PROSPECTUS SUPPLEMENT
(To Prospectus Dated August 6, 1992) RYDER SYSTEM
$200,000,000
RYDER SYSTEM, INC.
MEDIUM-TERM NOTES, SERIES 11
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
Ryder System, Inc. (the 'Company') from time to time may offer up to
$200,000,000 in aggregate initial offering price of its Medium-Term Notes,
Series 11 (the 'Notes'), subject to reduction from time to time after the date
hereof at the option of the Company including reduction as a result of the sale
of other debt securities of the Company under the Prospectus to which this
Prospectus Supplement relates. Each Note will mature on a day (as defined below)
nine months or more from the date of issue, as selected by the purchaser and
agreed to by the Company.
Each Note will bear interest at either a fixed rate (a 'Fixed Rate Note'), which
may be zero in the case of certain Notes issued at a price representing a
discount from the principal amount payable at maturity, or a floating rate (a
'Floating Rate Note'), as set forth in a pricing supplement (the 'Pricing
Supplement') to this Prospectus Supplement. Unless otherwise specified in the
applicable Pricing Supplement, interest on each Fixed Rate Note will accrue from
its date of issue and will be payable semiannually on each May 1 and November 1
and at maturity. Interest on each Floating Rate Note will accrue from its date
of issue and will be payable monthly, quarterly, semiannually or annually, as
specified in the applicable Pricing Supplement, and at maturity. Unless
otherwise specified in the applicable Pricing Supplement, the Notes may not be
redeemable at the option of the Company or repayable at the option of the holder
prior to the maturity thereof. See 'Terms of the Notes.'
Each Note will be represented either by a single global certificate (a 'Global
Security') in registered form registered in the name of a nominee of The
Depository Trust Company, as depositary (a 'Book-Entry Note'), or by a
certificate issued in temporary or definitive registered form (a 'Certificated
Note'), as set forth in the applicable Pricing Supplement. Beneficial interests
in Global Securities representing Book-Entry Notes will be shown on, and
transfers thereof will be effected only through, records maintained by said
depositary (the 'Depositary') and its direct and indirect participants.
Book-Entry Notes will not be issuable as Certificated Notes except under the
circumstances described herein. See 'Terms of the Notes.'
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, THE PROSPECTUS OR ANY
SUPPLEMENT HERETO. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
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<CAPTION>
PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSION(2) COMPANY(2)(3)
<S> <C> <C> <C>
Per Note............................... 100.000% .125%-.750% 99.875%-99.250%
Total.................................. $200,000,000 $250,000-$1,500,000 $199,750,000-$198,500,000
- ----------------------------------------------------------------------------------------------------------
<FN>
(1) Unless otherwise specified in the applicable Pricing Supplement, the price
to public will be 100% of the principal amount.
(2) The Company will pay a commission to Salomon Brothers Inc, Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan
Securities Inc. or Morgan Stanley & Co. Incorporated, as agents (each an
'Agent' and collectively the 'Agents'), depending upon maturity, ranging
from .125% to .750% of the principal amount of any Note sold through such
Agent. The Company has agreed to indemnify the Agents against certain
liabilities under the Securities Act of 1933.
(3) Before deducting other expenses payable by the Company estimated to be
approximately $250,000, including reimbursement of the Agents' expenses.
</FN>
</TABLE>
The Notes are being offered on a continuing basis by the Company through the
Agents, who have agreed to use their best efforts to solicit purchases of such
Notes. The Company may also sell Notes at a discount to the Agents for resale to
one or more investors and other purchasers at varying prices related to
prevailing market prices at the time of resale, or, if set forth in the
applicable Pricing Supplement, at a fixed public offering price, as determined
by such Agents. In addition, the Agents may offer Notes purchased by them as
principal to other dealers. Unless otherwise specified in the applicable Pricing
Supplement, any Note purchased by an Agent as principal will be purchased at
100% of the principal amount thereof less a percentage equal to the commission
applicable to an agency sale of a Note of identical maturity. The Company may
sell the Notes directly to investors on its own behalf in those jurisdictions
where it is authorized to do so. The Notes are not expected to be listed on any
securities exchange, and there can be no assurance that the Notes offered by
this Prospectus Supplement will be sold or that there will be a secondary market
for the Notes. The Company reserves any right to withdraw, cancel or modify the
offer made hereby without notice. The Company or any Agent, if it solicits the
offer, may reject any offer in whole or in part. See 'Plan of Distribution.'
SALOMON BROTHERS INC
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO.
INCORPORATED
The Date of this Prospectus Supplement is March 9, 1995.
<PAGE>
RECENT DEVELOPMENTS
The Company's revenue from continuing operations in the quarter ended
December 31, 1994 was $1.24 billion, compared with revenue of $1.09 billion in
the quarter ended December 31, 1993. Earnings from continuing operations in the
quarter ended December 31, 1994 were $38.0 million, or $0.48 per common share,
compared with $30.5 million, or $0.39 per share, in the quarter ended December
31, 1993.
For the year ended December 31, 1994, revenue from continuing operations
totaled $4.69 billion, compared with revenue of $4.22 billion in the year ended
December 31, 1993. Earnings from continuing operations rose to $153.5 million,
or $1.95 per share, in 1994, compared with $114.7 million, or $1.43 per share,
in 1993.
In the Company's Vehicle Leasing & Services Division, revenue for the
quarter ended December 31, 1994 rose to $1.08 billion. The division's pretax
earnings for the quarter ended December 31, 1994 were $55.5 million and were
positively impacted by higher revenue and gains on the sale of used vehicles,
partially offset by increased strategic spending in the areas of logistics,
sales and marketing, and reengineering. The division continued to reinvest a
significant portion of its earnings in these strategic areas. The division's
consumer and commercial truck rental businesses made the most significant
contributions to the division's fourth quarter growth in revenue and pretax
earnings.
The Company's Automotive Carrier Division, for the quarter ended December
31, 1994, posted increased earnings and flat revenue. The division's fourth
quarter earnings comparisons were affected by a charge of $5.6 million from an
organizational streamlining in 1993.
Due to increased sales of full service truck leases and dedicated logistics
contracts, and several acquisitions completed during 1994, the Company's capital
spending in the year ended December 31, 1994 totaled $1.91 billion, compared
with $1.24 billion in 1993.
REVENUE AND EARNINGS BEFORE TAXES
BY SEGMENT
PERIODS ENDED DECEMBER 31, 1994 AND 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOURTH QUARTER TWELVE MONTHS
----------------------- ----------------------
1994 1993 1994 1993
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenue:
Vehicle Leasing & Services........................... $1,079,477 929,634 4,057,735 3,596,803
Automotive Carriers.................................. 168,033 167,457 645,402 634,634
Intersegment......................................... (4,758) (3,446) (17,534) (14,407)
---------- --------- --------- ---------
$1,242,752 1,093,645 4,685,603 4,217,030
---------- --------- --------- ---------
---------- --------- --------- ---------
Earnings from continuing operations before income
taxes:
Vehicle Leasing & Services........................... $ 55,479 45,983 234,258 204,370
Automotive Carriers.................................. 15,215 10,641 50,078 31,955
Other................................................ (6,234) (7,296) (23,817) (26,549)
---------- --------- --------- ---------
$ 64,460 49,328 260,519 209,776
---------- --------- --------- ---------
---------- --------- --------- ---------
</TABLE>
S-2
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company and its subsidiaries, whether or not consolidated, for each of the
periods indicated. For purposes of computing the ratio of earnings to fixed
charges, fixed charges consist of interest expense plus interest capitalized and
that portion (one third) of rental expense considered to represent interest.
Earnings are computed by adding fixed charges, except interest capitalized, to
earnings from continuing operations before income taxes. On December 7, 1993,
the Company completed the spin-off of its aviation services businesses through a
distribution of common shares of Aviall, Inc. to holders of the Company's common
stock. Prior period ratios have been restated to exclude discontinued
operations, such as those aviation services businesses.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
- ---------------------------------------------------------
1994 1993 1992 1991 1990
- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
2.36 2.23 1.90 1.29 1.43
</TABLE>
TERMS OF THE NOTES
GENERAL
The following description (unless otherwise specified in a Pricing
Supplement) of the particular terms of the Notes offered hereby supplements, and
to the extent inconsistent therewith replaces, the description of the general
terms of the Notes set forth in the Prospectus, to which description reference
is hereby made.
The Notes are a series of the Debt Securities described in the accompanying
Prospectus and will be limited to $200,000,000 in aggregate initial offering
price. See 'Description of Debt Securities' on pages four to eleven of the
accompanying Prospectus for additional information concerning the Notes and the
Indenture (as defined in the accompanying Prospectus) under which they are to be
issued.
The Notes are to mature on any day nine months or more from the date of
issue (the 'Issue Date') as selected by the purchaser and agreed to by the
Company.
Each Note will bear interest at either (i) a fixed rate, which may be zero
in the case of certain Notes issued at an Issue Price (as defined below)
representing a discount from the principal amount payable at maturity (a 'Zero
Coupon Note'), or (ii) a floating rate determined by reference to the interest
rate basis or combination of interest rate bases (the 'Base Rate') or interest
rate formulas specified in the applicable Pricing Supplement, which may be
adjusted by a Spread or Spread Multiplier (each as defined below).
Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note. Except as set forth in the accompanying Prospectus under
'Description of Debt Securities--Global Securities,' Book-Entry Notes will not
initially be issuable as Certificated Notes. The Notes are issuable in
denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000. Unless otherwise specified in the applicable Pricing
Supplement attached hereto, the Notes will be issued at 100% of their principal
amount.
Principal and interest initially will be payable, and Certificated Notes
initially will be transferable and exchangeable, at the office of The Chase
Manhattan Bank (National Association), as Trustee, at 4 Chase MetroTech Center,
Brooklyn, New York 11245, provided that payment of interest on Certificated
Notes may be made at the option of the Company by check mailed to the registered
Holders of such Notes and provided further that the holder of $10 million or
more of Certificated Notes with similar tenor or terms will be entitled to
receive payment by wire transfer in U.S. dollars, but only if appropriate
payment instructions have been received in writing not later than 15 calendar
days prior to the applicable Interest Payment Date.
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<PAGE>
As used herein:
(i) 'Business Day' with respect to any Note means, unless otherwise
specified in the applicable Pricing Supplement, any day, other than a
Saturday or Sunday, that meets each of the following applicable
requirements: the day is (a) neither a legal holiday nor a day on which
banking institutions are authorized or required by law or regulation to be
closed in The City of New York; and (b) if such Note is a LIBOR Note, a
London Banking Day. 'London Banking Day' means any day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market;
(ii) 'Discount Note' means (a) a Note which provides for an amount less
than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to the
Indenture and (b) any other Note that for United States Federal income tax
purposes would be considered an original issue discount note;
(iii) 'Interest Payment Date' with respect to any Note means a date
(other than the Maturity Date) on which, under the terms of such Note,
regularly scheduled interest shall be payable;
(iv) 'Maturity Date' with respect to any Note means the date on which
such Note will mature, as specified thereon; and
(v) 'Record Date' with respect to any Interest Payment Date for any Note
shall be the date (whether or not a Business Day) 15 calendar days (unless
otherwise specified in the applicable Pricing Supplement) immediately
preceding such Interest Payment Date.
References herein to 'U.S. dollars' or 'U.S.$' or '$' are to the currency
of the United States of America.
All percentages resulting from any calculations will be rounded, if
necessary, to the nearest one millionth of a percentage point (with five
ten-millionths of a percentage point being rounded upward) and all amounts in
U.S. dollars rounded to the nearest cent (with one-half cent being rounded
upward).
The Pricing Supplement relating to each Note will describe the following
terms, as applicable: (1) whether such Note is a Fixed Rate Note, a Floating
Rate Note, a Discount Note or a Zero-Coupon Note; (2) the price (expressed as a
percentage of the aggregate principal amount thereof) at which such Note will be
issued (the 'Issue Price'); (3) the Issue Date; (4) the Maturity Date of such
Note; (5) if such Note is a Fixed Rate Note, the rate per annum at which such
Note will bear interest, if any (the 'Interest Rate'); (6) if such Note is a
Floating Rate Note, the Base Rate, the Initial Interest Rate, the Interest Reset
Period, the Interest Reset Date, the Interest Payment Dates, the Index Maturity,
the Maximum Interest Rate and the Minimum Interest Rate, if any, and the Spread
or Spread Multiplier, if any (all as defined herein), and any other terms
relating to the particular method of calculating the Interest Rate for such
Note; (7) whether such Note may be redeemed at the option of the Company or
repaid at the option of the holders thereof prior to its Maturity Date, and if
so, the provisions relating to such redemption or repayment; (8) whether such
Note will be represented by a Global Note or a certificate issued in definitive
form; (9) certain special tax consequences of the purchase, ownership and
disposition of certain Notes, if any; and (10) any other terms of such Note not
inconsistent with the provisions of the Indenture.
FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Issue Date or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, as the case may be, at the annual rate stated on the face thereof
and interest will be payable semiannually on May 1 and November 1 until the
principal amount thereof is paid or made available for payment or upon earlier
redemption or repayment. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. Interest will be paid to the person in whose name
the Fixed Rate Note is registered at the close of business on the Record Date
next preceding the May 1 and November 1 interest payment date
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<PAGE>
(each an 'Interest Payment Date'). Notwithstanding the foregoing, periodic
payments of interest will not be made with respect to any Zero-Coupon Note.
However, interest payable on the Maturity Date will be payable to the person in
whose name the Fixed Rate Note is registered on the Maturity Date and to whom
principal shall be payable, and the first payment of interest on any Fixed Rate
Note issued between a Record Date and an Interest Payment Date will be made on
the next succeeding Interest Payment Date to the registered owner at the close
of business on the Record Date next preceding the date of such payment. Interest
rates are subject to change by the Company from time to time but no such change
will affect any Fixed Rate Notes theretofore issued or as to which an offer has
been accepted by the Company. Each payment of interest shall include interest
accrued through the day preceding the Interest Payment Date or Maturity Date or
date of redemption or repayment. If any Interest Payment Date or the Maturity
Date (or date of redemption or repayment) of a Fixed Rate Note falls on a day
that is not a Business Day, the payment will be made on the next Business Day as
if it were made on the date such payment was due, and no interest will accrue on
the amount so payable for the period from and after such Interest Payment Date
or the Maturity Date (or the date of redemption or repayment), as the case may
be.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from its Issue Date at a rate
per annum equal to the Initial Interest Rate set forth on the applicable Pricing
Supplement until the first Interest Reset Date and thereafter at rates
determined by reference to the Base Rate plus or minus the Spread, if any, or
multiplied by the Spread Multiplier, if any (each as specified in the applicable
Pricing Supplement), until the principal thereof is paid or payment thereof is
duly provided for. The 'Spread' is the number of basis points (one basis point
equals one-hundredth of a percentage point) specified in the applicable Pricing
Supplement as being applicable to such Note, and the 'Spread Multiplier' is the
percentage specified in the applicable Pricing Supplement as being applicable to
such Note. Any Floating Rate Note may also have either or both of the following:
(i) a maximum numerical interest rate limitation, or ceiling, on the rate of
interest that may accrue during any interest period (the 'Maximum Interest
Rate') and (ii) a minimum numerical interest rate limitation, or floor, on the
rate of interest that may accrue during any interest period (the 'Minimum
Interest Rate'). The applicable Pricing Supplement will designate one or more of
the following Base Rates as applicable to each Floating Rate Note: (a) the
Commercial Paper Rate (a 'Commercial Paper Rate Note'), (b) LIBOR (a 'LIBOR
Note'), (c) the Treasury Rate (a 'Treasury Rate Note'), (d) the Federal Funds
Rate (a 'Federal Funds Rate Note'), (e) the Prime Rate (a 'Prime Rate Note') (f)
the CMT Rate (a 'CMT Rate Note') or (g) such other Base Rate or interest rate
formula as is specified in the applicable Pricing Supplement. The Spread, Spread
Multiplier, Index Maturity (as defined below) and other variable terms of the
Floating Rate Notes are subject to change by the Company from time to time, but
no such change will affect any Floating Rate Note theretofore issued or as to
which an offer has been accepted by the Company.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semiannually, annually or otherwise (such period
being the 'Interest Reset Period' for such Note, and the first day of each
Interest Reset Period being an 'Interest Reset Date'), as specified in the
applicable Pricing Supplement. Unless otherwise specified in the applicable
Pricing Supplement, the Interest Reset Date will be, in the case of Floating
Rate Notes that reset daily, each Business Day; in the case of Floating Rate
Notes (other than Treasury Rate Notes) that reset weekly, Wednesday of each
week; in the case of Treasury Rate Notes that reset weekly, Tuesday of each week
(except as hereinafter provided); in the case of Floating Rate Notes that reset
monthly, the third Wednesday of each month; in the case of Floating Rate Notes
that reset quarterly, the third Wednesday of March, June, September and
December; in the case of Floating Rate Notes that reset semiannually, the third
Wednesday of each of two months specified in the applicable Pricing Supplement;
and in the case of Floating Rate Notes that reset annually, the third Wednesday
of the month specified in the applicable Pricing Supplement. If any Interest
Reset Date for any Floating Rate Note would otherwise be a day that is not a
Business Day, such Interest Reset Date shall be postponed to the
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<PAGE>
next day that is a Business Day, except, in the case of a LIBOR Note, if such
Business Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day.
Interest on each Floating Rate Note will be payable monthly, quarterly,
semiannually, annually or as otherwise specified in the applicable Pricing
Supplement (the 'Interest Payment Period'). Except as provided below or in the
applicable Pricing Supplement, interest will be payable (in the case of Floating
Rate Notes which reset daily, weekly or monthly) on the third Wednesday of each
month or on the third Wednesday of March, June, September and December; in the
case of Floating Rate Notes which reset quarterly, on the third Wednesday of
March, June, September and December; in the case of Floating Rate Notes which
reset semiannually, on the third Wednesday of each of the two months specified
in the applicable Pricing Supplement; and in the case of Floating Rate Notes
which reset annually, on the third Wednesday of the month specified in the
applicable Pricing Supplement and, in each case, on the Maturity Date thereof.
If any Interest Payment Date for any Floating Rate Note would otherwise be a day
that is not a Business Day, such Interest Payment Date shall be postponed to the
next day that is a Business Day except, in the case of a LIBOR Note, if such
Business Day is in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding Business Day and no interest will accrue
for the period from and after such Interest Payment Date. If the Maturity Date
(or date of redemption or repayment) of any Floating Rate Note would fall on a
day that is not a Business Day, the payment of interest and premium, if any, and
principal may be made on the next succeeding Business Day, and no interest on
such payment will accrue for the period from and after the Maturity Date (or the
date of redemption or repayment).
Interest will be paid to the person in whose name a Floating Rate Note is
registered at the close of business on the Record Date immediately preceding an
Interest Payment Date; provided, however, that interest payable on the Maturity
Date (or the date of redemption or repayment) will be payable to the person in
whose name a Floating Rate Note is registered on such date and to whom principal
shall be payable; provided, further, that the first payment of interest on any
Floating Rate Note issued after a Record Date and before the next succeeding
Interest Payment Date shall be made on the second succeeding Interest Payment
Date to the registered owner at the close of business on the Record Date next
preceding the date of such payment.
Interest payments on each Interest Payment Date or on the Maturity Date (or
the date of redemption or repayment) for Floating Rate Notes will include
accrued interest from and including the Issue Date or from and including the
last date in respect of which interest has been paid or duly provided for, as
the case may be, to, but excluding, such Interest Payment Date or Maturity Date
(or the date of redemption or repayment).
Accrued interest will be calculated by multiplying the principal amount of
a Floating Rate Note by an accrued interest factor. Such accrued interest factor
will be computed by adding the interest factors calculated for each day in the
period for which accrued interest is being calculated. The interest factor
(expressed as a decimal) for each such day will be computed by dividing the
interest rate applicable to such day by 360, in the case of Commercial Paper
Rate Notes, LIBOR Notes, Federal Funds Rate Notes and Prime Rate Notes, or by
the actual number of days in the year in the case of Treasury Rate Notes or CMT
Rate Notes. The interest rate in effect on each day will be (i) if such day is
an Interest Reset Date, the interest rate with respect to the Interest
Determination Date (as defined below) pertaining to such Interest Reset Date, or
(ii) if such day is not an Interest Reset Date, the interest rate with respect
to the Interest Determination Date pertaining to the next preceding Interest
Reset Date, subject in either case to any Maximum Interest Rate or Minimum
Interest Rate limitation referred to above and to any adjustment by a Spread or
Spread Multiplier referred to above; provided, however, that (a) the interest
rate in effect for the period from the Issue Date to the first Interest Reset
Date set forth in the applicable Pricing Supplement will be the 'Initial
Interest Rate' specified in the applicable Pricing Supplement.
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<PAGE>
The 'Interest Determination Date' pertaining to an Interest Reset Date for
Commercial Paper Rate Notes, Prime Rate Notes, Federal Funds Rate Notes or CMT
Rate Notes will be the second Business Day next preceding such Interest Reset
Date. The Interest Determination Date pertaining to an Interest Reset Date for a
LIBOR Note will be the second London Banking Day next preceding such Interest
Reset Date. The Interest Determination Date pertaining to an Interest Reset Date
for a Treasury Rate Note will be the day of the week in which such Interest
Reset Date falls on which Treasury bills of the Index Maturity (as defined
below) specified on the face of such Note are auctioned, but in no event shall
such Interest Determination Date be after the related Interest Payment Date.
Treasury bills are normally sold at auction on Monday of each week, unless that
day is a legal holiday, in which case the auction is normally held on the
following Tuesday, except that such auction may be held on the preceding Friday.
If, as the result of a legal holiday, an auction is so held on the preceding
Friday, such Friday will be the Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week for such a Treasury
Rate Note. If an auction date shall fall on any Interest Reset Date for a
Treasury Rate Note, then such Interest Reset Date shall instead be the first
Business Day immediately following such auction date. If no auction is held in
any week (or on the preceding Friday), the Interest Determination Date shall be
the Monday of the week in which the Interest Reset Date falls.
The 'Calculation Date', where applicable, pertaining to an Interest
Determination Date will be the first to occur of either (a) the tenth calendar
day after such Interest Determination Date or, if such day is not a Business
Day, the next succeeding Business Day or (b) the Business Day preceding the date
any payment is required to be made for any period following the applicable
Interest Reset Date or Maturity Date (or the date of redemption or repayment).
Unless otherwise specified in the applicable Pricing Supplement, The Chase
Manhattan Bank (National Association) shall be the calculation agent (in such
capacity, the 'Calculation Agent') with respect to Floating Rate Notes. Upon
request of the holder of any Floating Rate Note, the Calculation Agent will
provide the interest rate then in effect and, if determined, the interest rate
that will become effective on the next Interest Reset Date with respect to such
Floating Rate Note.
'Index Maturity' is the particular maturity (specified in the applicable
Pricing Supplement) of the type of instrument or obligation from which a Base
Rate is calculated.
COMMERCIAL PAPER RATE NOTES
Each Commercial Paper Rate Note will bear interest at the interest rate
calculated with reference to the Commercial Paper Rate and the Spread or Spread
Multiplier, if any, specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
'Commercial Paper Rate' means, with respect to any Interest Determination Date,
the Money Market Yield (calculated as described below) of the rate on such date
for commercial paper having the Index Maturity designated in the applicable
Pricing Supplement as such rate is published by the Board of Governors of the
Federal Reserve System in 'Statistical Release H.15(519), Selected Interest
Rates,' or any successor publication of such Board ('H.15(519)'), under the
heading 'Commercial Paper.' If such rate is not published by 9:00 a.m., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, then the Commercial Paper Rate shall be the Money Market Yield of the rate
on that Interest Determination Date for commercial paper having the Index
Maturity designated in the applicable Pricing Supplement as published by the
Federal Reserve Bank of New York in its daily statistical release 'Composite
3:30 p.m. Quotations for U.S. Government Securities' ('Composite Quotations')
under the heading 'Commercial Paper.' If such rate is not published by 3:00
p.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the Commercial Paper Rate for that Interest
Determination Date shall be calculated by the Calculation Agent and shall be the
Money Market Yield of the arithmetic mean of the offered rates of three leading
dealers of commercial paper in The City of New York, which may include The Chase
Manhattan Bank (National Association) (in such capacity, 'Chase'), selected by
the Calculation
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<PAGE>
Agent (after consulting with the Company) as of 11:00 a.m., New York City time,
on that Interest Determination Date, for commercial paper having the Index
Maturity designated in the applicable Pricing Supplement placed for an
industrial issuer whose bond rating is 'AA,' or the equivalent, from a
nationally recognized rating agency; provided, however, that, if the dealers
selected as aforesaid are not quoting as mentioned in this sentence, the
Commercial Paper Rate will be the Commercial Paper Rate in effect on such
Interest Determination Date.
'Money Market Yield' shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
D X 360
Money Market Yield = ------------- X 100
360 - (D X M)
where 'D' refers to the per annum rate for the commercial paper, quoted on a
bank discount basis and expressed as a decimal; and 'M' refers to the actual
number of days in the interest period for which interest is being calculated.
LIBOR NOTES
Each LIBOR Note will bear interest at the interest rate calculated with
reference to LIBOR and the Spread or Spread Multiplier, if any, specified in
such Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, 'LIBOR'
will be determined by the Calculation Agent in accordance with the following
provisions:
(i) With respect to an Interest Determination Date, LIBOR shall equal
either: (A) the arithmetic mean, as determined by the Calculation Agent, of
the offered rates which appear on the display specified in the applicable
Pricing Supplement on the LIBOR page of the Reuters Monitor Money Rates
Service (or such other relevant page as may replace that page on that
service) (the 'Reuters Screen') or (B) the offered rate which appears on
page 3750 of the Dow Jones Telerate Service (or such other page as may
replace that page on that service) (the 'Telerate Page'), in each case as
of 11:00 a.m., London time, on such Interest Determination Date; if neither
the Reuters Screen nor the Telerate Page is specified in the applicable
Pricing Supplement, LIBOR will be determined as if the Telerate Page had
been specified; provided, however, in the case of (A) above, if fewer than
two such offered rates so appear on the Reuters Screen, or in the case of
(B) above, if no rate appears on the Telerate Page, LIBOR for such Interest
Determination Date will be determined as described in (ii) below.
(ii) If, on any Interest Determination Date, fewer than two offered
rates appear on the Reuters Screen and if no rate appears on the Telerate
Page, as the case may be, the Calculation Agent will request the principal
London office of each of four major banks in the London interbank market,
which may include Chase, as selected by the Calculation Agent (after
consulting with the Company), to provide the Calculation Agent with its
quotation of the rate offered to prime banks in the London interbank market
at approximately 11:00 a.m., London time, on such Interest Determination
Date for deposits in U.S. dollars having the Index Maturity, and in a
principal amount equal to an amount not less than $1,000,000 that is
representative of a single transaction in such market at such time (a
'Representative Amount'). If at least two such quotations are provided,
LIBOR will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR will be the arithmetic mean of the rates
quoted at approximately 11:00 a.m., New York City time, on such Interest
Determination Date by three major U.S. banks, which may include Chase,
selected by the Calculation Agent (after consulting with the Company), for
loans in U.S. dollars to leading European banks having the Index Maturity
designated in the Pricing Supplement, commencing on the second London
Banking Day immediately following that Interest Determination Date and in a
Representative Amount, provided, however, that if fewer than three banks
selected as aforesaid by the Calculation Agent
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are quoting as mentioned in this sentence, LIBOR for such date will be
LIBOR in effect on such Interest Determination Date.
TREASURY RATE NOTES
Each Treasury Rate Note will bear interest at the interest rate calculated
with reference to the Treasury Rate and the Spread or Spread Multiplier, if any,
specified in such Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
'Treasury Rate' means, with respect to any Interest Determination Date, the rate
for the auction held on such Interest Determination Date of direct obligations
of the United States ('Treasury bills') having the Index Maturity designated in
the applicable Pricing Supplement as such rate is published in H.15(519) under
the heading 'U.S. Government Securities--Treasury bills--auction average
(investment)' or, if such rate is not so published by 9:00 a.m., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
then the Treasury Rate shall be the auction average rate (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise made available by the United States
Department of the Treasury. In the event that the results of the auction of
Treasury bills having the Index Maturity designated in the applicable Pricing
Supplement is not published or made available as provided above by 3:00 p.m.,
New York City time, on such Calculation Date or if no such auction is held in a
particular week (or on the preceding Friday, if applicable), then the Treasury
Rate for that Interest Determination Date shall be calculated by the Calculation
Agent and shall be a yield to maturity (expressed as a bond equivalent, on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily basis)
of the arithmetic mean of the secondary market bid rates, as of approximately
3:30 p.m., New York City time, on such Interest Determination Date, of three
leading primary United States government securities dealers selected by the
Calculation Agent (after consulting with the Company) for the issue of Treasury
bills with a remaining maturity closest to the Index Maturity designated in the
applicable Pricing Supplement; provided, however, that if the dealers selected
as aforesaid are not quoting as mentioned in this sentence, the Treasury Rate
will be the Treasury Rate in effect on such Interest Determination Date.
FEDERAL FUNDS RATE NOTES
Each Federal Funds Rate Note will bear interest at the interest rate
calculated with reference to the Federal Funds Rate and the Spread or Spread
Multiplier, if any specified in such Note and in the applicable Pricing
Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
'Federal Funds Rate' means, with respect to any Interest Determination Date, the
rate on that day for Federal Funds as published in H.15(519) under the heading
'Federal Funds (Effective),' or, if such rate is not so published by 11:00 a.m.,
New York City time, on the Calculation Date pertaining to such Interest
Determination Date, then the Federal Funds Rate shall be the rate on such
Interest Determination Date as published in Composite Quotations under the
heading 'Federal Funds/Effective Rate.' If such rate is not published in either
H.15(519) or Composite Quotations by 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Federal
Funds Rate for such Interest Determination Date shall be calculated by the
Calculation Agent and will be the arithmetic mean of the rates for the last
transaction in overnight Federal Funds arranged by each of three leading brokers
of Federal Funds transactions in New York City, which may include Chase,
selected by the Calculation Agent (after consulting with the Company) prior to
11:00 a.m., New York City time, on such Interest Determination Date; provided,
however, that if the brokers selected as aforesaid are not quoting as mentioned
in this sentence, the Federal Funds Rate with respect to such Interest
Determination Date will remain the Federal Funds Rate then in effect on such
Interest Determination Date.
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PRIME RATE NOTES
Each Prime Rate Note will bear interest at the interest rate calculated
with reference to the Prime Rate and the Spread or Spread Multiplier, if any
specified in such Note and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the 'Prime
Rate' means, with respect to any Interest Determination Date, the rate on such
date as published in H.15(519) under the heading 'Bank Prime Loan.' In the event
that such rate is not published by 9:00 a.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the Prime
Rate will be determined by the Calculation Agent and will be the arithmetic mean
of the rates of interest publicly announced by each bank that appears on the
Reuters Screen NYMF Page as such bank's prime rate or base lending rate as in
effect for that Interest Determination Date. 'Reuters Screen NYMF Page' means
the display designated as page 'NYMF' on the Reuters Monitor Money Rates Service
(or such other page as may replace the NYMF page on that service for the purpose
of displaying prime rates or base lending rates of major United States banks).
If fewer than four such rates but more than one such rate appear on the Reuters
Screen NYMF Page for such Interest Determination Date, the Prime Rate shall be
determined by the Calculation Agent and will be the arithmetic mean of the prime
rates quoted on the basis of the actual number of days in the year divided by
360 as of the close of business on such Interest Determination Date by at least
two major money center banks in New York City selected by the Calculation Agent
(after consulting with the Company). If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate will be determined by the Calculation
Agent and will be the arithmetic mean of the prime rates furnished in New York
City by three substitute banks or trust companies organized and doing business
under the laws of the United States, or any State thereof, in each case having
total equity capital of at least U.S. $500,000,000 and being subject to
supervision or examination by Federal or State authority, which may include
Chase, selected by the Calculation Agent (after consulting with the Company) to
provide such rate or rates; provided, however, that if the banks selected as
aforesaid are not quoting as mentioned in this sentence, the Prime Rate will
remain the Prime Rate in effect on such Interest Determination Date.
CMT RATE NOTES
Each CMT Rate Note will bear interest at the interest rate calculated with
reference to the CMT Rate and the Spread or Spread Multiplier, if any, specified
in such Note and any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the 'CMT
Rate' means, with respect to any Interest Determination Date, the rate on such
date as displayed on the Designated CMT Telerate Page (as defined below) under
the caption '. . .Treasury Constant Maturities. . .Federal Reserve Board Release
H.15. . .Mondays Approximately 3:45 P.M.,' under the column for the Designated
CMT Maturity Index (as defined below) for (i) if the Designated CMT Telerate
Page is 7055, the rate on such CMT Rate Interest Determination Date and (ii) if
the Designated CMT Telerate Page is 7052, the week, or the month, as applicable,
ended immediately preceding the week in which the related CMT Rate Interest
Determination Date occurs. If such rate is no longer displayed on the relevant
page, or if not displayed by 3:00 P.M., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest Determination
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index as published in the relevant H.15(519). If such rate is no longer
published, or if not published by 3:00 P.M., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest Determination
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index (or other United States Treasury rate for the Designated CMT
Maturity Index) for the CMT Rate Interest Determination Date with respect to
such Interest Reset Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed
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on the Designated CMT Telerate Page and published in the relevant H.15(519). If
such information is not provided by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for the CMT Rate Interest
Determination Date will be calculated by the Calculation Agent, and will be a
yield to maturity, based on the arithmetic mean of the secondary market closing
offer side prices as of approximately 3:30 P.M., New York City time, on the CMT
Rate Interest Determination Date reported, according to their written records,
by three leading primary United States government securities dealers (each, a
'Reference Dealer') in The City of New York (which may include the Agents or
their affiliates) selected by the Calculation Agent after consulting with the
Company (from five such Reference Dealers selected by the Calculation Agent
after consulting with the Company and eliminating the highest quotation (or, in
the event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest) ), for the most recently issued direct
noncallable fixed rate obligations of the United States ('Treasury Notes') with
an original maturity of approximately the Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated CMT Maturity Index
minus one year. If the Calculation Agent cannot obtain three such Treasury Note
quotations, the CMT Rate for such CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity based on the
arithmetic mean of the secondary market offer side prices as of approximately
3:30 P.M., New York City time, on the CMT Rate Interest Determination Date of
three Reference Dealers in The City of New York (from five such Reference
Dealers selected by the Calculation Agent after consulting with the Company and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest) ), for Treasury Notes with an original maturity of the number of years
that is the next highest to the Designated CMT Maturity Index and a remaining
term to maturity closest to the Designated CMT Maturity Index and in an amount
of at least $100 million. If three or four (and not five) of such Reference
Dealers are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided however, that if fewer than
three Reference Dealers selected by the Calculation Agent after consulting with
the Company are quoting as described herein, the CMT Rate will be the CMT Rate
in effect on such CMT Rate Interest Determination Date. If two Treasury Notes
with an original maturity as described in the third preceding sentence have
remaining terms to maturity equally close to the Designated CMT Maturity Index,
the quotes for the Treasury Note with the shorter remaining term to maturity
will be used.
'Designated CMT Telerate Page' means the display on the Dow Jones Telerate
Service on the page designated in the applicable Pricing Supplement (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519) ), for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no such page is specified in the applicable Pricing Supplement, the Designated
CMT Telerate Page shall be 7052, for the most recent week.
'Designated CMT Maturity Index' means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
BOOK-ENTRY NOTES
Upon issuance, all Fixed Rate Book-Entry Notes having the same Issue Date,
Interest Rate, Interest Payment Dates, redemption provision, if any, repayment
provision, if any, and Maturity Date and all Floating Rate Book-Entry Notes
having the same Base Rate, Initial Interest Rate, Interest Reset Dates, Interest
Reset Period, Spread or Spread Multiplier, Index Maturity, redemption provision,
if any, repayment provision, if any, and Maturity Date will be represented by a
single Global Security. Each Global Security representing Book-Entry Notes will
be deposited with, or on behalf of, the Depositary and registered in the name of
a nominee of the Depositary.
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The Depositary has advised the Company and the Agent as follows: the
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a 'clearing
corporation' within the meaning of the New York Uniform Commercial Code and a
'clearing agency' registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. The Depositary was created to hold securities
of its participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Agents), banks, trust
companies, clearing corporations and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies, that clear through or maintain a custodial relationship
with a participant, either directly or indirectly.
A further description of the Depositary's procedure with respect to Global
Securities representing Book-Entry Notes is set forth in the accompanying
Prospectus under 'Description of Debt Securities--Global Securities.' The
Depositary has confirmed to the Company, the Agents and the Trustee that it
intends to follow such procedures.
SINKING FUND
Unless otherwise specified in the applicable Pricing Supplement, no sinking
fund will be provided for the Notes.
REDEMPTION
Although the Notes will not generally be redeemable prior to their Maturity
Date, the Company in the applicable Pricing Supplement relating to a Note may
specify that such Note will be redeemable at the Company's option on a date or
dates specified prior to its Maturity Date at a price or prices set forth in the
applicable Pricing Supplement, together with accrued interest to the date of
redemption. The Company may redeem any of the Notes which are redeemable and
remain outstanding either in whole or from time to time in part, upon not less
than 30, nor more than 60, days notice. If less than all of the Notes with like
tenor and terms are not redeemed, the Notes to be redeemed shall be selected by
the Trustee by such method as the Trustee shall deem fair and appropriate.
The amount of any Discount Note payable in the event of redemption by the
Company or acceleration of the Maturity Date thereof, in lieu of the stated
principal amount due at the Maturity Date, shall be the Amortized Face Amount of
such Discount Note as of the date of such redemption, repayment or acceleration.
The 'Amortized Face Amount' of a Discount Note shall be the amount equal to (a)
the Issue Price of such Discount Note set forth in the applicable Pricing
Supplement plus (b) the portion of the difference between the Issue Price and
the principal amount of such Discount Note that has accrued at the yield to
maturity set forth in the Pricing Supplement (computed in accordance with
generally accepted United States bond yield computation principles) at the date
as of which the Amortized Face Amount is calculated, but in no event shall the
Amortized Face Amount of such Discount Note exceed its stated principal amount.
See also 'Certain Federal Income Tax Considerations--United States
Persons--Discount Notes.'
REPAYMENT AND REPURCHASE
Although the Notes will not generally be repayable at the option of the
holder prior to their Maturity Date, the Company, in the Pricing Supplement
relating to a Note, may specify that such Note will be repayable at the option
of the holder on a date or dates specified prior to its Maturity Date at a price
or prices set forth in the applicable Pricing Supplement, together with accrued
interest to the date of repayment.
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In order for a Note to be repaid, the Paying Agent (the Company has
initially appointed the Trustee as Paying Agent) must receive at least 30, but
not more than 45, days prior to the repayment date (i) the Note with the form
entitled 'Option to Elect Repayment' on the reverse of the Note duly completed
or (ii) a facsimile transmission or a letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company in the United States of America setting forth
the name of the holder of the Note, the principal amount of the Note, the
principal amount of the Note to be repaid, the certificate number or a
description of the tenor and terms of the Note, a statement that the option to
elect repayment is being exercised thereby and a guarantee that the Note to be
repaid with the form entitled 'Option to Elect Repayment' on the reverse of the
Note duly completed will be received by the Paying Agent not later than five
Business Days after the date of such facsimile transmission or letter and such
Note and form duly completed are received by the Paying Agent by such fifth
Business Day. Exercise of the repayment option by the holder of a Note shall be
irrevocable. The repayment option may be exercised by the holder of a Note for
less than the entire principal amount of the Note provided that the principal
amount of the Note remaining outstanding after repayment is an authorized
denomination.
The Company may at any time purchase Notes at any price in the open market
or otherwise. Notes so purchased by the Company may be held or resold or, at the
discretion of the Company may be surrendered to the Trustee for cancellation.
CERTAIN LIMITATIONS ON CLAIMS IN BANKRUPTCY
If a bankruptcy proceeding is commenced in respect of the Company, the
claim of the holder of a Discount Note may, under Section 502(b)(2) of Title 11
of the United States Code, be limited to the issue price of such Note plus that
portion of any original issue discount that is amortized from the date of issue
to the commencement of the proceeding.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the principal U.S. Federal tax consequences
resulting from the beneficial ownership of Notes by certain persons. This
summary does not purport to consider all the possible U.S. Federal tax
consequences of the purchase, ownership or disposition of the Notes and is not
intended to reflect the individual tax position of any beneficial owner. It
deals only with Notes held as capital assets, whether issued in U.S. dollars or
currencies or composite currencies other than U.S. dollars ('Foreign Currency').
Moreover, except as expressly indicated, it addresses initial purchasers and
does not address beneficial owners with a special tax status or special tax
situations, such as dealers in securities or currencies, Notes (or Foreign
Currency) held as a hedge against currency risks or as part of a straddle with
other investments or as part of a 'synthetic security' or other integrated
investment (including a 'conversion transaction') comprised of a Note and one or
more other investments, or situations in which the functional currency of the
beneficial owner is not the U.S. dollar. Except to the extent discussed below
under 'Non-U.S. Holders', this summary is not applicable to non-United States
persons not subject to U.S. Federal income tax on their worldwide income. This
summary is based upon the U.S. Federal tax laws and regulations as now in effect
and as currently interpreted and does not take into account possible changes in
such tax laws or such interpretations, any of which may be applied
retroactively. It does not include any description of the tax laws of any state,
local or foreign governments that may be applicable to the Notes or holders
thereof. Persons considering the purchase of Notes should consult their own tax
advisors concerning the application of the U.S. Federal tax laws to their
particular situations as well as any consequences to them under the laws of any
other taxing jurisdiction.
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U.S. HOLDERS
PAYMENTS OF INTEREST
In general, interest on a Note, whether payable in U.S. dollars or a
Foreign Currency (other than certain payments on a Discount Note, as defined and
described below under 'Original Issue Discount'), will be taxable to a
beneficial owner who or which is (i) a citizen or resident of the United States,
(ii) a corporation created or organized under the laws of the United States or
any State thereof (including the District of Columbia) or (iii) a person
otherwise subject to United States Federal income taxation on its worldwide
income (a 'U.S. Holder') as ordinary income at the time it is received or
accrued, depending on the holder's method of accounting for tax purposes. If an
interest payment is denominated in or determined by reference to a Foreign
Currency, then special rules, described below under 'Foreign Currency Notes',
apply.
ORIGINAL ISSUE DISCOUNT
The following discussion summarizes the U.S. Federal income tax
consequences to holders of Notes issued with original issue discount ('OID').
The basic rules for reporting OID are contained in the Internal Revenue Code of
1986, as amended (the 'Code'). On February 2, 1994, the Treasury Department
published final regulations (the 'OID Regulations') which expand and illustrate
the rules set forth in the Code.
Special rules apply to OID on a Note that is denominated in Foreign
Currency. See 'Foreign Currency Notes--Foreign Currency Discount Notes'.
General. A Note will be treated as issued with OID (a 'Discount Note') if
the excess of the Note's 'stated redemption price at maturity' over its issue
price is greater than a de minimis amount (set forth in the Code and the OID
Regulations). Generally, the issue price of a Note (or any Note that is part of
an issue of Notes) will be the first price at which a substantial amount of
Notes that are part of such issue of Notes are sold. Under the OID Regulations,
the 'stated redemption price at maturity' of a Note is the sum of all payments
provided by the Note that are not payments of 'qualified stated interest'. A
'qualified stated interest' payment includes any stated interest payment on a
Note that is unconditionally payable at least annually at a single fixed rate
(or at certain floating rates) that appropriately takes into account the length
of the interval between stated interest payments. The Pricing Supplement will
state whether a particular issue of Notes will constitute an issue of Discount
Notes.
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is de minimis, then such excess constitutes 'de minimis
OID'. Under the OID Regulations, unless the election described below under
'Election to Treat All Interest as Original Issue Discount' is made, such a Note
will not be treated as issued with OID (in which case the following paragraphs
under 'Original Issue Discount' will not apply) and a U.S. Holder of such a Note
will recognize capital gain with respect to such de minimis OID as stated
principal payments on the Note are made. The amount of such gain with respect to
each such payment will equal the product of the total amount of the Note's de
minimis OID and a fraction, the numerator of which is the amount of the
principal payment made and the denominator of which is the stated principal
amount of the Note.
In certain cases, Notes that bear stated interest and are issued at par may
be deemed to bear OID for Federal income tax purposes, with the result that the
inclusion of interest in income for Federal income tax purposes may vary from
the actual cash payments of interest made on such Notes, generally accelerating
income for cash method taxpayers. Under the OID Regulations, a Floating Rate
Note may be a Discount Note where (i) it provides for a maximum interest rate or
a minimum interest rate that is reasonably expected as of the issue date to
cause the yield on the Note to be significantly less, in the case of a maximum
rate, or more, in the case of a minimum rate, than the expected yield determined
without the maximum or minimum rate, as the case may be; (ii) it provides for
significant front-loading or back-loading of interest; (iii) it bears interest
at certain combinations of floating or fixed rates; or (iv) it provides for
certain other kinds of contingent
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payments. Notice will be given in the applicable Pricing Supplement when the
Company determines that a particular Note will be a Discount Note. Unless
specified in the applicable Pricing Supplement, Floating Rate Notes will not be
Discount Notes.
The Code and the OID Regulations require a U.S. Holder of a Discount Note
having a maturity of more than one year from its date of issue to include OID in
gross income before the receipt of cash attributable to such income, without
regard to the holder's method of accounting for tax purposes. The amount of OID
includible in gross income by a U.S. Holder of a Discount Note is the sum of the
'daily portions' of OID with respect to the Discount Note for each day during
the taxable year or portion of the taxable year in which the U.S. Holder holds
such Discount Note ('accrued OID'). The daily portion is determined by
allocating to each day in any 'accrual period' a pro rata portion of the OID
allocable to that accrual period. Under the OID Regulations, accrual periods
with respect to a Note may be any set of periods (which may be of varying
lengths) selected by the U.S. Holder as long as (i) no accrual period is longer
than one year and (ii) each scheduled payment of interest or principal on the
Note occurs on the first day or final day of an accrual period.
The amount of OID allocable to an accrual period equals the excess of (a)
the product of the Discount Note's adjusted issue price at the beginning of the
accrual period and the Discount Note's yield to maturity (determined on the
basis of compounding at the close of each accrual period and properly adjusted
for the length of the accrual period) over (b) the sum of any payments of
qualified stated interest on the Discount Note allocable to the accrual period.
The 'adjusted issue price' of a Discount Note at the beginning of the first
accrual period is the issue price and at the beginning of any accrual period
thereafter is (x) the sum of the issue price of such Discount Note, the accrued
OID for each prior accrual period (determined without regard to the amortization
or any acquisition premium or bond premium, which are discussed below), and the
amount of any qualified stated interest on the Note that has accrued prior to
the beginning of the accrual period but is not payable until a later date, less
(y) any prior payments on the Discount Note that were not qualified stated
interest payments. If a payment (other than a payment of qualified stated
interest) is made on the first day of an accrual period, then the adjusted issue
price at the beginning of such accrual period is reduced by the amount of the
payment. If a portion of the initial purchase price of a Note is attributable to
interest that accrued prior to the Note's issue date, the first stated interest
payment on the Note is to be made within one year of the Note's issue date and
such payment will equal or exceed the amount of pre-issuance accrued interest,
then the U.S. Holder may elect to decrease the issue price of the Notes by the
amount of pre-issuance accrued interest, in which case a portion of the first
stated interest payment will be treated as a return of the excluded pre-issuance
accrued interest and not as an amount payable on the Note.
The OID Regulations contain certain special rules that generally allow any
reasonable method to be used in determining the amount of OID allocable to a
short initial accrual period (if all other accrual periods are of equal length)
and require that the amount of OID allocable to the final accrual period equal
the excess of the amount payable at the maturity of the Note (other than any
payment of qualified stated interest) over the Note's adjusted issue price as of
the beginning of such final accrual period. In addition, if an interval between
payments of qualified stated interest on a Note contains more than one accrual
period, then the amount of qualified stated interest payable at the end of such
interval is allocated pro rata (on the basis of their relative lengths) between
the accrual periods contained in the interval.
U.S. Holders of Discount Notes generally will have to include in income
increasingly greater amounts of OID over the life of the Note.
Acquisition Premium. A U.S. Holder that purchases a Note at its original
issuance for an amount in excess of its issue price but less than its stated
redemption price at maturity (any such excess being 'acquisition premium'), and
that does not make the election described below under 'Original Issue
Discount--Election To Treat All Interest as Original Issue Discount', is
permitted to reduce the daily portions of OID by a fraction, the numerator of
which is the excess of the U.S. Holder's purchase price for the Note over the
issue price, and the denominator of which is the excess
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of the sum of all amounts payable on the Note after the purchase date, other
than payments of qualified stated interest, over the Note's issue price.
Alternatively, a U.S. Holder may elect to compute OID accruals as described
under 'Original Issue Discount--General' above, treating the U.S. Holder's
purchase price as the issue price.
Optional Redemption. If the Company has an option to redeem a Note, or the
Holder has an option to cause a Note to be repurchased, prior to the Note's
stated maturity, such option will be presumed to be exercised if, by treating
any date on which such Note may be redeemed or repurchased as the maturity date
and the amount payable on such date in accordance with the terms of such Note
(the 'redemption price') as the stated redemption price at maturity, the yield
on the Note would be (i) in the case of an option of the Company, lower than its
yield to stated maturity, or (ii) in the case of an option of the Holder, higher
than its yield to stated maturity. If such option is not in fact exercised when
presumed to be exercised, the Note would be treated solely for OID purposes as
if it were redeemed or repurchased, and a new Note were issued, on the presumed
exercise date for an amount equal to the Note's adjusted issue price on that
date.
Short-Term Notes. Under the Code, special rules apply with respect to OID
on Notes that mature one year or less from the date of issuance ('Short-Term
Notes'). In general, a cash basis U.S. Holder of a Short-Term Note is not
required to include OID in income as it accrues for U.S. Federal income tax
purposes unless it elects to do so. Accrual basis U.S. Holders and certain other
U.S. Holders, including banks, regulated investment companies, dealers in
securities and cash basis U.S. Holders who so elect, are required to include OID
in income as it accrues on Short-Term Notes on either a straight-line basis or
under the constant yield method (based on daily compounding), at the election of
the U.S. Holder. In the case of a U.S. Holder not required and not electing to
include OID in income currently, any gain realized on the sale or retirement of
Short-Term Notes will be ordinary income to the extent of the OID accrued on a
straight-line basis (unless an election is made to accrue the OID under the
constant yield method) through the date of sale or retirement. U.S. Holders who
are not required and do not elect to include OID on Short-Term Notes in income
as it accrues will be required to defer deductions for interest on borrowings
allocable to Short-Term Notes in an amount not exceeding the deferred income
until the deferred income is realized.
Any U.S. Holder of a Short-Term Note can elect to apply the rules in the
preceding paragraph taking into account the amount of 'acquisition discount', if
any, with respect to the Note (rather than the OID with respect to such Note).
Acquisition discount is the excess of the stated redemption price at maturity of
the Short-Term Note over the U.S. Holder's purchase price. Acquisition discount
will be treated as accruing on a ratable basis or, at the election of the U.S.
Holder, on a constant-yield basis.
For purposes of determining the amount of OID subject to these rules, the
OID Regulations provide that interest payments on a Short-Term Note are not
qualified stated interest, but instead are included in the Short-Term Note's
stated redemption price at maturity. However, all payments on Short-Term Notes,
whether denominated as principal or interest, will be treated as taxable
payments of accrued OID, to the extent that OID as accrued at time of payment.
NOTES PURCHASED AT A PREMIUM
Under the Code, a U.S. Holder that purchases a Note for an amount in excess
of its principal amount will not be subject to the OID rules and may elect to
treat such excess as 'amortizable bond premium', in which case the amount of
qualified stated interest required to be included in the U.S. Holder's income
each year with respect to interest on the Note will be reduced by the amount of
amortizable bond premium allocable (based on the Note's yield to maturity) to
such year. Any election to amortize bond premium shall apply to all bonds (other
than bonds the interest on which is excludible from gross income) held by the
U.S. Holder at the beginning of the first taxable year to which the election
applies or thereafter acquired by the U.S. Holder, and may not be revoked
without the consent of the Internal Revenue Service ('IRS'). See also 'Original
Issue Discount--Election to Treat All Interest as Original Issue Discount'.
S-16
<PAGE>
NOTES PURCHASED AT A MARKET DISCOUNT
A Note, other than a Short-Term Note, will be treated as issued at a market
discount (a 'Market Discount Note') if the amount for which a U.S. Holder
purchased the Note is less than the Note's issue price, subject to a de minimis
rule similar to the rule relating to de minimis OID described under 'Original
Issue Discount--General'.
In general, any gain recognized on the maturity or disposition of a Market
Discount Note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on such Note. Alternatively, a U.S.
Holder of a Market Discount Note may elect to include market discount in income
currently over the life of the Market Discount Note. Such an election applies to
all debt instruments with market discount acquired by the electing U.S. Holder
on or after the first day of the first taxable year to which the election
applies and may not be revoked without the consent of the IRS.
Market discount accrues on a straight-line basis unless the U.S. Holder
elects to accrue such market discount on a constant yield to maturity basis.
Such an election shall apply only to the Note with respect to which it is made
and is irrevocable. A U.S. Holder of a Market Discount Note who does not elect
to include market discount in income currently generally will be required to
defer deductions for interest on borrowings allocable to such Note in an amount
not exceeding the accrued market discount on such Note until the maturity or
disposition of such Note.
The market discount rules do not apply to a Short-Term Note.
ELECTION TO TREAT ALL INTEREST AS ORIGINAL ISSUE DISCOUNT
Any U.S. Holder may elect to include in gross income all interest that
accrues on a Note using the constant yield method (described above under the
heading 'Original Issue Discount--General'), with the modifications described
below. For purposes of this election, interest includes stated interest, OID, de
minimis OID, market discount (described above under 'Notes Purchased at a Market
Discount'), acquisition discount, de minimis market discount and unstated
interest, as adjusted by any amortizable bond premium (described above under
'Notes Purchased at a Premium') or acquisition premium.
In applying the constant-yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing U.S.
Holder's adjusted basis in the Note immediately after its acquisition, the issue
date of the Note will be the date of its acquisition by the electing U.S.
Holder, and no payments on the Note will be treated as payments of qualified
stated interest. This election will generally apply only to the Note with
respect to which it is made and may not be revoked without the consent of the
IRS. If this election is made with respect to a Note with amortizable bond
premium, then the electing U.S. Holder will be deemed to have elected to apply
amortizable bond premium against interest with respect to all debt instruments
with amortizable bond premium (other than debt instruments the interest on which
is excludible from gross income) held by such electing U.S. Holder as of the
beginning of the taxable year in which the Note with respect to which the
election is made is acquired or thereafter acquired. The deemed election with
respect to amortizable bond premium may not be revoked without the consent of
the IRS.
If the election described above to apply the constant-yield method to all
interest on a Note is made with respect to a Market Discount Note, as defined
above, then the electing U.S. Holder will be treated as having made the election
(discussed above under 'Notes Purchased at a Market Discount') to include market
discount in income currently over the life of all debt instruments held or
thereafter acquired by such U.S. Holder.
PURCHASE, SALE AND RETIREMENT OF THE NOTES
General. A U.S. Holder's tax basis in a Note will generally be its U.S.
dollar cost (which, in the case of a Note purchased with a foreign currency,
will be the U.S. dollar value of the purchase price
S-17
<PAGE>
on the date of purchase), increased by the amount of any OID or market discount
(or acquisition discount, in the case of a Short-Term Note) included in the U.S.
Holder's income with respect to the Note and the amount, if any, of income
attributable to de minimis OID included in the U.S. Holder's income with respect
to the Note, and reduced by the sum of (i) the amount of any payments that are
not qualified stated interest payments, and (ii) the amount of any amortizable
bond premium applied to reduce interest on the Note. A U.S. Holder generally
will recognize gain or loss on the sale or retirement of a Note equal to the
difference between the amount realized on the sale or retirement and the tax
basis of the Note. The amount realized on a sale or retirement for an amount in
foreign currency will be the U.S. dollar value of such amount on the date of
sale or retirement. Except to the extent described above under 'Original Issue
Discount--Short Term Notes' or 'Market Discount' or below under 'Foreign
Currency Notes--Exchange Gain or Loss', and except to the extent attributable to
accrued but unpaid interest, gain or loss recognized on the sale or retirement
of a Note will be capital gain or loss and will be long-term capital gain or
loss if the Note was held for more than one year.
FOREIGN CURRENCY NOTES
Interest Payments. If an interest payment is denominated in or determined
by reference to a Foreign Currency, the amount of income recognized by a cash
basis U.S. Holder will be the U.S. dollar value of the interest payment, based
on the exchange rate in effect on the date of receipt, regardless of whether the
payment is in fact converted into U.S. dollars. Accrual basis U.S. Holders may
determine the amount of income recognized with respect to such interest payments
in accordance with either of two methods. Under the first method, the amount of
income recognized will be based on the average exchange rate in effect during
the interest accrual period (or, with respect to an accrual period that spans
two taxable years, the partial period within the taxable year). Upon receipt of
an interest payment (including a payment attributable to accrued but unpaid
interest upon the sale or retirement of a Note) determined by reference to a
Foreign Currency, an accrual basis U.S. Holder will recognize ordinary income or
loss measured by the difference between such average exchange rate and the
exchange rate in effect on the date of receipt, regardless of whether the
payment is in fact converted into U.S. dollars. Under the second method, an
accrual basis U.S. Holder may elect to translate interest income into U.S.
dollars at the spot exchange rate in effect on the last day of the accrual
period or, in the case of an accrual period that spans two taxable years, at the
exchange rate in effect on the last day of the partial period within the taxable
year. Additionally, if a payment of interest is actually received within 5
business days of the last day of the accrual period or taxable year, an accrual
basis U.S. Holder applying the second method may instead translate such accrued
interest into U.S. dollars at the spot exchange rate in effect on the day of
actual receipt (in which case no exchange gain or loss will result). Any
election to apply the second method will apply to all debt instruments held by
the U.S. Holder at the beginning of the first taxable year to which the election
applies or thereafter acquired by the U.S. Holder and may not be revoked without
the consent of the IRS.
Exchange of Amounts in Other than U.S. Dollars. Foreign Currency received
as interest on a Note or on the sale or retirement of a Note will have a tax
basis equal to its U.S. dollar value at the time such interest is received or at
the time of such sale or retirement, as the case may be. Foreign Currency that
is purchased will generally have a tax basis equal to the U.S. dollar value of
the Foreign Currency on the date of purchase. Any gain or loss recognized on a
sale or other disposition of a Foreign Currency (including its use to purchase
Notes or upon exchange for U.S. dollars) will be ordinary income or loss.
Foreign Currency Discount Notes. OID for any accrual period on a Discount
Note that is denominated in a Foreign Currency will be determined in the Foreign
Currency and then translated into U.S. dollars in the same manner as stated
interest accrued by an accrual basis U.S. Holder. Upon receipt of an amount
attributable to original issue discount (whether in connection with a payment of
interest or the sale or retirement of a Note), a U.S. Holder may recognize
ordinary income or loss.
S-18
<PAGE>
Amortizable Bond Premium. In the case of a Note that is denominated in a
Foreign Currency, bond premium will be computed in units of Foreign Currency and
amortizable bond premium will reduce interest income in units of the Foreign
Currency. At the time amortized bond premium offsets interest income, a U.S.
Holder may realize ordinary income or loss, measured by the difference between
exchange rates at that time and at the time of the acquisition of the Notes.
Exchange Gain or Loss. Gain or loss recognized by a U.S. Holder on the
sale or retirement of a Note that is attributable to changes in exchange rates
will be treated as ordinary income or loss. However, exchange gain or loss is
taken into account only to the extent of total gain or loss realized on the
transaction.
INDEXED NOTES
The applicable Pricing Supplement will contain a discussion of any special
U.S. Federal income tax rules with respect to Notes indexed to currencies,
currency units, commodity prices, financial or non-financial indices or other
factors (the 'Indexed Notes').
NON-U.S. HOLDERS
Subject to the discussion of backup withholding below, payments of
principal (and premium, if any) and interest (including OID) by the Company or
any agent of the Company (acting in its capacity as such) to any holder of a
Note that is not a U.S. Holder (a 'Non-U.S. Holder') will not be subject to U.S.
Federal withholding tax, provided, in the case of interest (including OID), that
(i) the Non-U.S. Holder does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of the Company entitled
to vote, (ii) the Non-U.S. Holder is not a controlled foreign corporation for
U.S. tax purposes that is related to the Company (directly or indirectly)
through stock ownership and (iii) either (A) the Non-U.S. Holder certifies to
the Company or its agent under penalties of perjury that it is not a United
States person and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a 'financial
institution') and holds the Note certifies to the Company or its agent under
penalties of perjury that such statement has been received from the Non-U.S.
Holder by it or by another financial institution and furnishes the payor with a
copy thereof.
If a Non-U.S. Holder is engaged in a trade or business in the United States
and interest (including OID) on the Note is effectively connected with the
conduct of such trade or business, such Non-U.S. Holder may claim exemption from
U.S. Federal withholding tax on such interest (or OID) by providing, in lieu of
the certificate described in the preceding paragraph, a properly executed IRS
Form 4224. However, such a Non-U.S. Holder may be subject to U.S. Federal income
tax on such interest (or OID) in the same manner as if it were a U.S. Holder. In
addition, if the Non-U.S. Holder is a foreign corporation, it may be subject to
a branch profits tax equal to 30% of its effectively connected earnings and
profits for the taxable year, subject to certain adjustments. For purposes of
the branch profits tax, interest (including OID) on a Note will be included in
the earnings and profits of such holder if such interest (or OID) is effectively
connected with the conduct by such holder of a trade or business in the United
States.
Any capital gain, market discount or exchange gain realized on the sale,
exchange, retirement or other disposition of a Note by a Non-U.S. Holder will
not be subject to U.S. Federal income or withholding taxes if (i) such gain is
not effectively connected with a U.S. trade or business of the Non-U.S. Holder
and (ii) in the case of an individual, such Non-U.S. Holder (A) is not present
in the United States for 183 days or more in the taxable year of the sale,
exchange, retirement or other disposition or (B) does not have a tax home (as
defined in Section 911(d)(3) of the Code) in the United States in the taxable
year of the sale, exchange, retirement or other disposition and the gain is not
attributable to an office or other fixed place of business maintained by such
individual in the United States.
Notes held by an individual who is neither a citizen nor a resident of the
United States for U.S. Federal tax purposes at the time of such individual's
death will not be subject to U.S. Federal estate
S-19
<PAGE>
tax, provided that the income from such Notes was not or would not have been
effectively connected with a U.S. trade or business of such individual and that
such individual qualified for the exemption from U.S. Federal withholding tax
(without regard to the certification requirements) described above.
PURCHASERS OF NOTES WHO ARE NON-U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE POSSIBLE APPLICABILITY OF UNITED STATES WITHHOLDING
AND OTHER TAXES UPON INCOME REALIZED IN RESPECT OF THE NOTES.
INFORMATION REPORTING AND BACKUP WITHHOLDING
For each calendar year in which the Notes are outstanding, each DTC
participant or indirect participant holding an interest in a Note on behalf of a
beneficial owner of a Note and each paying agent making payments in respect of a
Note will generally be required to provide the IRS with certain information,
including such beneficial owner's name, address and taxpayer identification
number (either such beneficial owner's Social Security number or its employer
identification number, as the case may be), and the aggregate amount of interest
and principal paid to such beneficial owner during the calendar year. These
reporting requirements, however, do not apply with respect to certain beneficial
owners who establish their eligibility for an exemption, including corporations,
securities broker-dealers, other financial institutions, tax-exempt
organizations, qualified pension and profit sharing trusts, individual
retirement accounts and Non-U.S. persons that hold either (i) Notes directly and
receive payments thereon outside the United States or (ii) Notes indirectly
through Euroclear or Cedel, as the case may be.
In the event that a beneficial owner of a Note fails to establish its
exemption from such information reporting requirements or is subject to the
reporting requirements described above and fails to supply its correct taxpayer
identification number in the manner required by applicable law, or underreports
its tax liability, as the case may be, the DTC participant or indirect
participant holding such interest on behalf of such beneficial owner or payment
agent making payments in respect of a Note may be required to 'backup' withhold
a tax equal to 31% of each payment of interest and principal with respect to
Notes. This backup withholding tax is not an additional tax and may be credited
against the beneficial owner's U.S. Federal income tax liability if the required
information is furnished to the IRS.
PLAN OF DISTRIBUTION
The Notes are offered on a continuing basis by the Company through the
Agents, which have agreed to use their best efforts to solicit orders for the
purchase of the Notes. The Company reserves the right to sell Notes directly to
investors on its own behalf in those jurisdictions where it is authorized to do
so. The Company will have the sole right to accept orders to purchase Notes and
may reject any proposed purchase of Notes in whole or in part. Each Agent will
have the right, in its discretion reasonably exercised, to reject any proposed
purchase of Notes through it in whole or in part. Payment of the purchase price
of Notes will be required to be made in immediately available funds. The Company
will pay each Agent a commission ranging from .125% to .750%, depending upon
maturity of the Notes sold, of the principal amount of Notes sold through such
Agent. No commission will be payable on any sales made directly by the Company.
The Company may also sell Notes at a discount to an Agent as principal for
resale to one or more investors and other purchasers at varying prices related
to prevailing market prices at the time of resale or, if set forth in the
applicable Pricing Supplement, at a fixed public offering price, as determined
by such Agent. After any initial public offering of Notes to be resold to
investors and other purchasers, the public offering price (in the case of Notes
to be resold at a fixed public offering price) the concession and the discount
may be changed. In addition, an Agent may offer Notes purchased by it as
principal to other dealers. Notes sold by an Agent to a dealer may be sold at a
discount and, unless otherwise specified in the applicable Pricing Supplement,
such discount allowed will not be in excess of the discount received by such
Agent from the Company. Unless otherwise specified in the
S-20
<PAGE>
applicable Pricing Supplement, any Note purchased by an Agent as principal will
be purchased at 100% of the principal amount thereof less a percentage equal to
the commission applicable to an agency sale of a Note of identical maturity.
Concurrently with the offering of the Notes through the Agents or otherwise
as described herein, the Company may issue other Debt Securities as described in
the accompanying Prospectus.
The Agents, whether acting as agent or principal, may be deemed to be
'underwriters' within the meaning of the Securities Act of 1933 (the 'Securities
Act'). The Company has agreed to indemnify the Agents against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Agent may be required to make in respect thereof.
No Note will have an established trading market when issued. The Notes will
not be listed on any securities exchange. Each Agent may make a market in the
Notes, but such Agent is not obligated to do so and may discontinue any
market-making at any time without notice. There can be no assurance of a
secondary market for any Notes or that the Notes will be sold.
Each Agent and certain of its affiliates may from time to time engage in
transactions with, and perform investment banking and commercial lending
services for, the Company and certain of its affiliates in the ordinary course
of business.
S-21
<PAGE>
$800,000,000
RYDER SYSTEM, INC.
DEBT SECURITIES
------------------------------------------------------------------
Ryder System, Inc. (the 'Company') from time to time may offer its debt
securities (the 'Debt Securities'), in one or more Series, of up to $800,000,000
in aggregate principal amount (or net proceeds in the case of securities issued
at an original issue discount), including the equivalent thereof in other
currencies, or composite currency units such as the European Currency Unit, in
amounts, at prices and on terms to be determined at the time of offering. See
'Plan of Distribution.'
The Debt Securities, when issued, will rank on a parity with all other unsecured
and unsubordinated indebtedness of the Company.
When a particular Series of Debt Securities is offered (the 'Offered Debt
Securities'), a supplement to this Prospectus will be delivered (the 'Prospectus
Supplement') together with this Prospectus setting forth the terms of such
Offered Debt Securities, including the specific designation, aggregate principal
amount, denominations, maturity, interest rate (or method for its calculation)
and payment dates, if any, any redemption or repayment terms, the initial public
offering price, whether such Offered Debt Securities will be issued, in whole or
in part, in registered, bearer or global form (or any two or three of such
forms), the names of, and the principal amounts to be purchased by or through
underwriters, dealers or agents, if any, and the compensation of such persons,
any listing of the Offered Debt Securities on a securities exchange and other
terms in connection with the offering and sale of such Offered Debt Securities.
The Company may sell the Debt Securities to or through underwriters and also may
sell the Debt Securities directly to other purchasers or through agents or
dealers. See 'Plan of Distribution.'
------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------------------------------------------
This Prospectus may not be used to consummate sales of Debt Securities unless
accompanied by a Prospectus Supplement.
The Date of this Prospectus is August 6, 1992.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT OTHER THAN THOSE CONTAINED IN, OR
INCORPORATED BY REFERENCE IN, THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, AND
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY AGENT, UNDERWRITER OR DEALER. THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE DEBT SECURITIES IN ANY JURISDICTION
TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT AT
ANY TIME DOES NOT IMPLY THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE DATES.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the 'Commission'). Such reports and other information concerning the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's Regional Offices at 75 Park Place, New York, New York
10007 and Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois
60661-2511. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Certain securities of the Company are listed on the New York,
Midwest and Pacific stock exchanges. Reports and other information concerning
the Company can also be inspected in the offices of such stock exchanges.
The Company has filed with the Commission a registration statement on Form
S-3 with respect to the Debt Securities (herein, together with all amendments
and exhibits, referred to as the 'Registration Statement') under the Securities
Act of 1933, as amended (the 'Securities Act'). This Prospectus does not contain
all of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act, are incorporated by reference in this
Prospectus and shall be deemed to be a part hereof:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991; and
(2) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1992.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made by this Prospectus
and any accompanying Prospectus Supplement shall be deemed to be incorporated
herein by reference and shall be deemed to be a part hereof from the date of
filing of such documents (such documents, and the documents enumerated above,
being herein referred to as 'Incorporated Documents'; provided, however, that
the documents enumerated above and documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
filing with the Commission of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 shall not be Incorporated Documents or be
2
<PAGE>
incorporated by reference in this Prospectus or be a part hereof from and after
the filing of such Annual Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of the Registration Statement or this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed Incorporated Documents or in an accompanying Prospectus
Supplement modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all Incorporated Documents, other than
exhibits to such Incorporated Documents unless such exhibits are specifically
incorporated by reference into the Incorporated Documents. Requests should be
directed to James M. Herron, Senior Executive Vice President and General
Counsel, Ryder System, Inc., 3600 N.W. 82nd Avenue, Miami, Florida 33166
(Telephone: 305/593-3283).
RYDER SYSTEM, INC.
The Company was incorporated in Florida in 1955. Through its subsidiaries,
the Company engages primarily in the following businesses: (1) full service
leasing and short-term rental of trucks, tractors and trailers; (2) customized
transportation services; (3) public transit management and student
transportation; (4) transportation by truck of automobiles, trucks and dry
freight; (5) repair and overhaul of turbine and turboprop engines, and turbine
engine components and accessories, for aircraft and helicopters; and (6) sale
and leasing of aircraft parts to the worldwide aviation industry.
The principal executive offices of the Company are located at 3600 N.W.
82nd Avenue, Miami, Florida 33166. Its telephone number is 305/593-3726.
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the net proceeds
available to the Company from the sale of the Offered Debt Securities may be
used for general corporate purposes, which might include the repayment of
indebtedness, working capital, capital expenditures, acquisitions and the
repurchase of shares of the Company's equity securities. Pending use for these
purposes, the Company may invest proceeds from the sale of the Offered Debt
Securities in short-term marketable securities. The precise amount and timing of
sales of any Debt Securities will be dependent on market conditions and the
availability and cost of other funds to the Company.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company and its subsidiaries for each of the indicated periods. For purposes
of computing the ratio of earnings to fixed charges, fixed charges consist of
interest expense plus interest capitalized and that portion (one-third) of
rental expense considered to represent interest. Earnings are computed by adding
fixed charges, except interest capitalized, to earnings from continuing
operations before income taxes. Prior period ratios have been restated to
exclude discontinued operations.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
- ------------------------------------------------ ---------------
1991 1990 1989 1988 1987 1992 1991
- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
1.46 1.50 1.31(1) 1.76(1) 2.09 1.80 1.27
<FN>
(1) The ratio of earnings to fixed charges for the year ended December 31, 1989,
was unfavorably impacted by several unusual charges. These charges, totaling
$90 million before taxes, related primarily to a change in estimated prior
years workers' compensation loss reserves; losses
3
<PAGE>
arising from vehicle, staff and facility reductions; and a write-down of
assets. The ratio of earnings to fixed charges for the year ended December
31, 1988, was adversely impacted by unusual charges, including a write-down
of goodwill and provisions for business restructurings, totaling $70 million
before taxes. Without such charges, the ratio of earnings to fixed charges
for the years ended December 31, 1989 and 1988 would have been 1.61 and
2.01, respectively.
</FN>
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which a Prospectus Supplement may
relate. The particular terms of the Offered Debt Securities and the extent, if
any, to which such general provisions do not apply to the Offered Debt
Securities will be described in the Prospectus Supplement relating to such
Offered Debt Securities.
The Offered Debt Securities may be issued from time to time under an
Indenture dated as of May 1, 1987 and supplemented as of November 15, 1990 and
June 24, 1992 (as supplemented, the 'Indenture'), between the Company and The
Chase Manhattan Bank (National Association), as Trustee (the 'Trustee'). The
following are brief summaries of certain provisions of the Indenture and are
subject to the detailed provisions of such Indenture, to which reference is
hereby made for a complete statement of such provisions. References appearing
below are to the Indenture and, wherever particular provisions are referred to,
such provisions are incorporated by reference as a part of the statement made,
and the statement is qualified in its entirety by such reference. Whenever a
capitalized term is referred to and not herein defined, the definition thereof
is contained in the Indenture.
GENERAL
The Debt Securities which may be offered under the Indenture are not
limited in amount and may be issued from time to time in one or more Series.
(Section 2.01.)
The Debt Securities may be issued in fully registered form without coupons
('Registered Securities') or in bearer form with or without coupons ('Bearer
Securities'). In addition, Debt Securities may be issued in the form of one or
more global securities (each a 'Global Security'). Registered Securities which
are book-entry securities ('Book-Entry Securities') will be issued as registered
Global Securities. Bearer Securities may be issued in the form of temporary or
definitive Global Securities. Unless otherwise provided in the Prospectus
Supplement, the Debt Securities will be only Registered Securities.
Debt Securities of a single Series may be issued at various times with
different maturity dates and different principal repayment provisions, may bear
interest at different rates, may be issued at or above par or with an original
issue discount, and may otherwise vary, all as provided in the Indenture.
The Debt Securities will be unsecured and unsubordinated general
obligations of the Company and will rank on a parity with all other unsecured
and unsubordinated indebtedness of the Company.
Reference is made to the Prospectus Supplement relating to the particular
Series of Offered Debt Securities for the following terms of such Debt
Securities: (a) the title of such Debt Securities; (b) any limit upon the
aggregate principal amount of such Debt Securities; (c) the initial public
offering price; (d) the currency or currency unit of payment; (e) the date or
date on which the principal of such Debt Securities is payable; (f) the rate or
rates at which such Debt Securities will bear interest or the method for
calculating such rate, if any, the date or dates from which such interest will
accrue, the dates on which such interest will be payable and the record date for
the interest payable on any interest payment date; (g) whether such Debt
Securities will be issued as Registered Securities or Bearer Securities or both;
(h) the place where the principal of and interest on such Debt Securities will
be payable; (i) the period or periods, if any, within which the price or prices
at which
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and the terms and conditions upon which such Debt Securities may be redeemed by
the Company; (j) the obligation, if any, of the Company to redeem or purchase
such Debt Securities pursuant to any sinking fund or at the option of a Holder
thereof, and the terms and conditions upon which such Debt Securities shall be
redeemed or purchased pursuant to such obligation; (k) any provisions for the
remarketing of the Debt Securities by and on behalf of the Company; (l) if other
than denominations of $1,000 and integral multiples thereof, the denominations
in which such Debt Securities shall be issuable; (m) if other than the principal
amount thereof, the portion of the principal amount of such Debt Securities
which shall be payable upon declaration of acceleration of the maturity thereof;
(n) whether the Offered Debt Securities are to be issued in whole or in part in
the form of one or more Global Securities and, if so, the identity of the
depositary for such Global Security or Securities; (o) whether and under what
circumstances the Company will pay additional amounts to any Holder of Offered
Debt Securities who is not a United States person in respect of any tax,
assessment or other governmental charge required to be withheld or deducted and,
if so, whether the Company will have the option to redeem rather than pay any
additional amounts; (p) any additions, deletions or modifications to the
covenants, events of default or the ability of the Company to discharge its
obligations set forth in the Indenture, that will be applicable with respect to
the Offered Debt Securities; or (q) any other terms not inconsistent with the
Indenture. (Section 2.02.) If any Debt Securities of a particular Series are
Bearer Securities, the Prospectus Supplement will describe additional provisions
relating to, and any applicable restrictions on, such Bearer Securities,
including certain tax consequences.
A Debt Security will not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent. Such signature will be
conclusive evidence that the Debt Security has been authenticated under the
Indenture. (Section 2.03.)
The Company will maintain an office or agency where registered Debt
Securities may be presented for registration of transfer or exchange
('Registrar') and an office or agency where the Debt Securities and coupons, if
any, may be presented for payment ('Paying Agent'). For a discussion of certain
restrictions on the registration, transfer and exchange of Global Securities,
see 'Global Securities'. If the Company fails to maintain a Registrar or Paying
Agent, the Trustee will act as such. (Sections 2.05 and 4.04.)
CERTAIN DEFINITIONS
A summary of the definitions of certain terms in the Indenture follows
(reference should be made to Article 1 of the Indenture for complete definitions
of the following and other terms):
'Additional Amounts' means any additional amounts which are required by
a Debt Security or by or pursuant to a Board Resolution, under
circumstances specified therein, to be paid by the Company in respect of
certain taxes, assessments or other governmental charges imposed on certain
Holders of Debt Securities.
'After-Acquired Indebtedness' means (a) pre-existing indebtedness
assumed by the Company or a Restricted Subsidiary as a result of the
acquisition of the assets or stock of an entity other than a Subsidiary of
the Company and (b) liens on property existing at the time of acquisition
of said property.
'Indebtedness' means indebtedness other than Subordinated Indebtedness
of the Company or its Restricted Subsidiaries for borrowed money or leasing
obligations as reflected on the Consolidated balance sheet of the Company
and its Restricted Subsidiaries, and indebtedness of other parties
guaranteed by the Company or its Restricted Subsidiaries.
'Leasing Indebtedness' means the capitalized Indebtedness of any lease
obligations on personal property.
'Net Tangible Assets' means total assets as reflected on the
Consolidated balance sheet of the Company and its Restricted Subsidiaries,
after deduction for minority interests, less:
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(a) goodwill and other intangibles, (b) amounts invested in, advanced to,
or equity in Unrestricted Subsidiaries and (c) unamortized debt discount.
'Original Issue Discount Debt Security' means a Debt Security which
provides that an amount less than the principal amount thereof shall become
due and payable upon acceleration of the maturity or redemption thereof, or
any Debt Security which for United States Federal income tax purposes would
be considered an original issue discount debt security.
'Restricted Subsidiary' means any Subsidiary other than an Unrestricted
Subsidiary.
'Secured Indebtedness' means Indebtedness, other than Intercompany
Indebtedness, secured by a lien on any property and any unsecured
Indebtedness of any Restricted Subsidiary other than a Foreign Financing
Subsidiary.
'Unrestricted Subsidiary' means (a) any Subsidiary (other than a Foreign
Financing Subsidiary) substantially all of the property of which is located
or substantially all of the business of which is conducted outside of the
United States of America or its possessions, Canada or the United Kingdom
and (b) any other Subsidiary (including, if so designated, a Foreign
Financing Subsidiary) so designated by the Board of Directors or the Chief
Executive Officer of the Company.
CERTAIN COVENANTS OF THE COMPANY
Limitation on Secured Indebtedness.
Unless otherwise provided in the Prospectus Supplement, the Company and its
Restricted Subsidiaries will not incur any Secured Indebtedness unless Debt
Securities then outstanding are equally and ratably secured, with the following
exceptions: (a) Secured Indebtedness existing at the date of the Indenture, (b)
Indebtedness of a corporation in existence at the time it becomes a Restricted
Subsidiary, (c) After-Acquired Indebtedness, (d) Intercompany Indebtedness
secured in favor of the Company or any Restricted Subsidiary, (e) Indebtedness
deemed Secured Indebtedness by virtue of certain liens or charges not yet due or
payable without penalty or which are being contested and for which reserves have
been set aside, (f) industrial revenue bond Indebtedness, (g) Real Property
Indebtedness, (h) Leasing Indebtedness not to exceed 10% of Consolidated Net
Tangible Assets and (i) additional Secured Indebtedness and Leasing Indebtedness
not to exceed a total of 15% of Consolidated Net Tangible Assets. (Section
4.06.)
Limitation on Consolidations and Mergers.
The Company shall not consolidate with or merge into, or transfer all or
substantially all of its assets to, another entity unless such entity is a
corporation that assumes all the obligations under the Debt Securities and the
Indenture and certain other conditions are met (whereupon all such obligations
of the Company shall terminate). (Section 5.01.)
EVENTS OF DEFAULT AND REMEDIES
Unless otherwise provided in the Prospectus Supplement, the Events of
Default with respect to the Debt Securities of any Series are: (a) default for
30 days in the payment of interest thereon, (b) default in the payment of
principal thereof, (c) default in performance of any other agreement of the
Company with respect thereto which continues for 90 days after written notice,
and (d) certain events of bankruptcy, insolvency or reorganization. (Section
6.01.) if an Event of Default is continuing with respect to the Debt Securities
of any Series, the Trustee or the Holders of 25% in principal amount of the Debt
Securities of that Series, by notice in writing to the Company and the Trustee,
may accelerate the principal of such Debt Securities, but the Holders of a
majority in principal amount of such Debt Securities may rescind such
acceleration if all existing Events of Default have been cured. (Section 6.02.)
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<PAGE>
Holders of Debt Securities may not enforce the Indenture except in the case
of the failure of the Trustee, for 60 days, to act after notice of an Event of
Default and a request to enforce the Indenture by the Holders of 25% in
principal amount of the Series of Debt Securities affected thereby and an offer
of indemnity satisfactory to the Trustee. (Section 6.06.) This provision will
not prevent any Holder of a Debt Security from enforcing payment of the
principal of and interest on such Debt Security at the respective due dates
thereof. (Section 6.07.) The Holders of a majority in principal amount of the
Debt Securities of any Series may direct the manner of conducting any
proceedings for any remedy or trust power available to the Trustee. The Trustee,
however, may refuse to follow any direction that conflicts with law or the
Indenture, is unduly prejudicial to Holders of other Debt Securities or would
involve the Trustee in personal liability. (Section 6.05.)
Holders of a majority in principal amount of any Series of Debt Securities
may waive any Default with respect to that Series except a Default in payment of
the principal or interest. (Section 6.04.)
The Company will furnish an annual Officers' Certificate to the Trustee as
to knowledge of any Default under the Indenture. (Section 4.03.)
SATISFACTION AND DISCHARGE
Unless otherwise provided in the Prospectus Supplement, the Company may
terminate certain of its obligations under the Indenture, including its
obligation to comply with the covenants described above with respect to the Debt
Securities of any Series which does not provide for the payment of any
Additional Amounts, on the terms and subject to the conditions contained in the
Indenture, by depositing in trust with the Trustee, money or U.S. Government
Obligations sufficient to pay principal and interest on such Debt Securities to
maturity. Such deposit and termination is conditioned upon the Company's
delivery of an opinion of independent tax counsel that the Holders of such Debt
Securities will have no Federal income tax consequences as a result of such
deposit and termination. Such termination will not relieve the Company of its
obligation to pay when due the principal of or interest on the Debt Securities
if the Debt Securities are not paid from the money or U.S. Government
Obligations held by the Trustee for the payment thereof. (Section 8.01.)
MODIFICATION AND WAIVER
The Company and the Trustee, with the consent of the Holders of 66 2/3% in
principal amount of the Debt Securities affected, may execute supplemental
indentures amending the Indenture or such Debt Securities, except that no such
amendment may, without the consent of the Holders of the affected Debt
Securities, among other things, change the maturity or reduce the principal
amount thereof, change the rate or the time of payment of interest thereon,
change any obligation of the Company to pay Additional Amounts relating to a
particular Debt Security or reduce the amount of principal of an Original Issue
Discount Debt Security that would be due and payable upon a declaration of
acceleration of the maturity thereof. (Sections 9.02 and 9.03.)
The Company and the Trustee may also, without the consent of any Holders of
Debt Securities, enter into supplemental indentures for the purposes, among
other things, of curing ambiguities and inconsistencies and making changes that
do not adversely affect the rights of any Holders of Debt Securities. (Section
9.01.)
PAYMENT AND PAYING AGENTS
Unless otherwise provided in the Prospectus Supplement, payment of
principal of, premium, if any, and interest, if any, on Registered Securities
will be made in U.S. dollars at the office of such Paying Agent or Paying Agents
as the Company may designate from time to time, except that at the option of the
Company payment of any interest may be made by check mailed to the address of
the person entitled thereto as such address shall appear in the security
register maintained by the Registrar. Unless otherwise provided in the
Prospectus Supplement, payment of any installment of
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interest on Registered Securities will be made to the person in whose name such
Registered Security is registered at the close of business on the regular record
date for such interest. (Section 4.01.)
Unless otherwise provided in the Prospectus Supplement, payment of
principal of, premium, if any, and interest, if any, on Bearer Securities will
be payable in U.S. dollars, subject to any applicable laws and regulations, at
the offices of such Paying Agents outside the United States as the Company may
designate from time to time and payment of interest on Bearer Securities with
coupons appertaining thereto on any Interest Payment Date will be made only
against surrender of the coupon relating to such Interest Payment Date. No
payment of interest on a Bearer Security will be made unless on the earlier of
the date of the first such payment by the Company or the delivery by the Company
of the Bearer Security in definitive form, a written certificate in the form
required by the Indenture is provided to the Trustee stating that on such date
the Bearer Security is not owned by a United States person or, if a beneficial
interest in such Bearer Security is owned by a United States person, that such
United States person (i) is a foreign branch of a United States financial
institution, (ii) acquired and holds the Bearer Security through the foreign
branch of a United States financial institution (and, in either case (i) or
(ii), such financial institution agrees to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended (the 'Code'), and the regulations thereunder) or (iii) is a financial
institution purchasing for resale during the restricted period (as defined under
'Global Securities--Bearer Securities') only to non-United States persons
outside the United States. As used herein, 'United States' means the United
States of America (including the states and the District of Columbia), its
territories, its possessions and any other areas subject to its jurisdiction. No
payment with respect to any Bearer Security will be made at any office or agency
of the Company in the United States or by check mailed to any address in the
United States or by transfer to an account maintained with a bank located in the
United States. Notwithstanding the foregoing, payments of principal of, premium,
if any, and interest, if any, on Bearer Securities denominated and payable in
U.S. dollars will be made at the office of the Company's Paying Agent in The
City of New York, if (but only if) payment of the full amount thereof at all
offices or agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions. (Section 4.04.)
Unless otherwise provided in the Prospectus Supplement, the Corporate Trust
Office of the Trustee in The City of New York will be designated as the
Company's sole Paying Agent for payments with respect to Offered Debt Securities
that are issuable solely as Registered Securities and as the Company's Paying
Agent in The City of New York for payments with respect to Offered Debt
Securities (subject to the limitations described above in the case of Bearer
Securities) that are issuable solely as Bearer Securities or as both Registered
Securities and Bearer Securities. Any Paying Agents outside the United States
and any other Paying Agents in the United States initially designated by the
Company for the Offered Debt Securities will be named in the Prospectus
Supplement. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts, except that, if Debt Securities of a Series
are issuable solely as Registered Securities, the Company will be required to
maintain a Paying Agent in each place of payment for such Series and, if Debt
Securities of a Series are issuable as Bearer Securities, the Company will be
required to maintain (i) a Paying Agent in The City of New York for payments
with respect to any Registered Securities of the Series (and for payments with
respect to Bearer Securities of the Series in the circumstances described above,
but not otherwise) and (ii) a Paying Agent in a place of payment located outside
the United States where Debt Securities of such Series and any coupons
appertaining thereto may be presented and surrendered for payment; provided,
that if the Debt Securities of such Series are listed on The International Stock
Exchange of the United Kingdom and the Republic of Ireland Limited or the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company will maintain a
Paying Agent in London or Luxembourg or any other required city located outside
the United States, as the case may be, for the Debt Securities of such Series.
(Section 4.04.)
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GLOBAL SECURITIES
The Debt Securities of a Series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depositary (a 'Depositary') identified in the Prospectus Supplement
relating to such Series. Global Securities may be issued in either registered or
bearer form, and in either temporary or definitive form. Unless and until it is
exchanged in whole for Debt Securities in definitive form, a Global Security may
not be transferred except as a whole by the U.S. Depositary for such Global
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor of such Depositary or a nominee of such
successor. (Section 2.16.)
The specific terms of any depositary arrangement with respect to the
Offered Debt Securities will be described in the Prospectus Supplement relating
thereto. Unless otherwise specified, the Company anticipates that the following
provision will apply to all depositary arrangements.
Unless otherwise specified in the Prospectus Supplement, Registered
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Depositary will be represented by a Global Security registered
in the name of such Depositary or its nominee. (Section 2.16.) Upon the issuance
of a Global Security in registered form, the Depositary for such Global Security
will credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Global Security to
the accounts of institutions that have accounts with such Depositary or its
nominee ('participants'). The accounts to be credited shall be designated by the
underwriters or selling agents for such Debt Securities, or by the Company if
such Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in such Global Securities will be limited to participants
or persons that may hold interests through participants. Ownership of beneficial
interests in such Global Securities will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary or
its nominee for such Global Security or by participants or persons that hold
through participants. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary for a Global Security in registered form, or its
nominee, is the registered owner of such Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or Holder of
the Debt Securities represented by such Global Security for all purposes under
the Indenture governing such Debt Securities. Except as set forth below, owners
of beneficial interests in such Global Securities will not be entitled to have
Debt Securities of the Series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
Debt Securities of such Series in definitive form and will not be considered the
owners or Holders thereof under the Indenture.
Payment of principal of, premium, if any, and interest, if any, on Debt
Securities registered in the name of or held by a Depositary or its nominee will
be made to the Depositary or its nominee, as the case may be, as the registered
owner or the Holder of the Global Security representing such Debt Securities.
None of the Company, the Trustee, any Paying Agent or the Registrar for such
Debt Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. (Section 2.15.)
The Company expects that the Depositary for Debt Securities of a Series,
upon receipt of any payment of principal of, premium, if any, or interest, if
any, on permanent Global Securities, will immediately credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Securities as shown on the
records of such Depositary. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing
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instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in 'street name,' and
will be the responsibility of such participants.
If a Depositary for Registered Securities is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within 90 days, the Company will issue individual certificates for
the Registered Securities in definitive form in exchange for the Global Security
or Securities representing such Registered Securities. In addition, the Company
may at any time and in its sole discretion determine not to have any Registered
Securities represented by one or more Global Securities and, in such event, will
issue individual certificates for the Registered Securities in definitive form
in exchange for the Global Security or Securities representing such Registered
Securities. In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery in definitive form of individual
certificates for the Registered Securities of the Series represented by such
Global Security equal in principal amount to such beneficial interest and to
have such individual certificates registered in the name of the owner of such
beneficial interest. (Section 2.16.)
Bearer Securities.
If so specified in the Prospectus Supplement, all or any portion of the
Debt Securities of a Series that are issuable as Bearer Securities initially
will be represented by one or more temporary Global Securities, without interest
coupons, to be deposited with a Common Depositary in London for Morgan Guaranty
Trust Company of New York, Brussels Office, as operator of the Euro-clear System
('Euro-clear') and Centrale de Livraison de Valeurs Mobilieres, S.A. ('CEDEL')
for credit to the respective accounts of the beneficial owners of such Debt
Securities (or to such other accounts as they may direct). On and after the
exchange date determined as provided in any such temporary Global Security and
described in the Prospectus Supplement, each such temporary Global Security will
be exchangeable for definitive Global Securities without interest coupons, as
specified in the Prospectus Supplement, upon written certification (as described
under 'Payment and Paying Agents') of non-United States beneficial ownership.
Thereafter, the beneficial owner of a Debt Security represented by a definitive
Global Security may at any time upon 30 days notice to the Trustee given through
Euro-clear or CEDEL, exchange its interest for definitive Bearer Securities or
Bearer Securities with coupons, if any. No Bearer Security delivered in exchange
for a portion of a temporary Global Security shall be mailed or otherwise
delivered to any location in the United States in connection with such exchange.
(Section 2.04.)
Unless otherwise provided in the Prospectus Supplement, interest in respect
of any portion of a temporary Global Security payable in respect of an Interest
Payment Date occurring prior to the issuance of definitive Debt Securities will
be paid to each of Euro-clear and CEDEL with respect to the portion of the
temporary Global Security held for its account upon delivery to the Trustee of a
certificate of non-United States beneficial ownership signed by Euro-clear or
CEDEL, as the case may be, in the form required by the Indenture and dated no
earlier than such Interest Payment Date. (Section 4.01.)
ABSENCE OF CERTAIN COVENANTS
The Company is not restricted by the Indenture from paying dividends or
from incurring, assuming or becoming liable for any type of debt or other
obligation or creating liens on its property, except as set forth under
'Limitation on Secured Indebtedness.' The Indenture does not require the
maintenance of any financial ratios or specified levels of net worth or
liquidity. The Indenture contains no provisions which afford Holders of the Debt
Securities protection in the event of a highly leveraged transaction involving
the Company.
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TITLE
Title to any Bearer Securities and any coupons appertaining thereto will
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any coupon
and the registered owner of any Registered Security (including Registered
Securities in global registered form) as the absolute owner thereof (whether or
not such Debt Security or coupon shall be overdue and notwithstanding any notice
to the contrary) for the purpose of making payment and for all other purposes.
REGARDING THE TRUSTEE
The Company may from time to time maintain lines of credit, deposit
accounts and other customary banking relationships with (or with affiliates of)
The Chase Manhattan Bank (National Association), which also serves as Trustee
under the Indenture. M. Anthony Burns, Chairman of the Board, President, Chief
Executive Officer and a director of the Company and Howard C. Kauffmann, a
director of the Company, presently also serve as directors of The Chase
Manhattan Corporation, the parent company of the Trustee.
NOTICES
Notices to Holders of registered Debt Securities will be mailed by first
class mail to the address on the register kept by the Registrar. Notices to
Holders of Bearer Securities will be given by publication at least twice in a
daily newspaper in London and, if any of the Bearer Securities are listed on any
stock exchange, in such other publication as might be required by such exchange.
(Section 10.02.)
PLAN OF DISTRIBUTION
GENERAL
The Company may sell the Debt Securities to or through underwriters and
also may sell the Debt Securities directly to other purchasers or through agents
or dealers. Only underwriters named in a Prospectus Supplement are deemed to be
underwriters in connection with the Debt Securities offered thereby.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed
from time to time, or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Each
Prospectus Supplement will describe the method of distribution of the Offered
Debt Securities. The Offered Debt Securities may include previously issued Debt
Securities which have been acquired and are being remarketed on behalf of the
Company.
In connection with the sale of the Debt Securities, such underwriters may
receive compensation from the Company or from purchasers of the Debt Securities
for whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters, dealers and agents that participate in the
distribution of the Debt Securities may be deemed to be underwriters and any
discounts or commissions received by them and any profit on the resale of the
Debt Securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter, dealer or agent will
be identified, and any such compensation will be described, in the Prospectus
Supplement. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of the Debt Securities
may be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, or to contribution
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with respect to payments which the underwriters, dealers or agents may be
required to make in respect thereof.
Unless otherwise specified in the Prospectus Supplement, each underwriter,
dealer and agent participating in the distribution of any Debt Securities which
are Bearer Securities will agree that it will not offer, sell or deliver,
directly or indirectly, Bearer Securities in the United States or to United
States persons (other than offices located outside the United States of certain
United States financial institutions) in connection with the original issuance
of the Debt Securities.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the Company will authorize
dealers or other persons acting as the Company's agents to solicit offers by
certain institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. The obligations of any purchaser under any such contract will not
be subject to any conditions except that (a) the purchase of the Offered Debt
Securities shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject and (b) if the Offered Debt
Securities are also being sold to underwriters, the Company shall have sold to
such underwriters the Offered Debt Securities not sold for delayed delivery. The
dealers and such other persons will not have any responsibility in respect of
the validity or performance of such contracts.
EXPERTS
The financial statements and schedules of Ryder System, Inc. as of December
31, 1991 and 1990, and for each of the years in the three-year period ended
December 31, 1991, incorporated by reference herein, have been incorporated by
reference herein in reliance upon the report of KPMG Peat Marwick, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing. To the extent that
KPMG Peat Marwick audits and reports on financial statements of Ryder System,
Inc. issued at future dates, and consents to the use of their reports thereon,
such financial statements also will be incorporated by reference herein in
reliance upon their report and said authority.
With respect to the unaudited interim financial information for the periods
ended March 31, 1992 and 1991, incorporated by reference herein, the independent
certified public accountants have reported that they applied limited procedures
in accordance with professional standards for a review of such information.
However, their separate report included in the Company's quarterly report on
Form 10-Q for the quarter ended March 31, 1992, and incorporated by reference
herein, states that they did not audit and they do not express an opinion on
that interim financial information. Accordingly, the degree of reliance on their
report on such information should be restricted in light of the limited nature
of the review procedures applied. The accountants are not subject to the
liability provisions of section 11 of the Securities Act for their report on the
unaudited interim financial information because that report is not a 'report' or
a 'part' of the Registration Statement prepared or certified by the accountants
within the meaning of sections 7 and 11 of the Securities Act.
LEGAL OPINIONS
Certain legal matters relating to the Debt Securities to be offered hereby
will be passed upon for the Company by James M. Herron, Senior Executive Vice
President and General Counsel of the Company, and for the underwriters, if any,
by Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New
York 10019. Mr. Herron owns 11,246 shares of common stock of the Company and
options to purchase 148,485 shares of such stock.
12
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND
SUCH PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
PAGE
-----
PROSPECTUS SUPPLEMENT
Recent Developments.............................. S- 2
Ratio of Earnings to Fixed Charges............... S- 3
Terms of the Notes............................... S- 3
Certain U.S. Federal Income Tax
Considerations................................. S-13
Plan of Distribution............................. S-20
PROSPECTUS
Available Information............................ 2
Incorporation of Certain Documents
by Reference................................... 2
Ryder System, Inc................................ 3
Use of Proceeds.................................. 3
Ratio of Earnings to Fixed Charges............... 3
Description of Debt Securities................... 4
Plan of Distribution............................. 11
Experts.......................................... 12
Legal Opinions................................... 12
$200,000,000
RYDER SYSTEM, INC.
MEDIUM-TERM NOTES,
SERIES 11
DUE NINE MONTHS
OR MORE
FROM DATE OF ISSUE
RYDER SYSTEM
SALOMON BROTHERS INC
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO.
INCORPORATED
PROSPECTUS SUPPLEMENT
DATED MARCH 9, 1995
