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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File No. 1-4364
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RYDER SYSTEM, INC.
(a Florida corporation)
3600 N. W. 82nd Avenue
Miami, Florida 33166
Telephone (305) 500-3726
I.R.S. Employer Identification No. 59-0739250
-------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: YES [X] NO [ ]
Ryder System, Inc. (the "Registrant" or the "Company") had 81,856,680 shares of
common stock ($0.50 par value per share) outstanding as of October 31, 1996.
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<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
Ryder System, Inc. and Consolidated Subsidiaries
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Periods ended September 30, 1996 and 1995 Third Quarter Nine Months
(In thousands, except per share amounts) ----------------------------- -----------------------------
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
REVENUE $1,408,702 1,264,049 4,162,701 3,821,974
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Operating expense 1,119,480 1,003,975 3,333,550 3,023,076
Depreciation expense, net of gains
(quarter, 1996 - $13,666,
1995 - $20,756; nine months,
1996 - $53,072, 1995 - $70,713) 185,674 172,853 547,877 487,018
Interest expense 52,552 50,251 159,171 141,697
Miscellaneous expense (income) 2,986 (7) 2,717 1,161
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1,360,692 1,227,072 4,043,315 3,652,952
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Earnings before income taxes and
cumulative effect of change
in accounting 48,010 36,977 119,386 169,022
Provision for income taxes 21,722 16,046 51,336 70,026
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Earnings before cumulative effect
of change in accounting 26,288 20,931 68,050 98,996
Cumulative effect of change
in accounting -- -- -- (7,759)
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NET EARNINGS $ 26,288 20,931 68,050 91,237
=================================================================================================================
Earnings per common share:
Earnings before cumulative
effect of change in accounting $ 0.32 0.26 0.84 1.25
Cumulative effect of change
in accounting -- -- -- (0.10)
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EARNINGS PER COMMON SHARE $ 0.32 0.26 0.84 1.15
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Cash dividends per common share $ 0.15 0.15 0.45 0.45
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Average common and common
equivalent shares 81,946 79,511 81,059 79,264
=================================================================================================================
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
Item 1. Financial Statements (continued)
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Ryder System, Inc. and Consolidated Subsidiaries
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Nine months ended September 30, 1996 and 1995
(In thousands) 1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 68,050 91,237
Cumulative effect of change in accounting -- 7,759
Depreciation expense, net of gains 547,877 487,018
Deferred income taxes 64,934 51,231
Proceeds from sales of receivables -- 30,000
Increase in receivables (58,360) (15,408)
Increase (decrease) in accounts payable
and accrued expenses (46,351) 14,026
Other, net (11,333) 6,809
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564,817 672,672
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CASH FLOWS FROM FINANCING ACTIVITIES:
Debt proceeds 220,530 965,788
Debt repaid, including capital lease obligations (189,989) (439,519)
Common stock issued 52,041 7,968
Dividends on common stock (36,178) (35,486)
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46,404 498,751
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and revenue earning equipment (1,053,703) (1,742,084)
Sales of property and revenue earning equipment 282,034 262,292
Sale and leaseback of revenue earning equipment 150,000 300,000
Other, net 37,643 29,130
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(584,026) (1,150,662)
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INCREASE IN CASH AND CASH EQUIVALENTS 27,195 20,761
Cash and cash equivalents at January 1 92,857 75,878
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CASH AND CASH EQUIVALENTS AT SEPTEMBER 30 $ 120,052 96,639
======================================================================================
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
Item 1. Financial Statements (continued)
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEETS
Ryder System, Inc. and Consolidated Subsidiaries
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September 30, December 31,
(Dollars in thousands, except per share amounts) 1996 1995
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<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 120,052 92,857
Receivables 436,872 374,689
Inventories 59,937 59,699
Tires in service 168,446 195,742
Deferred income taxes 22,206 39,527
Prepaid expenses and other current assets 140,006 121,547
Consumer Truck Rental assets held for sale 528,714 --
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Total current assets 1,476,233 884,061
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Revenue earning equipment 5,230,071 5,892,408
Less accumulated depreciation (1,949,181) (2,116,523)
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Net revenue earning equipment 3,280,890 3,775,885
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Operating property and equipment 1,168,424 1,174,217
Less accumulated depreciation (510,402) (512,852)
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Net operating property and equipment 658,022 661,365
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Direct financing leases and other assets 307,276 269,819
Intangible assets and deferred charges 295,242 302,685
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$ 6,017,663 5,893,815
======================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 145,030 212,077
Accounts payable 346,622 380,264
Accrued expenses 505,608 527,834
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Total current liabilities 997,260 1,120,175
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Long-term debt 2,520,357 2,411,024
Other non-current liabilities 475,147 474,218
Deferred income taxes 695,992 648,373
Shareholders' equity:
Common stock of $0.50 par value per share
(shares outstanding at
September 30, 1996 - 81,606,164;
December 31, 1995 - 79,280,613) 606,681 550,197
Retained earnings 735,392 703,520
Translation adjustment (13,166) (13,692)
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Total shareholders' equity 1,328,907 1,240,025
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$ 6,017,663 5,893,815
======================================================================================
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
Item 1. Financial Statements (continued)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(A) INTERIM FINANCIAL STATEMENTS
The accompanying unaudited consolidated condensed financial statements
have been prepared by the Company in accordance with the accounting
policies described in the 1995 Annual Report and should be read in
conjunction with the consolidated financial statements and notes which
appear in that report. These statements do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
(B) ACCOUNTING CHANGES AND RECENT ACCOUNTING PRONOUNCEMENTS
Effective January 1, 1995, the Company adopted Statement of Financial
Accounting Standards No. 116, "Accounting for Contributions Received and
Contributions Made," which requires that promises to make contributions be
recognized in the financial statements as an expense and a liability when
a promise is made. As a result, a pretax charge of $12.2 million ($7.8
million after tax, or $0.10 per common share) was recorded as the
cumulative effect of a change in accounting principle to establish a
liability for the present value of the Company's total outstanding
charitable commitments as of January 1, 1995. Prior to the adoption of the
new Statement, charitable contributions were recorded in the financial
statements in the period in which they were paid.
On January 1, 1996, the Company adopted Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of." Adoption of the Statement had no
impact on the Company's results of operations or financial position in
1996. In addition, Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," became effective in 1996. As
provided for in Statement No. 123, the Company has elected to continue to
apply the provisions of APB No. 25, "Accounting for Stock Issued to
Employees" in accounting for stock-based compensation. As a result, the
Statement had no impact on the Company's results of operations or
financial position in 1996. The Company will provide disclosures required
by Statement No. 123 in its December 31, 1996 annual financial statements.
In October 1996, the American Institute of Certified Public Accountants
issued Statement of Position 96-1, "Environmental Remediation Liabilites."
The Statement provides guidance as to how environmental remediation
liabilities should be measured and when such liabilities should be
reflected in the financial statements. The provisions of the Statement
must be adopted for fiscal years beginning after December 15, 1996,
although earlier adoption is encouraged. The effect of initially applying
this Statement is required to be reported as a change in accounting
estimate and, as such, restatement of previously issued financial
statements is not permitted. Management is currently analyzing this
Statement and does not expect it to have a material impact on the
Company's results of operations or financial position.
(C) RESTRUCTURING AND OTHER CHARGES
In the second quarter of 1996, the Company began reviewing various
alternatives to improve its cost structure and enhance productivity and
organizational efficiency. As part of this process, the Company has taken
several actions which led to pretax restructuring and other charges to
operating expense of $12 million ($8 million after tax, or $0.10 per
common share) in the third quarter and $31 million ($20 million after tax,
or $0.25 per common share) in the second and third quarters combined.
These actions included an early retirement program in Automotive Carriers
and the elimination of various positions within Ryder Transportation
Services and the Company's headquarters. The Company also exited the
commercial rental business at all of its locations in Germany and
eliminated its company-owned car benefit program. Approximately 350
positions were eliminated by these actions. In addition to recording
restructuring liabilities (severance and exit costs) totaling $15 million
(of which $8 million remained at September 30, 1996), the Company recorded
asset write-downs of $8 million, increased pension and other
postretirement liabilities by $4 million and recorded other charges for $4
million. The remaining restructuring liabilities at September 30, 1996 are
expected to be paid by the end of 1996. Savings as a result of these
actions are projected to be approximately $24 million annually. The
Company expects to take further cost reduction actions in the fourth
quarter of 1996 which will likely result in significant additional
restructuring charges.
<PAGE>
Item 1. Financial Statements (continued)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(D) SUBSEQUENT EVENTS
On October 17, 1996, the Company completed the sale of substantially all
the assets of its consumer truck rental business for $579 million (subject
to adjustment upon final audit of assets sold). Revenues related to the
consumer truck rental business were $164 million and $169 million for the
third quarter of 1996 and 1995, respectively and $417 million and $418
million for the nine-month periods ended September 30, 1996 and 1995,
respectively. Pretax earnings of the consumer truck rental business were
$24 million and $12 million for the third quarter of 1996 and 1995,
respectively, and $20 million and $3 million for the nine months ended
1996 and 1995, respectively. These amounts represent consumer truck
rental's pretax earnings on a legal entity basis and do not include any
benefit derived from Ryder Transportation Services for services sold to
consumer truck rental.
Subsequent to September 30, 1996, the Company retired approximately $80
million of its outstanding debt at a premium to book value and incurred an
after tax loss of approximately $10 million which will be reported as an
extraordinary loss in the fourth quarter.
<PAGE>
KPMG PEAT MARWICK LLP
CERTIFIED PUBLIC ACCOUNTANTS
One Biscayne Tower Telephone 305-358-2300
Suite 2900 Telecopier 305-557-0544
2 South Biscayne Boulevard
Miami, FL 33131
INDEPENDENT AUDITORS' REVIEW REPORT
The Board of Directors and Shareholders
Ryder System, Inc.:
We have reviewed the accompanying consolidated condensed balance sheet of Ryder
System, Inc. and consolidated subsidiaries as of September 30, 1996, and the
related consolidated condensed statements of earnings for the three- and
nine-month periods ended September 30, 1996 and 1995 and the consolidated
condensed statements of cash flows for the nine-month periods ended September
30, 1996 and 1995. These consolidated condensed financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the consolidated condensed financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Ryder System, Inc. and consolidated
subsidiaries as of December 31, 1995, and the related consolidated statements of
earnings and cash flows for the year then ended (not presented herein); and in
our report dated March 8, 1996, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying consolidated condensed balance sheet as of December 31, 1995,
is fairly presented, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
As discussed in the notes to the consolidated condensed financial statements, in
1995, Ryder System, Inc. and consolidated subsidiaries changed its method of
accounting for contributions received and contributions made.
KPMG PEAT MARWICK LLP
Miami, Florida
October 21, 1996
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition --
Three and nine months ended September 30, 1996 and 1995
RESULTS OF OPERATIONS
The Company reported earnings before income taxes of $48 million in the third
quarter of 1996, compared with $37 million in last year's third quarter.
Earnings before income taxes in the first nine months of 1996 were $119 million,
compared with $169 million (excluding the cumulative effect of change in
accounting) in the first nine months of 1995. Earnings in each third quarter
period were negatively impacted by pretax restructuring and other charges
(hereinafter referred to as "restructuring charges") of $12 million recorded in
both periods ($8 million after tax in 1996 and $7 million after tax in 1995).
Earnings in the first nine months of 1996 and 1995 included pretax restructuring
charges of $31 million ($20 million after tax) and $12 million ($7 million after
tax), respectively. In addition to restructuring charges, both 1995 periods were
impacted by a $14 million pretax loss at Automotive Carriers in the 1995 third
quarter due to a 32-day strike by the International Brotherhood of Teamsters
("Teamsters"). Favorably impacting pretax earnings in the first nine months of
1995 was a pretax earnings credit of $8 million ($6 million after tax) for the
resolution of certain operating tax matters. In both the third quarter and first
nine months of 1996, pretax results (excluding restructuring charges) benefited,
compared with last year, from earnings improvements in integrated logistics and
consumer truck rental, as well as improvement in full service truck leasing
operating margin. Lower earnings at Automotive Carriers combined with lower
commercial rental operating margin, costs associated with international
expansion and lower gains on vehicle sales more than offset these improvements
in the first nine months of 1996 compared with the same 1995 period.
Net earnings in the third quarter of 1996 were $26 million, or $0.32 per common
share, compared with $21 million, or $0.26 per common share, in the third
quarter of 1995. In the first nine months of 1996, net earnings were $68
million, or $0.84 per common share, compared with $91 million, or $1.15 per
common share, in the first nine months of 1995. Net earnings in the first nine
months of 1995 included a first quarter after tax charge of $8 million ($0.10
per common share) for the cumulative effect of a change in accounting for
charitable contributions (see "Accounting Changes and Recent Accounting
Pronouncements"). Excluding the impact of restructuring charges, the 1995 pretax
earnings credit for the resolution of certain operating tax matters and the
accounting change, net earnings were 21% higher in the third quarter of 1996 and
12% lower in the first nine months of 1996 compared with the same periods a year
ago. The Company's effective tax rates in the third quarter and first nine
months of 1996 were 45.2% and 43.0%, respectively, compared with 43.4% and
41.4%, respectively, in the same 1995 periods. Higher 1996 effective tax rates
resulted from the impact of a similar amount of non-deductible items on lower
pretax earnings.
Revenue was 11% higher in the third quarter and 9% higher in the first nine
months of 1996 compared with the same periods last year. Vehicle Leasing &
Services revenue increased 10% in both periods, led by the division's two
primary contractual product lines - integrated logistics and full service truck
leasing. Automotive Carriers revenue was 31% higher in the third quarter and
about the same in the first nine months of 1996, compared with the same periods
last year. Higher Automotive Carriers revenue in the third quarter of 1996
compared with 1995 resulted from the impact that the Teamsters strike had on
1995 vehicle shipment volume.
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition (continued) --
Three and nine months ended September 30, 1996 and 1995
Excluding restructuring charges, operating expense as a percentage of revenue
was slightly less than 80% in both the third quarter and first nine months of
1996, as well as in the same 1995 periods. Operating expense as a percentage of
revenue was impacted in both 1996 periods, compared with the corresponding 1995
periods, by higher fuel prices and an increase in purchased transportation
services, offset by lower maintenance and vehicle liability expense.
Depreciation expense (before gains on vehicle sales) increased 3% in the third
quarter and 8% in the first nine months of 1996 compared with the same periods
last year. Higher depreciation resulted from an increase in the size of the full
service lease fleet. Depreciation related to investments in new systems and
technology development also contributed to the increase. Consistent with
management's expectations, gains on vehicle sales were $7 million and $18
million lower in the third quarter and first nine months of 1996, respectively,
compared with the same periods in 1995. The decrease in gains resulted from
fewer units being sold combined with a reduction in the average gain per vehicle
sold.
Interest expense increased $2 million and $17 million in the third quarter and
first nine months of 1996, respectively, compared with the same periods in 1995,
due to higher outstanding debt levels resulting from growth in the full service
lease fleet partially offset by a reduction in the overall cost of debt during
1996. The Company continued to maintain slightly less than one-third of its
financing obligations at variable interest rates at September 30, 1996.
In the second quarter of 1996, the Company began reviewing various alternatives
to improve its cost structure and enhance productivity and organizational
efficiency. As part of this process, the Company has taken several actions which
led to pretax restructuring charges to operating expense of $12 million in the
third quarter and $31 million in the second and third quarters combined. These
actions included an early retirement program in Automotive Carriers and the
elimination of various positions within Ryder Transportation Services and the
Company's headquarters. The Company also exited the commercial rental business
at all of its locations in Germany and eliminated its company-owned car benefit
program. Approximately 350 positions were eliminated by these actions. In
addition to recording restructuring liabilities (severance and exit costs)
totaling $15 million (of which $8 million remained at September 30, 1996), the
Company recorded asset write-downs of $8 million, increased pension and other
postretirement liabilities by $4 million and recorded other charges for $4
million. The remaining restructuring liabilities at September 30, 1996 are
expected to be paid by the end of 1996. Savings as a result of these actions are
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition (continued) --
Three and nine months ended September 30, 1996 and 1995
projected to be approximately $24 million annually. The Company expects to take
further cost reduction actions in the fourth quarter of 1996 which will likely
result in significant additional restructuring charges.
SALE OF CONSUMER TRUCK RENTAL
On October 17, 1996, the Company completed the sale of substantially all the
assets of its consumer truck rental business for $579 million (subject to
adjustment upon final audit of assets sold). Revenues related to the consumer
truck rental business were $164 million and $169 million for the third quarter
of 1996 and 1995, respectively, and $417 million and $418 million for the nine-
month periods ended September 30, 1996 and 1995, respectively. Pretax earnings
of the consumer truck rental business were $24 million and $12 million for the
third quarter of 1996 and 1995, respectively, and $20 million and $3 million for
the nine months ended 1996 and 1995, respectively. These amounts represent
consumer truck rental's pretax earnings on a legal entity basis and do not
include any benefit derived from Ryder Transportation Services for services sold
to consumer truck rental.
The proceeds from the sale will be used to reduce outstanding debt and
repurchase common stock. The Company intends to repurchase up to 6 million
shares of its common stock. The pro forma impact of this transaction on the
results of operations and financial position is included in Item 5 of this
filing.
VEHICLE LEASING & SERVICES
Revenue from full service truck leasing increased 8% in the third quarter and 9%
in the first nine months of 1996, compared with the same periods last year, as a
result of new business sales in 1995 and increased fuel revenue due to higher
fuel prices in 1996 (full service lease contracts provide for the pass-through
of fuel costs to customers). Integrated logistics revenue increased 27% and 29%
in the third quarter and first nine months of 1996, respectively, over the same
1995 periods, as a result of continued strong new business start-ups over the
past 12 months. Revenue from public transportation services increased 14% in the
third quarter and 10% in the first nine months of 1996, compared with the same
periods last year, due to growth in all of the product line's service offerings.
International Division revenue was 26% higher in the third quarter and 17%
higher in the first nine months of 1996, compared with the same 1995 periods,
due primarily to new full service lease and logistics contracts in the United
Kingdom combined with growth in the division's expanding operations in Mexico,
Argentina and Brazil. Consumer truck rental revenue was about the same in both
the third quarter and first nine months of 1996 compared with the same periods
last year. Commercial truck rental revenue decreased 10% in both the third
quarter and first nine months of 1996, compared with the same periods in 1995,
due to lower demand from full service lease customers either awaiting delivery
of new lease vehicles or satisfying short-term needs, as well as a reduction in
the rental fleet.
Pretax earnings for Vehicle Leasing & Services were $59 million in the third
quarter of 1996 compared with $57 million in the third quarter of 1995. For the
nine months ended September 30, 1996, pretax earnings were $141 million compared
with $172 million for the same period last year. Excluding the division's
pretax portion of the restructuring charges recorded during the periods
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition (continued) --
Three and nine months ended September 30, 1996 and 1995
($10 million in the third quarter of 1996, $23 million in the first nine months
of 1996 and $12 million in the third quarter of 1995) and its portion of the
pretax earnings credit recognized in the second quarter of 1995 ($5 million),
earnings before income taxes were about the same in the third quarter and 8%
lower in the first nine months of 1996, compared with the same periods last
year. Margin (revenue less direct operating expenses, depreciation and interest
expense) from full service truck leasing was slightly higher in the third
quarter and first nine months of 1996 compared with the same periods last year,
due to increased revenue. Margin as a percentage of revenue was lower for both
periods, due primarily to lower pricing on new full service lease contracts
signed in 1994 and 1995. Integrated logistics margin increased at approximately
the same rate of growth as revenue in the third quarter and first nine months of
1996 compared with the same 1995 periods. In public transportation services,
margin was relatively flat and margin as a percentage of revenue was slightly
lower in both the third quarter and first nine months of 1996, compared with the
same periods last year, due to the effect of adverse weather on first quarter
operating costs combined with increased driver compensation in both 1996
periods. Although International Division margin was about the same in both 1996
periods compared with 1995, margin as a percentage of revenue in the 1996
periods decreased compared with the same 1995 periods due to continued
investment in Europe and South America.
Consumer truck rental margin and margin as a percentage of revenue was higher in
both the third quarter and first nine months of 1996 compared with the same
periods in 1995 resulting primarily from improved vehicle utilization.
Commercial truck rental margin and margin as a percentage of revenue were lower
in the same periods, due to a decline in revenue and a decrease in utilization
of tractors typically rented on a short-term basis to full service lease
customers. Consistent with management's plan to down-size the truck rental
fleets, the combined number of rental power units at September 30, 1996 was 9%
lower than at September 30, 1995.
For the division as a whole, higher overall operating margin in the third
quarter and first nine months of 1996 was offset by lower gains on vehicle
sales and higher indirect operating expenses (primarily due to costs relating to
international expansion, new systems and technology development and higher
restructuring charges in the first half of 1996).
AUTOMOTIVE CARRIER SERVICES
Automotive Carriers revenue was 31% higher in the third quarter and about the
same in the first nine months of 1996 compared with the same periods in 1995.
Revenue in the quarter was impacted by a 41% increase in the number of vehicles
shipped as a result of the Teamsters strike in the third quarter of 1995. Higher
vehicle shipments in the first nine months of 1996, compared with the same
period in 1995, were offset by a 5% decline in the average revenue per vehicle
due in part to a decrease in the average length of haul.
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition (continued) --
Three and nine months ended September 30, 1996 and 1995
Automotive Carriers reported a pretax loss of $5 million in the third quarter of
1996, compared with a $14 million pretax loss in last year's third quarter. For
the nine months ended September 30, 1996, Automotive Carriers reported a pretax
loss of $3 million compared with pretax earnings of $15 million in the first
nine months of 1995. During the periods, pretax earnings were impacted by
restructuring charges ($2 million in the third quarter of 1996 and $6 million in
the first nine months of 1996) and the division's portion of the second quarter
1995 pretax earnings credit ($3 million). In addition to the impact of these
items, pretax earnings comparisons in both periods were affected by the 1995
Teamsters strike, higher wages resulting from the final contract with the
Teamsters, higher vehicle liability and cargo damage expenses and increased
vehicle maintenance costs.
OTHER
Other, which is comprised primarily of corporate administrative costs, reported
net expenses in the third quarter and first nine months of 1996 of $6 million
and $19 million, respectively, compared with net expenses of $6 million and $18
million, respectively, in the same periods last year. Other expenses included
pretax restructuring charges of $3 million in the nine months ended
September 30, 1996 and $1 million in the third quarter of 1995.
ACCOUNTING CHANGES AND RECENT ACCOUNTING PRONOUNCEMENTS
See "Notes to Consolidated Condensed Financial Statements" included in Item 1.
LIQUIDITY AND CAPITAL RESOURCES
Total capital expenditures in the first nine months of 1996 were $1.05 billion,
compared with $1.74 billion in the first nine months of 1995. The reduction was
consistent with management's plans to limit capital spending by being
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition (continued) --
Three and nine months ended September 30, 1996 and 1995
more selective in accepting new business and focusing on those products and
services with the greatest returns. Capital expenditures in full service truck
leasing in the U.S. and Canada were $619 million in the first nine months of
1996 - a decrease of $301 million compared with the same period last year -
primarily due to portfolio selectivity and generally lower demand for new
vehicles. Consistent with management's plan to reduce the rental fleet and
allocate capital to the higher return contractual businesses, capital
expenditures in commercial and consumer truck rental were lower in the first
nine months of 1996 compared with last year's first nine months. In commercial
truck rental, capital expenditures were $24 million in the first nine months of
1996 compared with $242 million in last year's first nine months and in consumer
truck rental, capital expenditures were $70 million compared with $205 million
last year. International Division capital expenditures were $109 million in the
nine months ended September 30, 1996 compared with $116 million in the same
period last year. Automotive Carriers capital expenditures decreased to $28
million in the first nine months of 1996 compared with $54 million in the same
period last year due to a lower level of fleet replacement in 1996. All other
capital expenditures were $204 million in the nine months ended September 30,
1996 and remained relatively unchanged with expenditures in the same period in
1995. Management estimates that total capital expenditures for all of 1996
will be approximately 30% lower compared with 1995.
Total debt at September 30, 1996 was $2.7 billion, compared with $2.6 billion at
December 31, 1995. U.S. commercial paper outstanding increased from $45 million
at December 31, 1995 to $156 million at September 30, 1996. During the first
nine months of 1996, the Company made $102 million of scheduled unsecured note
payments and $15 million of unscheduled debenture payments. Foreign debt
increased $54 million in the first nine months of 1996 due to growth in the
Company's international operations. The Company's debt to equity ratio at
September 30, 1996, was 201% compared with 210% at June 30, 1996 and 212% at
December 31, 1995. As part of its financing program, the Company periodically
enters into sale and leaseback agreements for revenue earning equipment which
are accounted for as operating leases. Proceeds from sale and leaseback
transactions were $150 million and $300 million during the first nine months of
1996 and 1995, respectively. Subsequent to September 30, 1996, the Company
retired approximately $80 million of its outstanding debt at a premium
to book value and incurred an after tax loss of approximately $10 million which
will be reported as an extraordinary loss in the fourth quarter.
Cash flow from operating activities in the first nine months of 1996 was $565
million, compared with $673 million in the same period last year. The decrease
resulted primarily from lower earnings and an increase in cash required for
working capital, partially offset by a higher non-cash depreciation charge.
Increases in cash required for working capital included higher receivables due
to revenue growth and lower payables due to reduced vehicle purchases. Cash flow
from operating activities (excluding sales of receivables) plus asset sales as a
percentage of capital expenditures was 80% in the first nine months of 1996,
compared with 52% in the same period last year principally as a result of lower
levels of capital spending.
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition (continued) --
Three and nine months ended September 30, 1996 and 1995
At September 30, 1996 and December 31, 1995, the Company had "floating to fixed"
interest rate swap agreements outstanding with aggregate notional amounts
totaling $131 million and $171 million, respectively. The Company also continued
to maintain $100 million of "floating to floating" interest rate swap agreements
at September 30, 1996.
The Company had contractual lines of credit totaling $716 million at September
30, 1996, of which $508 million was available. The Company also had $268 million
of debt securities available under a shelf registration statement filed in 1995.
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition (continued) --
Three and nine months ended September 30, 1996 and 1995
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OPERATIONAL DATA
(Dollars in thousands)
Third Quarter Nine Months
--------------------------- ------------------------
1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VEHICLE LEASING & SERVICES
Revenue:
Ryder Transportation Services:
Full service lease and programmed
maintenance $ 532,861 493,255 1,591,447 1,453,699
Commercial rental 134,103 149,388 388,635 430,885
Other 82,768 77,089 244,282 230,639
---------- --------- --------- ---------
749,732 719,732 2,224,364 2,115,223
Ryder Integrated Logistics 276,759 217,827 804,591 625,568
Consumer Truck Rental 164,166 169,318 416,732 417,550
Public Transportation 87,082 76,120 317,328 287,698
International 90,433 72,049 256,336 219,371
Eliminations (92,380) (91,926) (280,603) (270,561)
---------- --------- --------- ---------
Total 1,275,792 1,163,120 3,738,748 3,394,849
---------- --------- --------- ---------
Operating expense 982,906 891,207 2,911,610 2,617,275
Depreciation expense 190,832 184,435 572,106 527,540
Gains on sale of revenue
earning equipment (13,675) (20,151) (52,988) (68,916)
Interest expense 53,200 50,434 162,173 144,925
Miscellaneous expense, net 3,075 221 4,407 1,751
---------- --------- --------- ---------
Earnings before income taxes $ 59,454 56,974 141,440 172,274
========== ========= ========= =========
Fleet size (owned and leased
including international):
Full service lease 111,300 102,818
Commercial and consumer rental 72,165 78,901
Buses operated or managed 13,021 12,617
Ryder Truck Rental service locations 1,127 1,121
- ----------------------------------------------------------------------------------------------------
AUTOMOTIVE CARRIER SERVICES
Revenue $ 136,557 104,150 434,502 439,756
========== ========= ========= =========
Earnings (loss) before
income taxes $ (5,247) (13,622) (2,659) 14,834
========== ========= ========= =========
Total units transported (000) 1,393 987 4,490 4,269
Total miles traveled (000) 51,562 40,583 165,068 165,633
Auto transports:
Owned and leased 2,766 3,249
Owner-operators 549 458
Locations 89 83
- ----------------------------------------------------------------------------------------------------
</TABLE>
Note: Certain 1995 amounts have been reclassified to conform to 1996
classifications.
<PAGE>
PART II. OTHER INFORMATION
ITEM 5. Other Information.
(1) Introduction to Ryder System, Inc. and Consolidated
Subsidiaries Pro Forma Consolidated Condensed
Financial Information.
(2) Ryder System, Inc. and Consolidated Subsidiaries Pro
Forma Consolidated Condensed Statement of Earnings
for the Nine Months Ended September 30, 1996.
(3) Ryder System, Inc. and Consolidated Subsidiaries Pro
Forma Consolidated Condensed Statement of Earnings
for the Year Ended December 31, 1995.
(4) Ryder System, Inc. and Consolidated Subsidiaries Pro
Forma Consolidated Condensed Balance Sheet at
September 30, 1996.
(5) Notes to Ryder System, Inc. and Consolidated
Subsidiaries Unaudited Pro Forma Consolidated
Condensed Financial Information.
<PAGE>
ITEM 5. INTRODUCTION TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
On October 17, 1996, a subsidiary of the Company completed the sale of its
consumer truck rental business unit to a consortium of investors led by Questor
Partners Fund, L.P. ("Questor"). The purchase price of the transaction, $579
million, subject to certain adjustments, was determined by negotiations between
the Company and Questor and was paid in cash at the closing.
The unaudited Pro Forma Consolidated Condensed Statements of Earnings of Ryder
System, Inc. and consolidated subsidiaries for the nine-month period ended
September 30, 1996 and for the year ended December 31, 1995, present the
Company's earnings before cumulative effect of a change in accounting, assuming
that the transactions resulting from the sale, including the use of proceeds,
had occurred on January 1, 1995, and, in the opinion of management, include all
material adjustments necessary to restate the Company's historical results.
The adjustments required to reflect such assumptions are set forth in the
"Pro Forma Adjustments" column.
The unaudited Pro Forma Consolidated Condensed Balance Sheet of Ryder System,
Inc. and consolidated subsidiaries as of September 30, 1996, presents the
financial position of the Company, assuming the transactions associated with the
sale had been completed as of that date. The adjustments required to reflect
such assumptions are set forth in the "Pro Forma Adjustments" column.
The historical amounts are derived from the historical financial statements of
Ryder System, Inc. and consolidated subsidiaries. The unaudited Pro Forma
Consolidated Condensed Financial Information of the Company should be read in
conjunction with the historical financial statements and related notes of the
Company included in the most recent annual report previously filed with the
Commission, copies of which are available from the Company. The pro forma
information presented is for informational purposes only and may not necessarily
reflect the results of operations which would have occurred had the sale of the
consumer truck rental business been consummated at the beginning of the
financial periods presented, nor is the pro forma information intended to be
indicative of future results of operations or financial position of the Company.
Traditionally, the consumer truck rental business is seasonal with generally
higher levels of demand during the summer months. Accordingly, the results of
the consumer truck rental business through September 30, 1996 may not be
indicative of anticipated full year 1996 results.
<PAGE>
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
Nine Months Ended September 30, 1996
(Dollars in thousands, except per share amounts)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
- --------------------------------------------------------------------------------
REVENUE $ 4,162,701 (360,632) (a) 3,802,069
- --------------------------------------------------------------------------------
Operating expense 3,333,550 (249,686) (a) 3,083,864
Depreciation expense, net of gains 547,877 (72,513) (a) 475,364
Interest expense 159,171 (8,500) (b) 150,671
Miscellaneous (income) expense 2,717 651 (a)
(7,200) (c) (3,832)
- --------------------------------------------------------------------------------
4,043,315 (337,248) 3,706,067
- --------------------------------------------------------------------------------
Earnings before income taxes 119,386 (23,384) 96,002
Provision for income taxes 51,336 (7,830) (a)
(1,400) (d) 42,106
- --------------------------------------------------------------------------------
NET EARNINGS $ 68,050 (14,154) 53,896
================================================================================
EARNINGS PER COMMON SHARE $ 0.84 0.72
- --------------------------------------------------------------------------------
Average common and common
equivalent shares 81,059 75,059
================================================================================
See accompanying notes to the unaudited pro forma consolidated condensed
financial information.
<PAGE>
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
Year Ended December 31, 1995
(Dollars in thousands, except per share amounts)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
- --------------------------------------------------------------------------------
REVENUE $ 5,167,421 (472,319) (a) 4,695,102
- --------------------------------------------------------------------------------
Operating expense 4,049,322 (335,111) (a) 3,714,211
Depreciation expense, net of gains 664,073 (100,748) (a) 563,325
Interest expense 191,157 (11,800) (b) 179,357
Miscellaneous (income) expense (1,517) 776 (a)
(10,600) (c) (11,341)
- --------------------------------------------------------------------------------
4,903,035 (457,483) 4,445,552
- --------------------------------------------------------------------------------
Earnings before income taxes
and cumulative effect
of change in accounting 264,386 (14,836) 249,550
Provision for income taxes 108,961 (3,183) (a)
(2,600) (d) 103,178
- --------------------------------------------------------------------------------
Earnings before cumulative effect
of change in accounting $ 155,425 (9,053) 146,372
================================================================================
Earnings per common share
before cumulative effect of
change in accounting $ 1.96 1.99
- --------------------------------------------------------------------------------
Average common and common
equivalent shares 79,370 73,370
================================================================================
See accompanying notes to the unaudited pro forma consolidated condensed
financial information.
<PAGE>
<TABLE>
<CAPTION>
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
September 30, 1996
(Dollars in thousands, except per share amounts)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 120,052 583,400 (e)
(498,000) (f) 205,452
Receivables 436,872 175,000 (f) 611,872
Inventories 59,937 59,937
Tires in service 168,446 168,446
Deferred income taxes 22,206 22,206
Prepaid expenses and other current assets 140,006 (1,886) (e) 138,120
Consumer Truck Rental assets
held for sale 528,714 (528,714) (e) -
- -----------------------------------------------------------------------------------------
Total current assets 1,476,233 (270,200) 1,206,033
- -----------------------------------------------------------------------------------------
Revenue earning equipment 3,280,890 3,280,890
Operating property and equipment 658,022 (600) (e) 657,422
Direct financing leases and other assets 307,276 307,276
Intangible assets and deferred charges 295,242 295,242
- -----------------------------------------------------------------------------------------
$6,017,663 (270,800) 5,746,863
=========================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 145,030 (1,100) (e) 143,930
Accounts payable 346,622 (300) (e) 346,322
Accrued expenses 505,608 77,500 (e) 583,108
- -----------------------------------------------------------------------------------------
Total current liabilities 997,260 76,100 1,073,360
- -----------------------------------------------------------------------------------------
Long-term debt 2,520,357 (143,000) (f) 2,377,357
Other non-current liabilities 475,147 475,147
Deferred income taxes 695,992 (39,000) (e) 656,992
Shareholders' equity:
Common stock of $0.50 par value per share
(shares outstanding at
September 30, 1996 - 81,606,164) 606,681 (180,000) (f) 426,681
Retained earnings 735,392 15,100 (e) 750,492
Translation adjustment (13,166) (13,166)
- -----------------------------------------------------------------------------------------
Total shareholders' equity 1,328,907 (164,900) 1,164,007
- -----------------------------------------------------------------------------------------
$6,017,663 (270,800) 5,746,863
=========================================================================================
</TABLE>
See accompanying notes to unaudited pro forma consolidated condensed financial
information.
<PAGE>
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED FINANCIAL INFORMATION
Note 1 -
On October 17, 1996, the Company sold substantially all the assets and certain
liabilities of its consumer truck rental business to Questor Partners Fund, L.P.
and certain other investors for $579 million. The sale is subject to a final
audit of the net assets sold as of the closing date. The audit is to be
completed and final purchase price adjusted based upon such audit before
December 31, 1996. As such, the purchase price and gain reflected in the
accompanying pro forma consolidated condensed financial information is subject
to change.
Pursuant to the terms of the sales agreement, the Company gave the buyer a
royalty-free license to use the Ryder trademark and color scheme, subject to
certain restrictions, for a total of 10 years (with required modifications to
the trademark after five years). The Company and the buyer have also entered
into service agreements for various periods of time ranging from two to five
years, with options for extensions after five years for certain of the
agreements. Under the agreements, the Company will continue to provide various
services to the buyer including vehicle maintenance, claims processing,
management information systems and other administrative services. In addition,
certain Company branch locations will continue to act as consumer truck rental
dealers and the Company will continue to assist in the disposition of the
buyer's used vehicles through its sales network. Rates agreed upon for the
various services are considered reasonable based on market rates.
The Company announced at the time of the sale its intention to use the proceeds
from the sale to pay down debt and repurchase stock. The repurchase of stock is
intended to enhance shareholder value by retiring capital invested previously in
the consumer truck rental business. As such, the accompanying pro forma
consolidated condensed financial information reflects the repurchase of six
million shares and a related reduction in common stock of $180 million. For each
10% change in the assumed stock repurchase price of $30 per common share, the
pro forma earnings per common share would change by approximately $0.01.
The accompanying unaudited pro forma consolidated condensed financial
information reflects all adjustments, in the opinion of management, which are
necessary to present a fair statement of the financial position and results of
operations of the Company. The information does not include certain disclosures
required under generally accepted accounting principles and, therefore should be
read in conjunction with the financial statements and notes thereto included in
the Company's most recent annual report filed with the Commission.
Note 2 -
The pro forma adjustments to the accompanying consolidated condensed financial
information are described below:
(a) To deconsolidate the results of the operations of the consumer truck rental
business, net of certain intercompany adjustments (in millions) as follows:
<TABLE>
<CAPTION>
For the nine months For the year
ended ended
September 30, 1996 December 31, 1995
------------------- -----------------------
<S> <C> <C>
Charges for maintenance services provided $ 44.5 57.4
Allocated interest 19.2 29.7
Commissions earned as rental dealer 7.0 10.1
Charges for vehicle disposition services 4.6 7.0
(b) To reduce interest expense due to the reduction of debt from cash flows
generated from the sale.
</TABLE>
<PAGE>
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED FINANCIAL INFORMATION
(CONTINUED)
(c) To increase miscellaneous (income) expense as a result of a reduction in
the level of receivables sold (at a discount) due to cash being available
from the sale (and assumed to be used in lieu of selling receivables).
(d) To reflect the income tax benefit associated with the pro forma
adjustments to the statements of earnings.
(e) To reflect the sale of substantially all the assets and certain liabilities
of the consumer truck rental business. The net book value of the items sold
as of September 30, 1996 was $523.4 million compared with $519.4 million
at the closing date.
The sale price for the business was based upon the net book value of the
net assets sold plus $60 million, subject to a final audit. As such, the
sale proceeds would have been $583.4 million had the transaction taken
place on September 30, 1996.
The net estimated pro forma increase to retained earnings of $15.1 million
is calculated as follows (in millions):
Gross proceeds (assuming September 30, 1996 sale) $ 583.4
Less:
Net book value of assets sold 523.4
Severance and stay-on bonuses 9.3
Direct transaction costs 7.2
Write-off of assets not sold 2.5
Sales tax, vehicle titling, software licensing
and other costs 16.0
-----------
25.0
Income tax benefit (expense) -
Current (48.9)
Deferred 39.0
===========
Net adjustment to retained earnings
(subject to final audit) $ 15.1
===========
(f) To reflect the usage of the net proceeds after transaction costs and other
liabilities established upon sale, as follows (in millions):
Proceeds at October 17, 1996 $ 579.4
Less:
Estimated taxes payable 48.9
Severance and stay-on bonuses 9.3
Direct transaction costs 7.2
Sales tax, vehicle titling, software
licensing and other costs 16.0
===========
$ 498.0
===========
The net proceeds of $498.0 were assumed to be used as follows:
Repurchase common stock $ 180.0
Reduce sales of receivables 175.0
Debt reduction 143.0
===========
$ 498.0
===========
<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K:
(a) EXHIBITS
(3.1) The Ryder System, Inc. Restated Articles of Incorporation,
dated November 8, 1985, as amended through May 18, 1990,
previously filed with the Commission as an exhibit to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1990, are incorporated by reference into this
report.
(3.2) The Ryder System, Inc. By-Laws, as amended through November
23, 1993, previously filed with the Commission as an exhibit
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1993, are incorporated by reference into this
report.
(11) Statement regarding computation of per share earnings.
(15) Letter regarding unaudited interim financial statements.
(27) Financial data schedule (for SEC use only).
(b) REPORTS ON FORM 8-K
A report on Form 8-K, dated July 19, 1996, was filed by the Registrant
with respect to a press release reporting that the Registrant was
exploring the sale of its Consumer Truck Rental business.
A report on Form 8-K, dated September 19, 1996, was filed by the
Registrant with respect to an announcement that the Registrant had
entered into a definitive agreement to sell its Consumer Truck Rental
business to a consortium of investors led by Questor Partners Fund,
L.P. for approximately $575 million.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RYDER SYSTEM, INC.
(Registrant)
Date: November 14, 1996 /S/ EDWIN A. HUSTON
-------------------
Edwin A. Huston
Senior Executive Vice President-Finance
and Chief Financial Officer
(Principal Financial Officer)
Date: November 14, 1996 /S/ ANTHONY G. TEGNELIA
-----------------------
Anthony G. Tegnelia
Senior Vice President
and Controller (Principal
Accounting Officer)
Exhibit 11
Statement Regarding Computation of Per Share Earnings
Primary earnings per share are computed by dividing earnings available to common
shares by the weighted average number of common and common equivalent shares
outstanding during the period.
For purposes of computing primary earnings per share, common equivalent shares
include the average number of common shares issuable upon the exercise of all
employee stock options and awards and outstanding employee stock subscriptions,
if dilutive, less the common shares which could have been purchased at the
average market price during the period with the assumed proceeds, including
"windfall" tax benefits, from the exercise of the options, awards and
subscriptions.
Fully-diluted earnings per share are computed by dividing the sum of earnings
available to common shares by the weighted average number of common shares,
common equivalent shares and common shares assumed converted from potentially
dilutive securities outstanding during the period.
For purposes of computing fully-diluted earnings per share, common equivalent
shares are computed on a basis comparable to that for primary earnings per
share, except that common shares are assumed to be purchased at the market price
at the end of the period, if dilutive.
EXHIBIT 15
KPMG PEAT MARWICK LLP
CERTIFIED PUBLIC ACCOUNTANTS
One Biscayne Tower Telephone 305-358-2300
Suite 2900 Telecopier 305-557-0544
2 South Biscayne Boulevard
Miami, FL 33131
The Board of Directors and Shareholders
Ryder System, Inc.:
We acknowledge our awareness of the incorporation by reference in the following
Registration Statements of our report dated October 21, 1996 related to our
review of interim financial information:
Form S-3:
/bullet/ Registration Statement No. 33-20359 covering $1,000,000,000
aggregate principal amount of debt securities.
/bullet/ Registration Statement No. 33-50232 covering $800,000,000
aggregate principal amount of debt securities.
/bullet/ Registration Statement No. 33-58667 covering $800,000,000
aggregate principal amount of debt securities.
Form S-8:
/bullet/ Registration Statement No. 33-20608 covering the Ryder System
Employee Stock Purchase Plan.
/bullet/ Registration Statement No. 33-4333 covering the Ryder Employee
Savings Plan.
/bullet/ Registration Statement No. 1-4364 covering the Ryder System
Profit Incentive Stock Plan.
/bullet/ Registration Statement No. 33-69660 covering the Ryder System,
Inc. 1980 Stock Incentive Plan.
/bullet/ Registration Statement No. 33-37677 covering the Ryder System UK
Stock Purchase Scheme.
/bullet/ Registration Statement No. 33-442507 covering the Ryder Student
Transportation Services, Inc. Retirement/Savings Plan.
/bullet/ Registration Statement No. 33-63990 covering the Ryder System,
Inc. Directors' Stock Plan.
/bullet/ Registration Statement No. 33-58001 covering the Ryder System,
Inc. Employee Savings Plan A.
/bullet/ Registration Statement No. 33-58003 covering the Ryder System,
Inc. Employee Savings Plan B.
<PAGE>
The Board of Directors and Shareholders
Ryder System, Inc.
Page 2
/bullet/ Registration Statement No. 33-58045 covering the Ryder System,
Inc. Savings Restoration Plan.
/bullet/ Registration Statement No. 33-61509 covering the Ryder System,
Inc. Stock for Merit Increase Replacement Plan.
/bullet/ Registration Statement No. 33-62013 covering the Ryder System,
Inc. 1995 Stock Incentive Plan.
Pursuant to Rule 436 (c) under the Securities Act of 1933, such report is not
considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of Sections 7 and 11 of the Act.
KPMG PEAT MARWICK LLP
Miami, Florida
November 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED CONDENSED
BALANCE SHEETS AND STATEMENTS OF EARNINGS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 120,052
<SECURITIES> 0
<RECEIVABLES> 436,872
<ALLOWANCES> 0
<INVENTORY> 59,937
<CURRENT-ASSETS> 1,476,233
<PP&E> 6,398,495
<DEPRECIATION> 2,459,583
<TOTAL-ASSETS> 6,017,663
<CURRENT-LIABILITIES> 997,260
<BONDS> 2,520,357
0
0
<COMMON> 606,681
<OTHER-SE> 722,226
<TOTAL-LIABILITY-AND-EQUITY> 6,017,663
<SALES> 0
<TOTAL-REVENUES> 4,162,701
<CGS> 0
<TOTAL-COSTS> 3,884,144
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 159,171
<INCOME-PRETAX> 119,386
<INCOME-TAX> 51,336
<INCOME-CONTINUING> 68,050
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 68,050
<EPS-PRIMARY> 0.84
<EPS-DILUTED> 0
</TABLE>
