SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 17, 1996
RYDER SYSTEM, INC.
(Exact name of registrant as specified in its charter)
Florida 1-4364 59-0739250
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
3600 N. W. 82nd Avenue, Miami, Florida 33166
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (305) 500-3726
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ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
(1) Introduction to Ryder System, Inc. and Subsidiaries
Pro Forma Consolidated Condensed Financial
Information.
(2) Ryder System, Inc. and Subsidiaries Pro Forma
Consolidated Condensed Statement of Operations for
the Year Ended December 31, 1996.
(3) Notes to Ryder System, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Condensed Financial
Information.
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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 was $574
million and was determined by negotiations between the Company and Questor.
The unaudited Pro Forma Consolidated Condensed Statement of Operations of Ryder
System, Inc. and subsidiaries for the year ended December 31, 1996, presents the
Company's results of operations before extraordinary item, assuming that the
transactions resulting from the sale, including the use of proceeds, had
occurred on January 1, 1996, 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 historical amounts are derived from the historical financial statements of
Ryder System, Inc. and 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 period
presented, nor is the pro forma information intended to be indicative of future
results of operations 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 October 16, 1996 may not be
indicative of anticipated full year 1996 results.
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RYDER SYSTEM, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
Year Ended December 31, 1996
(In thousands, except per share amounts)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
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REVENUE $ 5,519,415 (380,813) (a) 5,138,602
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Operating expense 4,641,528 (266,009) (a) 4,375,519
Depreciation expense, net of gains 713,344 (76,757) (a) 636,587
Interest expense 206,607 (9,700) (b) 196,907
Miscellaneous income (24,441) 652 (a)
(8,300) (c) (32,089)
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5,537,038 (360,114) 5,176,924
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Loss before income taxes and
extraordinary item (17,623) (20,699) (38,322)
Provision for income taxes 13,664 (7,239) (a)
(1,000) (d) 5,425
- --------------------------------------------------------------------------------
LOSS BEFORE EXTRAORDINARY ITEM $ (31,287) (12,460) (43,747)
================================================================================
LOSS PER COMMON SHARE BEFORE
EXTRAORDINARY ITEM $ (0.39) (0.58)
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Average common and common
equivalent shares 81,263 (5,713) (e) 75,550
================================================================================
See accompanying notes to the unaudited pro forma consolidated condensed
financial information.
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RYDER SYSTEM, INC. AND 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 $574 million in cash, resulting in an after tax
gain of $15.1 million (net of applicable income taxes of $9.9 million), which is
included in miscellaneous income.
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 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 accompanying unaudited pro forma consolidated condensed financial
information reflects all adjustments, in the opinion of management, which are
necessary to fairly present the 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:
FOR THE PERIOD
FROM JANUARY 1, 1996 TO
OCTOBER 16, 1996
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Charges for maintenance services provided $47.1
Allocated interest 20.4
Commissions earned as rental dealer 7.4
Charges for vehicle disposition services 4.8
(b) To reduce interest expense due to the reduction of debt from cash flows
generated from the sale.
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RYDER SYSTEM, INC. AND SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED FINANCIAL INFORMATION
(CONTINUED)
(c) To increase miscellaneous income 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 statement of operations.
(e) To reflect the use of proceeds from the sale to repurchase up to 6 million
common shares in the open market. The pro forma amount is net of actual
shares repurchased during the period.
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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.
Dated: March 28, 1997
RYDER SYSTEM, INC.
By: /S/ EDWARD R. HENDERSON
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Name: Edward R. Henderson
Title: Associate General Counsel
and Assistant Secretary
