured 

investors that the headwind the Company faced in its FMS business from a decline in used vehicle 

sales “is being offset on the earnings line by the improvements that we’ve seen in depreciation 

expense also.” 

301. On September 10, 2015, Defendants participated in the RBC Capital Markets 

Global Industrials Conference. During the conference, Defendant Garcia stated that “we’ve been 

benefiting from the solid used truck environment because of an increase in residuals, which helped 

bring down depreciation expense, which more than offset any gains headwind that we saw.” 

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Defendant Garcia stated further that “we probably haven’t raised our residuals fast enough” and 

“we’ve been kind of conservative in that.” 

302. On July 27, 2016, Ryder held a conference call with investors to discuss second 

quarter 2016 earnings (the “Second Quarter 2016 Conference Call”). During the Second Quarter 

2016 Conference Call, Defendant Sanchez stated that based on “what we’re seeing in the current 

marketplace, . . . I wouldn’t envision an increase or decrease in residual values out over the next 

four, five years.” 

303. On November 8, 2016, Defendants participated in the Stephens Fall Investor 

Conference. During the conference, Defendant Garcia stated that the decline in used truck prices 

that the Company has experienced “will not result in us changing residuals right now.” 

304. On February 16, 2018, Ryder held a conference call with investors to discuss fourth 

quarter and full-year 2017 earnings (the “Fourth Quarter 2017 Conference Call”). During the 

Fourth Quarter 2017 Conference Call, an analyst asked “what is it that’s driving the change in 

residuals and the additional depreciation that you’re taking? Is it something specific with the 

vintage of equipment that you’re seeing? Or is it the expectation as you look out and the supply 

that’s coming into—potentially coming into the market here into ’18? If you can just give us a 

sense of maybe why some of the fundamentals seem a little bit better, but you are still dealing with 

the change in the residuals and the incremental depreciation.” Defendant Garcia responded that, 

based on Ryder’s expectations for used truck pricing, depreciation will be at “a lower level than 

what we had seen this year.” 

305. On April 24, 2018, Ryder held a conference call with investors to discuss first 

quarter 2018 earnings (the “First Quarter 2018 Conference Call”). During the First Quarter 2018 

Conference Call, in response to an analyst’s question about what the Company’s residual value 

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adjustment would be for 2019, Defendant Garcia stated that “[i]t could be a little bit less than what 

it was this year” and guided analysts to “model[] in that $30 million to $40 million range.” 

Defendant Sanchez also assured investors during the First Quarter 2018 Conference Call that “the 

earnings in the rest of the business is going to more than offset the earnings headwind from used 

vehicle sales and depreciation.” 

306. On October 26, 2018, Defendants held a conference call with investors to discuss 

Ryder’s third quarter 2018 earnings (the “Third Quarter 2018 Conference Call”). During the Third 

Quarter 2018 Conference Call, Defendant Sanchez assured investors that, with respect to the 

Company’s accounting treatment of its residual values, Ryder “keep[s] the residuals in the middle 

of the fairway as best we can.” 

307. On February 14, 2019, Ryder held a conference call with investors to discuss fourth 

quarter and full-year 2018 earnings (the “Fourth Quarter 2018 Conference Call”). During the 

Fourth Quarter 2018 Conference Call, Defendant Sanchez stated that the Company saw an 

improvement in the parity between the market price and residual value of Ryder’s used trucks as 

“the impact of all the accelerated [depreciation] and depreciation policy changes we’re making 

starts to bring that number down” and “[s]o I feel really good about where we’re headed with that.” 

Defendant Sanchez also stated that “going forward, I see the growth continuing and the headwinds 

really beginning to subside” and “that really helps us feel really good about where we’re going to 

be facing in the next couple of years.” He further stated that the Company expected a $0.38 

headwind to earnings per share due to accelerated depreciation, changes to residual values, and 

used vehicle sales in 2019 and thus “the headwinds that we’re looking at for this year [ ] are a lot 

less than last year.” 

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308. These statements were highly detailed and often directly in response to analysts’ 

inquiries. Defendants’ answers implied that, at a bare minimum, they had a reasonable basis for 

these claims, which they in fact lacked. 

309. Analysts Were Focused on the Depreciation of Ryder’s Used Truck Fleet and 

Defendants Professed Knowledge About the Issue. As set forth herein, given the importance of 

the vehicle fleet to Ryder’s business, the market focused closely on its valuation and 

depreciation. Indeed, analysts issued dozens of reports addressing these subjects and consistently 

asked questions about the Company’s residual values, used vehicle sales, and depreciation 

expenses. In light of the attention that the market paid to these subjects—and the fact that 

Defendants spoke reassuringly on the subject dozens of times—any failure by Defendants to 

ensure the accuracy of their repeated statements was severely reckless at a minimum. 

310. Leasing Trucks is Ryder’s Core Operation and the Sale of Used Trucks 

Comprised a Material Aspect of its Business. The topic of Ryder’s vehicle fleet value formed the 

basis of many of Defendants’ misstatements and omissions, and the fact that the Company’s truck 

and tractor leasing and used vehicle sales were a core operation of Ryder’s business and critical to 

Ryder’s financial success strongly supports an inference of the Officer Defendants’ scienter. 

311. As discussed above in Section IV.A., Ryder is a provider of transportation and 

supply chain management solutions, with most of the Company’s revenue coming from its FMS 

business, which mainly provides truck and tractor leasing to a variety of entities. The FMS 

segment accounts for approximately 60% of the Company’s total revenue. As discussed above, 

the vast majority of Ryder’s assets are in the form of revenue-earning equipment, which mostly 

consists of its vehicle fleet. According to Ryder’s second quarter Form 10-Q filed on July 30, 

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earning equipment. The proceeds from Ryder’s sale of that revenue-earning equipment was also 

material to the Company’s cash flow. For example, according to the Company’s Form 10-K filed 

on February 21, 2019, for the years 2016, 2017, and 2018, sales from “revenue-earning equipment” 

i.e., trucks, tractors, and trailers, constituted between 18% to 20% of total cash generated each 

year. FE 6 corroborated the importance of used truck sales to Ryder, stating that “[i]t was huge 

for the Company because it was bottom-line profit,” and recalled seeing a report indicating that he 

Company made $100 million in sales in 2014 or 2015. 

312. In addition, the terms of Ryder’s leasing contracts depend heavily on the residual 

value of the vehicle–the higher the residual value of the vehicle, the “cheaper” Ryder could price 

the lease, and vice versa. And because of how competitive the truck and tractor leasing market is, 

with many customers’ main consideration being lease pricing, residual pricing was incredibly 

significant to how competitive Ryder’s lease pricing would be in the market. According to FE 10, 

the price of its trucks was “extremely important” to Ryder because Ryder had “so much” dependent 

on the prices of Ryder’s trucks. 

313. Defendants’ Understatement of Depreciation Expense was Significant. The scale 

of Defendants’ understatement of depreciation expense over the course of the Class Period was 

also significant, and Defendant’s retroactive, partial, and belated disclosure of increasing 

accelerated depreciation expense with each corrective disclosure failed to fully disclose the actual 

depreciation expenses the Company should have reported. 

314. In its 2019 Form 10-K, Ryder reported an additional depreciation expense of $317 

million for 2019 and a net income loss of approximately $42 million. Later, by August 2020, 

Ryder reported an overall additional depreciation expense of $415 million for 2019. In effect, 

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Ryder’s additional depreciation expenses singlehandedly wiped out the Company’s entire net 

income before income taxes for 2019. 

315. The depreciation charges in 2020 are shaping up to be even greater. In the 

Company presentation that accompanied Ryder’s third quarter 2019 earnings call, Ryder estimated 

an impact of change in “residual estimates on policy depreciation and accelerated depreciation” of 

$250 million for 2020. Once again, even these drastically increased residual value adjustments 

were significantly understated. As of July 29, 2020, Defendants projected a further impact of 

changed residual estimates of $520 million for 2020, roughly $475-480 million over early 2019 

estimates and still $270 million over late 2019 residual estimates. 

316. These depreciation charges had, and continue to have, a disastrous effect on the 

Company’s finances. For each quarter beginning the third quarter 2019, Ryder has reported at 

least a 148.1% year-over-year decrease in GAAP EPS. Similarly, EBIT has declined at least 100% 

each quarter year-over-year. 

317. Defendants Sanchez, Garcia, and Cooke Made Significant Insider Sales of 

Personally-Held Ryder Stock. Officer Defendants Sanchez, Garcia, and Cooke were among the 

highest-ranking executives at Ryder during the Class Period, and in the case of Defendants 

Sanchez and Garcia, exercised control over, and signed, the Company’s public filings with the 

SEC. All three Officer Defendants spoke repeatedly to investors about Ryder’s financial 

performance, depreciation expense, and its commercial fleet’s residual values. They therefore had 

the opportunity to defraud Ryder investors with respect to such. 

318. Defendants Sanchez, Garcia, and Cooke also had a significant personal financial 

motive to make false statements to investors about Ryder’s fleet’s residual values. First, 

Defendants greatly benefitted from the sale of personally-held stock at artificially inflated prices. 

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Defendant Sanchez and Cooke, in particular, sold over $6.6 and $3.8 million, respectively, worth 

of personally held stock in the three years preceding the first corrective disclosure. The sales made 

by Defendants Sanchez, Garcia, and Cooke are set forth in the following chart. 

Defendant Sanchez 

Date Shares Sold Share Price Total Value 

05/24/2016 37,550 $68.05 $2,555,360.11 

08/04/2017 26,275 $72.43 $1,902,995.78 

08/07/2018 27,830 $78.04 $2,171,928.34 

Total $6,630,284.23 

Defendant Garcia 

Date Shares Sold Price Total Value 

02/19/2016 2,000 56.38 $112,753.60 

02/15/2017 2,205 78.83 $173,827.65 

07/30/2018 3,412 76.82 $262,110.18 

Total $548,691.43 

Defendant Cooke 

Date Shares Sold Price Total Value 

11/14/2016 6,000 $79.27 $475,615.80 

7/31/2017 9,650 $72.75 $702,052.94 

10/31/2017 32,328 $81.46 $2,633,542.32 

Total $3,811,211.06 

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319. Further, none of these executives used a “Rule 10b5-1 plan” to execute these trades. 

In 2000, the SEC adopted Rule 10b5-1, 17 C.F.R. § 240.10b5- 1, which provides that a person will 

be deemed to have traded “on the basis of” material, nonpublic information if the person engaging 

in the transaction was “aware of” that information at the time of the trade. Previously, courts had 

split on whether simple possession of material, nonpublic information at the time of the trade was 

a sufficient basis for imposing liability, and some courts had held that liability attached to a trade 

only if the insider “used” inside information in making the trade. See Selective Disclosure and 

Insider Trading, 65 Fed. Reg. 51, 716, at 51,727 (Aug. 24, 2000). To provide a safe harbor under 

the “aware of” standard, the SEC created an affirmative defense to insider trading claims for trades 

made pursuant to a binding agreement or plan (“10b5-1 Trading Plans”). See id. at 51,727-28. 

Pursuant to SEC Rule 10b5-1(c), a 10b5-1 Plan is a defense to insider trading liability only if it is 

entered into by an insider “before becoming aware” of inside information, and was established “in 

good faith and not as part of a plan or scheme to evade the prohibitions” against insider trading. 

Based on Ryder’s Form 4s filed with the SEC, none of Sanchez, Garcia, or Cooke’s trades were 

made pursuant to 10b5-1 trading plans. This suspiciously contrasts with how, before the Class 

Period, Sanchez, Garcia, and Cooke utilized such plans. 

320. By taking advantage of the significantly inflated stock prices during the Class 

Period, Defendants Sanchez, Garcia, and Cooke recognized substantial windfalls. Each of these 

Defendants’ stock sales, discussed in more detail below, were precipitated by false and misleading 

statements concerning Ryder’s financials and more specifically, Ryder’s depreciation expense and 

the residual values of the Company’s fleet. 

321. Defendant Sanchez. Defendant Sanchez sold $6.6 million worth of personally 

held stock in the three years preceding the first corrective disclosure. Defendant Sanchez’s sales 

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of Ryder securities were suspicious in size, timing, and amount because, in each sale, he sold at 

least 23% of his total holdings, and each sale closely followed false or misleading statements issued 

by the Company or made by him, Defendant Garcia, or Defendant Cooke. 

322. For example, on May 19, 2016, Ryder held a conference call with analysts and 

investors as part of its 2016 investors day, five days before Defendant Sanchez sold 37,550 shares 

of Ryder stock (or 36% of his total shares) at $68.05. During the May 19, 2016 call, Defendant 

Garcia told investors that Ryder’s residual values would remain flat over the next several years. 

Then, more than a year later, on July 26, 2017, less than 10 days before Defendant Sanchez sold 

26,275 Ryder shares (or 25% of his total shares) at $72.43, Defendant Garcia told the market that 

his “views about the residual impact [were] still there,” referencing the guidance that Defendants 

Sanchez and Garcia had given the prior quarter that investors should expect “something similar” 

to the residual value drop in 2017. 

323. Finally, on July 25, 2018, less than two weeks before Defendant Sanchez sold over 

27,000 shares of Ryder stock (or 23% of his total shares) at $78.04, Sanchez told the market that 

Ryder would “still be able to generate some nice earnings growth” despite 2019 depreciation 

expense “in that $40 million to $45 million range.” 

324. Defendant Garcia. Defendant Garcia sold almost $550,000 of personally held 

Ryder stock in the years preceding the first corrective disclosure. Defendant Garcia’s sales were 

suspicious in size, timing, and amount as in each sale he sold at least 9.5% of his total holdings, 

and each sale closely followed false or misleading statements issued by the Company or made by 

him, Defendant Sanchez, or Defendant Cooke. 

325. On February 2, 2016, two and a half weeks before Defendant Garcia sold 2,000 

shares of Ryder stock (or 9.5% of his total shares) at $56.38, the Company issued a press release 

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announcing its financial and operating results for the fourth quarter and full year ended December 

31, 2015. In that press release, Ryder stated that the Company’s fourth quarter earnings benefitted 

from “lower depreciation associated with increased residual values.” 

326. On February 14, 2017, just one day before Defendant Garcia sold 2,205 shares of 

Ryder stock (or 18.1% of his total shares) at $78.83, Ryder filed its annual report with the SEC on 

Form 10-K. In that 2016 Form 10-K Ryder reported that depreciation expense increased 6% in 

2016 and increased 7% in 2015 and stated that “[t]he increases in both years were partially offset 

by $35 million and $40 million, respectively, from increases in residual values.” The Company 

also stated that “[f]ull service lease and commercial rental results benefited from lower 

depreciation of $35 million due to residual value changes implemented January 1, 2016.” Finally, 

on July 25, 2018, five days before Garcia sold 3,412 shares of Ryder stock (18.2% of all shares), 

Defendant Sanchez claimed that while depreciation would remain a headwind in 2019 Ryder 

should “still be able to generate some nice earnings growth . . . driven by the contractual parts of 

the business.”

327. Defendant Cooke. Defendant Cooke sold more than $3.8 million of personally 

held Ryder stock, virtually all of his vested shares, in the years preceding the first corrective 

disclosure. Defendant Cooke’s sales were suspicious in size, timing, and amount as in each sale 

he sold at least 33.6% of his total holdings, and each sale closely followed false or misleading 

statements issued by the Company or made by him, Defendant Sanchez, or Defendant Garcia.

328. For example, on November 8, 2016, just six days before Defendant Cooke sold 

6,000 shares of Ryder stock (or 33.6% of his total shares) at $79.27 for proceeds of $475,615, 

Defendants participated in the Stephens Fall Investor Conference. During the conference, 

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Defendant Garcia stated that the decline in used truck prices that the Company has experienced 

“will not result in us changing residuals right now.”

329. On July 31, 2017, just five days after Ryder filed its quarterly report with the SEC 

on Form 10-Q, which contained materially misstated financial results as discussed above in ¶¶225-

26, Defendant Cooke sold 9,650 shares of Ryder stock (or 77% of his total shares) at $72.75 for 

proceeds of $702,062.

330. Finally, On October 31, 2017, just six days after Ryder issued its press release 

announcing its financial and operating results for its third quarter 2017, which contained materially 

misstated financial results as discussed above in ¶¶229-230, Defendant Cooke made his largest, 

by far, stock sale during his tenure at the Company and sold 32,328 Ryder shares (or 91.8% of his 

total shares) at $81.46 (near its Class Period high) for proceeds of $2,633,542.

331. Higher Residual Values Significantly Boosted the Officer Defendants’ Executive 

Compensation. Further, the vast majority of the Officer Defendants’ compensation during the 

Class Period was performance-based and tied to the overall success of the Company, with base 

salary never exceeding 14% of total compensation at any point during the Class Period. Thus, the 

Officer Defendants’ statements regarding residual values directly and indirectly affected their 

compensation over the Class Period. As discussed above in Section IV.B., an asset’s residual (or 

salvage) value is integral to a company’s calculation of depreciation expense. Depreciation 

expense, in turn, reduces net income (or earnings) under GAAP. Thus, as alleged herein, inflated 

residual values artificially lowered Ryder’s calculated depreciation expense and thus increased net 

income during the Class Period. Further, as discussed above in SectionIV.C., higher residual 

values lowered the prices of leases, allowing Ryder to better compete on leasing prices with its 

largest competitors – increasing revenue in the process. 

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332. According to Ryder’s annual Definitive Proxy Statement, filed on March 18, 2019, 

Ryder’s executive compensation program, which applied to Defendants Sanchez, Garcia, and 

Cooke, consisted of three principle elements: (1) Base Salary; (2) Annual Cash Incentive Awards 

(“cash incentive”); and (3) Long Term Incentive Program (“LTIP”). Each is explained in further 

detail below. 

333. Each executive’s base salary, paid in cash, is established based on “experience, 

market, performance, tenure, responsibility, and succession potential” and is “reviewed annually 

based on market position and individual qualifications.” Base salary represented a small 

percentage of the executives’ overall compensation. 

334. Each executive’s cash incentive was determined based on two factors: 60% of the 

cash incentive was based on the Company’s comparable earnings per share (“EPS”); and the 

remaining 40% was based on the Company’s Operating Revenue23. 

335. Lastly, but most importantly, the executive’s LTIP was determined based on three 

factors: 

a. 60% on Performance Based Restricted Stock Rights (“PBRSRs), which 

consisted of the Return on Capital over Cost of Capital Spread (3-year 

performance period) (“Capital Return24”) and the “Strategic Revenue 

Growth (3-year performance period). These PBRSRs vested immediately. 

The PBRSR was also subject to a total shareholder return (“TSR”) metric, 

which compared Ryder stock price to industry competitors. 

b. 30% on Stock Options based on 3-year ratable vesting; and 

c. 10% on Restricted Stock based on 3-year ratable vesting. 

23 According to Ryder’s 2019 Proxy Statement, “Operating Revenue [] is defined as total revenue for [the 

Company] excluding any (1) fuel and (2) subcontracted transportation.” 

24 The Company defined the ROC/COC spread as “the difference between adjusted ROC and the weighted 

average cost of capital. The Company's adjusted ROC is defined as the Company's net (after-tax) earnings 

from continuing operations, excluding restructuring and other items (which are the same items adjusted 

from comparable earnings as disclosed in our SEC filings), as a percentage of the sum of the Company's 12 

month average (i) debt, (ii) off-balance sheet debt and (iii) shareholders’ equity.”

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336. As indicated by the structure of their compensation packages, the Officer 

Defendants benefitted personally from reporting artificially high operating income, net income and 

revenue. For example, 60% of the executives’ cash incentive was based off EPS or earnings per 

share. EPS is determined by dividing net income (or net earnings) by the number of outstanding 

shares. Thus, a higher net income would result in a higher EPS, increasing the Officer Defendants’ 

cash incentive. 

337. Further, the Company’s LTIP program heavily relied on stock performance and 

stock options to incentivize the Officer Defendants. The market analyzes stock based on several 

financial metrics, which often rely on operating income, net income or earnings as a key variable.25

As described above, The LTIP program consisted of three categories: performance based restricted 

stock rights, stock options, and restricted stock units. The PBRSRs, which vest after a three-year 

performance period, were determined by both the Company’s Capital Return ratios and Strategic 

Revenue Growth. The Company’s Capital Return ratio is determined by dividing adjusted net 

earnings over liabilities including on-balance sheet debt, off-balance debt, and shareholder’s 

equity. Adjusted net earnings are derivative of net income, thus higher net income would result in 

higher PBRSRs. The PBRSRs reward could also be modified by “TRS” to the extent of a 15% 

reward or 15% penalty to the executive’s PBRSRs award. According to Ryder’s proxy statements: 

338. TSR is calculated for Ryder and each peer company based on the percentage change 

in Ryder's stock price from the average closing price of the last ten trading days prior to the 

beginning of the relevant performance period to the average of the last ten trading days prior to 

the end of the relevant performance period, assuming reinvestment of dividends. The custom peer 

group for 2018 consisted of 26 companies plus Ryder and included the 13 companies in Ryder’s 

25 See e.g., Stephens May 1, 2019 Ryder System, Inc. research brief. Stephens focuses almost exclusively 

on EPS, operating EPS, pre-tax income, and adjusted EPS. 

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2018 Industry Peer Group plus additional related companies (provided in the chart below) that are 

subject to similar market conditions and economic recovery cycles as Ryder. At the end of the 

three-year performance period, the companies in the custom peer group are sorted by TSR 

performance, and the 25th, 50th and 75th percentiles of the custom peer group are calculated. 

Ryder's TSR performance is compared to the TSR of the companies in the custom peer group. The 

number of accrued PBRSRs will then be adjusted up or down by a percentage based on the TSR 

relative percentile rank as shown below; provided, however, that (i) in no event will the TSR 

modifier adjustment result in accrual of more than 200% of the target PBRSRs and (ii) even if the 

Company's TSR rank is above the 50th percentile, no positive TSR modifier will be applied if the 

Company's TSR is negative. 

339. TSR is meant to link executive compensation to Ryder’s stock performance as 

compared to its largest competitors. Similarly, stock options attempt to align executive and 

stockholder interests by incentivizing executives to increase the price of stock to benefit from the 

exercise price of the stock option. Restricted stock units also incentivize executives to maximize 

the price of the Company’s common stock at least until the restricted stock units vest. Thus, 

Defendants Sanchez, Garcia, and Cooke had a pecuniary interest in maximizing the stock price, 

particularly by increasing the reported EPS numbers. 

340. The Officer Defendants also benefitted personally from the lower lease prices 

caused by the artificially inflated residual values. The ability to lower prices is key to increasing 

sales volume. Operating Revenue and Strategic Growth Revenue are key metrics in determining 

the Defendants’ cash incentive compensation as well as their PBRSR grants. Higher revenues 

correlated to higher stock prices, which for all the reasons mentioned above, benefitted the Officer 

Defendants financially in a number of ways. 

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341. As a result, Defendants Sanchez, Garcia and Cooke personally benefited from their 

material misstatements of Ryder’s financial condition by obtaining the compensation, including 

incentive-based compensation, set forth below: 

Defendant Sanchez 

Year Salary 

($) 

Stock 

Awards 

($) 

Options 

Awards 

($) 

Non-Equity 

Incentive Plan 

Compensation 

($) 

Change in 

Pension Value 

and 

Nonqualified 

Deferred 

Compensation 

Earnings ($) 

All other 

Compensation 

($) 

Total ($) 

2019 870,468 3,897,431 860,002 501,247 196,915 278,788 6,604,851 

2018 820,080 3,558,155 1,230,369 1,595,259 — 190,013 7,393,876 

2017 804,000 2,140,487 1,640,009 1,309,625 101,879 218,186 6,214,186 

2016 785,225 1,351,441 1,539,987 1,207,635 65,069 156,329 5,105,686 

2015 768,825 1,628,493 1,539,956 1,520,137 — 183,526 5,640,937 

Defendant Garcia 

Year Salary 

($) 

Stock 

Awards 

($) 

Options 

Awards 

($) 

Non-Equity 

Incentive Plan 

Compensation 

($) 

Change in 

Pension Value 

and 

Nonqualified 

Deferred 

Compensation 

Earnings ($) 

All other 

Compensation 

($) 

Total ($) 

2019 166,667 90,876 — — 115,698 1,503,808 1,877,049 

2018 500,000 1,028,202 360,113 509,282 — 85,698 2,483,295 

2017 492,500 601,366 480,031 410,686 62,842 87,804 2,135,229 

2016 479,783 337,208 392,027 351,234 42,095 78,347 1,680,694 

2015 440,800 372,679 359,954 424,426 — 80,825 1,678,684 

Defendant Cooke 

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Year Salary 

($) 

Stock 

Awards 

($) 

Options 

Awards 

($) 

Non-Equity 

Incentive Plan 

Compensation 

($) 

Change in 

Pension Value 

and 

Nonqualified 

Deferred 

Compensation 

Earnings ($) 

All other 

Compensation 

($) 

Total ($) 

2019 527,358 1,228,413 270,002 — — 2,188,591 4,214,364 

2018 566,825 1,147,463 405,127 708,217 — 97,427 2,925,059 

2017 555,000 666,620 539,966 558,692 — 100,151 2,420,429 

2016 543,750 353,692 399,982 456,462 — 89,800 1,843,686 

2015 533,050 424,134 400,010 600,559 — 95,801 2,053,554 

IX. CLASS ACTION ALLEGATIONS 

342. Lead Plaintiffs bring this action as a class action pursuant to Rule 23 of the Federal 

Rules of Civil Procedure on behalf of all persons who purchased or otherwise acquired the publicly 

traded common stock of Ryder during the Class Period (the “Class”). Excluded from the Class 

are Defendants and their families, directors, and officers of Ryder and their families and affiliates. 

343. The members of the Class are so numerous that joinder of all members is 

impracticable. The disposition of their claims in a class action will provide substantial benefits to 

the parties and the Court. As of January 31, 2020, Ryder had over 53 million shares of common 

stock outstanding, owned by hundreds or thousands of investors. 

344. There is a well-defined community of interest in the questions of law and fact 

involved in this case. Questions of law and fact common to the members of the Class which 

predominate over questions which may affect individual Class members include: 

a. Whether Defendants violated the Exchange Act; 

b. Whether Defendants omitted and/or misrepresented material facts; 

c. Whether Defendants’ statements omitted material facts necessary in order 

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to make the statements made, in light of the circumstances under which they were made, 

not misleading; 

d. Whether the Officer Defendants are personally liable for the alleged 

misrepresentations and omissions described herein; 

e. Whether Defendants knew or recklessly disregarded that their statements 

and/or omissions were false and misleading; 

f. Whether Defendants’ conduct impacted the price of Ryder common stock; 

g. Whether Defendants’ conduct caused the members of the Class to sustain 

damages; and 

h. The extent of damage sustained by Class members and the appropriate 

measure of damages. 

345. Lead Plaintiffs’ claims are typical of those of the Class because Lead Plaintiffs and 

the Class sustained damages from Defendants’ wrongful conduct. 

346. Lead Plaintiffs will adequately protect the interests of the Class and have retained 

counsel experienced in class action securities litigation. Lead Plaintiffs have no interests which 

conflict with those of the Class. 

347. A class action is superior to other available methods for the fair and efficient 

adjudication of this controversy. Joinder of all Class members is impracticable. 

X. INAPPLICABILITY OF STATUTORY SAFE HARBOR 

348. Ryder’s “Safe Harbor” warnings accompanying its forward-looking statements 

issued during the Class Period were ineffective to shield those statements from liability. 

349. Defendants are also liable for any false or misleading forward-looking statements 

pleaded herein because, at the time each such statement was made, the speaker knew the statement 

was false or misleading and the statement was authorized and/or approved by an executive officer 

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of Ryder who knew that the statement was false. None of the historic or present tense statements 

made by Defendants were assumptions underlying or relating to any plan, projection, or statement 

of future economic performance, as they were not stated to be such assumptions underlying or 

relating to any projection or statement of future economic performance when made, nor were any 

of the projections or forecasts made by Defendants expressly related to, or stated to be dependent 

on, those historic or present tense statements when made. 

XI. PRESUMPTION OF RELIANCE 

350. At all relevant times, the market for Ryder common stock was an efficient market 

for the following reasons, among others: 

a. Ryder common stock met the requirements for listing, and was listed and 

actively traded on the NYSE, a highly efficient and automated market; 

b. As a regulated issuer, Ryder filed periodic public reports with the SEC and 

the NYSE; 

c. Ryder regularly and publicly communicated with investors via established 

market communication mechanisms, including through regular disseminations of press 

releases on the national circuits of major newswire services and through other wideranging public disclosures, such as communications with the financial press and other 

similar reporting services; and 

d. Ryder was followed by several securities analysts employed by major 

brokerage firm(s) who wrote reports which were distributed to the sales force and 

certain customers of their respective brokerage firm(s). Each of these reports was 

publicly available and entered the public marketplace. 

351. As a result of the foregoing, the market for Ryder common stock promptly digested 

current information regarding Ryder from all publicly available sources and reflected such 

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information in the price of Ryder common stock. Under these circumstances, all purchasers of 

Ryder common stock during the Class Period suffered similar injury through their purchase of 

Ryder common stock at artificially inflated prices and the presumption of reliance applies. 

352. A Class-wide presumption of reliance is also appropriate in this action under the 

Supreme Court’s holding in Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128 (1972), 

because the Class’s claims are grounded on Defendants’ material omissions. Because this action 

involves Defendants’ failure to disclose material adverse information regarding Ryder’s business 

and operations—information that Defendants were obligated to disclose—positive proof of 

reliance is not a prerequisite to recovery. All that is necessary is that the facts withheld be material 

in the sense that a reasonable investor might have considered them important in making investment 

decisions. Given the importance residual values have on the accounting for depreciation expense 

and the impact a change in residual values has on the Company’s earnings, that requirement is 

satisfied here. 

XII. CAUSES OF ACTION 

COUNT I 

For Violations of Section 10(b) of the Exchange Act and Rule 10b-5 

Against All Defendants 

353. Lead Plaintiffs repeat and reallege each and every allegation contained above as if 

fully set forth herein. 

354. During the Class Period, Defendants carried out a plan, scheme, and course of 

conduct which was intended to and, throughout the Class Period, did: (i) deceive the investing 

public, including Lead Plaintiffs and other Class members, as alleged herein; and (ii) cause Lead 

Plaintiffs and other members of the Class to purchase Ryder common stock at artificially inflated 

prices. 

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355. Defendants: (i) employed devices, schemes, and artifices to defraud; (ii) made 

untrue statements of material fact and/or omitted to state material facts necessary to make the 

statements not misleading; and (iii) engaged in acts, practices, and a course of business which 

operated as a fraud and deceit upon the purchasers of the Company’s common stock in an effort 

to maintain artificially high market prices for Ryder common stock in violation of Section 10(b) 

of the Exchange Act and Rule 10b-5, promulgated thereunder. 

356. Defendants, individually and in concert, directly and indirectly, by the use, means 

or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a 

continuous course of conduct to conceal adverse material information about the Company’s 

financial well-being, operations, and prospects. 

357. During the Class Period, Defendants made the false statements specified above, 

which they knew or recklessly disregarded to be false and misleading in that they contained 

misrepresentations and failed to disclose material facts necessary in order to make the statements 

made, in light of the circumstances under which they were made, not misleading. 

358. Defendants had actual knowledge of the misrepresentations and omissions of 

material fact set forth herein, or recklessly disregarded the true facts that were available to them. 

Defendants engaged in this misconduct to conceal Ryder’s true condition from the investing public 

and to support the artificially inflated prices of the Company’s common stock. 

359. Lead Plaintiffs and the Class have suffered damages in that, in reliance on the 

integrity of the market, they paid artificially inflated prices for Ryder common stock. Lead 

Plaintiffs and the Class would not have purchased the Company’s common stock at the prices they 

paid, or at all, had they been aware that the market prices for Ryder common stock had been 

artificially inflated by Defendants’ fraudulent course of conduct. 

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360. As a direct and proximate result of Defendants’ wrongful conduct, Lead Plaintiffs 

and the other members of the Class suffered damages in connection with their respective purchases 

of the Company’s common stock during the Class Period. 

361. By virtue of the foregoing, Defendants violated Section 10(b) of the Exchange Act 

and Rule 10b-5, promulgated thereunder. 

COUNT II 

For Violations of Section 20(a) of the Exchange Act 

Against the Officer Defendants 

362. Lead Plaintiffs repeat, incorporate, and reallege each and every allegation set forth 

above as if fully set forth herein. 

363. The Officer Defendants acted as controlling persons of Ryder within the meaning 

of Section 20(a) of the Exchange Act. By virtue of their high-level positions, participation in 

and/or awareness of the Company’s operations, direct involvement in the day-to-day operations of 

the Company, and/or intimate knowledge of the Company’s actual performance, and their power 

to control public statements about Ryder, the Officer Defendants had the power and ability to 

control the actions of Ryder and its employees. By reason of such conduct, the Officer Defendants 

are liable pursuant to Section 20(a) of the Exchange Act. 

XIII. PRAYER FOR RELIEF 

WHEREFORE, Lead Plaintiffs pray for judgment as follows: 

A. Determining that this action is a proper class action under Rule 23 of the 

Federal Rules of Civil Procedure; 

B. Awarding compensatory damages in favor of Lead Plaintiffs and other 

Class members against all Defendants, jointly and severally, for all damages sustained as a result 

of Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon; 

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C. Awarding Lead Plaintiffs and the Class their reasonable costs and expenses 

incurred in this action, including attorneys’ fees and expert fees; and 

D. Awarding such equitable/injunctive or other further relief as the Court 

may deem just and proper. 

XIV. JURY DEMAND 

Lead Plaintiffs demand a trial by jury. 

DATED: October 5, 2020 Respectfully submitted, 

KLAUSNER KAUFMAN JENSEN 

& LEVINSON 

/s/ Robert D. Klausner 

Robert D. Klausner 

Florida Bar Number 244082 

Stuart A. Kaufman 

Florida Bar Number 979211 

7080 NW 4th Street 

Plantation, FL 33317 

Tel: (954) 916-1202 

Fax: (954) 916-1232 

bob@robertdklausner.com 

stu@robertdklausner.com 

Liaison Counsel for Lead Plaintiffs the State of 

Alaska, Alaska Permanent Fund; the City of Fort 

Lauderdale General Employees’ Retirement 

System; and the City of Plantation Police Officers 

Pension Fund 

BERNSTEIN LITOWITZ BERGER 

& GROSSMANN LLP 

Salvatore Graziano, pro hac vice forthcoming 

Hannah Ross, pro hac vice forthcoming 

John Rizio-Hamilton, pro hac vice forthcoming 

Brenna Nelinson, pro hac vice forthcoming 

Matthew Traylor, pro hac vice forthcoming 

1251 Avenue of the Americas 

New York, NY 10020 

Tel: (212) 554-1400 

Fax: (212) 554-1444 

salvatore@blbglaw.com

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hannah@blbglaw.com 

johnr@blbglaw.com

brenna.nelinson@blbglaw.com 

matthew.traylor@blbglaw.com 

Counsel for Lead Plaintiffs the State of Alaska, 

Alaska Permanent Fund; the City of Fort 

Lauderdale General Employees’ Retirement 

System; and the City of Plantation Police Officers 

Pension Fund 

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