FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM _____ TO ______
Commission file number 1-4364
RYDER SYSTEM, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-0739250
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3600 N.W. 82 AVENUE, MIAMI, FLORIDA 33166 (305) 500-3726
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(Address of principal executive (Telephone number
offices including zip code) including area code)
Indicate by check mark whether the registrant (l) 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 [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K: [_]
The aggregate market value of the voting stock held by non-affiliates of the
registrant computed by reference to the price at which the stock was sold as of
January 31, 2000, was $1,284,659,715. The number of shares of Ryder System, Inc.
Common Stock ($.50 par value) outstanding as of January 31, 2000, was
59,399,121.
DOCUMENTS INCORPORATED BY PART OF FORM 10-K INTO WHICH
REFERENCE INTO THIS REPORT DOCUMENT IS INCORPORATED
Ryder System, Inc. 2000 Proxy Part III
Statement
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[Cover page 1 of 3 pages]
<PAGE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS OF SECURITIES EXCHANGE ON WHICH REGISTERED
- --------------------------------- ----------------------------
Ryder System, Inc. Common Stock New York Stock Exchange
($.50 par value) and Preferred Pacific Stock Exchange
Share Purchase Rights Chicago Stock Exchange
(the Rights are not currently Berlin Stock Exchange
exercisable, transferable or
exchangeable apart from the
Common Stock)
Ryder System, Inc. 9% Series G Bonds, New York Stock Exchange
due May 15, 2016
Ryder System, Inc. 8 3/8% Series H Bonds, New York Stock Exchange
due February 15, 2017
Ryder System, Inc. 8 3/4% Series J Bonds, New York Stock Exchange
due March 15, 2017
Ryder System, Inc. 9 7/8% Series K Bonds, New York Stock Exchange
due May 15, 2017
Ryder System, Inc. 9 1/4% Series N Notes, None
due May 15, 2001
Ryder System, Inc. 6 1/2% Series O Notes, None
due May 15, 2005
Ryder System, Inc. 6.60% Series P Notes, None
due November 15, 2005
Ryder System, Inc. Medium-Term Notes None
Series 1, due from 9 months to
10 years from date of issue at
rate based on market rates at time
of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 7, due from 9 months to
30 years from date of issue at
rate based on market rates at time
of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 8, due from 9 months to 30 years
from date of issue at rate based on
market rates at time of issuance
[Cover page 2 of 3 pages]
<PAGE>
Ryder System, Inc. Medium-Term Notes, None
Series 9, due 9 months or more from date
of issue at rate based on market rates
at time of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 10, due 9 months or more from date
of issue at rate based on market rates
at time of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 11, due 9 months or more from date
of issue at rate based on market rates
at time of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 12, due 9 months or more from date
of issue at rate based on market rates
at time of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 13, due 9 months or more from date
of issue at rate based on market rates
at time of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 14, due 9 months or more from date
of issue at rate based on market rates
at time of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 15, due 9 months or more from date
of issue at rate based on market rates
at time of issuance
Ryder System, Inc. Medium-Term Notes, None
Series 16, due 9 months or more from date
of issue at rate based on market rates
at time of issuance
SECURITIES REGISTERED PURSUANT TO
SECTION 12(g) OF THE ACT: None
[Cover page 3 of 3 pages]
<PAGE>
RYDER SYSTEM, INC.
Form 10-K Annual Report
TABLE OF CONTENTS
PAGE NO.
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PART I
Item 1 Business.......................................................... 5
Item 2 Properties........................................................ 9
Item 3 Legal Proceedings................................................. 10
Item 4 Submission of Matters to a Vote of Security Holders............... 10
PART II
Item 5 Market for Registrant's Common Equity and Related Stockholder
Matters....................................................... 11
Item 6 Selected Financial Data........................................... 11
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................... 12
Item 7A Quantitative and Qualitative Disclosures About Market Risk........ 24
Item 8 Financial Statements and Supplementary Data....................... 25
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure...................................... 50
PART III
Item 10 Directors and Executive Officers of the Registrant................ 50
Item 11 Executive Compensation............................................ 50
Item 12 Security Ownership of Certain Beneficial Owners and
Management.................................................... 50
Item 13 Certain Relationships and Related Transactions.................... 50
PART IV
Item 14 Exhibits, Financial Statement Schedules, and Reports on
Form 8-K...................................................... 51
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PART I
ITEM 1. BUSINESS
GENERAL
Ryder System, Inc. (the "Company") was incorporated in Florida in 1955. Through
its subsidiaries, the Company engages primarily in the logistics and
transportation business with focus on: 1) integrated logistics, including
dedicated contract carriage, the management of carriers, and inventory
deployment; and 2) transportation services, including full service leasing,
maintenance and short-term rental of trucks, tractors and trailers. As of
December 31, 1999, the Company and its subsidiaries had a fleet of 171,538
vehicles and 30,340 employees.(1)
On September 13, 1999, the Company completed the sale of its public
transportation services business. On September 30, 1997, the Company completed
the sale of its automotive carrier business. The disposals of these businesses
have been accounted for as discontinued operations and, accordingly, their
operating results and cash flows are segregated and reported as discontinued
operations in the Company's consolidated financial statements.
Financial information about industry segments is included in Item 8 on pages 46
through 48 of this report.
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1 This number does not include drivers obtained by certain subsidiaries of
the Company under driver leasing agreements.
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LOGISTICS AND TRANSPORTATION BUSINESS UNITS
INTEGRATED LOGISTICS
Ryder Integrated Logistics, Inc. ("Ryder Integrated Logistics") provides global
integrated logistics support of customers' entire supply chains, from in-bound
raw materials supply through finished goods distribution, including dedicated
contract carriage, the management of carriers, and inventory deployment and
overall supply chain design and management through 870 locations in the U.S. and
Canada. Ryder Integrated Logistics utilizes advanced information technology and
frequently teams with strategic alliance partners. Services include varying
combinations of logistics system design, the provision of vehicles and equipment
(including maintenance and drivers), warehouse management (including cross
docking and flow-through distribution), transportation management, vehicle
dispatch, and in-bound and out-bound just-in-time delivery. Logistics systems
include procurement and management of all modes of transportation, shuttles,
interstate long-haul operations, just-in-time service to assembly plants and
factory-to-warehouse-to-retail facility service. These services are used in
major industry sectors including electronics, high-tech, telecommunications,
automotive, industrial, aerospace, consumer packaged goods, paper and paper
products, chemical, office equipment, news, food and beverage, general retail
industries, along with other industries and the federal sector. Part of Ryder's
strategy is to take advantage of, and build upon, the expertise, market
knowledge and infrastructure of strategic alliance and joint venture partners to
complement its own expertise in providing logistics solutions to businesses
involved in the over-the-road transportation of goods and to those who move
goods around the world using any mode of transportation. In 1999, Ryder
Integrated Logistics continued to expand its presence in the logistics market
through internal growth, increased emphasis on global account management and
initiation of strategic alliances. On-going expansion initiatives include the
establishment of e-Commerce services and increased capabilities in Asia and the
Pacific Rim.
FULL SERVICE LEASING, MAINTENANCE AND SHORT-TERM RENTAL OF TRUCKS, TRACTORS AND
TRAILERS
Ryder Truck Rental, Inc., which does business as Ryder Transportation Services
("Ryder Transportation Services"), provides full service truck leasing to nearly
13,450 customers (ranging from large national enterprises to small companies),
with a fleet of 115,464 vehicles (including 15,438 vehicles leased to
affiliates), through 805 locations in 49 states, Puerto Rico, and 8 Canadian
provinces. Under a full service lease, Ryder Transportation Services provides
customers with vehicles, maintenance, supplies and related equipment necessary
for operation, while the customers furnish and supervise their own drivers, and
dispatch and exercise control over the vehicles. Additionally, Ryder
Transportation Services provides contract maintenance services to more than
1,900 customers, servicing 40,818 vehicles under maintenance contracts, and
provides short-term truck rental, which tends to be seasonal, to commercial
customers to supplement their fleets during peak business periods. A fleet of
40,984 vehicles, ranging from heavy-duty tractors and trailers to light-duty
trucks, is available for commercial short-term rental. In 1999, Ryder
Transportation Services focused on the expansion of its long-term contractual
businesses such as the full service leasing of trucks, tractors and trailers,
and contract truck maintenance, through internal growth. Ryder Transportation
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Services also provides additional services for customers, including fleet
management, freight management and the Ryder Citicorp Finance Lease program. By
expanding its vehicle financing options, Ryder Transportation Services gives
customers the flexibility to choose a full service lease or the combination of a
finance lease and contract maintenance for their vehicles.
INTERNATIONAL OPERATIONS
Ryder also provides logistics and transportation services in markets outside the
U.S. and Canada, including full service leasing of trucks, tractors and
trailers, commercial truck rental, contract maintenance and a broad range of
warehousing, logistics and supply chain management services. Ryder continues to
implement a strategy for further growth in international markets, providing
national and global logistics solutions to multinational customers. National
service refers to the provision of services within the confines of a particular
country. International services require the management of the movement of goods
across borders, and global services include both of the foregoing for customers
with needs in a number of international markets who may also require
multinational coordination of logistic and supply chain management services.
As of December 31, 1999, Ryder's international operations had 12,839 vehicles,
5,247 employees, and provided services through 133 locations in the United
Kingdom, Germany, Mexico, Poland, Argentina, the Netherlands and Brazil. In
1999, Ryder continued to enhance its presence in the United Kingdom, Mexico,
Argentina, Brazil and Poland through internal growth, and also commenced both
assessing and exploiting opportunities in markets in other countries. In its
world-wide operations, Ryder is always mindful of its need to mitigate risks,
including the minimization of asset and currency exposures.
ORGANIZATIONAL CHANGES
During the fourth quarter of 1999, the Company implemented several
reorganization initiatives designed to improve customer service and
profitability, and align the organizational structure of its divisions with the
Company's long-term strategic planning. The reorganization combines the
Company's existing business units into one operation.
DISPOSITION OF REVENUE EARNING EQUIPMENT
The Company's business units have historically disposed of used revenue earning
equipment at prices in excess of book value. The gains on the sale of revenue
earning equipment (reported as reductions in depreciation expense) were
approximately 14%, 13% and 12% of earnings from reportable business segments
before interest, taxes and unusual items in 1999, 1998 and 1997, respectively.
The extent to which gains will be realized on future disposal of revenue earning
equipment is dependent upon various factors including the general state of the
used vehicle market, the age and condition of vehicles at the time of their
disposal and depreciation methods with respect to vehicles.
COMPETITION
As an alternative to using the Company's services, customers may choose to
provide these services for themselves, or may choose to obtain similar or
alternative services from other third-party vendors.
In the United States and Canada, Ryder Integrated Logistics competes with
companies providing similar services on a national, regional and local level.
Additionally, this business is subject to potential competition in most of the
regions it serves from air cargo, shipping, railroads, motor carriers and other
companies that are expanding logistics services such as freight forwarders and
integrators. On a country-by-country basis and on a global basis, Ryder
International competes with companies providing similar services in
international markets outside the United States and Canada. In the United
Kingdom, the markets for full service leasing of trucks, tractors and trailers,
and dedicated contract carriage services are well developed and competitive,
similar to those in the U.S. and Canada. Germany's continued integration into
the European Community and the resulting deregulation, and Poland's
transformation to a market economy all create a growing opportunity for Ryder
International to provide services in these new markets. Additionally, recent
developments in Argentina and Brazil, such as the expanded investment in
automotive manufacturing, create growing opportunities for Ryder International
to provide services in the southern cone of South America. Moreover, the Company
continues to expand its involvement with global logistics customers who obtain
critical materials from Asia and the Pacific rim. Ryder Integrated Logistics
expects that competition with its services in these emerging markets and in the
global integrated logistics marketplace will increase. Competitive factors
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include price, equipment, maintenance, geographical coverage, market knowledge,
expertise in logistics-related technology, and overall performance (e.g.,
timeliness, accuracy and flexibility). Value-added differentiation of these
service offerings across the full global supply chain will continue to be Ryder
Integrated Logistics' overriding strategy.
Ryder Transportation Services competes with companies providing similar services
on a national, regional and local level. Regional and local competitors may
sometimes provide services on a national level through their participation in
various cooperative programs and through their membership in various industry
associations. Competitive factors include price, equipment, maintenance and
geographical coverage. Ryder Transportation Services also competes, to an
extent, with a number of truck and trailer manufacturers who provide truck and
trailer leasing, extended warranty maintenance, rental and other transportation
services. Value-added differentiation of the full service truck leasing, truck
rental, and contract and non-contract truck maintenance service offerings has
been, and will continue to be, Ryder Transportation Services' emphasis.
OTHER DEVELOPMENTS AND FURTHER INFORMATION
Many federal, state and local laws designed to protect the environment, and
similar laws in some foreign jurisdictions, have varying degrees of impact on
the way the Company and its subsidiaries conduct their business operations,
primarily with regard to their use, storage and disposal of petroleum products
and various wastes associated with vehicle maintenance activities. Based on
information presently available, management believes that the ultimate
disposition of such matters, although potentially material to the Company's
results of operations in any one year, will not have a material adverse affect
on the Company's financial condition or liquidity.
For further discussion concerning the business of the Company and its
subsidiaries, see the information included in Items 7 and 8 of this report.
EXECUTIVE OFFICERS OF THE REGISTRANT
All of the executive officers of the Company were elected or re-elected to their
present offices either at or subsequent to the meeting of the Board of Directors
held on May 7, 1999 in conjunction with the Company's 1999 Annual Meeting on the
same date. They all hold such offices, at the discretion of the Board of
Directors, until their removal, replacement or retirement.
NAME AGE POSITION
- ------------------- --- -----------------------------------------------
M. Anthony Burns 57 Chairman and Chief Executive Officer
Dwight D. Denny 56 Executive Vice President - Development
Raymond B. Greer 37 President - Ryder Integrated Logistics, Inc.
James B. Griffin 45 President - Ryder Transportation Services
Edwin A. Huston 61 Vice Chairman
Corliss J. Nelson 55 Senior Executive Vice President -
Finance and Chief Financial Officer
Vicki A. O'Meara 42 Executive Vice President, General Counsel and
Secretary
Lisa A. Rickard 44 Senior Vice President - Government Relations
George P. Scanlon 42 Senior Vice President - Planning and Controller
Gregory T. Swienton 50 President and Chief Operating Officer
8
<PAGE>
M. Anthony Burns has been Chairman of the Board since May 1985, Chief Executive
Officer since January 1983, and a director since December 1979. He also served
as the Company's President from December 1979 until June 1999.
Dwight D. Denny has been Executive Vice President - Development since January
1996, and was President - Ryder Commercial Leasing & Services from December 1992
to December 1995. Mr. Denny served Ryder Truck Rental, Inc. as Executive Vice
President and General Manager - Commercial Leasing & Services from June 1991 to
December 1992. Mr. Denny served Ryder Truck Rental, Inc. as Senior Vice
President and General Manager - Eastern Area from March 1991 to June 1991, and
Senior Vice President - Central Area from December 1990 to March 1991. Mr. Denny
previously served Ryder Truck Rental, Inc. as Region Vice President in Tennessee
from July 1985 to December 1990.
James B. Griffin has been President - Ryder Transportation Services (formerly
Commercial Leasing & Services) since January 1996, and was President - Ryder
Automotive Carrier Group, Inc. from February 1993 to December 1995. Mr. Griffin
served Ryder Truck Rental, Inc. as Vice President and General Manager -
Mid-South Region from December 1990 to February 1993. Mr. Griffin previously
served Ryder Truck Rental, Inc. as Region Vice President in Syracuse, New York
from April 1988 to December 1990.
Raymond B. Greer has been President - Ryder Integrated Logistics, Inc. since
December 1998, and was Senior Vice President and General Manager - Global
Operations since January 1998 and was Chief Information Officer for Ryder
Integrated Logistics, Inc./ Ryder System, Inc. since January 1997.
Edwin A. Huston has been Vice Chairman since May 1999, and was Senior Executive
Vice President - Finance and Chief Financial Officer from January 1987 through
April 1999. Mr. Huston was Executive Vice President - Finance from December 1979
to January 1987.
Vicki A. O'Meara has been Executive Vice President and General Counsel since
June 1997 and Secretary since February 1998. Previously, Ms. O'Meara was with
the Chicago office of the law firm of Jones Day Reavis & Pogue where she was a
partner.
Corliss J. Nelson has been Senior Executive Vice President - Finance and Chief
Financial Officer since May 1999. Previously, Mr. Nelson was President of Koch
Capital Services and was a Vice-President of Koch Industries, Inc.
Lisa A. Rickard has been Senior Vice President - Government Relations since
January 1997. Ms. Rickard served as Vice President - Federal Affairs from
January 1994 until January 1997. From June 1982 until December 1993, Ms. Rickard
was with the Washington law firm of Akin, Gump, Strauss, Hauer & Feld, LLP,
where she was a partner.
George P. Scanlon has been Senior Vice President - Planning and Controller since
January 1997. Mr. Scanlon is the Company's principal accounting officer. Prior
to that, Mr. Scanlon served as Vice President - Corporate Planning since August
1996. Mr. Scanlon served as Group Director - Corporate Planning from October
1993 until August 1996 and Group Director - Audit Services from March 1991 until
October 1993.
Gregory T. Swienton has been President and Chief Operating Officer since June
1999. Previously, Mr. Swienton was Sr. Vice President of Growth Initiatives of
Burlington Northern Santa Fe Corporation.
ITEM 2. PROPERTIES
The Company's property consists primarily of vehicles, vehicle maintenance and
repair facilities, and other real estate and improvements. Information regarding
vehicles is included in Item 1, which is incorporated herein by reference.
Ryder Integrated Logistics, Inc. has 870 locations in the United States and
Canada; 4 of these facilities are owned and the remainder are leased. Such
locations generally include a warehouse and administrative offices.
Ryder Transportation Services has 805 locations in the United States, Puerto
Rico and Canada; 397 of these facilities are owned and the remainder are leased.
Such locations generally include a repair shop and administrative offices.
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The Company's international operations (locations outside of North America) have
133 locations. These locations are in the United Kingdom, Germany, the
Netherlands, Poland, Mexico, Argentina, and Brazil; 19 of these facilities are
owned and the remainder are leased. Such locations generally include a repair
shop, warehouse and administrative offices.
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are involved in various claims, lawsuits, and
administrative actions arising in the course of their businesses. Some involve
claims for substantial amounts of money and/or claims for punitive damages.
While any proceeding or litigation has an element of uncertainty, management
believes that the disposition of such matters, in the aggregate, will not have a
material impact on the consolidated financial condition, results of operations
or liquidity of the Company and its subsidiaries.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the quarter
ended December 31, 1999.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Information required by Item 5 is included in Item 8, "Supplementary Data."
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
FIVE-YEAR SUMMARY
Ryder System, Inc. and Subsidiaries
Dollars in thousands, except per share amounts 1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C>
Revenue $4,952,204 4,606,976 4,368,148 4,496,373 4,172,778
Earnings from continuing operations before
unusual items:(a)
Before income taxes $ 193,637 238,942 213,042 134,335 166,790
After income taxes $ 121,129 149,292 130,019 79,158 98,099
Per diluted common share(a) $ 1.76 2.03 1.66 0.97 1.24
Earnings (loss) from continuing operations:
Before income taxes $ 117,494 204,564 209,550 (47,653) 174,363
After income taxes $ 72,917 127,812 127,888 (43,845) 102,489
Per diluted common share(a) $ 1.06 1.74 1.64 (0.54) 1.29
Net earnings (loss)(b) $ 419,678 159,071 175,685 (41,318) 147,666
Per diluted common share(b) $ 6.11 2.16 2.25 (0.51) 1.86
Cash dividends per common share $ 0.60 0.60 0.60 0.60 0.60
Average common shares-diluted (in thousands) 68,732 73,645 78,192 81,263 79,370
Average common equity, excluding unusual items $1,122,698 1,106,133 1,126,519 1,261,101 1,176,373
Return on average common equity(%)(c) 11.5 16.4 15.5 6.4 13.2
Book value per common share $ 20.29 15.37 14.39 14.19 15.64
Market price - high $ 28.75 40.56 37.13 31.13 26.13
Market price - low $ 18.81 19.44 27.13 22.63 21.00
Total debt $2,393,389 2,583,031 2,568,915 2,436,968 2,623,101
Long-term debt $1,819,136 2,099,697 2,267,554 2,237,010 2,411,024
Debt-to-equity(%) 199 236 242 220 212
Year-end assets $5,770,450 5,708,601 5,509,060 5,645,389 5,893,815
Return on average assets(%)(d) 2.0 2.8 2.5 1.3 1.9
Average asset turnover(%)(e) 85.4 86.5 83.7 83.4 82.6
Cash flow from continuing operating activities
and asset sales $ 671,721 1,212,172 908,845 839,945 1,057,051
Capital expenditures, including capital leases(e) $1,734,566 1,333,352 992,408 1,210,372 2,048,814
Number of vehicles(e) 171,538 162,677 152,833 152,770 188,178
Number of employees(e) 30,340 29,166 27,516 27,924 27,987
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</TABLE>
(a) Unusual items represent Year 2000 expense, 1999 and 1996 restructuring and
other charges and results of the consumer truck rental business. Year 2000
expense totaled $24 million ($15 million after tax, or $0.22 per diluted
common share) in 1999, $37 million ($23 million after tax, or $0.32 per
diluted common share) in 1998 and $3 million ($2 million after tax, or
$0.03 per diluted common share) in 1997. Restructuring and other charges
totaled $52 million ($33 million after tax, or $0.48 per diluted common
share) in 1999, $(3) million ($(2) million after tax, or $(0.03) per
diluted common share) in 1998 and $227 million ($149 million after tax, or
$1.84 per diluted common share) in 1996. The consumer truck rental business
reported earnings of $45 million ($27 million after tax, or $0.33 per
diluted common share) in 1996 and $8 million ($4 million after tax, or
$0.05 per diluted common share) in 1995.
(b) Net earnings for 1999 include, in addition to the items discussed in (a)
above, an after-tax extraordinary loss of $4 million ($0.06 per diluted
common share) relating to the early extinguishment of debt. Net loss for
1996 includes, in addition to the items discussed in (a) above, an
after-tax extraordinary loss of $10 million ($0.12 per diluted common
share) relating to the early extinguishment of debt. Net earnings for 1995
include, in addition to the items discussed in (a) above, the cumulative
effect of a change in accounting for charitable contributions resulting in
an after-tax charge of $8 million ($0.10 per diluted common share). Net
earnings (loss) for all years include the results of discontinued
operations.
(c) Excludes Year 2000 expense, the cumulative effect of changes in accounting
and restructuring and other charges and gains related to discontinued
operations and, in 1999, the impact of a $200 million stock repurchase
program which utilized proceeds from the sale of discontinued operations.
(d) Excludes Year 2000 expense, restructuring and other charges and the
cumulative effect of changes in accounting and discontinued operations.
(e) Excludes discontinued operations.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company's business segments consist of Integrated Logistics,
Transportation Services (which primarily provides full service leasing,
programmed maintenance and commercial rental services in the United States and
Canada) and International (which provides integrated logistics and full service
leasing in Europe, South America and Mexico). The Company sold its public
transportation services business in 1999 and automotive carrier business in
1997. In the accompanying consolidated statements of earnings and cash flows
(included in Item 8 of this report), the public transportation services and
automotive carrier businesses have been reported as discontinued operations.
CONSOLIDATED RESULTS
Years ended December 31
In thousands 1999 1998 1997
- -------------------------------------------------------------
Earnings from continuing
operations before
unusual items* $121,129 149,292 130,019
Per diluted
common share 1.76 2.03 1.66
Earnings from
continuing operations 72,917 127,812 127,888
Per diluted
common share 1.06 1.74 1.64
- -------------------------------------------------------------
*Year 2000 expense and restructuring and other charges.
Earnings from continuing operations decreased 19 percent in 1999 and increased
15 percent in 1998 after adjusting for the effects of unusual items. See
"Operating Results by Business Segment" for a further discussion of operating
results in the past three years. The earnings per share growth rate the last two
years exceeded the earnings growth rate because the average number of shares
outstanding during 1999 and 1998 decreased by 7 percent and 6 percent,
respectively, compared with prior periods. The decrease in shares reflects the
impact of the Company's various stock repurchase programs announced since 1996.
Years ended December 31
In thousands 1999 1998 1997
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REVENUE
Transportation Services $2,973,548 2,811,244 2,836,950
Integrated Logistics 1,713,051 1,501,126 1,370,320
International 590,226 603,834 457,869
Eliminations (324,621) (309,228) (296,991)
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Total revenue $4,952,204 4,606,976 4,368,148
===================================================================
Revenue from continuing operations increased 7 percent to $5 billion in 1999
compared with 1998, led by Integrated Logistics, which grew 14 percent.
Transportation Services posted revenue gains of 6 percent due primarily to full
service leasing and programmed maintenance. Revenue from continuing operations
in 1998 increased 5 percent, compared with 1997, led by International and
Integrated Logistics. The International revenue growth includes the impact of an
acquisition completed in May 1998. Revenue by segment is discussed in more
detail in the segment results section.
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The Transportation Services segment leases revenue earning equipment, sells
fuel and provides maintenance and other ancillary services to the Integrated
Logistics segment. Intersegment sales are accounted for at fair value as if the
sales were made to third parties. Eliminations reflect the elimination of
revenue for these services and sales.
Years ended December 31
In thousands 1999 1998 1997
- -------------------------------------------------------------------
Operating expense $3,585,079 3,283,556 3,180,453
Percentage of revenue 72% 71% 73%
- -------------------------------------------------------------------
Operating expense increased 9 percent in 1999 compared with 1998. The increase
was attributable to higher compensation and employee benefit expenses, outside
driver costs, vehicle liability and technology costs primarily as a result of
higher business volumes, as well as higher fuel costs as a result of increasing
fuel prices, particularly in the second half of 1999. Equipment rental costs
have also increased because of sale-leaseback transactions, totaling
approximately $830 million over the last 13 months. The increase in operating
expense as a percentage of revenue in 1999 was attributable to the impact of
increased equipment rental costs. This growth trend in operating expense as a
percentage of revenue should continue in 2000 given the full year impact of
sale-leaseback transactions completed in 1999 as well as expected 2000
transactions.
Operating expense increased 3 percent in 1998 compared with 1997. The
increase was attributable to higher compensation and employee benefit expenses,
outside driver costs, maintenance, technology and workers' compensation costs
primarily as a result of higher business volumes. These increases were partially
offset by lower fuel costs. The decrease in operating expense as a percentage of
revenue in 1998 was primarily attributable to lower fuel costs.
Years ended December 31
In thousands 1999 1998 1997
- ------------------------------------------------------------------
Freight under
management expense $425,769 330,124 244,874
Percentage of revenue 9% 7% 6%
- -------------------------------------------------------------------
Freight under management expense represents subcontracted freight costs on
logistics contracts for which the Company purchases transportation. Freight
under management expense increased $96 million, or 29 percent, in 1999 and $85
million, or 35 percent, in 1998 compared with prior periods. The increases in
freight under management expense reflect the growth these integrated logistics
contracts experienced, particularly during the latter half of 1998.
Years ended December 31
In thousands 1999 1998 1997
- -------------------------------------------------------------------
Depreciation expense $622,726 626,293 608,840
Gains on vehicle sales (55,961) (56,631) (49,667)
- -------------------------------------------------------------------
Depreciation expense, net $566,765 569,662 559,173
===================================================================
Percentage of revenue 11% 12% 13%
- ------------------------------------------------------------------
Depreciation expense decreased 1 percent in 1999 compared with 1998.
Depreciation expense was reduced by the impact of sale-leaseback transactions
completed since December 1998 and, to a lesser extent, depreciation changes made
over the past several years with respect to residual values and useful lives of
revenue earning equipment. The Company periodically reviews and adjusts the
residual values and useful lives of revenue earning equipment based on current
and expected operating trends and projected realizable values. These factors
served to offset the impact on depreciation expense from the growth in the
average size of the full service lease and commercial rental fleets. Gains on
vehicle sales also decreased 1 percent in 1999, compared with 1998, due to a
decrease in the average gain per vehicle sold, which offset a 25 percent
increase in the number of vehicles sold. The reduced average gains reflect the
overall increased carrying value of vehicles at the date of disposition and a
changing mix of vehicles sold and disposal methods. Average proceeds per vehicle
sold in 1999 exceeded 1998 levels.
Depreciation expense increased 3 percent in 1998 compared with 1997,
reflecting growth in the average size of the full service lease and commercial
rental fleets. Gains on vehicle sales increased 14 percent in 1998 compared with
1997. The increase was due to a higher number of vehicles sold in 1998 as well
as greater average gain per vehicle sold.
13
<PAGE>
Years ended December 31
In thousands 1999 1998 1997
- ---------------------------------------------------------
Interest expense $183,676 187,786 179,751
Percentage of revenue 4% 4% 4%
- ---------------------------------------------------------
Interest expense decreased 2 percent in 1999, compared with 1998, due primarily
to debt reductions associated with the use of proceeds from the sale of the
public transportation services business and the impact of sale-leaseback
transactions completed since December 1998. These factors offset the impact of
higher average outstanding debt levels, particularly during the second and third
quarters of 1999, primarily from increased levels of capital spending.
Interest expense increased 4 percent in 1998 compared with 1997 as higher
average outstanding debt levels were only partially offset by lower average
interest rates. The higher outstanding debt levels resulted primarily from
increased levels of capital spending.
Years ended December 31
In thousands 1999 1998 1997
- --------------------------------------------------------
Miscellaneous income, net $2,722 3,094 9,145
- --------------------------------------------------------
Miscellaneous income decreased slightly in 1999, compared with 1998, due
primarily to increased costs associated with a higher volume of trade-receivable
sales during the year, particularly during the second and third quarters. This
cost increase was virtually offset by increased gains from the sale of surplus
non-operating properties.
The decrease in miscellaneous income in 1998 compared with 1997 was due
primarily to lower earnings from equity investments, in part due to the
International acquisition of an entity previously reported on the equity method
of accounting, and increased costs associated with a higher volume of
trade-receivable sales during the year. These items were partially offset by
increased gains from the sale of surplus non-operating properties.
Years ended December 31
In thousands 1999 1998 1997
- ----------------------------------------------------
Unusual items:
Restructuring and
other charges $52,093 (3,040) --
Year 2000 expense 24,050 37,418 3,492
- ----------------------------------------------------
$76,143 34,378 3,492
====================================================
Unusual items represent restructuring and other charges and Year 2000 expense.
Restructuring and other charges totaled $33 million after tax ($0.48 per diluted
common share) in 1999 compared with a net credit in 1998 of $2 million after tax
($0.03 per diluted common share). Incremental Year 2000 expense totaled $15
million after tax ($0.22 per diluted common share) in 1999 compared with $23
million after tax ($0.32 per diluted common share) in 1998 and $2 million after
tax ($0.03 per diluted common share) in 1997. See "Restructuring and Other
Charges" and "Year 2000" sections of this Management's Discussion and Analysis
of Financial Condition and Results of Operations for a further discussion of
these matters.
Years ended December 31
In thousands 1999 1998 1997
- -----------------------------------------------------------
Provision for income taxes $44,577 76,752 81,662
- -----------------------------------------------------------
The effective income tax rate is the provision for income taxes as a percentage
of earnings from continuing operations before income taxes. The Company's
effective tax rate was 37.9 percent in 1999, 37.5 percent in 1998 and 39.0
percent in 1997. The lower effective tax rate in 1998 resulted primarily from
lower state income taxes and lower net non-deductible items.
RESTRUCTURING AND OTHER CHARGES
During 1999, the Company introduced initiatives and organizational changes to
build on competitive advantages, enhance client service and provide long-term,
sustainable profitable growth. The organizational changes included combining the
Ryder Transportation Services and Ryder Integrated Logistics business units and
creating Ryder Capital Services ("RCS"), a captive finance subsidiary, to fund
operating company needs. Complementing RCS, the Company created a new asset
management group with company-wide responsibility for acquisition, utilization,
maintenance, depreciation and pricing of assets throughout their lifecycle.
During 1999, the Company also restructured the U.K. truck leasing and rental
business following the December 1998 decision to retain this business. Lastly,
14
<PAGE>
the Company recorded asset impairment and other charges in connection with these
initiatives and an overall review of asset recoverability. Restructuring and
other charges related to these actions totaled $52 million in 1999. Savings
directly associated with the charge are estimated to be $15 million in 2000 and
relate principally to reduced employee expense. It is anticipated that the
savings will be substantially reinvested in new training and technology
initiatives in support of the new organization.
The restructuring initiatives resulted in identification of approximately
250 employees whose jobs were terminated, all of whom were notified of their
termination prior to December 31, 1999. Severance benefits, which totaled $17
million, will be substantially paid during the year 2000.
Contractual lease obligations associated with facilities to be closed as a
result of the restructuring amounted to $4 million. The Company also recorded
asset impairments of $14 million for certain classes of used vehicles, real
estate and other assets held for sale and software development projects that
would not be implemented or further utilized in the future.
In conjunction with the restructuring, the Company formed a captive
insurance subsidiary under which the Company's various self-insurance programs
will be administered. Costs incurred related to the start-up of this entity
totaled $8 million. The Company also recorded $9 million for other charges
incurred for professional consulting services and other costs associated with
the restructuring initiative.
In 1996, the Company recorded restructuring and other charges in connection
with an organizational realignment. Restructuring and other charges in 1998
amounted to a credit of $3 million and included the reversal of charges provided
as part of the 1996 restructuring as well as unusual items incurred that year.
See the "Restructuring and Other Charges" note to the consolidated
financial statements (included in item 8 of this report) for a further
discussion.
OPERATING RESULTS BY BUSINESS SEGMENT
Years ended December 31
Dollars in thousands 1999 1998 1997
- ------------------------------------------------------------------
REVENUE
Transportation Services:
Full service lease and
programmed
maintenance $1,613,679 1,553,568 1,538,621
Commercial rental 503,989 467,222 419,720
Fuel 574,424 528,977 631,702
Other 281,456 261,477 246,907
- ------------------------------------------------------------------
2,973,548 2,811,244 2,836,950
Integrated Logistics 1,713,051 1,501,126 1,370,320
International 590,226 603,834 457,869
Eliminations (324,621) (309,228) (296,991)
- ------------------------------------------------------------------
Total revenue $4,952,204 4,606,976 4,368,148
==================================================================
EARNINGS BEFORE
INCOME TAXES
Transportation Services $ 192,764 214,028 200,254
Integrated Logistics 54,365 76,514 67,300
International 29 252 1,516
Eliminations (38,709) (38,618) (35,754)
- ------------------------------------------------------------------
Total reportable segments 208,449 252,176 233,316
Other, primarily corporate
administrative expense (14,812) (13,234) (20,274)
Restructuring and
other charges (52,093) 3,040 --
Year 2000 expense (24,050) (37,418) (3,492)
- ------------------------------------------------------------------
Total earnings before
income taxes $ 117,494 204,564 209,550
==================================================================
VEHICLE FLEET SIZE (owned
and leased - continuing
operations):
Transportation Services:*
Full service lease 115,464 109,124 102,914
Commercial rental 40,984 37,517 34,371
Service vehicles 2,178 2,127 2,053
- ------------------------------------------------------------------
158,626 148,768 139,338
International 12,839 13,802 13,386
Integrated Logistics 73 107 109
- ------------------------------------------------------------------
171,538 162,677 152,833
==================================================================
*Includes vehicles:
Not yet earning revenue 3,197 4,314 2,775
No longer earning revenue 6,337 4,159 4,009
- ------------------------------------------------------------------
9,534 8,473 6,784
==================================================================
15
<PAGE>
The Company evaluates financial performance based upon several factors, of which
the primary measure is business segment earnings before income taxes and unusual
items such as restructuring and other charges and Year 2000 expense. Business
segment earnings before income taxes represent the total profit earned from each
segment's clients across all of the Company's segments and include allocations
of certain overhead costs. These results are not necessarily indicative of the
results of operations that would have occurred had each segment been an
independent stand-alone entity during the periods presented.
INTEGRATED LOGISTICS
Revenue from Integrated Logistics increased 14 percent in 1999 compared with
1998, due primarily to expansion of revenue from existing clients and start-up
of business sold in the previous year. The expansions and new start-ups were
across the automotive, high tech, consumer products and telecommunications
industry groups. Dedicated contract carriage services grew only slightly in 1999
compared with 1998 due to lost business and pricing pressures, particularly
during the first half of 1999.
A large component of growth in 1999 came from logistics contracts where the
Company managed the transportation of freight and subcontracted the delivery of
products to third parties. Operating revenue (which excludes subcontracted
freight costs) increased 10 percent in 1999 compared with 1998. New business
sales were strong in 1999, continuing a trend that began in the latter half of
1998. Business sales, after reflecting the impact of contracts not renewed,
increased over 50 percent in 1999 compared with 1998, due primarily to lower
levels of lost business. Management continues to believe that improved sales
force capabilities, industry segmentation and the ability to leverage rapidly
emerging logistics technologies should result in continued new sales growth for
2000. In light of the timing of the start-up of business sales, revenue growth
rates in 2000 are not expected to significantly exceed current levels.
Integrated Logistics pretax earnings decreased 29 percent in 1999 to $54
million compared with $77 million in 1998. Pretax earnings as a percentage of
operating revenue also decreased to 4.2 percent in 1999 from 6.5 percent in
1998. Pretax earnings in 1999 were impacted by numerous factors including lower
margins on volume-sensitive accounts and increased operating expenses on several
start-up accounts. Integrated Logistics also experienced increased
outside-driver costs as part of dedicated contract carriage and higher
litigation and settlement costs. Finally, overhead and technology costs also
grew to support product development and marketing initiatives.
Revenue from Integrated Logistics increased 10 percent in 1998 compared
with 1997. Operating revenue increased 4 percent in 1998 compared with 1997.
Revenue growth was impacted by the termination of two large accounts. Adjusting
for these accounts, total revenue and operating revenue would have increased 15
percent and 9 percent, respectively, in 1998 compared with 1997. Pretax earnings
increased 14 percent in 1998 compared with 1997. Pretax earnings as a percentage
of operating revenue also increased to 6.5 percent in 1998 from 6.0 percent in
1997. These improvements were due primarily to increased operating efficiencies,
lower overhead spending, improved pricing in new and existing contracts and, to
a lesser extent, the growth in revenue.
TRANSPORTATION SERVICES
The primary product lines of Transportation Services consist of full service
leasing, programmed maintenance and commercial rental of trucks, tractors and
trailers. Revenue in the Transportation Services segment increased 6 percent in
1999 compared with 1998 and decreased 1 percent in 1998 compared with 1997. The
results for both years were impacted by fluctuations in fuel revenue. Dry
revenue (revenue excluding fuel) increased 5 percent in 1999 compared with 1998
due primarily to growth in full service leasing and programmed maintenance. Dry
revenue increased 3 percent in 1998 compared with 1997 due primarily to growth
in commercial rental revenue.
Fuel revenue increased 9 percent in 1999 compared with 1998, as a result of
higher worldwide fuel prices, particularly in the latter half of 1999, which
offset slightly lower fuel volumes. Fuel revenue decreased 16 percent in 1998
compared with 1997 as a result of both lower fuel prices and volume. Other
transportation services revenue, consisting of non-contractual third-party
maintenance, trailer rentals and other ancillary revenue to support product
lines, increased 8 percent in 1999 and 6 percent in 1998, compared with prior
years.
16
<PAGE>
Transportation Services pretax earnings decreased 10 percent in 1999 to
$193 million compared with $214 million in 1998. Earnings before income taxes as
a percentage of dry revenue also decreased to 8.0 percent in 1999, compared with
9.4 percent in 1998. The decline in pretax earnings was due primarily to reduced
operating efficiencies in commerical rental, higher compensation, environmental
and vehicle liability expenses, the overall margin impact of lost business and
the continuing delays of in-service and out-service processing of lease
vehicles. Transportation Services pretax earnings increased 7 percent in 1998
compared with 1997. Earnings before income taxes as a percentage of dry revenue
also improved to 9.4 percent in 1998, compared with 9.1 percent in 1997. The
improvement resulted from higher revenue and operating margins in both product
lines, particularly commercial rental, which more than offset increased overhead
spending for technology and 1998 marketing initiatives.
FULL SERVICE LEASING. Full service lease and programmed maintenance revenue
increased 4 percent in 1999 compared with 1998 and continues to be impacted by
non-renewals and delays associated with the in-service processing of vehicles.
In 1999, the average level of vehicles not yet earning revenue exceeded 1998
levels by 73 percent. New lease sales in 1999 were comparable to 1998 levels.
Based on the level of non-renewals as well as the status of in-servicing
efforts, management does not expect lease revenue growth rates in 2000 to
substantially exceed 1999 rates.
Operating margin (revenue less direct operating expenses, depreciation and
interest expense) from full service leasing increased in 1999 compared with
1998, primarily as a result of revenue growth. Operating margin as a percentage
of revenue remained the same for 1999 and 1998 as lower vehicle maintenance
costs were offset by increased depreciation and interests costs associated with
the in-servicing delays previously discussed as well as out-servicing delays
related to vehicles no longer earning revenue. As of December 31, 1999, vehicles
in the out-servicing process totaled 6,337 compared with 4,159 last year.
Management does not expect operating margins in 2000 to exceed 1999 amounts
until the average number of vehicles not earning revenue is reduced to
historical levels.
Full service lease and programmed maintenance revenue increased 1 percent
in 1998 compared with 1997. New lease sales for 1998 were significantly higher
than new lease sales in 1997. The benefits of strong lease sales in 1998 were
partially offset by in-servicing delays, including extended manufacturers'
delivery times for new vehicle purchases. However, the impact of delays in
delivery did begin to lessen during the second half of 1998. Operating margin
and operating margin as a percentage of revenue from full service leasing were
up slightly in 1998, compared with 1997, as revenue growth on a larger fleet was
offset by higher vehicle maintenance costs, principally on older units.
COMMERCIAL RENTAL. Commercial rental revenue increased 8 percent in 1999
compared with 1998 due primarily to a larger commercial rental fleet. Vehicle
utilization in 1999 remained strong, but was lower than 1998. The growth in
commercial rental revenue included increased rentals from full service lease
clients awaiting delivery of new lease equipment. Such "awaiting new lease"
rental revenue increased $12 million, or 25 percent, to $60 million in 1999,
compared with 1998. However, the growth in this ancillary service slowed in
1999, particularly in the second half of the year due to conversions to full
service lease as well as unfavorable comparisons to last year's second half.
Management expects this trend to continue in 2000. The Company also adjusts
fleet levels in response to seasonal demands, utilization targets and projected
future spending. The commercial rental product line continues to be sensitive to
the overall condition of the U.S. economy and 2000 rental results will depend to
a great extent on the strength of the economy. In light of all of these factors,
management does not expect year 2000 commercial rental revenue to grow at 1999
rates.
Commercial rental operating margin increased in 1999 compared with 1998,
reflecting continued strong, but lower, utilization of a larger average fleet.
Operating margin as a percentage of revenue decreased in 1999 compared with 1998
reflecting lower fleet utilization.
17
<PAGE>
Commercial rental revenue in 1998 increased 11 percent, compared with 1997,
due to strong utilization of a larger fleet. Utilization levels reflect, in
part, increased demand from full service lease clients particularly while
awaiting delivery of new full service lease vehicles. Such "awaiting new lease"
rental revenue increased $23 million, or 95 percent, to $48 million in 1998
compared with 1997. Commercial rental operating margin and operating margin as a
percentage of revenue were significantly higher in 1998, compared with 1997, as
a result of higher vehicle utilization.
INTERNATIONAL
International segment revenue decreased 2 percent in 1999 compared with 1998,
due primarily to the impact of the economic difficulties in Brazil and Argentina
and revenue reductions in U.K. truck leasing and rental. These factors offset
revenue gains in Mexico and the U.K. logistics operations. The 1999 year-to-date
revenue growth also includes the impact of the acquisition of the remaining
interest in Companhia Transportadora e Comercial Translor, S.A. ("Translor"), a
Brazilian logistics company that was fully consolidated in May 1998.
International segment revenue grew 32 percent in 1998 compared with 1997.
The revenue growth in 1998 resulted primarily from the May 1998 acquisition of
the remaining interest in Translor; however, revenue improvements were made in
every country. The 1998 revenue growth also reflected the impact of a ground
equipment maintenance contract with British Airways that commenced in the U.K.
during the second quarter of 1997.
Pretax results in the International segment were break-even in 1999 and
1998 compared with earnings of $1.5 million in 1997. The International results
in the last two years were impacted by operating losses in U.K. logistics and
European carrier management as a result of volume shortfalls, operating
inefficiencies and several unprofitable client contracts. Latin American results
were also adversely impacted by the general economic problems experienced in the
region during the last two years.
At this time, there are no significant legal restrictions regarding the
repatriation of cash flows to the U.S. from the foreign countries where the
Company is currently operating.
CORPORATE ADMINISTRATIVE EXPENSES AND OTHER
Net corporate administrative expenses and other totaled $15 million in 1999
compared with $13 million in 1998 and $20 million in 1997. The 1999 increase in
net corporate administrative expenses and other reflected higher corporate
spending and lower gains relative to the prior year. These factors were
mitigated somewhat by additional corporate-level interest income as a result of
debt reductions made with proceeds from the sale of the public transportation
services business. The 1998 decrease in net corporate administrative expenses
and other was due primarily to gains from the sale of surplus non-operating
properties and the reinsurance of certain vehicle-related liabilities.
DISCONTINUED OPERATIONS
Years ended December 31
In thousands 1999 1998 1997
- ---------------------------------------------------------------
Income from discontinued
operations $ 11,831 31,259 44,597
Gain on sale of
discontinued operations 339,323 -- 3,200
- ---------------------------------------------------------------
On September 13, 1999, the Company completed the sale of its public
transportation services business for $940 million in cash and realized a $339
million after-tax gain ($4.94 per diluted common share). On September 30, 1997,
the Company completed the sale of its automotive carrier business for $111
million in cash and realized a $3 million after-tax gain ($0.04 per diluted
common share).
Earnings from the public transportation services business totaled $12
million, $31 million, and $33 million in 1999, 1998 and 1997, respectively.
Earnings from the automotive carrier business totaled $12 million in 1997. The
1999 results of the public transportation services business reflect the
unfavorable comparisons associated with selling the unit in mid-September,
particularly the impact on student transportation that is not fully productive
until that time when the school year resumes. The student transportation
business also experienced reduced profitability because of higher driver
recruiting and compensation costs in several regions due to labor shortages and
increased vehicle liability costs. The decrease in 1998 earnings, compared with
18
<PAGE>
1997, was due to increased maintenance, safety and termination costs associated
with several public transit and fleet maintenance contracts which more than
offset improvements in student transportation services achieved as a result of
revenue growth and fleet efficiencies. See the "Divestitures" note to the
consolidated financial statements (included in Item 8 of this report) for a
further discussion.)
FINANCIAL RESOURCES AND LIQUIDITY
CASH FLOW
The following is a summary of the Company's cash flows from continuing
operating, financing and investing activities:
Years ended December 31
In thousands 1999 1998 1997
- -------------------------------------------------------------------
Net cash provided by (used in):
Operating activities $ 269,819 890,210 569,405
Financing activities (527,848) (124,549) (104,316)
Investing activities 228,067 (727,126) (542,944)
- -------------------------------------------------------------------
Net cash flows from
continuing operations $ (29,962) 38,535 (77,855)
===================================================================
The decrease in cash flow from continuing operating activities in 1999 compared
with 1998 was primarily attributable to higher working capital needs. The higher
working capital needs related primarily to a decrease in the aggregate balance
of trade receivables sold and the cash requirements associated with the tax
liabilities incurred on the sale of the public transportation services business.
During 1999, receivables also increased in conjunction with revenue growth and
accounts payable for vehicle purchases decreased due to the timing of vehicle
deliveries. The increase in cash flow from continuing operating activities in
1998 compared with 1997 was attributable to lower working capital needs. The
lower working capital needs related primarily to an increase in the aggregate
balance of trade receivables sold, increased accounts payable for vehicle
purchases due to the timing of new lease sales and vehicle deliveries, and lower
cash payments for accrued expenses as 1997 activity reflected payments
associated with restructuring activities initiated in 1996. A summary of the
individual items contributing to the cash flow changes is included in the
Consolidated Statements of Cash Flows.
During 1999, cash of $528 million was used in financing activities,
primarily to repurchase $275 million of common stock and reduce debt by $220
million. In 1999, the Company completed a $200 million stock repurchase program
utilizing a portion of the proceeds from the sale of the public transportation
services business and a three-million share repurchase program announced in
December 1998. During 1998, cash of $125 million was used in financing
activities, primarily to repurchase $110 million of common stock and pay
dividends of $44 million. Debt levels were relatively unchanged for 1998
compared with 1997. Since 1996, the Company has repurchased 27 million shares of
common stock. The Company has utilized proceeds from the sale of the public
transportation services, automotive carrier and consumer truck rental
businesses, cash from operating activities and commercial paper borrowings to
fund these programs.
During 1999, investing activities provided cash of $228 million compared
with a net usage of $727 million in 1998 and $543 million in 1997. The 1999
increase in cash provided by investing activities reflected the proceeds from
the sale of the public transportation services business and increased proceeds
from the sale (including leasebacks) of revenue earning equipment. These
proceeds offset a 30 percent increase in capital expenditures. The 1998 increase
in cash used in investing activities was primarily attributable to higher
capital expenditures, which were partially offset by the sale and operating
leaseback of revenue earning equipment in 1998. Additionally, 1997 investing
activities included the sale of the automotive carrier business which generated
proceeds of $111 million.
The following is a summary of capital expenditures:
Years ended December 31
In thousands 1999 1998 1997
- ----------------------------------------------------------------
Revenue earning equipment:
Transportation Services $1,551,576 1,136,582 818,932
International 75,630 84,432 75,991
- ----------------------------------------------------------------
1,627,206 1,221,014 894,923
Operating property and
equipment 107,013 112,127 94,654
- ----------------------------------------------------------------
$1,734,219 1,333,141 989,577
================================================================
19
<PAGE>
Capital spending for 1999 was consistent with management's expectations of
anticipated growth and fleet replacement in full service leasing and commercial
rental. However, capital spending was significantly above plan during the first
half of 1999, which reflected higher than anticipated requirements for
replacement lease equipment and new lease sales. During the second half of 1999,
management reviewed capital spending requirements and undertook several actions
to slow the rate of spending. In 1999, capital expenditures in full service
truck leasing increased $349 million to $1.3 billion. Capital expenditures for
commercial rental were $201 million in 1999, an increase of $35 million compared
with 1998, due to a planned shift in fleet mix and fleet replacement to reduce
the average age of the commercial rental fleet. In 2000, management projects
that capital expenditures will be 10 to 15 percent below 1999 levels, primarily
as a result of reduced manufacturer equipment delays, less fleet replacement
requirements and better capital asset management. The Company expects to fund
its 2000 capital expenditures with both internally generated funds and
additional financing.
During the past three years, the Company completed a number of
acquisitions, in all business segments, each of which has been accounted for
using the purchase method of accounting. Total consideration for these
acquisitions was $13 million in 1999, $53 million in 1998 and $43 million in
1997. The Company will continue to evaluate selective acquisitions in logistics
and transportation services in 2000.
The Company's cash requirements are funded principally through operations
and the sale of revenue earning equipment. Cash flow from continuing operating
activities (excluding sales of receivables) plus sales of property and revenue
earning equipment as a percentage of capital expenditures was 46 percent in
1999, compared with 82 percent in 1998 and 92 percent in 1997. The decrease in
1999 compared with 1998 was due primarily to reduced cash flow from operations
and higher capital spending. The decrease in 1998 compared with 1997 was due
primarily to higher capital spending.
FINANCING
Ryder utilizes external capital to support growth in its asset-based product
lines. The Company has a variety of financing alternatives available to fund
its capital needs. These alternatives include long- and medium-term public and
private debt, as well as variable-rate financing available through bank credit
facilities and commercial paper. The Company also periodically enters into
sale-leaseback agreements on revenue earning equipment, the majority of which
are accounted for as operating leases. In 1999, the Company utilized a portion
of the proceeds from the sale of the public transportation services business and
proceeds from the sale and leaseback of revenue earning equipment to reduce
debt. These repayments have altered the Company's balance sheet debt structure
compared to prior years. During the fourth quarter of 1999, the Company retired
$156 million of medium-term notes early and recorded an extraordinary after-tax
loss of $4 million. The retired debt carried a weighted average interest rate of
8.5 percent. This debt reduction will produce future interest savings of $2
million.
The Company's debt ratings as of December 31, 1999 were as follows:
Commercial Unsecured
Paper Notes
- ----------------------------------------------------
Moody's Investors Service P2 Baa1
Standard & Poor's Ratings Group A2 BBB+
Duff & Phelps Credit Rating Co. D2 A-
- ----------------------------------------------------
On July 21, 1999, Standard & Poor's Ratings Group confirmed its short-term
credit ratings for the Company and placed its long-term ratings for the Company
on CreditWatch with negative implications following the Company's announcement
of a definitive agreement to sell the public transportation services business.
On July 21, 1999, Moody's Investors Service confirmed its credit ratings for the
Company. On April 27, 1999, Duff & Phelps Credit Rating Co. lowered its credit
ratings of the Company's commercial paper and unsecured notes to D2 and A- from
D1 and A, respectively. Duff & Phelps Credit Rating Co. reaffirmed these credit
ratings on July 21, 1999.
Debt totaled $2.4 billion at the end of 1999, a decrease of 7 percent from
1998. The Company made $530 million of unsecured note payments in 1999,
20
<PAGE>
including $156 million associated with the early retirement of debt. The Company
issued $174 million of medium-term notes in 1999. U.S. commercial paper
outstanding at December 31, 1999, was $320 million, compared with $198 million
at the end of 1998. The Company's foreign debt remained relatively unchanged at
approximately $400 million. The Company's percentage of variable-rate financing
obligations, including the present value of off-balance sheet obligations such
as operating leases, was 26 percent at December 31, 1999, which is within the
Company's targeted level of 25 to 30 percent and comparable to the level which
existed at December 31, 1998. The Company's debt-to-equity ratio at December 31,
1999, decreased to 199 percent from 236 percent at December 31, 1998.
The Company has a $720 million global revolving credit facility, which
expires in May 2002. The primary purpose of the credit facility is to finance
working capital and provide support for the issuance of commercial paper. At the
Company's option, the interest rate on borrowings under the credit facility is
based on LIBOR, prime, federal funds or local equivalent rates. The credit
facility has an annual facility fee of 0.08 percent based on the Company's
current credit rating. At December 31, 1999, foreign borrowings of $58 million
were outstanding under the credit facility. At the end of 1999, $342 million was
available under the Company's global credit facility.
In September 1998, the Company filed an $800 million shelf registration
statement with the Securities and Exchange Commission. Proceeds from debt issues
under the shelf registration are available for capital expenditures, debt
refinancing and general corporate purposes. As of December 31, 1999, the Company
had $487 million of debt securities available for issuance under this shelf
registration statement. The Company also participates in an agreement to sell,
with limited recourse, up to $375 million of trade receivables on a revolving
basis through July 2002. At December 31, 1999 and 1998, the outstanding balance
of receivables sold pursuant to this agreement was $75 million and $200 million,
respectively.
Proceeds from sale-leaseback transactions were $594 million in 1999 and
$312 million in 1998. The sale-leaseback transactions include vehicle
securitizations in which the Company sold a beneficial interest in certain lease
vehicles to separately-rated and unconsolidated vehicle lease trusts. Such
securitizations generated cash proceeds of $294 million in 1999 and $73 million
in 1998. The vehicles were sold for their carrying value and the Company
retained an interest in the form of a subordinated note issued at the date of
each sale. The Company has provided credit enhancement in the form of cash
reserve funds and a pledge of the subordinated notes as additional security for
the trusts to the extent that delinquencies and losses on the truck leases and
related vehicle sales are incurred. The vehicle securitizations provide the
Company with further liquidity and increased access to capital markets.
FINANCIAL INSTRUMENT MARKET RISK
In the normal course of business, the Company is exposed to fluctuations in
interest rates, foreign exchange rates and fuel prices. The Company manages such
exposures in several ways, including the use of a variety of derivative
financial instruments when deemed prudent. The Company does not enter into
leveraged financial transactions or use derivative financial instruments for
trading purposes.
The exposure to market risk for changes in interest rates relates primarily
to debt obligations. The Company's interest rate risk management program
objective is to limit the impact of interest rate changes on earnings and cash
flows and to lower overall borrowing costs. The Company manages its exposure to
interest rate risk through the proportion of fixed-rate and variable-rate debt
in the total debt portfolio. The Company targets variable-rate debt levels at 25
to 30 percent of total financing obligations, including the present value of
off-balance sheet obligations such as operating leases. From time to time, the
Company also uses interest rate swap and cap agreements to manage its fixed-rate
and variable-rate exposure and to better match the repricing of its debt
instruments to that of its portfolio of assets. No interest rate swap or cap
agreements were outstanding at December 31, 1999 and 1998.
21
<PAGE>
The following tables summarize debt obligations outstanding as of December
31, 1999 and 1998 expressed in U.S. dollar equivalents. The tables show the
amount of debt and related weighted average interest rates by contractual
maturity dates. Weighted average variable rates are based on implied forward
rates in the yield curve at December 31, 1999 and 1998. This information should
be read in conjunction with the "Debt" note to the consolidated financial
statements, which is included in Item 8 of this report.
<TABLE>
<CAPTION>
Expected Maturity Date
- ------------------------------------------------------------------------------------------------------------------------------
1999 Years ended December 31
- ------------------------------------------------------------------------------------------------------------------------------
In thousands 2000 2001 2002 2003 2004 Thereafter Total Fair Total
- ------------------------------------------------------------------------------------------------------------------------------
Fixed-rate debt:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dollar denominated $437,570 264,214 166,323 75,590 72,098 622,989 1,638,784 1,586,126
Average interest rate 7.20% 7.04% 7.00% 7.09% 7.19% 7.25%
Pound Sterling denominated 24,230 24,230 80,765 -- -- -- 129,225 130,132
Average interest rate 8.13% 8.13% 7.90% -- -- --
Canadian Dollar denominated 10,386 10,386 17,310 45,006 17,310 -- 100,398 102,970
Average interest rate 6.73% 6.64% 6.58% 6.42% 6.51% --
Other 5,279 3,016 1,339 1,339 772 1,545 13,290 10,825
Average interest rate 5.86% 5.76% 5.99% 6.09% 6.31% 6.31%
Variable-rate debt:
Dollar denominated(a) -- -- 327,300 -- -- -- 327,300 327,300
Average interest rate 6.53% 7.25% 7.25% -- -- --
Pound Sterling denominated 16,153 -- 58,151 -- -- -- 74,304 74,304
Average interest rate 6.56% 7.04% 6.94% -- -- --
Canadian Dollar denominated 45,006 -- -- -- -- -- 45,006 45,006
Average interest rate 5.83% -- -- -- -- --
Other 10,732 810 724 142 -- -- 12,408 12,408
Average interest rate 10.77% 12.00% 12.00% 12.00% -- --
- ------------------------------------------------------------------------------------------------------------------------------
Total Debt (excluding capital leases) $2,340,715 2,289,071
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Expected Maturity Date
- ------------------------------------------------------------------------------------------------------------------------------
1998 Years ended December 31
- ------------------------------------------------------------------------------------------------------------------------------
In thousands 1999 2000 2001 2002 2003 Thereafter Total Fair Total
- ------------------------------------------------------------------------------------------------------------------------------
Fixed-rate debt:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dollar denominated $374,270 443,738 281,287 107,502 92,657 691,350 1,990,804 2,060,816
Average interest rate 7.54% 7.41% 7.33% 7.33% 7.47% 7.51%
Pound Sterling denominated 24,893 24,893 24,893 58,083 -- -- 132,762 136,587
Average interest rate 8.06% 8.17% 8.17% 7.88% -- --
Canadian Dollar denominated 22,873 19,605 22,873 -- 9,803 -- 75,154 75,356
Average interest rate 7.22% 7.12% 6.49% 5.75% 5.75% --
Other 10,614 5,371 4,326 2,298 1,685 3,600 27,894 28,968
Average interest rate 6.61% 7.00% 5.92% 5.97% 5.91% 5.96%
Variable-rate debt:
Dollar denominated(a) -- -- -- 206,882 -- -- 206,882 206,882
Average interest rate 5.08% 5.02% 5.06% 5.56% -- --
Pound Sterling denominated 34,850 -- -- 54,764 -- -- 89,614 89,614
Average interest rate 5.68% 5.67% 5.48% 5.40% -- --
Canadian Dollar denominated -- -- -- 18,102 -- -- 18,102 18,102
Average interest rate 5.11% 5.24% 5.41% 5.53% -- --
Other 2,500 -- -- 4,615 -- -- 7,115 7,115
Average interest rate 6.36% 3.56% 3.84% 4.11% -- --
- ------------------------------------------------------------------------------------------------------------------------------
Total Debt (excluding capital leases) $2,548,327 2,623,440
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Includes commercial paper assumed to be renewed through June 2002. As
discussed in the "Debt" note to the consolidated financial statements, the
commercial paper program is supported by the Company's $720 million global
credit facility, which is scheduled to expire in June 2002. The Company
classified commercial paper borrowings as long-term debt in the consolidated
balance sheets at December 31, 1999 and 1998.
22
<PAGE>
The exposure to market risk for changes in foreign exchange rates relates
primarily to foreign operations' buying, selling and financing in currencies
other than local currencies and to the carrying value of net investments in
foreign subsidiaries. The Company manages its exposure to foreign exchange rate
risk related to foreign operations' buying, selling and financing in currencies
other than local currencies by naturally offsetting assets and liabilities not
denominated in local currencies. The Company also uses foreign currency option
contracts and forward agreements to preserve the carrying value of foreign
currency assets, liabilities, commitments and anticipated foreign currency
transactions. No foreign currency option contracts or forward agreements were
outstanding at December 31, 1999 and 1998. The Company does not generally hedge
the translation exposure related to its net investment in foreign subsidiaries.
Based on the overall level of transactions denominated in other than local
currencies and of the net investment in foreign subsidiaries, the exposure to
market risk for changes in foreign exchange rates is not material.
The exposure to market risk for fluctuations in fuel prices relates to
fixed-price fuel sales commitments with certain customers. The Company mitigates
this exposure by entering into forward purchases for delivery at fueling
facilities. Fixed-price fuel arrangements represent less than 5 percent of total
fuel purchases.
ENVIRONMENTAL MATTERS
The operations of the Company involve storing and dispensing petroleum products,
primarily diesel fuel, regulated under environmental protection laws. These laws
require the Company to eliminate or mitigate the effect of such substances on
the environment. In response to these requirements, the Company has upgraded
operating facilities and implemented various programs to detect and minimize
contamination. Capital expenditures related to these programs totaled $5 million
in 1999 and $9 million in 1998. The Company also incurred $10 million of
environmental expenses in 1999, compared with $4 million in 1998 and 1997. The
increase in expenses for 1999 reflected the impact of lower claim recoveries
compared with 1998. In 1999, the Company also increased the previous accrual for
a current site as a result of the ongoing evaluation of the contamination and
alternative cleanup methods. Based on current circumstances and the present
standards imposed by government regulations, environmental expenses should not
increase materially from 1999 levels in the near term.
The ultimate cost of the Company's environmental liabilities cannot
presently be projected with certainty due to the presence of several unknown
factors, primarily the level of contamination, the effectiveness of selected
remediation methods, the stage of management's investigation at individual sites
and the recoverability of such costs from third parties. Based upon information
presently available, management believes that the ultimate disposition of these
matters, although potentially material to the results of operations in any
single year, will not have a material adverse effect on the Company's financial
condition or liquidity. See the "Environmental Matters" note to the consolidated
financial statements (included in Item 8 of this report) for a further
discussion.
YEAR 2000
The Year 2000 issue was the result of computer systems, software products and
embedded technology using two digits rather than four to indicate the applicable
year and the resultant inability to properly interpret dates beyond the year
1999. During 1997, after consideration of the potential impact to operations,
including client and supplier relationships, an enterprise-wide program was
initiated to modify computer information systems to be Year 2000 compliant or to
replace noncompliant systems. The cumulative impact on after-tax earnings for
incremental Year 2000 costs was $40 million.
The Company did not experience any material adverse effects in its
operating or business systems when the date changed from 1999 to 2000.
Additionally, the Company currently is not aware of any significant Year 2000
problems that have arisen for its clients and suppliers.
23
<PAGE>
EURO CONVERSION
On January 1, 1999, the participating countries of the European Union adopted
the euro as their common legal currency. The participating countries' existing
national currencies will continue as legal tender until at least January 1,
2002. During this transition period, parties may pay for goods and services
using either the euro or the participating country's legacy currency. Due to the
nature of current international operations, conversion to the euro is not
expected to have a material impact on the Company's results of operations or
financial position.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities," which requires all derivatives to be recognized at fair
value as either assets or liabilities on the balance sheet. Any gain or loss
resulting from changes in such fair value is required to be recognized in
earnings to the extent the derivatives are not effective as hedges. This
statement, as amended, is effective for fiscal years beginning after June 15,
2000, and is effective for interim periods in the initial year of adoption.
Adoption of this statement is not expected to have a material impact on the
Company's results of operations or financial position.
OUTLOOK
The divestiture of the public transportation services business has heightened
and renewed the Company's focus on logistics and transportation services. In
2000, the Company will leverage this focus with a new organizational structure
that will enhance client service and business retention across the product line
continuum. The new organizational structure should provide growth opportunities
through the expanded access to and awareness of existing logistics capabilities.
The Company will emphasize growing revenue and margin in logistics and
transportation services through continued strong new sales and focus on client
loyalty and retention, better asset utilization, rationed capital spending and
overall cost containment to enhance productivity.
FORWARD-LOOKING STATEMENTS
This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are based
on the current plans and expectations of Ryder System, Inc. and involve risks
and uncertainties that may cause actual results to differ materially from the
forward-looking statements.
Important factors that could cause such differences include, among others,
general economic conditions in the United States and worldwide, the highly
competitive environment applicable to the Company's operations (including
competition in integrated logistics from other logistics companies as well as
from air cargo, shipping, railroads and motor carriers and competition in full
service leasing and commercial rental from companies providing similar services
as well as from truck and trailer manufacturers who provide leasing, extended
warranty maintenance, rental and other transportation services), greater than
expected expenses associated with the Company's personnel needs or activities
(including increased cost of freight and transportation), availability of
equipment, changes in clients' business environments (or the loss of a
significant client) or changes in government regulations.
The risks included here are not exhaustive. New risk factors emerge from
time to time and it is not possible for management to predict all such risk
factors or to assess the impact of such risk factors on the Company's business.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by ITEM 7A is included in ITEM 7 (pages 21 through 23)
of PART II of this report.
24
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FINANCIAL STATEMENTS
Page No.
Independent Auditors' Report...............................................26
Consolidated Statements of Earnings........................................27
Consolidated Balance Sheets................................................28
Consolidated Statements of Cash Flows......................................29
Consolidated Statements of Shareholders' Equity............................30
Notes to Consolidated Financial Statements.................................31
SUPPLEMENTARY DATA
Quarterly Financial and Common Stock Data..................................49
25
<PAGE>
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
RYDER SYSTEM, INC.:
We have audited the accompanying consolidated balance sheets of Ryder System,
Inc. and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of earnings, shareholders' equity and cash flows for
each of the years in the three-year period ended December 31, 1999. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Ryder
System, Inc. and subsidiaries as of December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1999, in conformity with generally accepted accounting
principles.
/s/ KPMG LLP
Miami, Florida
February 2, 2000
26
<PAGE>
CONSOLIDATED STATEMENTS OF EARNINGS
RYDER SYSTEM, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Years ended December 31
In thousands, except per share amounts 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------
Revenue $4,952,204 4,606,976 4,368,148
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating expense 3,585,079 3,283,556 3,180,453
Freight under management expense 425,769 330,124 244,874
Depreciation expense, net of gains 566,765 569,662 559,173
Interest expense 183,676 187,786 179,751
Miscellaneous income, net (2,722) (3,094) (9,145)
Unusual items:
Restructuring and other charges, net 52,093 (3,040) --
Year 2000 expense 24,050 37,418 3,492
- ----------------------------------------------------------------------------------------------------------
4,834,710 4,402,412 4,158,598
- ----------------------------------------------------------------------------------------------------------
Earnings from continuing operations before income taxes 117,494 204,564 209,550
Provision for income taxes 44,577 76,752 81,662
- ----------------------------------------------------------------------------------------------------------
Earnings from continuing operations 72,917 127,812 127,888
Earnings from discontinued operations, less income taxes 11,831 31,259 44,597
Gain on disposal of discontinued operations, less income taxes 339,323 -- 3,200
- ----------------------------------------------------------------------------------------------------------
Earnings before extraordinary loss 424,071 159,071 175,685
Extraordinary loss on early extinguishment of debt (4,393) -- --
- ----------------------------------------------------------------------------------------------------------
Net Earnings $ 419,678 159,071 175,685
==========================================================================================================
Earnings per common share - Basic:
Continuing operations $ 1.06 1.75 1.66
Discontinued operations 0.17 0.43 0.58
Gain on sale of discontinued operations 4.95 -- 0.04
Extraordinary loss on early extinguishment of debt (0.06) -- --
- ----------------------------------------------------------------------------------------------------------
Net earnings $ 6.12 2.18 2.28
==========================================================================================================
Earnings per common share - Diluted:
Continuing operations $ 1.06 1.74 1.64
Discontinued operations 0.17 0.42 0.57
Gain on sale of discontinued operations 4.94 -- 0.04
Extraordinary loss on early extinguishment of debt (0.06) -- --
- ----------------------------------------------------------------------------------------------------------
Net earnings $ 6.11 2.16 2.25
==========================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
27
<PAGE>
CONSOLIDATED BALANCE SHEETS
RYDER SYSTEM, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
December 31
Dollars in thousands, except per share amounts 1999 1998
- -----------------------------------------------------------------------------------------------------------
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 112,993 138,353
Receivables 725,815 559,141
Inventories 69,845 67,605
Tires in service 162,877 166,578
Prepaid expenses and other current assets 137,861 111,170
- -----------------------------------------------------------------------------------------------------------
Total current assets 1,209,391 1,042,847
Revenue earning equipment 3,095,451 3,211,969
Operating property and equipment 581,105 597,951
Direct financing leases and other assets 652,270 543,242
Intangible assets and deferred charges 232,233 312,592
- -----------------------------------------------------------------------------------------------------------
$5,770,450 5,708,601
===========================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 574,253 483,334
Accounts payable 334,103 399,495
Accrued expenses 541,156 479,835
- -----------------------------------------------------------------------------------------------------------
Total current liabilities 1,449,512 1,362,664
Long-term debt 1,819,136 2,099,697
Other non-current liabilities 285,802 343,003
Deferred income taxes 1,011,095 807,623
- -----------------------------------------------------------------------------------------------------------
Total liabilities 4,565,545 4,612,987
- -----------------------------------------------------------------------------------------------------------
Shareholders' equity:
Common stock of $0.50 par value per share
Authorized, 400,000,000; outstanding, 1999 - 59,395,050;
1998 - 71,280,247 513,083 610,543
Retained earnings 714,544 504,105
Accumulated other comprehensive income (22,722) (19,034)
- -----------------------------------------------------------------------------------------------------------
Total shareholders' equity 1,204,905 1,095,614
- -----------------------------------------------------------------------------------------------------------
$5,770,450 5,708,601
===========================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
28
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
RYDER SYSTEM, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Years ended December 31
In thousands 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------
Continuing operations cash flows from operating activities:
<S> <C> <C> <C>
Earnings from continuing operations $ 72,917 127,812 127,888
Depreciation expense, net of gains 566,765 569,662 559,173
Amortization expense and other non-cash charges, net 26,236 (792) 5,862
Deferred income tax expense 250,041 100,432 122,620
Changes in operating assets and liabilities,
net of acquisitions:
Increase (decrease) in aggregate balance of trade
receivables sold (125,000) 125,000 --
Receivables (129,516) (30,948) (57,399)
Inventories (10,380) (1,474) (6,637)
Prepaid expenses and other assets (33,285) (39,829) (61,047)
Accounts payable (56,261) 90,038 26,866
Accrued expenses and other liabilities (291,698) (49,691) (147,921)
- -----------------------------------------------------------------------------------------------------------
269,819 890,210 569,405
- -----------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net change in commercial paper borrowings 147,671 (150,162) 305,132
Debt proceeds 314,821 474,969 47,502
Debt repaid, including capital lease obligations (682,517) (328,368) (231,729)
Dividends on common stock (40,878) (43,841) (45,859)
Common stock issued 7,949 32,393 61,973
Common stock repurchased (274,894) (109,540) (241,335)
- -----------------------------------------------------------------------------------------------------------
(527,848) (124,549) (104,316)
- -----------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchases of property and revenue earning equipment (1,734,219) (1,333,141) (989,577)
Sales of property and revenue earning equipment 401,902 321,962 339,440
Sale and leaseback of revenue earning equipment 593,680 312,230 --
Acquisitions, net of cash acquired (12,699) (52,792) (42,752)
Proceeds from business sold 940,000 -- 111,306
Other, net 39,403 24,615 38,639
- -----------------------------------------------------------------------------------------------------------
228,067 (727,126) (542,944)
- -----------------------------------------------------------------------------------------------------------
Net cash flows from continuing operations (29,962) 38,535 (77,855)
Net cash flows from discontinued operations 4,602 21,448 (35,159)
- -----------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents (25,360) 59,983 (113,014)
Cash and cash equivalents at January 1 138,353 78,370 191,384
- -----------------------------------------------------------------------------------------------------------
Cash and cash equivalents at December 31 $ 112,993 138,353 78,370
===========================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
29
<PAGE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'EQUITY
RYDER SYSTEM, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Accumulated
Other
Comprehensive Common Retained Comprehensive
Dollars in thousands, except per share amounts Income Stock Earnings Income Total
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1997 $588,290 521,889 (4,173) 1,106,006
Net earnings $175,685 -- 175,685 -- 175,685
Foreign currency translation
adjustments (6,949) -- -- (6,949) (6,949)
--------
Comprehensive income $168,736
========
Common stock dividends declared -
$0.60 per share -- (45,859) -- (45,859)
Common stock issued under
employee plans (2,778,372 shares)* 61,973 -- -- 61,973
Common stock repurchased
(7,047,300 shares) (55,877) (185,458) -- (241,335)
Other 11,187 -- -- 11,187
- -------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1997 605,573 466,257 (11,122) 1,060,708
Net earnings $159,071 -- 159,071 -- 159,071
Foreign currency translation
adjustments (7,912) -- -- (7,912) (7,912)
--------
Comprehensive income $151,159
========
Common stock dividends declared -
$0.60 per share -- (43,841) -- (43,841)
Common stock issued under
employee plans (1,388,021 shares)* 32,393 -- -- 32,393
Common stock repurchased
(3,800,000 shares) (32,158) (77,382) -- (109,540)
Other 4,735 -- -- 4,735
- -------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998 610,543 504,105 (19,034) 1,095,614
Net earnings $419,678 -- 419,678 -- 419,678
Foreign currency translation
adjustments (3,688) -- -- (3,688) (3,688)
--------
Comprehensive income $415,990
========
Common stock dividends declared -
$0.60 per share -- (40,878) -- (40,878)
Common stock issued under employee
plans (387,410 shares)* 7,949 -- -- 7,949
Common stock repurchased
(12,302,607 shares) (106,533) (168,361) -- (274,894)
Other (includes 30,000 restricted shares) 1,124 -- -- 1,124
- -------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999 $513,083 714,544 (22,722) 1,204,905
=========================================================================================================================
</TABLE>
*Net of common stock purchased from employees exercising stock options. See
accompanying notes to consolidated financial statements.
30
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Ryder System, Inc. and Subsidiaries
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation. The consolidated financial statements include the
accounts of Ryder System, Inc. and its subsidiaries (the "Company"). All
significant intercompany accounts and transactions have been eliminated. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
CASH EQUIVALENTS. All investments in highly liquid debt instruments with
maturities of three months or less at the date of purchase are classified as
cash equivalents.
REVENUE RECOGNITION. Operating lease revenue is recognized as vehicles are used
over the terms of the related agreements. Revenue from service contracts is
recognized as services are provided, generally at billing rates specified in
underlying contracts. Direct financing lease revenue is recognized by the
interest method over the terms of the lease agreements.
INVENTORIES. Inventories, which consist primarily of fuel and vehicle parts, are
valued using the lower of cost (specific identification or average cost) or
market.
TIRES IN SERVICE. The Company allocates a portion of the acquisition costs of
revenue earning equipment to tires in service and amortizes such tire costs to
expense over the lives of the vehicles and equipment. The cost of replacement
tires and tire repairs are expensed as incurred.
REVENUE EARNING EQUIPMENT, OPERATING PROPERTY AND EQUIPMENT AND DEPRECIATION.
Revenue earning equipment, principally vehicles, and operating property and
equipment are stated at cost. Vehicle repairs and maintenance that extend the
life or increase the value of the vehicle are capitalized, whereas ordinary
maintenance and repairs are expensed as incurred. Provision for depreciation is
computed using the straight-line method on substantially all depreciable assets.
Annual straight-line depreciation rates range from 10 percent to 33 percent for
revenue earning equipment, 2.5 percent to 10 percent for buildings and
improvements and 10 percent to 25 percent for machinery and equipment. The
Company periodically reviews and adjusts the residual values and useful lives of
revenue earning equipment based on current and expected operating trends and
projected realizable values.
Gains on sales of revenue earning equipment, net of selling and equipment
preparation costs, are reported as reductions of depreciation expense and
totaled $56 million, $57 million and $50 million in 1999, 1998 and 1997,
respectively. Gains on operating property and equipment sales are reflected in
miscellaneous income.
INTANGIBLE ASSETS. Intangible assets consist principally of goodwill totaling
$203 million in 1999 and $275 million in 1998. Goodwill is amortized on a
straight-line basis over appropriate periods generally ranging from 10 to 40
years. Accumulated amortization was approximately $110 million and $96 million
at December 31, 1999 and 1998, respectively.
IMPAIRMENT OF LONG-LIVED ASSETS. Long-lived assets, including intangible assets,
are reviewed for impairment when circumstances indicate that the carrying amount
of assets may not be recoverable. The Company assesses the recoverability of
long-lived assets by determining whether the depreciation or amortization of the
asset over its remaining life can be recovered based upon the management's best
estimate of the undiscounted future operating cash flows (excluding interest
charges) related to the asset. If the sum of such undiscounted cash flows is
less than carrying value of the asset, the asset is considered impaired. The
amount of impairment, if any, represents the excess of the carrying value of the
asset over fair value. Fair value is determined by quoted market price, if
available, or an estimate of projected future operating cash flows, discounted
using a rate that reflects the Company's average cost of funds.
Long-lived assets (including intangible assets) to be disposed of are
reported at the lower of carrying amount or fair value less costs to sell. Fair
value is determined based upon quoted market prices, if available, or the
results of applicable valuation techniques such as discounted cash flows.
31
<PAGE>
SELF-INSURANCE RESERVES. The Company retains a portion of the risk under vehicle
liability, workers' compensation and other insurance programs. Reserves have
been recorded which reflect the undiscounted estimated liabilities, including
claims incurred but not reported. Such liabilities are necessarily based on
estimates. While management believes that the amounts are adequate, there can be
no assurance that changes to management's estimates may not occur due to
limitations inherent in the estimation process. Changes in the estimates of
these reserves are charged or credited to income in the period determined.
Amounts estimated to be paid within one year have been classified as accrued
expenses with the remainder included in other non-current liabilities.
INCOME TAXES. Deferred taxes are provided using the asset and liability method
for temporary differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.
ENVIRONMENTAL EXPENDITURES. Liabilities are recorded for environmental
assessments and/or cleanup when it is probable a loss has been incurred and the
costs can be reasonably estimated. The liability may include costs such as
anticipated site testing, consulting, remediation, disposal, post-remediation
monitoring and legal fees, as appropriate. Estimates are not discounted. The
liability does not reflect possible recoveries from insurance companies or
reimbursement of remediation costs by state agencies, but does include estimates
of cost-sharing with other potentially responsible parties. Claims for
reimbursement of remediation costs are recorded when recovery is deemed
probable.
DERIVATIVE FINANCIAL INSTRUMENTS. From time to time, the Company enters into
interest rate swap and cap agreements to manage its fixed and variable interest
rate exposure and to better match the repricing of its debt instruments to that
of its portfolio of assets. The Company assigns each interest rate swap and cap
agreement to a debt or operating lease obligation. Amounts to be paid or
received under swap and cap agreements are recognized over the terms of the
agreements as adjustments to interest expense or rent expense. Derivative
financial instruments are not leveraged or held for trading purposes.
FOREIGN CURRENCY TRANSLATION. The Company's foreign operations generally use the
local currency as their functional currency. Assets and liabilities of these
operations are translated at the exchange rates in effect on the balance sheet
date. Income statement items are translated at the average exchange rates for
the year. The impact of currency fluctuation is included in other comprehensive
income as a translation adjustment. For subsidiaries whose economic environment
is highly inflationary, the U.S. dollar is the functional currency and gains and
losses that result from translation are included in earnings.
STOCK REPURCHASES. The cost of stock repurchases is allocated between common
stock and retained earnings based on the amount of capital surplus at the time
of the stock repurchase.
STOCK-BASED COMPENSATION. Stock-based compensation is recognized using the
intrinsic value method. Under this method, compensation cost is recognized based
on the excess, if any, of the quoted market price of the stock at the date of
grant (or other measurement date) and the amount an employee must pay to acquire
the stock.
EARNINGS PER SHARE. Basic earnings per share are computed by dividing net
earnings by the weighted average number of common shares outstanding. Diluted
earnings per share reflect the dilutive effect of potential common shares from
securities such as stock options.
COMPREHENSIVE INCOME. Comprehensive income presents a measure of all changes in
shareholders' equity except for changes resulting from transactions with
shareholders in their capacity as shareholders. The Company's total
comprehensive income presently consists of net earnings and currency translation
adjustments associated with foreign operations that use the local currency as
their functional currency.
ACCOUNTING CHANGES. Effective January 1, 1999, the Company adopted SOP 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use." This statement requires that certain direct development costs
32
<PAGE>
associated with internal-use software be capitalized and amortized over the
estimated useful life of the software. Costs incurred during the preliminary
project stage, as well as maintenance and training costs, are expensed as
incurred. Adoption of this statement did not have a material impact on the
Company's results of operations or financial position.
Effective January 1, 1999, the Company adopted SOP 98-5, "Reporting on the
Costs of Start-up Activities." This statement requires that all costs of
start-up activities, including organizational costs, be expensed as incurred.
The Company's existing accounting policies conformed to the requirements of SOP
98-5; therefore, adoption of this statement did not impact the Company's results
of operations or financial position.
RECLASSIFICATIONS. Certain prior year amounts have been reclassified to conform
to the current year presentation.
RECENT ACCOUNTING PRONOUNCEMENTS. In June 1998, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which requires
all derivatives to be recognized at fair value as either assets or liabilities
on the balance sheet. Any gain or loss resulting from changes in such fair value
is required to be recognized in earnings to the extent the derivatives are not
effective as hedges. This statement, as amended, is effective for fiscal years
beginning after June 15, 2000, and is effective for interim periods in the
initial year of adoption. Adoption of this statement is not expected to have a
material impact on the Company's results of operations or financial position.
ACQUISITIONS
Over the last three years, the Company completed a number of acquisitions in
each of its business segments, all of which have been accounted for using the
purchase method of accounting. The consolidated financial statements reflect the
results of operations of the acquired businesses from the acquisition dates. Pro
forma results of operations have not been presented because the effects of these
acquisitions were not significant. The fair value of assets acquired and
liabilities assumed in connection with these acquisitions, and related purchase
prices, were as follows:
Years ended December 31
In thousands 1999 1998 1997
- -----------------------------------------------------------
Working capital $ 359 15,309 409
Other net assets 10,401 40,433 35,915
Non-current liabilities (347) (33,767) (9,799)
- -----------------------------------------------------------
Net assets acquired 10,413 21,975 26,525
Goodwill 2,286 30,817 16,227
- -----------------------------------------------------------
Purchase price $12,699 52,792 42,752
===========================================================
DIVESTITURES
On September 13, 1999, the Company completed the sale of its public
transportation services business for $940 million in cash and realized a $339
million after-tax gain ($4.94 per diluted common share). On September 30, 1997,
the Company completed the sale of its automotive carrier business for $111
million in cash and realized a $3 million after-tax gain ($0.04 per diluted
common share). The disposals of these businesses have been accounted for as
discontinued operations and accordingly, their operating results and cash flows
are segregated and reported as discontinued operations in the accompanying
consolidated financial statements.
Summarized results of discontinued operations were as follows:
Years ended December 31
In thousands 1999 1998 1997
- ----------------------------------------------------------------------
Revenue $411,743 581,748 988,610
======================================================================
Earnings before income taxes $ 20,050 52,392 72,630
Provision for income taxes 8,219 21,133 28,033
- ----------------------------------------------------------------------
Earnings from
discontinued operations $ 11,831 31,259 44,597
- ----------------------------------------------------------------------
Gain (loss) on disposal $573,178 -- (5,300)
Income taxes 233,855 -- (8,500)
- ----------------------------------------------------------------------
Net gain on disposal $339,323 -- 3,200
======================================================================
In the fourth quarter of 1999, the Company increased the gain on disposal of the
public transportation services business by $4 million, reflecting the reduction
of income taxes as a consequence of the sale, the settlement of the final sale
price and the impact of insurance purchased to cover certain retained
liabilities of the discontinued operation.
Interest expense was allocated to discontinued operations based upon an
assumed debt-to-equity ratio consistent with the Company's historical interest
33
<PAGE>
allocation method for segment profit reporting. Interest expense of $8 million,
$11 million and $8 million was included in the operating results of discontinued
operations in 1999, 1998 and 1997, respectively. The results of discontinued
operations exclude management fees and, for public transportation services,
branch overhead charges allocated by the Company and previously included in
segment profit reporting. The gain on disposal of discontinued operations is net
of direct transaction costs, gains on the curtailment and settlement of certain
employee benefit plans and exit costs to separate the discontinued business.
RESTRUCTURING AND OTHER CHARGES
The components of restructuring and other charges and the allocation across
business segments were as follows:
Years ended December 31
In thousands 1999 1998
- -------------------------------------------------------------
Restructuring charges:
Employee severance and benefits $16,500 724
Facilities and related costs 4,478 --
- -------------------------------------------------------------
20,978 724
Other charges:
Asset write-downs and
valuation allowances 14,215 (8,264)
Start-up costs 7,970 --
Other 8,930 4,500
- -------------------------------------------------------------
$52,093 (3,040)
=============================================================
Transportation Services $17,728 (3,385)
Integrated Logistics 5,310 --
International 7,138 345
Corporate and other 21,917 --
- -------------------------------------------------------------
$52,093 (3,040)
=============================================================
During the fourth quarter of 1999, the Company implemented several restructuring
initiatives designed to improve profitability and align the organizational
structure with the strategic direction of the Company. The Company also
identified certain assets that would be sold or for which development would be
abandoned as a result of the restructuring. During 1999, the Company also
restructured its lease and rental operations in the United Kingdom in
conjunction with the December 1998 decision to retain the business. As a result
of these initiatives, the Company recorded pretax charges in 1999 of $52 million
($33 million after tax, or $0.48 per diluted common share).
The restructuring initiatives resulted in identification of approximately
250 employees whose jobs were terminated, all of whom were notified of their
termination prior to December 31, 1999. The employees terminated and positions
eliminated were principally corporate officers and staff, field operations
personnel and sales force positions. Severance benefits will be substantially
paid during the year 2000.
Facilities and related costs represent contractual lease obligations
associated with facilities to be closed as a result of the restructuring.
In accordance with the Company's accounting policy and in conjunction with
the restructuring, the Company reviewed identified assets for impairment. Asset
impairments included the write-down to fair value of certain classes of used
vehicles, real estate and other assets held for sale. Charges related to used
vehicles and other assets and real estate were $7 million and $2 million,
respectively. The fair value of impaired assets was determined using market
price information provided by brokers and other industry sources. Asset
write-offs included $5 million for certain software development projects that
would not be implemented or further utilized in the future.
In conjunction with the restructuring, the Company evaluated various
insurance and risk-management alternatives that could be relevant and
cost-effective given the Company's future direction and the current market for
insurance products. As a result, during the fourth quarter of 1999, the Company
formed a captive insurance subsidiary under which the Company's various
self-insurance programs will be administered. Costs incurred related to the
start-up of this entity totaled $8 million and consisted principally of
professional services and fees.
Other charges of $9 million consist primarily of costs incurred for
professional consulting services and other costs associated with the
restructuring initiative.
34
<PAGE>
In 1996, the Company recorded restructuring and other charges in connection
with an organizational realignment. Restructuring and other charges in 1998
included the reversal of charges provided as part of the 1996 restructuring as
well as unusual items incurred that year. In the third quarter of 1998, the
Company substantially completed a facility closure program implemented in 1996
and credited operating expense for excess accruals of $3 million. During the
fourth quarter of 1998, the Company also decided to retain a small foreign
business previously held for sale and reversed an asset impairment allowance of
$8 million that had been established in 1996.
During 1998, the Company explored various alternatives relative to
disposing of its full service leasing and rental business in the United Kingdom
in order to focus on global integrated logistics. In December 1998, the Company
announced its intention to retain this business. The Company recorded $5 million
in transaction costs incurred during the sale process. The Company also provided
$3 million for software development projects that would not be implemented.
The following table displays a rollforward of the activity and balances of
the restructuring reserve account for the years ended December 31, 1999 and
1998:
Dec. 31 1999 Dec. 31
1998 ---------------------- 1999
In thousands Balance Additions Deductions Balance
- ----------------------------------------------------------------------
Employee severance
and benefits $ 537 16,500 4,020 13,017
Facilities and
related costs 4,124 4,478 1,420 7,182
- ----------------------------------------------------------------------
$ 4,661 20,978 5,440 20,199
======================================================================
Dec. 31 1998 Dec. 31
1998 ---------------------- 1998
In thousands Balance Additions Deductions Balance
- ----------------------------------------------------------------------
Employee severance
and benefits $ 4,431 724 4,618 537
Facilities and
related costs 8,033 -- 3,909 4,124
- ----------------------------------------------------------------------
$12,464 724 8,527 4,661
======================================================================
RECEIVABLES
December 31
In thousands 1999 1998
- ----------------------------------------------------
Gross trade $ 736,555 705,695
Receivables sold (75,000) (200,000)
- ----------------------------------------------------
Net trade 661,555 505,695
Financing lease 54,570 55,927
Other 19,944 8,066
- ----------------------------------------------------
736,069 569,688
Allowance (10,254) (10,547)
- ----------------------------------------------------
$ 725,815 559,141
====================================================
The Company participates in an agreement to sell, with limited recourse, up to
$375 million of trade receivables on a revolving basis through July 2002. The
receivables are sold at a discount, which approximates the purchaser's financing
cost of issuing its own commercial paper backed by the trade receivables. At
December 31, 1999 and 1998, the outstanding balance of receivables sold pursuant
to this agreement was $75 million and $200 million, respectively. Sales of
receivables are reflected as a reduction of receivables in the accompanying
consolidated balance sheets. The costs associated with this program were $10
million in 1999, $8 million in 1998 and $6 million in 1997 and were charged to
miscellaneous income, net. In addition, the Company is generally at risk for
credit losses associated with sold receivables and provides for such in the
financial statements.
35
<PAGE>
REVENUE EARNING EQUIPMENT
December 31
In thousands 1999 1998
- --------------------------------------------------------
Full service lease $3,442,205 3,552,891
Commercial rental 1,136,330 1,278,036
- ---------------------------------------------------------
4,578,535 4,830,927
Accumulated depreciation (1,483,084) (1,803,425)
- --------------------------------------------------------
3,095,451 3,027,502
- --------------------------------------------------------
Public transportation revenue
earning equipment -- 352,739
Accumulated depreciation -- (168,272)
- --------------------------------------------------------
-- 184,467
- --------------------------------------------------------
$3,095,451 3,211,969
========================================================
OPERATING PROPERTY AND EQUIPMENT
December 31
In thousands 1999 1998
- --------------------------------------------------------
Land $ 105,794 107,057
Buildings and improvements 521,746 503,188
Machinery and equipment 439,352 407,304
Other 88,997 114,548
- --------------------------------------------------------
1,155,889 1,132,097
Accumulated depreciation (574,784) (534,146)
- --------------------------------------------------------
$ 581,105 597,951
========================================================
DIRECT FINANCING LEASES AND OTHER ASSETS
December 31
In thousands 1999 1998
- -------------------------------------------------------
Direct financing leases $ 391,346 375,360
Prepaid pension benefit cost 95,074 71,270
Vehicle securitization
credit enhancement 28,697 6,793
Investments held in Rabbi Trust 36,961 22,807
Notes receivable on asset sales 36,855 7,234
Deposits 17,151 8,582
Other 46,186 51,196
- -------------------------------------------------------
$ 652,270 543,242
=======================================================
ACCRUED EXPENSES AND OTHER NON-CURRENT LIABILITIES
December 31
In thousands 1999 1998
- -------------------------------------------------------
Salaries and wages $ 102,250 104,498
Employee benefits 21,228 16,360
Interest 27,859 38,628
Operating taxes 82,646 80,078
Income taxes 42,734 425
Self-insurance reserves 227,456 227,982
Postretirement benefits other
than pensions 41,766 46,761
Vehicle rent and related accruals 109,193 153,018
Environmental liabilities 18,462 22,962
Restructuring 20,199 4,661
Other 133,165 127,465
- -------------------------------------------------------
826,958 822,838
Non-current portion (285,802) (343,003)
- -------------------------------------------------------
Accrued expenses $ 541,156 479,835
=======================================================
36
<PAGE>
LEASES
Operating Leases as Lessor. One of the Company's major product lines is full
service leasing of commercial trucks, tractors and trailers. These lease
agreements provide for a fixed time charge plus a fixed per-mile charge. A
portion of these charges is often adjusted in accordance with changes in the
Consumer Price Index. Contingent rentals included in income during 1999, 1998
and 1997 were $263 million, $243 million and $235 million, respectively.
Direct Financing Leases. The Company also leases revenue earning equipment to
clients as direct financing leases. The net investment in direct financing
leases consisted of:
December 31
In thousands 1999 1998
- ------------------------------------------------------------------
Minimum lease payments receivable $ 796,838 772,550
Executory costs and unearned income (420,455) (405,777)
Unguaranteed residuals 69,533 64,514
- ------------------------------------------------------------------
Net investment in direct financing leases 445,916 431,287
Current portion (54,570) (55,927)
- ------------------------------------------------------------------
Non-current portion $ 391,346 375,360
==================================================================
Contingent rentals included in income were $26 million in 1999, 1998 and 1997.
OPERATING LEASES AS LESSEE. The Company leases vehicles, facilities and office
equipment under operating lease agreements. The majority of these agreements are
vehicle leases which specify that rental payments be adjusted periodically based
on changes in interest rates and provide for early termination at stipulated
values.
During 1999 and 1998, the Company entered into several agreements for the
sale and operating leaseback of revenue earning equipment. The leases contain
purchase and renewal options as well as limited guarantees of the lessor's
residual value. Proceeds from these transactions totaled $594 million in 1999
and $312 million in 1998.
The Company's sale-leaseback transactions include vehicle securitizations
in which the Company sold a beneficial interest in certain revenue earning
equipment to separately rated and unconsolidated vehicle lease trusts. Such
securitizations generated cash proceeds of $294 million in 1999 and $73 million
in 1998. The vehicles were sold for their carrying value and the Company
retained an interest in the form of a subordinated note issued at the date of
each sale. The Company is obligated to make lease payments only to the extent of
collections on the related vehicle leases and vehicle sales. The Company has
provided credit enhancement in the form of cash reserve funds and a pledge of
the subordinated notes as additional security for the trusts to the extent that
delinquencies and losses on the truck leases and related vehicle sales are
incurred. As of December 31, 1999 and 1998, credit enhancements maintained by
the Company totaled $29 million and $7 million, respectively, and are included
in "Direct Financing Leases and Other Assets."
During 1999, 1998 and 1997, rent expense was $285 million, $242 million and
$220 million, respectively. Contingent rentals paid on securitized vehicles were
$23 million in 1999 and $10 million in 1998.
37
<PAGE>
Lease Payments. Future minimum payments for leases in effect at December 31,
1999 were as follows:
As Lessor As Lessee
- ----------------------------------------------------
Direct
Operating Financing Operating
In thousands Leases Leases Leases
- ----------------------------------------------------
2000 $1,049,764 132,208 310,340
2001 891,356 130,008 284,447
2002 710,354 122,580 262,049
2003 523,728 113,776 170,769
2004 339,040 104,841 58,891
Thereafter 248,205 193,425 120,664
- ----------------------------------------------------
$3,762,447 796,838 1,207,160
====================================================
The amounts in the previous table are based upon the assumption that revenue
earning equipment will remain on lease for the length of time specified by the
respective lease agreements. This is not a projection of future lease revenue or
expense; no effect has been given to renewals, new business, cancellations,
contingent rentals or future rate changes.
INCOME TAXES
The components of the provision for income taxes attributable to continuing
operations were as follows:
Years ended December 31
In thousands 1999 1998 1997
- --------------------------------------------------------------
Current tax benefit:
Federal $(183,470) (24,173) (38,068)
State (24,392) (6,357) (4,329)
Foreign 2,398 6,850 1,439
- --------------------------------------------------------------
(205,464) (23,680) (40,958)
- --------------------------------------------------------------
Deferred tax expense:
Federal 210,542 88,173 99,610
State 31,596 11,729 14,796
Foreign 7,903 530 8,214
- --------------------------------------------------------------
250,041 100,432 122,620
- --------------------------------------------------------------
Provision for income taxes $ 44,577 76,752 81,662
==============================================================
A reconciliation of the Federal statutory tax rate with the effective tax rate
for continuing operations follows:
% of Pretax Income
1999 1998 1997
- ------------------------------------------------------
Federal statutory tax rate 35.0 35.0 35.0
Impact on deferred taxes
for changes in tax rates -- (0.8) (0.7)
State income taxes, net of
Federal income tax benefit 4.0 1.7 3.3
Amortization of goodwill 0.1 1.2 1.0
Miscellaneous items, net (1.2) 0.4 0.4
- ------------------------------------------------------
Effective tax rate 37.9 37.5 39.0
======================================================
38
<PAGE>
The components of the net deferred income tax liability were as follows:
December 31
In thousands 1999 1998
- ---------------------------------------------------------------------
Deferred income tax assets:
Self-insurance reserves $ 51,667 74,190
Alternative minimum taxes 6,011 30,905
Accrued compensation and benefits 30,484 31,345
Lease accruals and reserves 28,378 45,707
Miscellaneous other accruals 48,447 32,375
- ---------------------------------------------------------------------
164,987 214,522
Valuation allowance (12,822) (13,030)
- ---------------------------------------------------------------------
152,165 201,492
- ---------------------------------------------------------------------
Deferred income tax liabilities:
Property and equipment
bases difference (1,039,023) (894,475)
Other items (102,173) (113,361)
- ---------------------------------------------------------------------
(1,141,196) (1,007,836)
- ---------------------------------------------------------------------
Net deferred income tax liability* $ (989,031) (806,344)
=====================================================================
*Deferred tax assets of $22 million and $1 million have been included in the
consolidated balance sheet caption "Prepaid expenses and other current assets"
at December 31, 1999 and 1998, respectively.
Deferred taxes have not been provided on temporary differences related to
investments in foreign subsidiaries that are considered permanent in duration.
These temporary differences consist primarily of undistributed foreign earnings
of $100 million at December 31, 1999. A full foreign tax provision has been made
on these undistributed foreign earnings. Determination of the amount of deferred
taxes on these temporary differences is not practicable due to foreign tax
credits and exclusions.
The Company had unused alternative minimum tax credits, for tax purposes,
of $6 million at December 31, 1999, available to reduce future income tax
liabilities. The alternative minimum tax credits may be carried forward
indefinitely.
A valuation allowance has been established to reduce deferred income tax
assets, principally foreign tax loss carryforwards, to amounts expected to be
realized.
Income taxes paid (refunded) totaled $72 million in 1999, $(23) million in
1998, and $18 million in 1997 and include amounts related to both continuing and
discontinued operations.
39
<PAGE>
DEBT
December 31
In thousands 1999 1998
- -----------------------------------------------------------------------
U.S. commercial paper $ 320,000 197,500
Canadian commercial paper 45,006 18,102
Unsecured U.S. notes:
Debentures, 6.50% to 9.88%,
due 2001 to 2017 453,244 623,971
Medium-term notes,
5.00% to 8.45%,
due 2000 to 2025 1,181,443 1,364,062
Unsecured foreign obligations
(principally pound sterling),
4.84% to 14.25%,
due 2000 to 2006 335,343 338,496
Other debt, including capital leases 58,353 40,900
- -----------------------------------------------------------------------
Total debt 2,393,389 2,583,031
Current portion (574,253) (483,334)
- -----------------------------------------------------------------------
Long-term debt $1,819,136 2,099,697
=======================================================================
Debt maturities (including sinking fund requirements) during the five years
subsequent to December 31, 1999 were as follows:
Debt
In thousands Maturities
- ---------------------------------------------------
2000 $574,253
2001 322,347
2002 655,207
2003 126,835
2004 90,214
- ---------------------------------------------------
The weighted average interest rates for outstanding U.S. commercial paper at
December 31, 1999 and 1998, were 6.60 percent and 5.96 percent, respectively.
The weighted average interest rates for outstanding Canadian commercial paper at
December 31, 1999 and 1998, were 5.17 percent and 5.30 percent, respectively.
U.S. commercial paper is classified as long-term debt since it is backed by the
long-term revolving credit facility discussed below.
The Company can borrow up to $720 million through an unsecured global
revolving credit facility, which expires in May 2002. The global credit facility
is primarily to be used to finance working capital and provide support for the
issuance of commercial paper. At the Company's option, the interest rate on
borrowings under the global credit facility is based on LIBOR, prime, federal
funds or local equivalent rates. No compensating balances are required under the
global credit facility; however, it does have an annual facility fee of 0.08
percent based on the Company's current credit rating. At December 31, 1999,
foreign borrowings of $58 million were outstanding under the credit facility and
the Company had $342 million available under this agreement.
The Company has issued unsecured medium-term notes under various shelf
registration statements filed with the Securities and Exchange Commission. In
1998, the Company registered an additional $800 million for future debt issues.
As of December 31, 1999, the Company had $487 million of debt securities
available for issuance under the latest registration statement. The Company had
unamortized original issue discounts of $18 million and $21 million for the
medium-term notes and debentures at December 31, 1999 and 1998, respectively.
During the fourth quarter of 1999, the Company recorded an extraordinary
loss of $4 million (net of income tax benefit of $3 million) in connection with
the early retirement of $156 million of medium-term notes. The loss represents
the payment of redemption premiums and the write-off of deferred finance costs.
At December 31, 1999 and 1998, the Company also had letters of credit
outstanding totaling $134 million and $163 million, respectively, which
primarily guarantee various insurance activities.
Interest paid for both continuing and discontinued operations totaled $206
million in 1999, $201 million in 1998 and $196 million in 1997.
40
<PAGE>
The carrying amount of debt (excluding capital leases) was $2,341 million
and $2,548 million as of December 31, 1999 and 1998, respectively. Based on
dealer quotations that represent the discounted future cash flows through
maturity or expiration using current rates, the fair value of this debt at
December 31, 1999 and 1998 was estimated at $2,289 million and $2,623 million,
respectively.
At December 31, 1997, the Company had outstanding an interest rate swap
agreement effectively changing the interest rate exposure on $61 million of
medium-term notes from variable to a 5.84 percent fixed rate. The swap matured
in March 1998.
SHAREHOLDERS'EQUITY
In December 1999, the Company completed a $200 million stock repurchase program
announced in September 1999 in conjunction with the sale of the public
transportation services business. In September 1999, the Company also completed
a three million-share repurchase program announced in December 1998. Since 1996,
five repurchase programs have been completed, resulting in the repurchase of 27
million shares of common stock.
At December 31, 1999, the Company had 59,395,050 Preferred Stock Purchase
Rights (Rights) outstanding which expire in March 2006. The Rights contain
provisions to protect shareholders in the event of an unsolicited attempt to
acquire the Company that is not believed by the board of directors to be in the
best interest of shareholders. The Rights are evidenced by common stock
certificates, are subject to anti-dilution provisions, and are not exercisable,
transferable or exchangeable apart from the common stock until 10 days after a
person, or a group of affiliated or associated persons, acquires beneficial
ownership of 10 percent or more, or, in the case of exercise or transfer, makes
a tender offer for 10 percent or more of the Company's common stock. The Rights
entitle the holder, except such an acquiring person, to purchase at the current
exercise price of $100, that number of the Company's common shares that at the
time would have a market value of $200. In the event the Company is acquired in
a merger or other business combination (including one in which the Company is
the surviving corporation), each Right entitles its holder to purchase at the
current exercise price of $100 that number of common shares of the surviving
corporation which would then have a market value of $200. In lieu of common
shares, Rights holders can purchase 1/100 of a share of Series C Preferred Stock
for each Right. The Series C Preferred Stock would be entitled to quarterly
dividends equal to the greater of $10 per share or 100 times the common stock
dividend per share and have 100 votes per share, voting together with the common
stock. By action of the board of directors, the Rights may also be exchanged in
whole or in part, at an exchange ratio of one share of common stock per Right.
The Rights have no voting rights and are redeemable, at the option of the
Company, at a price of $0.01 per Right prior to the acquisition by a person or a
group of persons affiliated or associated persons of beneficial ownership of 10
percent or more of the common stock.
EMPLOYEE STOCK OPTION AND STOCK PURCHASE PLANS
Option Plans. The Company sponsors various stock option and incentive plans
which provide for the granting of options to employees and directors for
purchase of common stock at prices equal to fair market value at the time of
grant. Options granted under all plans are for terms not exceeding 10 years and
are exercisable cumulatively 20 percent to 50 percent each year based on the
terms of the grant.
Key employee plans also provide for the issuance of stock appreciation
rights, limited stock appreciation rights, performance units or restricted stock
at no cost to the employee. In 1999, the Company issued 30,000 shares of
restricted stock and granted restricted stock rights for 15,650 shares. No
grants were made in 1998 or 1997. Awards under a non-employee director plan may
also be granted in tandem with restricted stock units at no cost to the grantee;
4,013 units, 2,850 units and 47,673 units were granted in 1999, 1998 and 1997,
respectively. The value of the restricted stock and stock units, equal to fair
market value at the time of grant, is recognized as compensation expense as the
restricted stock and stock units vest over the periods established for each
41
<PAGE>
grant. This compensation expense was not significant in 1999, 1998 and 1997.
The following table summarizes the status of the Company's stock option
plans (shares in thousands):
1999 1998 1997
- ------------------------------------------------------------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
- ------------------------------------------------------------------------------
Beginning
of year 5,253 $28.06 6,000 $27.18 6,878 $24.33
Granted 2,200 26.76 246 33.21 1,339 35.08
Exercised (92) 22.44 (911) 23.60 (2,037) 22.85
Forfeited (599) 27.47 (82) 27.01 (180) 26.40
- ------------------------------------------------------------------------------
End
of year 6,762 $27.77 5,253 $28.06 6,000 $27.18
==============================================================================
Exercisable
at end
of year 4,099 $27.59 3,610 $26.12 3,373 $23.87
==============================================================================
Available
for future
grant 2,258 N/A 3,907 N/A 1,566 N/A
==============================================================================
Information about options in various price ranges at December 31, 1999 follows
(shares in thousands):
Options Options
Outstanding Exercisable
- ---------------------------------------------------------------------------
Remaining Weighted Weighted
Price Life Average Average
Ranges Shares (in years) Price Shares Price
- ---------------------------------------------------------------------------
$10-20 254 1.5 $16.13 254 $16.13
20-25 832 4.3 22.96 596 22.64
25-30 4,363 6.5 27.06 2,390 27.24
30-38 1,313 6.8 35.42 859 35.42
- ---------------------------------------------------------------------------
6,762 6.1 $27.77 4,099 $27.59
===========================================================================
Purchase Plans. The Employee Stock Purchase Plan provides for periodic offerings
to substantially all U.S. and Canadian employees, with the exception of
employees in executive stock option plans, to subscribe shares of the Company's
common stock at 85 percent of the fair market value on either the date of
offering or the last day of the purchase period, whichever is less. The most
recent stock purchase plan provides for quarterly purchase periods. The U.K.
Stock Purchase Scheme provides for periodic offerings to substantially all U.K.
employees to subscribe shares of the Company's common stock at 85 percent of the
fair market value on the date of the offering.
The following table summarizes the status of the Company's stock purchase
plans (shares in thousands):
1999 1998 1997
- -----------------------------------------------------------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
- -----------------------------------------------------------------------------
Beginning
of year 82 $27.05 571 $24.46 1,653 $23.88
Granted 300 18.43 146 20.31 63 30.28
Exercised (300) 19.71 (586) 23.05 (994) 23.96
Forfeited (10) 27.66 (49) 24.54 (151) 23.91
- -----------------------------------------------------------------------------
End of year 72 $27.00 82 $27.05 571 $24.46
=============================================================================
Exercisable
at end
of year -- N/A -- N/A 472 $23.96
=============================================================================
Available
for future
grant 2,436 N/A 226 N/A 323 N/A
=============================================================================
42
<PAGE>
Pro Forma Information. The Company accounts for stock-based compensation using
the intrinsic value method; accordingly, except for restricted stock grants, no
compensation expense has been recognized for stock-based compensation plans. Had
the fair value method of accounting been applied to the Company's plans, which
requires recognition of compensation expense over the vesting periods of the
awards, pro forma net earnings and earnings per share would have been:
Years ended December 31
In thousands, except per share amounts 1999 1998 1997
- ---------------------------------------------------------------------------
Net earnings:
As reported $419,678 159,071 175,685
Pro forma 412,789 150,958 164,235
Earnings per share:
Basic:
As reported 6.12 2.18 2.28
Pro forma 6.02 2.07 2.14
Diluted:
As reported 6.11 2.16 2.25
Pro forma 6.02 2.06 2.11
- ---------------------------------------------------------------------------
This pro forma impact only takes into account options granted since January 1,
1995 and is likely to increase in future years as additional options are granted
and amortized over the vesting period. The fair values of options granted since
January 1, 1995 were estimated as of the dates of grant using the Black-Scholes
option pricing model. The option pricing assumptions were as follows:
Years ended December 31
1999 1998 1997
- -------------------------------------------------------------------
Dividend yield 2.5% 2.3% 1.8%
Expected volatility 25.7% 25.1% 24.5%
Option plans:
Risk-free interest rate 5.4% 5.4% 6.2%
Weighted average
expected life 7 years 9 years 8 years
Weighted average grant-date
fair value per option $7.77 $11.05 $12.59
Purchase plans:
Risk-free interest rate 4.9% 5.3% 6.1%
Weighted average
expected life .25 year .25 year 5 years
Weighted average grant-date
fair value per option $4.99 $5.50 $12.30
- -------------------------------------------------------------------
EARNINGS PER SHARE INFORMATION
A reconciliation of the number of shares used in computing basic and diluted EPS
follows:
Years ended December 31
In thousands 1999 1998 1997
- ----------------------------------------------------------------------
Weighted average shares
outstanding - Basic 68,536 73,068 76,888
Common equivalents:
Shares issuable under
outstanding dilutive options 1,084 3,850 5,442
Shares assumed repurchased
based on the average market
value for the period (994) (3,416) (4,494)
Dilutive effect of restricted
stock and exercised options
prior to being exercised, net 106 143 356
- ----------------------------------------------------------------------
Weighted average shares
outstanding - Diluted 68,732 73,645 78,192
======================================================================
Anti-dilutive options not
included above 5,750 1,485 1,129
======================================================================
43
<PAGE>
EMPLOYEE BENEFIT PLANS
Pension Plans. The Company sponsors several defined benefit pension plans
covering substantially all employees not covered by union-administered plans,
including certain employees in foreign countries. These plans generally provide
participants with benefits based on years of service and career-average
compensation levels. The funding policy for these plans is to make contributions
based on normal costs plus amortization of unfunded past service liability but
not greater than the maximum allowable contribution deductible for Federal
income tax purposes. The majority of the plans' assets are invested in a master
trust which, in turn, is primarily invested in listed stocks and bonds. The
Company also contributed to various defined benefit, union-administered,
multi-employer plans for employees under collective bargaining agreements.
Pension (income) expense was as follows:
Years ended December 31
In thousands 1999 1998 1997
- -------------------------------------------------------------
Company-administered plans:
Service cost $ 32,649 26,067 24,037
Interest cost 50,087 48,356 46,160
Expected return on
plan assets (85,422) (75,680) (60,078)
Curtailment gain -- -- (7,614)
Amortization of
transition asset (3,818) (3,848) (3,376)
Recognized net actuarial
(gain) loss (2,323) (2,334) 523
Amortization of prior
service cost 2,382 2,368 1,816
- -------------------------------------------------------------
(6,445) (5,071) 1,468
Union-administered plans 2,591 2,488 1,840
- -------------------------------------------------------------
Net pension (income) expense $ (3,854) (2,583) 3,308
=============================================================
The Company also recorded curtailment and settlement gains of $4 million in 1999
and $3 million in 1997 as part of the gain on disposal of discontinued
operations.
The following table sets forth the balance sheet impact, as well as the
benefit obligations, assets and funded status associated with the Company's
pension plans:
December 31
In thousands 1999 1998
- -----------------------------------------------------------------------
Change in benefit obligations:
Benefit obligations at January 1, $ 787,729 708,714
Service cost 32,649 26,067
Interest cost 50,087 48,356
Amendments -- 618
Actuarial gain (7,047) (4,053)
Benefits paid (34,905) (38,530)
Settlement and curtailment (21,331) --
Change in discount rate assumption (104,019) 46,986
Foreign currency exchange rate changes (1,387) (429)
- -----------------------------------------------------------------------
Benefit obligations at December 31, 701,776 787,729
- -----------------------------------------------------------------------
Change in plan assets:
Fair value of plan assets at January 1, 929,161 820,696
Actual return on plan assets 167,229 136,108
Employer contribution 10,084 8,466
Plan participants' contributions 3,025 2,746
Benefits paid (34,905) (38,530)
Settlement (19,183) --
Foreign currency exchange rate changes (1,288) (325)
- -----------------------------------------------------------------------
Fair value of plan assets at
December 31, 1,054,123 929,161
- -----------------------------------------------------------------------
Funded status 352,347 141,432
Unrecognized transition asset (4,036) (7,990)
Unrecognized prior service cost 12,795 15,355
Unrecognized net actuarial gain (278,761) (88,713)
- -----------------------------------------------------------------------
Prepaid pension benefit cost $ 82,345 60,084
=======================================================================
44
<PAGE>
Amounts recognized in the balance sheet consist of:
December 31
In thousands 1999 1998
- -----------------------------------------------------------------------
Other assets (prepaid pension
benefit cost) $ 95,074 71,270
Accrued expenses (12,729) (11,186)
- -----------------------------------------------------------------------
$ 82,345 60,084
=======================================================================
The following table sets forth the actuarial assumptions used for the Company's
dominant plan:
December 31
1999 1998
- -----------------------------------------------------------------------
Discount rate 7.75% 6.75%
Rate of increase in compensation levels 5.00% 5.00%
Expected long-term rate of return
on plan assets 9.50% 9.50%
Transition amortization in years 8 8
Gain and loss amortization in years 8 8
- -----------------------------------------------------------------------
Savings Plans. The Company also has defined contribution savings plans that
cover substantially all eligible employees. Company contributions to the plans,
which are based on employee contributions and the level of company match,
totaled approximately $11 million in 1999 and $12 million in 1998 and 1997.
Supplemental Pension and Deferred Compensation Plans. The Company has a
non-qualified supplemental pension plan covering certain employees which
provides for incremental pension payments from the Company's funds so that total
pension payments equal amounts that would have been payable from the Company's
principal pension plans if it were not for limitations imposed by income tax
regulations. The benefit obligation under this plan totaled $15 million and $17
million at December 31, 1999 and 1998, respectively. The accrued pension expense
liability related to this plan was $13 million and $11 million at December 31,
1999 and 1998, respectively. Pension expense for this plan totaled $2 million in
1999, 1998 and 1997.
The Company also has deferred compensation plans that permit eligible
employees, officers and directors to defer a portion of their compensation. The
deferred compensation liability, including Company matching amounts and
accumulated earnings on notional investments, totaled $23 million and $20
million at December 31, 1999 and 1998, respectively.
The Company has established a grantor trust (Rabbi Trust) to provide
funding for benefits payable under the supplemental pension plan and deferred
compensation plans. The assets held in trust at December 31, 1999 and 1998,
amounted to $37 million and $23 million, respectively. These assets are included
in "Direct Financing Leases and Other Assets" in the accompanying balance sheets
because they are available to the general creditors of the Company in the event
of the Company's insolvency. Rabbi Trust assets consist of a managed portfolio
of equity securities and corporate-owned life insurance policies. The equity
securities are classified as trading assets and stated at fair value. Both
realized and unrealized gains and losses are included in miscellaneous income,
net.
Postretirement Benefits Other Than Pensions. The Company sponsors plans that
provide retired employees with certain health care and life insurance benefits.
Substantially all employees not covered by union-administered health and welfare
plans are eligible for these benefits. Health care benefits for the Company's
principal plans are generally provided to qualified retirees under age 65 and
eligible dependents. Generally, these plans require employee contributions which
vary based on years of service and include provisions which cap Company
contributions. On January 1, 1998, the postretirement plans were amended to
change the health care provider elections. The amendment generated an
unrecognized prior service credit of $9 million.
Total periodic postretirement benefit expense was as follows:
Years ended December 31
In thousands 1999 1998 1997
- ---------------------------------------------------------------------
Service cost $ 1,360 1,117 1,569
Interest cost 2,210 2,535 3,122
Curtailment gain -- -- (1,881)
Recognized net actuarial gain (94) -- --
Amortization of prior service cost (1,043) (1,091) --
- ---------------------------------------------------------------------
Postretirement benefit expense $ 2,433 2,561 2,810
=====================================================================
45
<PAGE>
The Company also recorded curtailment and settlement gains of $1 million in 1999
and $3 million in 1997 as part of the gain on disposal of discontinued
operations.
The Company's postretirement benefit plans are not funded. The following
table sets forth the balance sheet impact, as well as the benefit obligations
and rate assumptions associated with the Company's postretirement benefit plans:
December 31
In thousands 1999 1998
- ----------------------------------------------------------------
Benefit obligations at January 1, $38,976 44,286
Service cost 1,360 1,117
Interest cost 2,210 2,535
Amendment -- (8,731)
Actuarial loss (gain) (3,830) 2,801
Benefits paid (3,847) (3,497)
Curtailment and settlement (2,271) --
Change in discount rate assumption (2,959) 1,797
Change in participation assumption -- (1,332)
- ----------------------------------------------------------------
Benefit obligations at December 31, 29,639 38,976
Unrecognized prior service credit 5,556 7,640
Unrecognized net actuarial gain 6,571 145
- ----------------------------------------------------------------
Accrued postretirement benefit obligation $41,766 46,761
- ----------------------------------------------------------------
Discount rate 7.75% 6.75%
================================================================
The actuarial assumptions include health care cost trend rates projected ratably
from 7.5 percent in 2000 to 6 percent in 2003 and thereafter. Changing the
assumed health care cost trend rates by 1 percent in each year would not have
had a material effect on the accumulated postretirement benefit obligation as of
December 31, 1999 or postretirement benefit expense for 1999.
ENVIRONMENTAL MATTERS
The Company's operations involve storing and dispensing petroleum products,
primarily diesel fuel. In 1988, the Environmental Protection Agency issued
regulations that established requirements for testing and replacing underground
storage tanks. During 1998, the Company completed its tank replacement program
to comply with the regulations. In addition, the Company has received notices
from the Environmental Protection Agency and others that it has been identified
as a potentially responsible party (PRP) under the Comprehensive Environmental
Response, Compensation and Liability Act, the Superfund Amendments and
Reauthorization Act and similar state statutes and may be required to share in
the cost of cleanup of 34 identified disposal sites.
The Company's environmental expenses, which included remediation costs as
well as normal recurring expenses such as licensing, testing and waste disposal
fees, were $10 million in 1999 and $4 million in 1998 and 1997.
The ultimate costs of the Company's environmental liabilities cannot be
projected with certainty due to the presence of several unknown factors,
primarily the level of contamination, the effectiveness of selected remediation
methods, the stage of investigation at individual sites, the determination of
the Company's liability in proportion to other responsible parties and the
recoverability of such costs from third parties. Based on information presently
available, management believes that the ultimate disposition of these matters,
although potentially material to the results of operations in any one year, will
not have a material adverse effect on the Company's financial condition or
liquidity.
OTHER MATTERS
The Company is currently involved in litigation with a former client relating to
a logistics services agreement that was terminated in 1997. The former client
has filed a claim against the Company and the Company has filed a counter claim.
Management believes that the resolution of this matter will not have a material
impact on the Company's consolidated financial position, liquidity or results of
operations.
The Company is also a party to various other claims, legal actions and
complaints arising in the ordinary course of business. While any proceeding or
litigation has an element of uncertainty, management believes that the
disposition of these matters will not have a material impact on the consolidated
financial position, liquidity or results of operations of the Company.
SEGMENT REPORTING
The Company operates in three business segments: (1) Transportation Services,
which provides full service leasing, commercial rental and programmed
maintenance of trucks, tractors and trailers to clients throughout the U.S. and
Canada; (2) Integrated Logistics, which provides support services for clients'
entire supply chains, from inbound raw materials supply through finished goods
distribution, including dedicated contract carriage, the management of carriers,
and inventory deployment throughout the U.S. and Canada; and (3) International,
which provides full service leasing, commercial rental, programmed maintenance
and logistics services in Europe, South America and Mexico.
46
<PAGE>
The segment information set forth below is based on the nature of the
services offered, as well as the geographic markets served. The accounting
policies of the business segments are the same as those previously described in
the "Summary of Significant Accounting Policies" note. The Company evaluates
financial performance based upon several factors, of which the primary measure
is business segment earnings before income taxes and unusual items such as Year
2000 expense, restructuring and other charges. Business segment earnings before
income taxes represent the total profit earned from each segment's clients
across all of the Company's segments and include allocations of certain overhead
costs. The Transportation Services segment leases revenue earning equipment,
sells fuel and provides maintenance and other ancillary services to the
Integrated Logistics segment. Inter-segment sales are accounted for at fair
value as if the sales were made to third parties. Interest expense, net is
allocated to the various business segments based upon targeted debt-to-equity
ratios using an interest factor, which reflects the Company's average total cost
of debt. In 1998, 10 percent of the Company's revenue was derived from General
Motors Corporation, primarily from the Integrated Logistics segment. In 1999 and
1997, no customer exceeded 10 percent of the Company's revenue.
Years ended December 31
In thousands 1999 1998 1997
- -------------------------------------------------------------------------
REVENUE
Transportation Services $2,973,548 2,811,244 2,836,950
Integrated Logistics 1,713,051 1,501,126 1,370,320
International 590,226 603,834 457,869
Eliminations (324,621) (309,228) (296,991)
- -------------------------------------------------------------------------
Total revenue $4,952,204 4,606,976 4,368,148
=========================================================================
Years ended December 31
In thousands 1999 1998 1997
- -------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES
Transportation Services $ 192,764 214,028 200,254
Integrated Logistics 54,365 76,514 67,300
International 29 252 1,516
Eliminations (38,709) (38,618) (35,754)
- -------------------------------------------------------------------------
Total reportable segments 208,449 252,176 233,316
Other, primarily corporate
administrative expense (14,812) (13,234) (20,274)
Restructuring and other
charges (52,093) 3,040 --
Year 2000 expense (24,050) (37,418) (3,492)
- -------------------------------------------------------------------------
Total earnings before
income taxes $ 117,494 204,564 209,550
=========================================================================
Years ended December 31
In thousands 1999 1998 1997
- -------------------------------------------------------------------------
DEPRECIATION EXPENSE,
NET OF GAINS
Transportation Services $ 461,586 463,567 465,708
Integrated Logistics 20,662 18,824 16,485
International 82,408 84,824 74,730
- -------------------------------------------------------------------------
Total reportable segments 564,656 567,215 556,923
Other, primarily corporate 2,109 2,447 2,250
- -------------------------------------------------------------------------
Total depreciation, net
of gains $ 566,765 569,662 559,173
=========================================================================
Years ended December 31
In thousands 1999 1998 1997
- -------------------------------------------------------------------------
AMORTIZATION EXPENSE AND
OTHER NON-CASH CHARGES, NET
Transportation Services $ 2,093 2,649 (1,270)
Integrated Logistics 8,267 4,969 5,996
International 7,905 (4,490) (1,225)
- -------------------------------------------------------------------------
Total reportable segments 18,265 3,128 3,501
Other, primarily corporate 7,971 (3,920) 2,361
- -------------------------------------------------------------------------
Total amortization and other
non-cash charges, net $ 26,236 (792) 5,862
=========================================================================
47
<PAGE>
Years ended December 31
In thousands 1999 1998 1997
- -------------------------------------------------------------------------
INTEREST EXPENSE, NET
Transportation Services $ 169,082 162,070 159,317
Integrated Logistics 2,368 1,588 214
International 22,187 25,564 22,975
- ------------------------------------------------------------------------
Total reportable segments 193,637 189,222 182,506
Other, primarily corporate (9,961) (1,436) (2,755)
- -------------------------------------------------------------------------
Total interest expense, net $ 183,676 187,786 179,751
=========================================================================
December 31
In thousands 1999 1998 1997
- -------------------------------------------------------------------------
ASSETS
Transportation Services $4,633,637 4,236,787 4,229,236
Integrated Logistics 325,175 294,667 286,677
International 567,947 611,755 552,522
- -------------------------------------------------------------------------
Total reportable segments 5,526,759 5,143,209 5,068,435
Other, primarily corporate 243,691 186,909 87,143
Discontinued operations -- 378,483 353,482
- -------------------------------------------------------------------------
Total assets $5,770,450 5,708,601 5,509,060
=========================================================================
Years ended December 31
In thousands 1999 1998 1997
- ------------------------------------------------------------------------
CAPITAL EXPENDITURES
Transportation Services $1,617,934 1,203,885 872,568
Integrated Logistics 19,437 20,413 24,921
International 92,683 107,366 89,603
- ------------------------------------------------------------------------
Total reportable segments 1,730,054 1,331,664 987,092
Other, primarily corporate 4,165 1,477 2,485
- ------------------------------------------------------------------------
Total capital expenditures $1,734,219 1,333,141 989,577
========================================================================
Geographic Information
Years ended December 31
In thousands 1999 1998 1997
- ------------------------------------------------------------------------
REVENUE
Transportation Services $2,521,561 2,377,851 2,408,954
Integrated Logistics 1,556,526 1,386,458 1,298,408
- ------------------------------------------------------------------------
Total United States 4,078,087 3,764,309 3,707,362
- ------------------------------------------------------------------------
Transportation Services 460,993 400,354 386,045
Integrated Logistics 413,124 442,313 274,741
- ------------------------------------------------------------------------
Total Foreign 874,117 842,667 660,786
- ------------------------------------------------------------------------
Total $4,952,204 4,606,976 4,368,148
========================================================================
December 31
In thousands 1999 1998 1997
- ------------------------------------------------------------------------
LONG-LIVED ASSETS
United States $3,072,892 3,209,027 3,139,084
Foreign 603,664 600,893 588,082
- ------------------------------------------------------------------------
Total $3,676,556 3,809,920 3,727,166
========================================================================
48
<PAGE>
SUPPLEMENTARY DATA
RYDER SYSTEM, INC. AND SUBSIDIARIES
QUARTERLY FINANCIAL AND COMMON STOCK DATA
<TABLE>
<CAPTION>
Per Common Share
---------------------------------------------------
Earnings from
Earnings Continuing Dividends
From Operations Net Earnings Stock Prices Per
In thousands, Continuing Net --------------------------------------------------- Common
except share data Revenue Operations Earnings Basic Diluted Basic Diluted High Low Share
- ---------------------------------------------------------------------------------------------------------------
1999
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First quarter $1,154,022 10,888 22,140 0.15 0.15 0.31 0.31 28.75 23.56 0.15
Second quarter 1,214,832 20,579 30,150 0.29 0.29 0.43 0.43 28.38 22.19 0.15
Third quarter 1,261,566 35,109 361,467 0.51 0.51 5.22 5.21 26.25 20.00 0.15
Fourth quarter 1,321,784 6,341 5,921 0.10 0.10 0.09 0.09 24.94 18.81 0.15
- ---------------------------------------------------------------------------------------------------------------
Total $4,952,204 72,917 419,678 1.06 1.06 6.12 6.11 28.75 18.81 0.60
===============================================================================================================
1998
First quarter $1,092,518 24,992 37,274 0.34 0.33 0.50 0.50 38.94 31.44 0.15
Second quarter 1,131,001 33,458 45,267 0.45 0.45 0.61 0.61 40.56 31.06 0.15
Third quarter 1,176,332 40,417 37,048 0.55 0.55 0.51 0.51 32.25 19.44 0.15
Fourth quarter 1,207,125 28,945 39,482 0.40 0.40 0.55 0.55 28.81 21.75 0.15
- ---------------------------------------------------------------------------------------------------------------
Total $4,606,976 127,812 159,071 1.75 1.74 2.18 2.16 40.56 19.44 0.60
===============================================================================================================
</TABLE>
Quarterly and year-to-date computations of per share amounts are made
independently; therefore, the sum of per share amounts for the quarters may not
equal per share amounts for the year. Information for 1998 and the first two
quarters of 1999 has been restated to reflect the Company's public
transportation services business as a discontinued operation (see the
"Divestitures" note to the consolidated financial statements for a further
discussion).
Earnings from continuing operations in the third and fourth quarters of
1999 were impacted, in part, by after-tax restructuring and other charges of $2
million and $30 million, respectively. Earnings from continuing operations in
the third quarter of 1998 were impacted, in part, by after-tax restructuring and
other charges of $(2) million.
Net earnings in the fourth quarter of 1999 were also impacted by a $4
million after-tax extraordinary loss resulting from the early extinguishment of
debt.
The Company's common shares are traded on the New York Stock Exchange, the
Chicago Stock Exchange, the Pacific Stock Exchange and the Berlin Stock
Exchange. As of January 31, 2000, there were 15,458 common stockholders of
record.
49
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 regarding executive officers is set out in
Item 1 of Part I of this Form 10-K Annual Report.
Other information required by Item 10 is incorporated herein by reference to the
Company's definitive proxy statement, which will be filed with the Commission
within 120 days after the close of the fiscal year.
ITEM 11. EXECUTIVE COMPENSATION
Information required by Item 11 is incorporated herein by reference to the
Company's definitive proxy statement, which will be filed with the Commission
within 120 days after the close of the fiscal year.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required by Item 12 is incorporated herein by reference to the
Company's definitive proxy statement, which will be filed with the Commission
within 120 days after the close of the fiscal year.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by Item 13 is incorporated herein by reference to the
Company's definitive proxy statement, which will be filed with the Commission
within 120 days after the close of the fiscal year.
50
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
(a) 1. Financial Statements for Ryder System, Inc. and Consolidated
Subsidiaries:
Items A through E are submitted herein on the following pages of the Form
10-K Annual Report:
Page No.
A) Independent Auditors' Report.......................................26
B) Consolidated Statements of Earnings for years ended December 31,
1999, 1998 and 1997................................................27
C) Consolidated Balance Sheets as of December 31, 1999 and 1998.......28
D) Consolidated Statements of Cash Flows for years ended December 31,
1999, 1998 and 1997................................................29
E) Consolidated Statements of Shareholders' Equity for years
ended December 31, 1999, 1998 and 1997.............................30
F) Notes to Consolidated Financial Statements.........................31
2. Not applicable.
All other schedules and statements are omitted because they are not
applicable or not required or because the required information is
included in the consolidated financial statements or notes thereto.
Supplementary Financial Information consisting of selected quarterly
financial data is included in Item 5 of this report.
51
<PAGE>
3. Exhibits:
The following exhibits are filed with this report or, where indicated,
incorporated by reference (Forms 10-K, 10-Q and 8-K referenced herein
have been filed under the Commission's file No. 1-4364). The Company will
provide a copy of the exhibits filed with this report at a nominal charge
to those parties requesting them.
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
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 July 29, 1999.
4.1 The Company hereby agrees, pursuant to paragraph (b)(4)(iii) of Item
601 of Regulation S-K, to furnish the Commission with a copy of any
instrument defining the rights of holders of long-term debt of the
Company, where such instrument has not been filed as an exhibit hereto
and the total amount of securities authorized thereunder does not
exceed 10% of the total assets of the Company and its subsidiaries on a
consolidated basis.
4.2(a) The Form of Indenture between Ryder System, Inc. and The Chase
Manhattan Bank (National Association) dated as of June 1, 1984, filed
with the Commission on November 19, 1985 as an exhibit to the Company's
Registration Statement on Form S-3 (No. 33-1632), is incorporated by
reference into this report.
4.2(b) The First Supplemental Indenture between Ryder System, Inc. and The
Chase Manhattan Bank (National Association) dated October 1, 1987,
previously filed with the Commission as an exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, is
incorporated by reference into this report.
4.3 The Form of Indenture between Ryder System, Inc. and The Chase
Manhattan Bank (National Association) dated as of May 1, 1987, and
supplemented as of November 15, 1990 and June 24, 1992, filed with the
Commission on July 30, 1992 as an exhibit to the Company's Registration
Statement on Form S-3 (No. 33-50232), is incorporated by reference into
this report.
4.4 The Rights Agreement between Ryder System, Inc. and Boston Equiserve,
L.P., dated as of March 8, 1996, filed with the Commission on April 3,
1996 as an exhibit to the Company's Registration Statement on Form 8-A
is incorporated by reference into this report.
52
<PAGE>
10.1 The form of change of control severance agreement for executive
officers effective as of May 1, 1996, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1996, is incorporated by reference to
this report.
10.2 The form of severance agreement for executive officers effective as of
May 1, 1996, previously filed with the Commission as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31,
1996, is incorporated by reference to this report.
10.3(a) The Ryder System, Inc. 1997 Incentive Compensation Plan for
Headquarters Executive Management Levels MS 11 and Higher, previously
filed with the Commission as an exhibit to the Company's Annual Report
on Form 10-K for the year ended December 31, 1996, is incorporated by
reference to this report.
10.3(b) The Ryder System, Inc. 1998 Incentive Compensation Plan for
Headquarters Executive Management Level MS 11 and Higher, previously
filed with the Commission as an exhibit to the Company's Annual Report
on Form 10-K for the year ended December 31, 1997, is incorporated by
reference into this report.
10.3(c) The Ryder System, Inc. 1999 Incentive Compensation Plan for
Headquarters Executive Management Levels MS 11 and Higher, previously
filed with the Commission as an exhibit to the Company's Annual Report
on Form 10-K for the year ended December 31, 1998, is incorporated by
reference into this report.
10.4(a) The Ryder System, Inc. 1980 Stock Incentive Plan, as amended and
restated as of August 15, 1996, previously filed with the Commission as
an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997, is incorporated by reference into this report.
10.4(b) The form of Ryder System, Inc. 1980 Stock Incentive Plan, United
Kingdom Section, dated May 4, 1995, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1995, is incorporated by reference into
this report.
10.4(c) The form of Ryder System, Inc. 1980 Stock Incentive Plan, United
Kingdom Section, dated October 3, 1995, previously filed with the
Commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1995, is incorporated by reference into
this report.
10.4(d) The Ryder System, Inc. 1995 Stock Incentive Plan, as amended and
restated as of August 15, 1996, previously filed with the Commission as
an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997, is incorporated by reference into this report.
10.5(a) The Ryder System, Inc. Directors Stock Plan, as amended and restated as
of December 17, 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, is incorporated by reference into this report.
10.5(b) The Ryder System, Inc. Directors Stock Award Plan dated as of May 2,
1997, as amended and restated as of December 17, 1998, previously filed
with the Commission as an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1997, is incorporated by
reference into this report.
10.6(a) The Ryder System Benefit Restoration Plan, effective January 1, 1985,
previously filed with the Commission as an exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31, 1992, is
incorporated by reference into this report.
10.6(b) The First Amendment to the Ryder System Benefit Restoration Plan,
effective as of December 16, 1988, previously filed with the Commission
as an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, is incorporated by reference into this report.
53
<PAGE>
10.9(a) The Ryder System, Inc. Stock for Merit Increase Replacement Plan, as
amended and restated as of August 15, 1996, previously filed with the
commission as an exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, is incorporated by reference into
this report.
10.9(b) The form of Ryder System, Inc. Non-Qualified Stock Option Agreement,
dated as of February 21, 1998, previously filed with the Commission as
an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995, is incorporated by reference into this report.
10.9(c) The form of Combined Non-Qualified Stock Option and Limited Stock
Appreciation Right Agreement, dated October 1, 1997, previously filed
with the Commission as an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1997, is incorporated by
reference into this report.
10.10 The Ryder System, Inc. Deferred Compensation Plan effective January 1,
1997, as amended and restated as of November 3, 1997, previously filed
with the Commission as an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1997, is incorporated by
reference into this report.
10.11 Severance Agreement, dated as of March 15, 2000, between Ryder System,
Inc. and James B. Griffin. Severance Agreement, dated as of January 31,
2000, between Ryder System, Inc. and Edwin Huston.
10.12 The Asset and Stock Purchase Agreement by and between Ryder System,
Inc. and FirstGroup Plc dated as of July 21, 1999, filed with the
Commission on September 24, 1999 as an exhibit to the Company's report
on Form 8K, is incorporated by reference into this report.
21.1 List of subsidiaries of the registrant, with the state or other
jurisdiction of incorporation or organization of each, and the name
under which each subsidiary does business.
23.1 Auditors' consent to incorporation by reference in certain Registration
Statements on Forms S-3 and S-8 of their reports on consolidated
financial statements and schedules of Ryder System, Inc. and its
subsidiaries.
24.1 Manually executed powers of attorney for each of:
Joseph L. Dionne
Edward T. Foote II
David I. Fuente
John A. Georges
Vernon E. Jordan, Jr.
David T. Kearns
Lynn M. Martin
Paul J. Rizzo
Christine A. Varney
Alva O. Way
27.1 Financial Data Schedule.
(b) Reports on Form 8-K:
No such reports were filed.
(c) Executive Compensation Plans and Arrangements:
Please refer to the description of Exhibits 10.1 through 10.13 set forth under
Item 14(a)3 of this report for a listing of all management contracts and
compensation plans and arrangements filed with this report pursuant to Item
601(b)(10) of Regulation S-K.
54
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: March 13, 2000 RYDER SYSTEM, INC.
By: /S/ M. ANTHONY BURNS
------------------------------------
M. Anthony Burns
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Date: March 13, 2000 By: /S/ M. ANTHONY BURNS
------------------------------------
M. Anthony Burns
Chairman and Chief Executive Officer
(Principal Executive Officer)
Date: March 13, 2000 By: /S/ CORLISS J. NELSON
------------------------------------
Corliss J. Nelson
Senior Executive Vice President - Finance
and Chief Financial Officer
(Principal Financial Officer)
Date: March 13, 2000 By: /S/ GEORGE P. SCANLON
------------------------------------
George P. Scanlon
Senior Vice President - Planning
and Controller
(Principal Accounting Officer)
Date: March 13, 2000 By: /S/ GREGORY T. SWIENTON
------------------------------------
Gregory T. Swienton
President and Chief Operating Officer
55
<PAGE>
Date: March 13, 2000 By: /S/ JOSEPH L. DIONNE *
------------------------------------
Joseph L. Dionne
Director
Date: March 13, 2000 By: /S/ EDWARD T. FOOTE II *
------------------------------------
Edward T. Foote II
Director
Date: March 13, 2000 By: /S/ DAVID I. FUENTE *
------------------------------------
David I. Fuente
Director
Date: March 13, 2000 By: /S/ JOHN A. GEORGES *
------------------------------------
John A. Georges
Director
Date: March 13, 2000 By: /S/ VERNON E. JORDAN, JR. *
------------------------------------
Vernon E. Jordan, Jr.
Director
Date: March 13, 2000 By: /S/ DAVID T. KEARNS *
------------------------------------
David T. Kearns
Director
Date: March 13 , 2000 By: /S/ LYNN M. MARTIN *
------------------------------------
Lynn M. Martin
Director
Date: March 13, 2000 By: /S/ PAUL J. RIZZO *
------------------------------------
Paul J. Rizzo
Director
Date: March 13, 2000 By: /S/ CHRISTINE A. VARNEY *
------------------------------------
Christine A. Varney
Director
Date: March 13, 2000 By: /S/ ALVA O. WAY *
------------------------------------
Alva O. Way
Director
*By: /S/ KEVIN K. ROSS
------------------------------------
Kevin K. Ross
Attorney-in-Fact
56
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------ -----------
3.2 The Ryder System, Inc. By-Laws, as amended through July 29, 1999.
10.11 Severance Agreement, dated as of March 15, 2000, between Ryder System,
Inc. and James B. Griffin. Severance Agreement, dated as of January 31,
2000, between Ryder System, Inc. and Edwin Huston.
21.1 List of subsidiaries of the registrant, with the state or other
jurisdiction of incorporation or organization of each, and the name
under which each subsidiary does business.
23.1 Auditors' consent to incorporation by reference in certain Registration
Statements on Forms S-3 and S-8 of their reports on consolidated
financial statements and schedules of Ryder System, Inc. and its
subsidiaries.
24.1 Manually executed powers of attorney for each of:
Joseph L. Dionne
Edward T. Foote II
David I. Fuente
John A. Georges
Vernon E. Jordan, Jr.
David T. Kearns
Lynn M. Martin
Paul J. Rizzo
Christine A. Varney
Alva O. Way
27.1 Financial Data Schedule.
57
EXHIBIT 3.2
By-Laws
of Ryder System Inc.
Revision Adopted December 8, 1975
Effective January 1, 1976
Amended April 30, 1976
Amended December 14, 1979
Amended February 22, 1980
Amended June 26, 1981
Amended December 16, 1982
Amended May 4, 1984
Amended October 25, 1984
Amended November 8, 1985
Amended February 28, 1986
Amended December 12, 1986
Amended December 18, 1987
Amended June 22, 1990
Amended February 21, 1992
Amended November 23, 1993
Amended February 18, 1999
Amended July 29, 1999
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I Name 1
ARTICLE II Offices 1
ARTICLE III Corporate Seal 1
ARTICLE IV Stockholders 2
ARTICLE V Directors 6
ARTICLE VI Officers 11
ARTICLE VII Stock Certificates 14
ARTICLE VIII Depositories and Checks 15
ARTICLE IX Fiscal Year 15
ARTICLE X Dividends 15
ARTICLE XI Waiver of Notice 16
ARTICLE XII Indemnification of Officers,
Directors, Employees and Agents 16
ARTICLE XIII By-Law Amendment 18
ARTICLE XIV Continuing Effect of
By-Law Provisions 19
<PAGE>
BY-LAWS
OF
RYDER SYSTEM, INC.
ARTICLE I
Name
The name of this Corporation is RYDER SYSTEM, INC.
ARTICLE II
Offices
Section 1. Principal Florida Office
The principal office of the Corporation in the State of Florida shall
be in Miami, Dade County, Florida.
Section 2. Other Offices
The Corporation may also have offices in such other places, both within
and without the State of Florida, as the Board of Directors or the Chairman of
the Board may from time to time designate or as the business of the Corporation
may require. The registered office of the Corporation, required by applicable
law to be maintained in the State of Florida may be, but need not be, identical
with the Corporation's principal office in the State of Florida, and the address
of the registered office may be changed from time to time by the Board of
Directors or the Chairman of the Board.
ARTICLE III
Corporate Seal
The corporate seal shall be circular in form and have inscribed thereon
the following: "Ryder System, Inc., Incorporated Florida 1955".
<PAGE>
ARTICLE IV
Stockholders
Section 1. Meetings of Stockholders
a. Annual Meeting
The annual meeting of stockholders of the Corporation shall be held at
such time and place, within or without the State of Florida, as may be
designated by the Board of Directors, at which meeting, in accordance with the
Restated Articles of Incorporation and these By-Laws, the stockholders shall
elect members of the Board of Directors and transact such other business as
lawfully may come before it.
b. Special Meetings
(1) Special meetings of the stockholders may be called by the holders
of not less than one-tenth of all the shares outstanding and entitled to vote at
such meeting or by the Board of Directors; and such meetings shall be held at
such time and place, within or without the State of Florida, as may be
designated by the Board of Directors.
(2) Before a stockholder may request or demand that a special meeting
of the stockholders be held for any purpose, the following procedure must be
satisfied:
(A) Any stockholder seeking to request or demand, or to have the
stockholders request or demand, a special meeting shall first, by written notice
to the Secretary of the Corporation, request the Board of Directors to fix a
record date, pursuant to Section 3.b. of Article V of these By-Laws, for the
purpose of determining the stockholders entitled to request the special meeting.
The Board of Directors shall promptly, but in all events within 10 days after
the date upon which such a request is received, fix such a record date. Every
request to fix a record date for determining the stockholders entitled to
request a special meeting shall be in writing and shall set forth the purpose or
purposes for which the special meeting is requested, the name and address, as
they appear in the Corporation's books, of each stockholder making the request
and the class and number of shares of the Corporation which are owned of record
by each such stockholder, and shall bear the signature and date of signature of
each such stockholder.
In the event of the delivery to the Corporation of any request(s)
or demand(s) by stockholders with respect to a special meeting, and/or any
related revocation or revocations, the Corporation shall engage nationally
recognized independent inspectors of elections for the purpose of performing a
prompt ministerial review of the validity of the request(s), demand(s) and/or
revocation(s).
(B) No request or demand with respect to calling a special
meeting of stockholders shall constitute a valid and effective stockholder
request or demand for a special meeting (i) unless (A) within 60 days of the
record date established in accordance with subsection b(2)(A) of this Section,
written requests or demands signed by stockholders of record representing a
sufficient number of shares as of such record date to
2
<PAGE>
request or demand a special meeting pursuant to subsection b(1) of this Section
are delivered to the Secretary of the Corporation and (B) each request or demand
is made in accordance with and contains the information required by Section
5.b(2) of this Article IV and (ii) until such date as the independent inspectors
engaged in accordance with this subsection b(2) certify to the Corporation that
the requests or demands delivered to the Corporation in accordance with clause
(i) of this subsection b(2)(B) represent at least the minimum number of shares
that would be necessary to request such a meeting pursuant to subsection b(1) of
this Section.
(3) If the Corporation determines that a stockholder or
stockholders have satisfied the notice, information and other requirements
specified in subsection b(2)(B)(i) of this Section, then the Board of Directors
shall adopt a resolution calling a special meeting of the stockholders and
fixing a record date, pursuant to Section 3.b. of Article V, for the purpose of
determining the stockholders entitled to notice of and to vote at such special
meeting. Notice of such special meeting shall be provided in accordance with
Section 1.c. of this Article IV, provided that such notice shall be given within
60 days (or such longer period as from time to time may be permitted by law)
after the date the request(s) or demand(s) for such special meeting is(are)
delivered to the Corporation in accordance with subsection b(2)(B)(i) of this
Section.
(4) In fixing a meeting date for the special meeting of
stockholders, the Board of Directors may consider such factors as it deems
relevant within the good faith exercise of its business judgment, including,
without limitation, the nature of the action proposed to be taken, the facts and
circumstances surrounding the request, and any plan of the Board of Directors to
call a special or annual meeting of stockholders for the conduct of related
business, provided that such meeting date shall be within 120 days (or such
longer period as may from time to time be permitted by law) after the date the
request(s) or demand(s) for such special meeting is(are) delivered to the
Corporation in accordance with subsection b(2)(B)(i) of this Section.
(5) Nothing contained in this Section 1.b. shall in any way be
construed to suggest or imply that the Board of Directors or any stockholder
shall not be entitled to contest the validity of any request or demand or
revocation thereof, or to take any other action (including, without limitation,
the commencement, prosecution or defense of any litigation with respect
thereto).
c. Notice of Meetings
Except as otherwise permitted by law, notice of all meetings of
stockholders stating the time and place, and, in the case of special meetings,
the purpose or purposes for which the meeting is called, shall be given by
mailing the same to each stockholder entitled to vote not less than ten days nor
more than sixty days before the date set for such meeting. Such notice shall be
deemed to be delivered when deposited in the United States mail addressed to the
stockholder at his address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid.
d. Preparation of Voting List of Stockholders
The Secretary shall prepare and make, or cause to be prepared and
made, at least ten days before each meeting of stockholders, a complete list of
the stockholders
3
<PAGE>
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each stockholder
as such information appears on the stock transfer books of the Corporation. Such
list shall be kept on file at the principal place of business of the
Corporation, shall be open to the examination of any stockholder during normal
business hours for said ten day period upon receipt by the Secretary of a
written request to make such an examination, and shall be produced and kept at
the time and place of the meeting during the whole time thereof subject to the
inspection of any stockholder who may be present.
Section 2. Quorum and Vote of Stockholders
The holders of a majority of the voting power of the total number of
shares outstanding and entitled to vote, present in person or represented by
proxy thereat, shall constitute a quorum at a meeting of stockholders for the
transaction of business, except as otherwise provided by law or by the Restated
Articles of Incorporation. If, however, a quorum does not exist at a meeting,
the holders of a majority of the shares present or represented and entitled to
vote at such meeting may adjourn the meeting from time to time, without notice
other than by announcement at the meeting, until holders of the requisite number
of shares entitled to vote shall be present. Except as otherwise required by
law, at any such adjourned meeting at which a quorum exists, any business may be
transacted which might have been transacted at the meeting as originally
noticed. The stockholders present at a duly organized meeting may continue to
transact business in accordance with these By-Laws until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.
If a quorum is present, action on a matter (including the election of
directors) shall be approved by the stockholders of the Corporation if the
matter receives the affirmative vote of the holders of a majority of the voting
power of the total number of shares outstanding and entitled to vote on such
matter, unless the matter is one upon which, by express provision of law a
greater vote is required or from time to time permitted by action of the Board
of Directors, or by the Restated Articles of Incorporation or these By-Laws a
greater or different vote is required, in any which case such express provision
shall govern and control the requisite vote requirement.
Section 3. Voting by Stockholders
Each stockholder entitled to vote at any meeting may do so in person or
by proxy appointed by instrument in writing, subscribed by such stockholder or
his duly authorized attorney-in-fact and filed with the Secretary or the
tabulator of the vote before or at the time of the meeting.
Section 4. Stockholder Action
Any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of such
holders and may not be effected by any consent in writing by such holders.
4
<PAGE>
Section 5. Transaction of Business at Stockholder Meetings
a. Annual Meetings of Stockholders
(1) The proposal of business (other than the nomination of
persons for election to the Board of Directors, which is governed exclusively by
Sections 1.b. and 2 of Article V of these By-Laws) for consideration by the
stockholders may be made at an annual meeting of stockholders (a) pursuant to
the Corporation's notice of meeting, (b) by or at the direction of the Board of
Directors, or (c) by any stockholder of the Corporation who is a stockholder of
record at the time of giving of the notice provided for in subsection a(2) of
this Section, who shall be entitled to vote at the meeting, who is a stockholder
at the time of such meeting and who complies with the notice procedures set
forth in subsection a(2) of this Section.
(2)(A) For business to be properly brought before an annual
meeting by a stockholder pursuant to clause (c) of subsection a(1) above, the
stockholder must have given timely notice thereof in proper written form to the
Secretary of the Corporation.
(B) To be timely, a stockholder's notice shall be delivered to
the Secretary at the principal executive offices of the Corporation not less
than 90 days prior to the date of such annual meeting.
(C) To be in proper written form, such stockholder's notice shall
be in writing, shall be executed by the stockholder and shall set forth (i) as
to any business that the stockholder proposes to bring before the meeting, a
brief description of the business desired to be brought, the reasons for
conducting such business at the meeting, and any material interest in such
business of such stockholder or the beneficial owner, if any, on whose behalf
the proposal is made; and (ii) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the proposal is made, (A) the name and
address of such stockholder, as they appear on the Corporation's books, and of
such beneficial owner, and (B) the class and number of shares of the Corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner.
b. Special Meetings of Stockholders
(1) Only such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting pursuant to the
Corporation's notice of meeting pursuant to Section 1.c. of this Article IV.
Nominations of persons for election to the Board of Directors may be made at a
special meeting of stockholders only in accordance with the provisions of
Sections 1.b. and 2 of Article V of these By-Laws. Resolutions or other
proposals for the transaction of business (other than the nomination of persons
for election to the Board of Directors) may be proposed at a special meeting of
stockholders (a) by or at the direction of the Board of Directors, or (b) in the
event a stockholder of the Corporation satisfies the procedures set forth in
Section 1.b(2) of this Article IV, by such stockholder of the Corporation who is
a stockholder of record at the time of giving of the notice provided for in the
second sentence of Section 1.b(3) of this Article IV, who shall be entitled to
vote at the meeting, who is a stockholder at the time of such meeting and who
complies with the notice procedures set forth in subsection b(2) of this
Section.
5
<PAGE>
(2) For business to be properly brought before a special meeting
by a stockholder pursuant to clause (b) of subsection b(1) above, the
stockholder must have delivered notice thereof in the form required by
subsection a(2)(C) of this Section to the Secretary of the Corporation at the
principal executive offices of the Corporation.
c. General
(1) Only such business shall be conducted at an annual or special
meeting of stockholders as shall have been brought before the meeting in
accordance with the procedures set forth in this Section. The Chairman of the
meeting shall have the power and duty to determine whether any business proposed
to be brought before the meeting was properly brought before such meeting in
accordance with the procedures set forth in this Section and, if the Chairman
shall determine that any proposed business is not so brought in compliance with
this Section, to declare to the meeting that such defective proposal shall be
disregarded.
(2) Notwithstanding the foregoing provisions of this Section, a
stockholder shall also comply with all applicable requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder, with respect to the matters set forth in
this Section. Nothing in this Section shall be deemed to affect any rights of
stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
ARTICLE V
Directors
Section 1. Board of Directors
a. Number, election and terms
Except as otherwise fixed by or pursuant to the provisions of
Article III of the Restated Articles of Incorporation relating to the rights of
the holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation to elect additional directors under
specified circumstances, the number of the Directors of the Corporation shall be
13, but such number may be fixed from time to time at not less than three nor
more than 21 by resolution of the Board of Directors. The Directors, other than
those who may be elected by the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation, shall be
classified, with respect to the time for which they severally hold office, into
three classes, as nearly equal in number as possible. Such classes shall
originally consist of one class of four Directors who shall be elected at the
annual meeting of stockholders held in 1984 for a term expiring at the annual
meeting of stockholders to be held in 1985; a second class of three Directors
who shall be elected at the annual meeting of stockholders held in 1984 for a
term expiring at the annual meeting of stockholders to be held in 1986; and a
third class of four Directors who shall be elected at the annual meeting of
stockholders held in 1984 for a term expiring at the annual meeting of
stockholders to be held in 1987. The Board of Directors shall increase or
decrease the number of Directors in one or more classes as may be appropriate
whenever
6
<PAGE>
it increases or decreases the number of Directors pursuant to this Article V, in
order to ensure that the three classes shall be as nearly equal in number as
possible. At each annual meeting of the stockholders of the Corporation, the
successors of the class of Directors whose term expires at that meeting shall be
elected to hold office for a term expiring at the annual meeting of stockholders
held in the third year following the year of their election.
b. Stockholder nomination of director candidates
Advance notice of stockholder nominations for the election of
Directors shall be given in the manner provided in Section 2 of this Article V.
c. Newly created directorships and vacancies
Except as otherwise provided for or fixed by or pursuant to the
provisions of Article III of the Restated Articles of Incorporation relating to
the rights of the holders of any class or series of stock having a preference
over the Common Stock as to dividends or upon liquidation to elect directors
under specified circumstances, newly created directorships resulting from any
increase in the number of Directors and any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or other cause
shall be filled by the affirmative vote of a majority of the remaining Directors
then in office, even though less than a quorum of the Board of Directors. Any
Director elected in accordance with the preceding sentence shall hold office
until the next election of directors by the stockholders and until such
Director's successor shall have been elected and qualified. No decrease in the
number of Directors constituting the Board of Directors shall shorten the term
of any incumbent Director.
d. Removal
Subject to the rights of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation to elect
Directors under specified circumstances, any Director may be removed from
office, with or without cause, only by the affirmative vote of the holders of
75% the combined voting power of the then outstanding shares of stock entitled
to vote generally in the election of Directors, voting together as a single
class.
Section 2. Notification of Nominations
Subject to the rights of holders of any class or series of stock having
a preference over the Common Stock as to dividends or upon liquidation,
nominations for the election of directors may be made by the Board of Directors
or a proxy committee appointed by the Board of Directors or by any stockholder
entitled to vote in the election of directors generally. However, any
stockholder entitled to vote in the election of directors generally may nominate
one or more persons for election as directors at a meeting only if written
notice of such stockholder's intent to make such nomination or nominations has
been given, either by personal delivery or by United States mail, postage
prepaid, to the Secretary of the Corporation not later than (i) with respect to
an election to be held at an annual meeting of stockholders, 90 days in advance
of such meeting, and (ii) with respect to an election to be held at a special
meeting of stockholders for the election of directors, the close of business on
the seventh day following the date on which notice of such meeting is first
given to stockholders. Each such notice shall set forth: (a) the name and
address of the stockholder
7
<PAGE>
who intends to make the nomination and of the person or persons to be nominated;
(b) a representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the stockholder; (d) such other information regarding each nominee proposed by
such stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, had the
nominee been nominated, or intended to be nominated, by the Board of Directors;
and (e) the consent of each nominee to serve as a director of the Corporation if
so elected. The chairman of the meeting may refuse to acknowledge the nomination
of any person not made in compliance with the foregoing procedure.
Section 3. Powers of Directors
a. General Powers
The Board of Directors shall have authority over the entire
management of the property, business, and affairs of this Corporation. In
addition to such powers as are herein and in the Restated Articles of
Incorporation expressly conferred upon it, the Board of Directors shall have and
may exercise all the powers of the Corporation, subject to the provisions of law
and the Restated Articles of Incorporation.
b. Establishment of Record Date
The Board of Directors shall fix in advance a date not exceeding
sixty days (or such longer period as may from time to time be permitted by law)
preceding the date of any meeting of stockholders, or any dividend payment date,
or the date necessary to make a determination of stockholders for any purpose,
nor less than ten days (or such shorter period as may from time to time be
permitted by law) prior to the date of any meeting of stockholders, as a record
date for the determination of the stockholders; and in such case only such
stockholders as shall be stockholders of record on the date so fixed shall be
considered stockholders for purposes of such determination, notwithstanding any
transfer of stock on the books of the Corporation after any such record date
fixed as aforesaid.
Except as otherwise provided by law, unless the Board of
Directors fixes a new record date for any adjourned meeting of stockholders, the
record date originally fixed pursuant to this Section 3.b. of Article V for such
meeting shall remain the record date for such meeting.
The Board of Directors or any committee of the Board of Directors
authorized to fix record dates and declare dividends shall fix in advance a date
not exceeding sixty days (or such longer period, not inconsistent with the
Restated Articles of Incorporation, as may from time to time be permitted by
law) preceding the date of any Preferred Stock dividend payment date as a record
date for the determination of the stockholders of such Preferred Stock; and in
such case, only such stockholders as shall be holders of record of such
Preferred Stock on the date so fixed shall be considered stockholders of the
Preferred Stock for purposes of such determination, notwithstanding any transfer
of such Preferred Stock on the books of the Corporation after any such record
date fixed as aforesaid.
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c. Appointment of Committees
The Board of Directors may designate one or more committees,
consisting of at least two directors each, to perform such duties as may be
determined by the Board. The number of directors composing each such committee
and the powers conferred upon each such committee shall be determined by
resolution of the Board.
In the event that the Board of Directors shall designate a
committee that shall have the power to recommend or approve changes in the
compensation of executives of the Corporation or any subsidiary of the
Corporation and/or a committee that shall have the power to recommend nominees
for election as directors of the Corporation, the membership of each such
committee shall consist solely of directors who are "independent directors" as
defined in Section 7 of this Article V.
Section 4. Meetings of Directors
a. Regular Meetings
Regular meetings of the Board of Directors, or any committee
thereof, shall be held at any time or place, within or without the State of
Florida, as the Board, or such committee, may from time to time determine; and
if so determined, no notice thereof need be given.
After each election of directors, the Board, including the newly
elected directors, shall meet without notice for the purpose of electing
officers and transacting such other business as lawfully may come before it.
b. Special Meetings
Special meetings of the Board of Directors, or any committee
thereof, may be held at any time or place, within or without the State of
Florida, whenever called by the Chairman of the Board, the President, or at the
request of two or more directors or, for a special meeting of a committee, by
the chairman of such committee.
Notice of special meetings of the Board, or any committee
thereof, stating the time and place, shall be given by mailing the same to each
director or committee member, as appropriate, at his residence or business
address at least two days before the meeting, or by delivering the same to him
personally or by telephoning or telegraphing the same to him at said residence
or business address at least one day before the meeting. Such notice shall be
deemed to have been given on the date of mailing, telephoning or telegraphing as
the case may be.
c. Adjournments
A majority of the directors present, whether or not a quorum
exists, may adjourn any meeting of the Board of Directors, or any committee
thereof, to another time and place. Notice of any such adjourned meeting shall
be given to the directors who are not present at the time of the adjournment,
and to the other directors.
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d. Telephonic Participation at Meetings
Members of the Board of Directors may participate in a meeting of
the Board, or any committee thereof, by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other at the same time. Participation by such means
shall constitute presence in person at such meeting for all purposes.
e. Action Without a Meeting
Any action of the Board of Directors or of any committee thereof,
which is required or permitted to be taken at a meeting, may be taken without a
meeting if written consent to the action signed by all the members of the Board
or of the committee, as the case may be, is filed in the minutes of the
proceedings of the Board or of the committee.
Section 5. Quorum of Directors
A majority of the number of directors fixed in accordance with Section
1 of this Article V shall constitute a quorum of the Board for the transaction
of business, and one-half of the members of any committee shall constitute a
quorum of such committee; but a smaller number may adjourn any meeting until a
quorum is present.
When a quorum is present at any meeting of directors, a majority of the
members present shall decide any question brought before such meeting, except as
otherwise provided by law, the Restated Articles of Incorporation, or these
By-Laws.
Section 6. Compensation of Directors
Directors shall receive such compensation, including reimbursement of
expenses, for serving as members of the Board of Directors and for attendance at
each meeting of the Board of Directors, and members of committees of the Board
of Directors shall receive such compensation, including reimbursement of
expenses, for serving as members of a committee and for attendance at each
meeting of a committee, as the Board of Directors shall from time to time
prescribe.
Section 7.
Except as otherwise provided for or fixed by or pursuant to the
provisions of Article III of the Restated Articles of Incorporation relating to
the rights of holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation to elect directors under
specified circumstances, the majority of persons elected to the Board of
Directors shall consist of persons who are independent directors. For purposes
of this Article V, an "independent director" shall mean a director who: (i) has
not been employed by the Corporation or any subsidiary of the Corporation in an
executive capacity within the past five years; (ii) does not have, and is not
affiliated with a company, firm or institution that has, a significant economic
relationship to the Corporation (other than through stock ownership or customary
directors' fees); (iii) does not have a personal services contract with the
Corporation or any subsidiary of the Corporation and (iv) is not a familial
relative of any person described in (i) through (iii). Should the death,
resignation, disqualification or removal of any director result in the failure
of the requirement set forth in
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the preceding sentence to be met, such requirement shall not apply during the
term of the vacancy caused by such death, resignation, disqualification or
removal, and the remaining directors shall cause any such vacancy to be filled
in accordance with Subsection 1(c) of this Article V within a reasonable period
of time.
The Board of Directors shall have the exclusive right and power to
interpret and apply the provisions of this Article V relating to independent
directors and shall be entitled to rely upon the completeness and accuracy of
director's responses to written questionnaires circulated for the purpose of
enabling the Board of Directors to make the determinations of independence
required by this Article V.
Information regarding a nominee for director provided by a stockholder
pursuant to Section 2 of this Article V shall include such information as may be
necessary to enable the Board of Directors to make an informed determination as
to whether such nominee, if elected, would be an "independent director" as
defined in this Section.
ARTICLE VI
Officers
Section 1. Numbers and Titles
The officers of the Corporation shall be a Chairman of the Board, a
President, a Secretary, a Treasurer and a Controller and may also include one or
more Senior Executive Vice Presidents, one or more Executive Vice Presidents,
one or more Senior Vice Presidents, and one or more Vice Presidents; all of whom
shall be elected by the Board of Directors. The Board of Directors may from time
to time appoint such other officers, including one or more Assistant
Secretaries, Assistant Treasurers, and Assistant Controllers as they shall deem
necessary.
The Chairman of the Board and the President shall be members of the
Board of Directors, but the other officers need not be members of the Board.
Section 2. Tenure of Office/Removal of Officers
Officers of the Corporation shall hold their respective offices until
their successors are chosen and qualified, provided, however, that any officer
may be removed from such office during such term by the Board of Directors
whenever in its judgment the best interests of the Corporation will be served
thereby.
Section 3. Duties of Officers
a. Chairman of the Board
The Chairman of the Board shall preside at meetings of the Board
of Directors and of the stockholders.
He shall, subject to the approval of the Board of Directors,
submit a report to the stockholders of the Corporation for each fiscal year.
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He shall perform such other duties as the Board of Directors may
from time to time prescribe.
b. Chief Executive Officer
The Chief Executive Officer shall have overall responsibility for
supervision of the Corporation and shall report to the Board of Directors. He
shall see that the provisions of the By-Laws, all votes of the stockholders and
all orders and resolutions of the Board of Directors are carried into effect.
He shall preside at meetings of the stockholders in the absence
of the Chairman of the Board.
He shall have power to appoint proxies to vote stock of other
corporations owned by this Corporation.
He shall perform such other duties as the Board of Directors may
from time to time prescribe.
c. President
The President shall be the Chief Operating Officer of the
Corporation, shall report to the Chief Executive Officer and shall have overall
responsibility for supervision of the operations of the Corporation.
He shall preside at meetings of the stockholders in the absence
of the Chairman of the Board and Chief Executive Officer.
He shall perform such other duties as the Board of Directors may
from time to time prescribe.
d. Multiple Offices
The same person may hold one, two or all three of the offices
described in Paragraphs a., b. and c. above of this Section 3 as the Board of
Directors may prescribe.
e. Senior Executive Vice Presidents
The Senior Executive Vice Presidents shall have such powers and
perform such duties as the Board of Directors or the President may from time to
time prescribe.
f. Executive Vice Presidents
The Executive Vice Presidents shall have such powers and perform
such duties as the Board of Directors or the President may from time to time
prescribe.
g. Senior Vice Presidents
The Senior Vice Presidents shall have such powers and perform
such duties as the Board of Directors or the President may from time to time
prescribe.
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h. Vice Presidents
The Vice Presidents shall have such powers and perform such
duties as the Board of Directors or the President may from time to time
prescribe.
i. Secretary
The Secretary shall be Secretary of and shall attend, or a person
designated by him shall attend, all meetings of the stockholders, the Board of
Directors and all committees thereof. He, or such designated person, shall
record all of the proceedings of such meetings in books kept for that purpose.
He shall be custodian of the corporate seal and shall have the
power to affix it to any instrument requiring it and to attest the same.
He shall cause to be maintained a stock transfer book and such
other books as the Board of Directors may from time to time determine.
He shall serve all notices required by law, by these By-Laws, or
by resolution of the Board of Directors.
He shall, together with the President, sign certificates for
shares of the Corporation.
He shall perform such other duties as the Board of Directors or
the President may from time to time prescribe.
j. Treasurer
The Treasurer shall have the management and custody of the funds
and securities of the Corporation and he or persons designated by him, or by
others so authorized by the Board of Directors, shall deposit all monies and
other valuable effects in the name and to the credit of the Corporation in such
depositories as may be designated by the Board of Directors or by persons
authorized by the Board of Directors to make such designations.
He shall receive and disburse the funds of the Corporation for
corporate purposes and shall render to the Board of Directors and the President,
whenever they may require it, an account of all his transactions as Treasurer.
He shall perform such other duties as the Board of Directors or
the President may from time to time prescribe.
k. Controller
The Controller shall keep full and accurate accounts of all
assets, liabilities, commitments, receipts, disbursements, and other financial
transactions of the Corporation, including those of subsidiaries of the
Corporation, in books belonging to the Corporation, and shall perform all other
duties required of the accounting officer of the Corporation, and shall render
to the Board of Directors and the President, whenever they may require it, an
account of the financial condition of the Corporation.
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He shall perform such other duties as the Board of Directors or
the President may from time to time prescribe.
l. Assistant Secretaries
The Assistant Secretaries shall perform such of the duties of the
Secretary as the President or the Secretary may from time to time prescribe and
such other duties as the Board of Directors may from time to time prescribe.
m. Assistant Treasurers
The Assistant Treasurers shall perform such of the duties of the
Treasurer as the President or the Treasurer may from time to time prescribe and
such other duties as the Board of Directors may from time to time prescribe.
n. Assistant Controllers
The Assistant Controllers shall perform such duties of the
Controller as the President or the Controller may from time to time prescribe
and such other duties as the Board of Directors may from time to time prescribe.
Section 4. Delegation of Duties of Officers
The Board of Directors may delegate the powers or duties of any
officer of the Corporation in case of his absence, disability, death or removal,
or for any other reason, to any other officer or to any director.
ARTICLE VII
Stock Certificates
Section 1. Stock Certificates
Except as otherwise provided by resolution of the Board of Directors or
the Restated Articles of Incorporation or as permitted by law, every holder of
stock in the Corporation shall be entitled to have a certificate, representing
all shares to which he is entitled, in such form as may be prescribed by the
Board of Directors in accordance with the provisions of law. Such Certificates
shall be signed by the President and by the Secretary or an Assistant Secretary;
provided, however, that where any such certificate is signed by a party other
than an officer of the Corporation, such as a transfer agent or transfer clerk,
and by a registrar, the signatures of the President, Secretary, or Assistant
Secretary may be facsimiles. All certificates shall be counter-signed and
registered in such manner as the Board of Directors from time to time may
prescribe, and there shall be impressed thereon the seal of the Corporation or
imprinted thereon a facsimile of such seal.
In case any officer who signed or whose facsimile signature has been
placed upon such certificate shall have ceased to be such officer before such
certificate is issued, such signature shall be deemed to be valid and such
certificate may be issued by the Corporation with the same effect as if he were
such officer at the date of its issuance.
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Section 2. Transfer of Stock
Shares of stock of the Corporation may be transferred by delivery of
the stock certificate, accompanied either by an assignment in writing on the
back of the certificate or by a written power of attorney to sell, assign, and
transfer the shares on the books of the Corporation, signed by the person
appearing on the certificate to be the owner of the shares represented thereby;
and such shares shall be transferable on the books of the Corporation upon
surrender thereof so assigned or endorsed. In the case of a series of Preferred
Stock, shares of Preferred Stock may be transferred by delivery of the stock
certificate, as described above, or by such other method as may be set forth in
a statement of resolution establishing such series of Preferred Stock. The
person registered on the books of the Corporation as the owner of any shares of
stock shall be deemed by the Corporation to be the owner thereof for all
purposes exclusively and shall be entitled as the owner of such shares, to
receive dividends and to vote as such owner with respect thereto.
Section 3. Treasury Stock
Any shares of stock in the Corporation which may be redeemed,
purchased, or otherwise acquired by the Corporation after the issuance thereof,
shall have no voting rights and shall not participate in any dividends or
allotments of rights while such stock is held by the Corporation.
ARTICLE VIII
Depositories and Checks
Depositories of the funds of the Corporation shall be designated by the
Board of Directors or a duly authorized committee thereof; and all checks on
funds shall be signed by such officers or other employees of the Corporation as
the Board, or a duly authorized committee thereof, from time to time may
designate.
ARTICLE IX
Fiscal Year
The fiscal year of the Corporation shall begin on the first day of
January and end on the 31st day of December in each year.
ARTICLE X
Dividends
The Board of Directors may from time to time declare, and the
Corporation may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law and the Restated Articles of
Incorporation.
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ARTICLE XI
Waiver of Notice
Any notice required to be given by law, by the Restated Articles of
Incorporation, or by these By-Laws may be waived in writing signed by the person
entitled to such notice and delivered to the Corporation, whether before or
after the time stated therein, except that attendance of a person at a meeting
shall constitute a waiver of notice of such meeting unless such attendance is
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
A director of the Corporation who is present at a meeting of the Board
of Directors (or a committee thereof) at which action on any corporate matter is
taken shall be presumed to have assented to the action taken unless he votes
against such action or abstains from voting in respect thereto because of an
asserted conflict of interest.
ARTICLE XII
Indemnification of Officers,
Directors, Employees and Agents
Section 1. Indemnification
The Corporation shall, and does hereby, indemnify to the fullest extent
permitted or authorized by current or future legislation or current or future
judicial or administrative decisions (but, in the case of any such future
legislation or decisions, only to the extent that it permits the Corporation to
provide broader indemnification rights than permitted prior to such legislation
or decisions), each person (including here and hereinafter the heirs, executors,
administrators or the estate of such person) who was or is a party, or is
threatened to be made a party, or was or is a witness, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), against any liability (which
for purposes of this Article shall include any judgment, settlement, penalty or
fine) or cost, charge or expense (including attorneys' fees) asserted against
him or incurred by him by reason of the fact that such indemnified person (1) is
or was a director, officer or employee of the Corporation or (2) is or was an
agent of the Corporation as to whom the Corporation has agreed to grant such
indemnity or (3) is or was serving, at the request of the Corporation, as a
director, officer, employee of another corporation, partnership, joint venture,
trust or other enterprise (including serving as a fiduciary of any employee
benefit plan) or is serving as an agent of such other corporation, partnership,
joint venture, trust or other enterprise as to whom the Corporation has agreed
to grant such indemnity. Each director, officer, employee or agent of the
Corporation to whom indemnification rights under this Section 1 of this Article
have been granted shall be referred to as an "Indemnified Person".
Notwithstanding the foregoing, except as specified in Section 3 of this
Article, the Corporation shall not be required to indemnify an Indemnified
Person in connection with a Proceeding (or any part thereof) initiated by such
Indemnified Person unless such authorization for such Proceeding (or any part
thereof) was not denied by the Board of
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Directors of the Corporation prior to sixty (60) days after receipt of notice
thereof from such Indemnified Person stating his intent to initiate such
Proceeding and only upon such terms and conditions as the Board of Directors may
deem appropriate.
Section 2. Advance of Costs, Charges and Expenses
Costs, charges and expenses (including attorneys' fees) incurred by an
officer, director or employee who is an Indemnified Person in defending a
Proceeding shall be paid by the Corporation to the fullest extent permitted or
authorized by current or future legislation or current or future judicial or
administrative decisions (but, in the case of any such future legislation or
decisions only to the extent that it permits the Corporation to provide broader
rights to advance costs, charges and expenses than permitted prior to such
legislation or decisions) in advance of the final disposition of such
Proceeding, upon receipt of an undertaking by or on behalf of the Indemnified
Person to repay all amounts so advanced in the event that it shall ultimately be
determined that such person is not entitled to be indemnified by the Corporation
as authorized in this Article and upon such other terms and conditions, in the
case of agents as to whom the Corporation has agreed to grant such indemnity, as
the Board of Directors may deem appropriate. The Corporation may, upon approval
of the Indemnified Person, authorize the Corporation's counsel to represent such
person in any Proceeding, whether or not the Corporation is a party to such
Proceeding. Such authorization may be made by the Chairman of the Board, unless
he is a party to such Proceeding, or by the Board of Directors by majority vote,
including directors who are parties to such Proceeding.
Section 3. Procedure For Indemnification
Any indemnification or advance under this Article shall be made
promptly and in any event within sixty (60) days upon the written request of the
Indemnified Person. The right to indemnification or advances as granted by this
Article shall be enforceable by the Indemnified Person in any court of competent
jurisdiction, if the Corporation denies such request under this Article, in
whole or in part, or if no disposition thereof is made within sixty (60) days.
Such Indemnified Person's costs and expenses incurred in connection with
successfully establishing his right to indemnification, in whole or in part, in
any such action shall also be indemnified by the Corporation. It shall be a
defense to any such action that the claimant has not met the standard of
conduct, if any, required by current or future legislation or by current or
future judicial or administrative decisions for indemnification (but, in the
case of any such future legislation or decisions, only to the extent that it
does not impose a more stringent standard of conduct than permitted prior to
such legislation or decisions), but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including its Board
of Directors or any committee thereof, its independent legal counsel, and its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct, if any, nor the fact that
there has been an actual determination by the Corporation (including its Board
of Directors or any committee thereof, its independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
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Section 4. Survival of Indemnification
The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any agreement, vote of stockholders or disinterested directors or recommendation
of counsel or otherwise, both as to actions in such person's official capacity
and as to actions in another capacity while holding such office, and shall
continue as to an Indemnified Person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors,
administrators and the estate of such person. All rights to indemnification
under this Article shall be deemed to be a contract between the Corporation and
each Indemnified Person who serves or served in such capacity at any time while
this Article is in effect. Any repeal or modification of this Article or any
repeal or modification of relevant provisions of Florida corporation law or any
other applicable laws shall not in any way diminish any rights to
indemnification of such Indemnified Person, or the obligations of the
Corporation arising hereunder, for claims relating to matters occurring prior to
such repeal or modification.
Section 5. Insurance
The Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise (including serving as a fiduciary of an employee benefit plan),
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provisions of this Article XII or the applicable provisions of Florida law.
Section 6. Savings Clause
If this Article or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the Corporation shall
nevertheless indemnify each Indemnified Person as to costs, charges and expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any Proceeding, including an action by or in the right of the
Corporation, to the full extent permitted by any applicable portion of this
Article that shall not have been invalidated and as permitted by applicable law.
ARTICLE XIII
By-Law Amendment
Except as otherwise provided in the Restated Articles of Incorporation,
the Board of Directors shall have the power to adopt, alter, amend and repeal
the By-Laws of the Corporation (except insofar as the By-Laws of the Corporation
adopted by the stockholders shall otherwise provide). Any By-Laws made by the
stockholders may prescribe that they may not be altered, amended or repealed by
the Board of Directors. Any By-Laws made by the Board of Directors under the
powers conferred hereby and by the Restated Articles of Incorporation may be
altered, amended or repealed by the Board of Directors or by the stockholders.
Amendments to the By-Laws (including any amendment to this Article XIII) shall
be effected as follows:
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a. By Action of the Board of Directors
Unless a greater vote is specifically required by the laws of the State
of Florida, or a greater or different vote or a vote of stockholders is required
by the provisions of the Restated Articles of Incorporation, the Board of
Directors may alter, amend or repeal these By-Laws, or adopt such other By-Laws
as in their judgment may be advisable for the administration or regulation of
the management and affairs of the Corporation, to the extent not inconsistent
with the laws of the State of Florida or the Restated Articles of Incorporation,
only upon the affirmative vote of at least 75% of the total number of directors
as fixed in accordance with Section 1 of Article V of these By-Laws.
b. By Action of the Stockholders
Unless a greater vote is specifically required by the laws of the State
of Florida, or a greater or different vote is required by the provisions of the
Restated Articles of Incorporation, the stockholders may alter, amend or repeal
these By-Laws, or adopt such other By-Laws as in their judgment may be advisable
for the administration or regulation of the management and affairs of the
Corporation, to the extent not inconsistent with the laws of the State of
Florida or the Restated Articles of Incorporation, at any regular meeting of the
stockholders (or at any special meeting thereof duly called for that purpose in
accordance with the provisions of these By-Laws), only upon the affirmative vote
of at least 75% of the voting power of all the shares of the Corporation
entitled to vote generally in the election of directors, voting together as a
single class.
ARTICLE XIV
Continuing Effect of By-Law Provisions
Any provision contained in these By-Laws which, at the time of its
adoption, was authorized or permitted by applicable law shall continue to remain
in full force and effect until such time as such provision is specifically
amended in accordance with these By-Laws, notwithstanding any subsequent
modification of such applicable law (except to the extent such By-Law provision
expressly provides for its modification by or as a result of any such
subsequently enacted law).
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EXHIBIT 10.11
PLEASE READ CAREFULLY AS THIS DOCUMENT INCLUDES
A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS
SEVERANCE AGREEMENT AND RELEASE
THIS SEVERANCE AGREEMENT AND RELEASE, dated as of January 18, 2000, is
between RYDER TRUCK RENTAL, INC. (the "Company"), and JAMES B. GRIFFIN
("Employee").
WITNESSETH:
WHEREAS, the Company has employed Employee in a managerial capacity;
and
WHEREAS, Employee and the Company now desire to terminate Employee's
employment relationship with the Company;
NOW, THEREFORE, in consideration of the following terms, covenants and
conditions, the Company and Employee agree as follows:
1. (a) TERMINATION OF SEVERANCE AGREEMENT. The Company and Employee agree that
the Change of Control Severance Agreement dated as of May 1, 1996 and the
Severance Agreement dated as of the same date which provides severance benefits
to Employee in the event of Employee's termination under specified circumstances
(the "1996 Agreements") shall be terminated as of the date Employee terminates
his employment with the Company. Neither the Company nor Employee shall have any
further obligations under the 1996 Agreements. Effective as of Employee's Last
Day Worked (as defined below), Employee will resign as an officer and/or
director of the Company and/or its subsidiaries or affiliates and, to the extent
applicable, from all committees of which Employee is a member. Employee agrees
to sign the attached letter of resignation immediately upon Employee's Last Day
Worked.
(b) TERM AND SEVERANCE PAYMENTS. The employment of Employee is
terminated as of March 15, 2000 ("Employee's Last Day Worked"). The Company
shall continue Employee's current salary payments as severance pay on the
fifteenth and last day of each month for a thirty-six (36) month period
beginning on the day following Employee's Last Day Worked and terminating on
March 15, 2003 (the "Severance Period"), unless terminated sooner pursuant to
Paragraph 27. Provided, however, that except for Employee's vacation
entitlement, no payments will be made under this Severance Agreement and Release
until the end of the Revocation Period, as defined in Paragraph 34 hereof.
Notwithstanding the foregoing, in the event Employee obtains another
position with the Company, or any of its subsidiaries or affiliates, after the
execution of this Severance Agreement and Release, but prior to the last day of
the Severance Period, regardless of whether such position is on a temporary,
part-time, full-time, or consulting basis, Employee understands and agrees that
all severance payments will cease immediately and that all liabilities and
obligations hereunder shall terminate, except as provided in Paragraph 29.
<PAGE>
2. VACATION ENTITLEMENT. Employee has forty-two (42) calendar days of unused and
accrued vacation entitlement and shall be paid in a lump sum for such
entitlement, less any vacation taken prior to Employee's Last Day Worked, no
later than five (5) days following Employee's Last Day Worked.
3. MEDICAL AND DENTAL BENEFITS. The Company's health care program benefits will
be provided in accordance with the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, ("COBRA"), and the terms of the Company's health care
program, as it may be amended from time to time.
Until the first to occur of (i) the last day of the Severance Period,
(ii) the date Employee ceases the required employee contributions, or (iii) the
date Employee becomes eligible for medical and/or dental benefits as an employee
of another employer, Employee shall pay a pre-tax contribution for such coverage
at the then current employee contribution rates and the Company shall pay the
balance of the COBRA premiums. Thereafter, if Employee is eligible and wishes to
continue Employee's COBRA coverage, Employee shall be solely responsible for
payment of the entire COBRA premium.
4. LIFE INSURANCE AND SPLIT DOLLAR LIFE INSURANCE.
(a) LIFE INSURANCE. Coverage under the Company's group life insurance
plan and/or additional life insurance policy, if applicable, will continue until
the first to occur of (i) the last day of the Severance Period, (ii) the date
Employee becomes eligible for such coverage as an employee of another employer,
or (iii) for additional life insurance only, the date Employee effectively
cancels the premium deduction taken from Employee's severance pay.
Employee will continue to be covered by the Company's group life
insurance plan and any additional life insurance, if applicable, during each
plan's conversion privilege period. Information concerning the conversion
privilege to an individual policy may be obtained by directly contacting and
arranging the conversion through the Standard Insurance Company of Oregon or its
successor carrier.
(b) SPLIT DOLLAR LIFE INSURANCE. If Employee is covered by the
Company's split-dollar life insurance policy as of the date of this Severance
Agreement and Release, the Company shall continue and pay for Employee's
coverage until the end of the Severance Period. At the end of the Severance
Period, the Company will recover its collateral interest in the policy and
Employee shall have the option to (i) retain the policy and continue its life
insurance death benefit or (ii) surrender the policy for its remaining cash
surrender value, if any. If Employee elects to continue the life insurance death
benefit, Employee may be required to make additional premium payments. Employee
should contact Ryder System, Inc.'s Executive Vice President, Human Resources,
to ascertain whether any premiums may be required.
5. SHORT-TERM DISABILITY; LONG-TERM DISABILITY; AND SUPPLEMENTAL LONG TERM
DISABILITY INSURANCE.
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(a) SHORT-TERM DISABILITY. Coverage under the Company's Short-term
Disability program will cease as of Employee's Last Day Worked unless already on
benefit. Employee shall not be eligible to receive both severance payments and
Short-term Disability payments at the same time.
(b) LONG-TERM DISABILITY. Coverage under the Company's Long-term
Disability insurance plan will cease the last day of the month in which the
Employee worked as an active employee. The Employee may elect to convert his
Long-term disability coverage during the plan's conversion privilege period,
which is the thirty-one (31) days following the last day of the coverage as
defined above. During such period, Employee may convert the coverage to an
individual policy in accordance with conversion provisions by contacting the
Benefits Service Center at 800-373-7300.
(c) SUPPLEMENTAL LONG-TERM DISABILITY INSURANCE. The cost of Employee's
Supplemental Long-term Disability insurance will continue to be paid for by the
Company through the last day of the Severance Period, provided Employee remains
enrolled in the underlying basic long-term disability coverage with the Standard
Insurance Company of Oregon, or its successor carrier, or has other coverage
with an equivalent benefit. If Employee obtains other disability coverage during
the Severance Period and/or no longer participates in the Company's basic
long-term disability insurance plan, Employee must advise the Company of the
amount of coverage Employee has with the new carrier for purposes of adjusting
the coverage provided under the Supplemental Long-term Disability insurance.
6. BUSINESS TRAVEL ACCIDENT INSURANCE. Coverage under the Company's Business
Travel Accident Insurance Plan will cease as of Employee's Last Day Worked.
7. RETIREMENT PLAN. Employee will continue to participate in the Company's
retirement plan for a thirteen (13) week period following Employee's Last Day
Worked (equal to one (1) week for each full year of service with the Company,
subject to a maximum of thirteen (13) weeks). Employee has met the vesting
requirements of the Company's retirement plan and is eligible to receive
retirement benefits in accordance with plan provisions.
8. HEALTH OR DEPENDENT DAY CARE REIMBURSEMENT ACCOUNTS. If Employee is a
participant in the Health Care Reimbursement Account, Employee's participation
will continue in accordance with the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, ("COBRA"), and the terms of the Health Care
Reimbursement Account, as it may be amended from time to time.
Until the first to occur of (i) the last day of the Severance Period,
or (ii) the date Employee ceases the required employee contributions, Employee
shall pay pre-tax contributions for such participation at the Employee's current
contribution rate and the Company shall pay the balance of the COBRA premiums.
Thereafter, if Employee is eligible and wishes to continue Employee's COBRA
participation, Employee shall be solely responsible for payment of the entire
COBRA premium on an after-tax basis.
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If Employee is a participant in the Dependent Day Care Reimbursement
Account, Employee may continue to participate until the earlier to occur of (i)
the end of the Severance Period, or (ii) the end of the current Plan year.
Claims in connection with the Health or Dependent Day Care
Reimbursement Accounts must be filed in accordance with Plan provisions. Any
questions regarding continued participation in such Accounts should be directed
to Ryder System, Inc.'s Compensation and Benefits Plan Administrator.
9. EMPLOYEE SAVINGS PLAN; DEFERRED COMPENSATION PLAN.
(a) EMPLOYEE SAVINGS PLAN. If applicable, Employee will continue to
participate in the Ryder System, Inc. Employee Savings Plan until the first to
occur of (i) the last day of the Severance Period, or (ii) the last day of the
thirteenth week of the Severance Period. If the value of Employee's account is
$5,000 or less, a lump sum distribution will be made pursuant to plan
provisions. If the value of Employee's account is greater than $5,000,
Employee's account will be maintained in the Ryder System, Inc. Employee Savings
Plan unless and until the Employee requests a distribution from the Plan or a
distribution is otherwise required by plan provisions or law. Employee should
direct any questions regarding the Ryder System, Inc. Employee Savings Plan to
the Plan Administrator.
(b) DEFERRED COMPENSATION PLAN. If applicable, Employee will continue
to participate in the Ryder System, Inc. Deferred Compensation Plan until the
first to occur of (i) the last day of the Severance Period, or (ii) the last day
of the thirteenth week of the Severance Period. Employee's account will be
maintained in the Ryder System, Inc. Deferred Compensation Plan. The vested
portion of Employee's account shall be distributed on the January 1 following
Employee's Last Day Worked or after the last day of the Severance Period or as
soon as administratively practicable thereafter. Such distribution shall be made
in accordance with Employee's election and enrollment forms on file with the
plan.
10. STOCK PLANS. Employee must exercise stock options granted pursuant to any of
the Company's stock option plans and vested on Employee's "Termination Date"
within the period following Employee's "Termination Date" specified by the
applicable stock option agreement. Only for purposes of the Ryder System, Inc.
1980 and 1995 Stock Incentive Plans the phrase "Termination Date" shall mean the
end of the Severance Period with respect to Non-Qualified Stock Options granted
pursuant to such plans, and Employee's Last Day Worked with respect to Incentive
Stock Options granted thereunder.
11. INCENTIVE COMPENSATION. Employee shall receive a (i) bonus multiple payment
in the amount of Six Hundred Thirty-four Thousand Seven Hundred Thirty-six
Dollars ($634,736) and (ii) a tenure-related cash bonus payment in the amount of
Three Hundred Seventeen Thousand Three Hundred Sixty-eight Dollars ($317,368.00)
no later than five (5) business days following the later to occur of (i)
Employee's Last Day Worked, or (ii) the end of the Revocation Period. Otherwise,
Employee is not entitled to receive any bonus multiple or cash bonus payment
pursuant to any other incentive compensation plan of the Company.
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12. OUTPLACEMENT; PERQUISITE AND FINANCIAL PLANNING/TAX PREPARATION ALLOWANCE;
COMPANY EQUIPMENT.
(a) OUTPLACEMENT. The Company shall provide Employee with a program of
professional outplacement services mutually agreed to by the Company and
Employee. In addition, the Company shall reimburse Employee for documented and
approved incidental outplacement expenses directly related to job search such as
resume mailing and interviewing trips subject to a maximum cost of Twenty
Thousand Dollars ($20,000.00).
Professional outplacement services and/or the reimbursed incidental
outplacement expense allowance shall only be available to Employee after the end
of the Revocation Period, as defined in Paragraph 34 hereof, and until such date
as Employee secures employment with another employer or becomes self-employed,
or the end of the approved program, whichever occurs first. In addition,
Employee shall not be entitled to receive cash in lieu of the professional
outplacement services or reimbursed incidental outplacement expense allowance.
(b) PERQUISITE AND FINANCIAL PLANNING/TAX PREPARATION ALLOWANCE. The
Company shall provide Employee, if not yet paid, with the following allowances
for which Employee would have been entitled to receive payment or reimbursement
pursuant to the plans and programs of the Company:
o Perquisite allowance for calendar year 2001; and
o Financial planning/tax preparation for calendar years 2000 and
2001.
(c) COMPANY EQUIPMENT. As soon as practicable before Employee's Last
Day Worked, Employee shall return to the Company all of the Company's property,
documents, and equipment currently in Employee's possession or under Employee's
control, if any.
13. COMPANY CAR ALLOWANCE. Employee shall receive a Company car allowance of
Eight Hundred Dollars ($800) per month during the Severance Period.
14. OTHER BENEFITS. Any benefits not specifically stated in this Severance
Agreement and Release to continue beyond Employee's Last Day Worked shall cease
on Employee's Last Day Worked, unless provided otherwise in the relevant plan or
policy or by law.
15. UNEMPLOYMENT COMPENSATION. Should Employee apply for Unemployment Benefits
and should the Company be requested to complete any documents in connection
therewith, the Company shall complete such necessary documents and will not
contest Employee's receipt of such benefits.
16. COVENANT OF CONFIDENTIALITY. Employee agrees that Employee will keep
confidential and not divulge to any other party any of the Company's, Ryder
System, Inc.'s or their subsidiaries' or affiliates' confidential information,
trade and business secrets, including, but not limited to, such
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matters as costs, profits, markets, sales, products, product lines, key
personnel, pricing policies, operational methods, computer programs, processes
or services, bids and quotations, customer, vendor and supplier lists, contracts
with other parties, customer requirements, suppliers, plans for future
developments, and other business affairs and methods, and other information not
readily available to the public, except as required by law. Additionally,
Employee agrees that, upon Employee's termination of employment, Employee shall
promptly return to the Company any and all confidential and proprietary
information that is in Employee's possession.
17. COVENANT OF NON-SOLICITATION. During the thirty-six (36) months following
the Employee's employment, Employee shall not directly or indirectly in any
manner or capacity whatsoever:
(a) take away, interfere with relations with, divert or attempt to
divert from the Company, Ryder System, Inc., or any of their subsidiaries or
affiliates any business with any customer or account which (i) has been
solicited or serviced within one (1) year prior to the termination of Employee's
employment or (ii) with which the Employee had any contact or association; which
was under the supervision of Employee, or the identity of which was learned by
Employee as a result of Employee's employment with the Company, Ryder System,
Inc., or any of their subsidiaries or affiliates; and (iii) which remains a
customer at the time of the termination of employment, or
(b) induce or cause any Employee or independent contractor of the
Company, Ryder System, Inc., or any of their subsidiaries or affiliates to leave
his/her employment or refrain from providing services to the Company, Ryder
System, Inc., or any of their subsidiaries or affiliates.
18. COVENANT OF NON-DISPARAGEMENT AND COOPERATION. Employee agrees not to make
any remarks disparaging the conduct or character of the Company, Ryder System,
Inc. or any of their subsidiaries or affiliates, their agents, employees,
officers, directors, successors or assigns ("Ryder"). In addition, Employee
agrees to cooperate with Ryder in any litigation or administrative proceedings
(e.g., EEOC charges) involving any matters with which Employee was involved
during Employee's employment with the Company. The Company shall reimburse
Employee for travel and reasonable related expenses such as lodging,
transportation and meals approved by the Company incurred in providing such
assistance.
Further, Employee does not waive any rights under this Severance
Agreement and Release or any rights to indemnification from the Company under
the applicable provisions of the Company's articles of incorporation or by-laws,
under applicable liability insurance policies, or pursuant to the provisions of
the Florida General Corporation Act (Chapter 607, Florida Statutes).
19. COVENANT AGAINST COMPETITION. During the thirty-six (36) months following
Employee's Last Day Worked, Employee shall not engage or become a partner,
director, officer, principal, or Employee in the same or similar capacity as
Employee worked for the Company, Ryder System, Inc., and/or any of their
subsidiaries or affiliates directly or indirectly, in/for any business,
proprietorship, association, firm or corporation not owned or controlled by the
Company; Ryder System, Inc.; and/or any of their subsidiaries or affiliates
which is engaged or proposes to engage or hereafter engages in a business
competitive directly or indirectly with the business conducted by the
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Company; Ryder System, Inc.; and/or any of their subsidiaries or affiliates in
any geographic area where Employee worked or had customer contact without the
prior written consent of the Company's President. However, Employee is not
prohibited from owning one percent (1%) or less of the outstanding capital stock
of any corporation whose stock is listed on a national securities exchange.
20. SPECIFIC REMEDY. Employee acknowledges and agrees that if Employee commits a
material breach of the Covenant of Confidentiality (Paragraph 16), Covenant of
Non-Solicitation (Paragraph 17), Covenant of Non-Disparagement and Cooperation
(Paragraph 18) or Covenant Against Competition (Paragraph 19), the Company shall
have the right to have the obligations of Employee specifically enforced by any
court having appropriate jurisdiction on the grounds that any such breach will
cause irreparable injury to the Company, and that money damages will not provide
an adequate remedy to the Company. Employee further acknowledges and agrees that
the obligations contained in Paragraphs 16, 17, 18, and 19 of this Severance
Agreement and Release are fair, do not unreasonably restrict Employee's future
employment and business opportunities, and are commensurate with the
compensation arrangements set out in this Severance Agreement and Release.
21. APPLICABLE LAW. This Severance Agreement and Release shall be governed by
and construed according to the laws of the State of Florida, notwithstanding the
conflict of laws principles applied in that jurisdiction.
22. WITHHOLDING AND TAXATION. All payments under this Severance Agreement and
Release shall be less applicable withholding taxes and other proper deductions
consented to in writing by Employee or required by applicable law or regulation.
Additionally, the payments and benefits under this Severance Agreement and
Release may result in imputed income to Employee and may be included in either
Employee's W-2 earnings statements or 1099 statements.
23. ASSIGNMENT. This Severance Agreement and Release is personal to Employee and
Employee does not have the right to assign this Severance Agreement and Release
or any interest herein. This Severance Agreement and Release shall be binding on
and inure to the benefit of the successors and assigns of the Company.
24. SEVERABILITY. In the event that one or more terms or provisions of this
Severance Agreement and Release are found to be invalid or unenforceable for any
reason or to any extent, each remaining term and provision shall continue to be
valid and effective and shall be enforceable to the fullest extent permitted by
law.
25. UNSECURED, UNFUNDED OBLIGATIONS. The payments and benefits provided to
Employee pursuant to this Severance Agreement and Release may be unsecured,
unfunded obligations of the Company.
26. DEATH OF EMPLOYEE. If Employee dies during the Severance Period, this
Severance Agreement and Release will end at the conclusion of the month in which
the death occurs and only the payment owed by the Company to Employee in the
month of death will be paid to the estate of
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Employee. Death of the Employee during the Severance Period will cause the
payment in Paragraph 4 to be made, if applicable, pursuant to the terms and
conditions of the Company's group life insurance plan.
27. BREACH OF THE AGREEMENT. Except as provided in Paragraph 29 ("Survival"),
the Severance Period, this Severance Agreement and Release, and all liabilities
and obligations hereunder, shall terminate on the date Employee commits a
material breach of the provisions of this Severance Agreement and Release.
28. ARBITRATION. Should any dispute arise relating to the meaning or application
of this Severance Agreement and Release, such dispute shall be settled in Miami,
Florida, or another mutually agreed upon location in accordance with the rules
of the American Arbitration Association applicable to the resolution of
employment disputes. Judgment shall be entered and enforced in a court of
competent jurisdiction.
29. SURVIVAL. Paragraphs 17 ("Covenant of Non-Solicitation) and 19 ("Covenant
Against Competition") of this Severance Agreement and Release shall survive
termination for a material breach by Employee of the provisions of this
Severance Agreement and Release for the full period set forth in Paragraphs 17
and 19. Paragraphs 16 ("Covenant of Confidentiality"), 18 ("Covenant of
Non-Disparagement and Cooperation"), 20 ("Specific Remedy"), and 31 ("Release")
shall survive termination of this Severance Agreement and Release for any
reason.
30. COUNTERPARTS. This Severance Agreement and Release may be executed in any
number of counterparts and/or duplicate originals, any of which shall be deemed
to be an original, and all of which together shall be deemed one and the same
document.
31. RELEASE. FOR AND IN CONSIDERATION OF THE SEVERANCE BENEFITS PROVIDED TO
EMPLOYEE BY THE COMPANY, EMPLOYEE, ON BEHALF OF EMPLOYEE, EMPLOYEE'S HEIRS,
EXECUTORS, SUCCESSORS AND ASSIGNS, HEREBY RELEASES AND FOREVER DISCHARGES RYDER
FROM ANY AND ALL CLAIMS, DEMANDS, OBLIGATIONS, LOSSES, CAUSES OF ACTION, COSTS,
EXPENSES, ATTORNEYS' FEES AND ALL LIABILITIES WHATSOEVER, WHETHER KNOWN OR
UNKNOWN, SUSPECTED OR UNSUSPECTED, FIXED OR CONTINGENT, WHICH EMPLOYEE HAS OR
MAY HAVE AGAINST RYDER AS A RESULT OF EMPLOYEE'S EMPLOYMENT BY AND SUBSEQUENT
TERMINATION AS AN EMPLOYEE OF THE COMPANY, UP TO THE LATER TO OCCUR OF (I)
EMPLOYEE'S LAST DAY WORKED, OR (II) THE DATE OF THE EXECUTION OF THIS SEVERANCE
AGREEMENT AND RELEASE. THIS INCLUDES BUT IS NOT LIMITED TO CLAIMS AT LAW OR
EQUITY OR SOUNDING IN CONTRACT (EXPRESS OR IMPLIED) OR TORT ARISING UNDER
FEDERAL, STATE, OR LOCAL LAWS PROHIBITING AGE, SEX, RACE, DISABILITY, VETERAN OR
ANY OTHER FORMS OF DISCRIMINATION. THIS FURTHER INCLUDES ANY AND ALL CLAIMS
ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT, THE AMERICANS WITH
DISABILITIES ACT OF 1990, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, OR THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT (ERISA), AS AMENDED, OR CLAIMS GROWING
OUT OF ANY LEGAL
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RESTRICTIONS ON THE COMPANY'S RIGHT TO TERMINATE ITS EMPLOYEES. EMPLOYEE
COVENANTS AND AGREES THAT EMPLOYEE WILL NOT SUE OR FILE ANY LAWSUIT OR ACTION
AGAINST RYDER IN THE FUTURE WITH RESPECT TO ANY CLAIM OR CAUSE OF ACTION
RELEASED AS PART OF THIS SEVERANCE AGREEMENT AND RELEASE. EMPLOYEE FURTHER
AGREES THAT IF EMPLOYEE VIOLATES THIS COVENANT OR ANY OTHER PROVISION OF THIS
SEVERANCE AGREEMENT AND RELEASE, EMPLOYEE SHALL INDEMNIFY RYDER FOR ALL COSTS
AND ATTORNEYS FEES INCURRED BY RYDER IN ENFORCING THIS SEVERANCE AGREEMENT AND
RELEASE. IN ADDITION, EMPLOYEE SHALL BE INDEMNIFIED BY THE COMPANY FOR ALL
ATTORNEYS FEES INCURRED BY EMPLOYEE IN ENFORCING THIS SEVERANCE AGREEMENT AND
RELEASE IF IT IS DETERMINED BY A COURT OF COMPETENT JURISDICTION THAT THE
COMPANY VIOLATED THIS COVENANT OR ANY OTHER PROVISION OF THIS SEVERANCE
AGREEMENT AND RELEASE.
32. NON-ADMISSION. This Severance Agreement and Release shall not in any way be
construed as an admission by the Company of any unlawful or wrongful acts
whatsoever against Employee or any other person, and the Company specifically
disclaims any liability to or wrongful acts against Employee or any other
person, on the part of Ryder.
33. ENTIRE AGREEMENT. Employee understands that this document constitutes the
entire agreement concerning severance pay and related benefits between Employee
and the Company, that this document may not be modified except by a written
document signed by Employee and the Company, and that no other promises have
been made concerning the subject matter covered herein. Employee understands and
agrees that the Company has no obligations to Employee beyond the terms of this
Severance Agreement and Release and Employee acknowledges that Employee has not
relied upon any representations or statements, written or oral, not set forth in
this document. Employee acknowledges that this Severance Agreement and Release
supersedes any and all prior agreements, representations and understandings
between Employee and the Company. Employee further acknowledges that the
severance pay and benefits set forth in this Severance Agreement and Release
(with the exception of any accrued vacation) are not otherwise owed to Employee
as a result of Employee's employment with the Company, and therefore are a
material inducement for Employee's execution of this Severance Agreement and
Release.
34. REVOCATION PERIOD. EMPLOYEE UNDERSTANDS AND ACKNOWLEDGES THAT EMPLOYEE HAS
SEVEN (7) CALENDAR DAYS FOLLOWING EMPLOYEE'S EXECUTION OF THIS SEVERANCE
AGREEMENT AND RELEASE TO REVOKE EMPLOYEE'S ACCEPTANCE OF THIS SEVERANCE
AGREEMENT AND RELEASE (THE "REVOCATION PERIOD") AND THAT THIS SEVERANCE
AGREEMENT AND RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
REVOCATION PERIOD HAS EXPIRED. REVOCATION OF THIS SEVERANCE AGREEMENT AND
RELEASE MUST BE MADE BY DELIVERING A WRITTEN NOTICE OF REVOCATION TO VICKI A.
O'MEARA. FOR THIS REVOCATION TO BE EFFECTIVE, WRITTEN NOTICE MUST BE RECEIVED BY
VICKI A. O'MEARA NO LATER THAN THE CLOSE OF BUSINESS ON THE SEVENTH DAY AFTER
EMPLOYEE SIGNS THIS SEVERANCE AGREEMENT AND RELEASE. IN ADDITION, EMPLOYEE
UNDERSTANDS AND ACKNOWLEDGES THAT NO MONIES WILL BE PAID UNDER THE TERMS OF THIS
SEVERANCE AGREEMENT AND RELEASE UNTIL THE END OF THE REVOCATION PERIOD, EXCEPT
FOR EMPLOYEE'S VACATION ENTITLEMENT, IF ANY.
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EMPLOYEE CERTIFIES THAT EMPLOYEE HAS FULLY READ, HAS RECEIVED AN EXPLANATION OF,
HAS NEGOTIATED AND COMPLETELY UNDERSTANDS THE PROVISIONS OF THIS SEVERANCE
AGREEMENT AND RELEASE, THAT EMPLOYEE HAS BEEN ADVISED BY THE COMPANY TO CONSULT
WITH AN ATTORNEY BEFORE SIGNING THIS SEVERANCE AGREEMENT AND RELEASE, THAT
EMPLOYEE HAS BEEN GIVEN AT LEAST TWENTY-ONE (21) CALENDAR DAYS TO REVIEW AND
CONSIDER THE PROVISIONS OF THIS SEVERANCE AGREEMENT AND RELEASE, AND THAT
EMPLOYEE IS SIGNING FREELY AND VOLUNTARILY, WITHOUT DURESS, COERCION OR UNDUE
INFLUENCE.
WITNESSES: JAMES B. GRIFFIN
("Employee")
/s/ VICTORIA NAVARRO 3/7/00 /s/ JAMES B. GRIFFIN 3/7/00
- ----------------------------------------- -----------------------------------
Signature Date Signature Date
Victoria Navarro
- -----------------------------------------
Print Name Social Security No. ###-##-####
11521 NW 18 St., Pembroke Pines, FL 33026
- -----------------------------------------
Address
/s/ JENNIFER FERNANDEZ 3/7/00
- -----------------------------------------
Signature Date
Jennifer Fernandez
- -----------------------------------------
Print Name
2845 Morning Glory Cir., Davie, FL 33328
- -----------------------------------------
Address
ATTEST: RYDER TRUCK RENTAL, INC.
("Company")
/s/ V. AUBREY MINCE 3/7/00 By: /s/ VICKI O'MEARA
- ----------------------------------------- --------------------------------
Signature Date Signature Date
ASSISTANT SECRETARY EVP, GENERAL COUNSEL AND SECRETARY
- ----------------------------------------- -----------------------------------
Title Title
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January 18, 2000
TO THE BOARD OF DIRECTORS
OF RYDER SYSTEM, INC.
Dear Members of the Board:
Effective March 15, 2000, I hereby resign as an officer and/or director of Ryder
System, Inc. and/or its subsidiaries and affiliates and, to the extent
applicable, from all committees of which I am a member.
Sincerely,
/s/ JAMES B. GRIFFIN
-------------------------------
James B. Griffin
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PLEASE READ CAREFULLY AS THIS DOCUMENT INCLUDES
A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS
SEVERANCE AGREEMENT AND RELEASE
THIS SEVERANCE AGREEMENT AND RELEASE, dated as of January 18, 2000 is
between RYDER SYSTEM, INC. (the "Company") and EDWIN A. HUSTON ("Employee").
WITNESSETH:
WHEREAS, the Company has employed Employee in a managerial capacity;
and
WHEREAS, Employee and the Company now desire to terminate Employee's
employment relationship with the Company;
NOW, THEREFORE, in consideration of the following terms, covenants and
conditions, the Company and Employee agree as follows:
1. (a) TERMINATION OF SEVERANCE AGREEMENT. The Company and Employee agree
that the Change of Control Severance Agreement dated as of May 1, 1996 and the
Severance Agreement dated as of the same date which provides severance benefits
to Employee in the event of Employee's termination under specified circumstances
(the "1996 Agreements") are hereby terminated as of the date of this Severance
Agreement and Release. Effective as of Employee's Last Day Worked (as defined
below), Employee will resign as an officer and/or director of the Company and/or
its subsidiaries or affiliates and, to the extent applicable, from all
committees of which Employee is a member. Employee agrees to sign the attached
letter of resignation immediately upon Employee's Last Day Worked.
(b) TERM AND SEVERANCE PAYMENTS. The employment of Employee is
terminated as of January 31, 2000 ("Employee's Last Day Worked"). The Company
shall continue Employee's current salary payments as severance pay on the
fifteenth and last day of each month for a thirty-six (36) month period
beginning on the day following Employee's Last Day Worked and terminating on
January 31, 2003 (the "Severance Period"), unless terminated sooner pursuant to
Paragraph 27. Provided, however, that except for Employee's vacation
entitlement, no payments will be made under this Severance Agreement and Release
until the end of the Revocation Period, as defined in Paragraph 34 hereof.
Notwithstanding the termination of employment, Employee agrees to
assist the Company in recruiting an executive level human resources professional
and to facilitate the transition and remain as Vice Chair of Human Resources
until his successor has been hired.
Notwithstanding the foregoing, in the event Employee obtains another
position with the Company, or any of its subsidiaries or affiliates, after the
execution of this Severance Agreement and Release but prior to the last day of
the Severance Period, regardless of whether such position is on
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a temporary, part-time, full-time, or consulting basis, Employee understands and
agrees that all severance payments will cease immediately and that all
liabilities and obligations hereunder shall terminate, except as provided in
Paragraph 29.
2. VACATION ENTITLEMENT. Employee has twenty-eight (28) calendar days of unused
and accrued vacation entitlement and shall be paid in a lump sum for such
entitlement, less any vacation taken prior to Employee's Last Day Worked, no
later than five (5) days following Employee's Last Day Worked.
3. MEDICAL AND DENTAL BENEFITS. Employee is eligible to receive continued health
benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, ("COBRA"), and the terms of the Company's health care program, as it
may be amended from time to time. In addition, Employee shall be eligible to
participate in the Company's early retiree medical plan. If Employee chooses to
participate, benefits will be provided in accordance with the terms of such
plan, as it may be amended from time to time.
Until the first to occur of (i) the last day of the Severance Period,
(ii) the date Employee ceases the required employee contributions, or (iii) the
date Employee becomes eligible for medical and/or dental benefits as an employee
of another employer, Employee shall pay a pre-tax contribution for such coverage
at the then current employee contribution rates and the Company shall pay the
balance of the COBRA premiums. Thereafter, if Employee is eligible and wishes to
continue Employee's COBRA coverage, Employee shall be solely responsible for
payment of the entire COBRA premium.
4. LIFE INSURANCE AND SPLIT DOLLAR LIFE INSURANCE.
(a) LIFE INSURANCE. Coverage under the Company's group life insurance
plan and/or additional life insurance policy, if applicable, will continue until
the first to occur of (i) the last day of the Severance Period, (ii) the date
Employee becomes eligible for such coverage as an employee of another employer,
or (iii) for additional life insurance only, the date Employee effectively
cancels the premium deduction taken from Employee's severance pay.
Employee will continue to be covered by the Company's group life
insurance plan and any additional life insurance, if applicable, during each
plan's conversion privilege period. Information concerning the conversion
privilege to an individual policy may be obtained by directly contacting and
arranging the conversion through the Standard Insurance Company of Oregon or its
successor carrier.
(b) SPLIT DOLLAR LIFE INSURANCE. If Employee is covered by the
Company's split-dollar life insurance policy as of the date of this Severance
Agreement and Release, the Company shall continue and pay for Employee's
coverage until the end of the Severance Period. At the end of the Severance
Period, the Company will recover its collateral interest in the policy and
Employee shall have the option to (i) retain the policy and continue its life
insurance death benefit or (ii) surrender the policy for its remaining cash
surrender value, if any. If Employee elects to continue the life insurance death
benefit, Employee may be required to make additional premium payments.
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Employee should contact Ryder System, Inc.'s Executive Vice President, Human
Resources, to ascertain whether any premiums may be required.
At retirement, which is Employee's termination of employment on or
after reaching age 55 with ten years of service, Employee will have a projected
post-retirement life insurance coverage equal to 50% of the life insurance
coverage Employee had immediately prior to retirement. At retirement, the
Company will be repaid, from the cash surrender value of the policy, an amount
equal to the aggregate net premiums that it has paid on Employee's policy. The
remaining cash surrender value will be owned by Employee, and Employee will have
the right to maintain the policy for death benefit coverage or surrender the
policy for its remaining cash value.
5. SHORT-TERM DISABILITY; LONG-TERM DISABILITY; AND SUPPLEMENTAL LONG TERM
DISABILITY INSURANCE.
(a) SHORT-TERM DISABILITY. Coverage under the Company's Short-term
Disability program will cease as of Employee's Last Day Worked unless already on
benefit. Employee shall not be eligible to receive both severance payments and
Short-term Disability payments at the same time.
(b) LONG-TERM DISABILITY. Coverage under the Company's Long-term
Disability insurance plan will cease the last day of the month in which the
Employee worked as an active employee. The Employee may elect to convert his
Long-term disability coverage during the plan's conversion privilege period,
which is the thirty-one (31) days following the last day of the coverage as
defined above. During such period, Employee may convert the coverage to an
individual policy in accordance with conversion provisions by contacting the
Benefits Service Center at 800/373-7300.
(c) SUPPLEMENTAL LONG-TERM DISABILITY INSURANCE. The cost of Employee's
Supplemental Long-term Disability insurance will continue to be paid for by the
Company through the last day of the Severance Period, provided Employee remains
enrolled in the underlying basic long-term disability coverage with the Standard
Insurance Company of Oregon, or its successor carrier, or has other coverage
with an equivalent benefit. If Employee obtains other disability coverage during
the Severance Period and/or no longer participates in the Company's basic
long-term disability insurance plan, Employee must advise the Company of the
amount of coverage Employee has with the new carrier for purposes of adjusting
the coverage provided under the Supplemental Long-term Disability insurance.
6. BUSINESS TRAVEL ACCIDENT INSURANCE. Coverage under the Company's Business
Travel Accident Insurance Plan will cease as of Employee's Last Day Worked.
7. RETIREMENT PLAN. Employee will continue to participate in the Company's
retirement plan for a thirteen (13) week period following Employee's Last Day
Worked (equal to one (1) week for each full year of service with the Company,
subject to a maximum of thirteen (13) weeks). Employee has met the vesting
requirements of the Company's retirement plan and is eligible to receive
retirement benefits in accordance with plan provisions.
8. HEALTH OR DEPENDENT DAY CARE REIMBURSEMENT ACCOUNTS. If Employee is a
participant in the Health Care Reimbursement Account, Employee's participation
will continue in accordance with
-3-
<PAGE>
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended,
("COBRA"), and the terms of the Health Care Reimbursement Account, as it may be
amended from time to time.
Until the first to occur of (i) the last day of the Severance Period,
or (ii) the date Employee ceases the required employee contributions, Employee
shall pay pre-tax contributions for such participation at the Employee's current
contribution rate and the Company shall pay the balance of the COBRA premiums.
Thereafter, if Employee is eligible and wishes to continue Employee's COBRA
participation, Employee shall be solely responsible for payment of the entire
COBRA premium on an after-tax basis.
If Employee is a participant in the Dependent Day Care Reimbursement
Account, Employee may continue to participate until the earlier to occur of (a)
the end of the Severance Period, or (b) the end of the current Plan year.
Claims in connection with the Health or Dependent Day Care
Reimbursement Accounts must be filed in accordance with Plan provisions. Any
questions regarding continued participation in such Accounts should be directed
to Ryder System, Inc.'s Compensation and Benefits Administrator.
9. EMPLOYEE SAVINGS PLAN; DEFERRED COMPENSATION PLAN.
(a) EMPLOYEE SAVINGS PLAN. If applicable, Employee will continue to
participate in the Ryder System, Inc. Employee Savings Plan until the first to
occur of (i) the last day of the Severance Period, or (ii) the last day of the
thirteenth week of the Severance Period. If the value of Employee's account is
$5,000 or less, a lump sum distribution will be made pursuant to plan
provisions. If the value of Employee's account is greater than $5,000,
Employee's account will be maintained in the Ryder System, Inc. Employee Savings
Plan unless and until the Employee requests a distribution from the Plan or a
distribution is otherwise required by plan provisions or law. Employee should
direct any questions regarding the Ryder System, Inc. Employee Savings Plan to
the Plan Administrator.
(b) DEFERRED COMPENSATION PLAN. If applicable, Employee will continue
to participate in the Ryder System, Inc. Deferred Compensation Plan until the
first to occur of (i) the last day of the Severance Period, or (ii) the last day
of the thirteenth week of the Severance Period. Employee's account will be
maintained in the Ryder System, Inc. Deferred Compensation Plan. The vested
portion of Employee's account shall be distributed on the January 1 following
the last day of the Severance Period or as soon as administratively practicable
thereafter. Such distribution shall be made in accordance with Employee's
election and enrollment forms on file with the plan.
10. STOCK PLANS. Employee must exercise stock options granted pursuant to any of
the Company's stock option plans and vested on Employee's "Termination Date"
within the period following Employee's "Termination Date" specified by the
applicable stock option agreement. Only for purposes of the Ryder System, Inc.
1980 and 1995 Stock Incentive Plans the phrase "Termination Date" shall mean the
end of the Severance Period with respect to Non-Qualified Stock Options granted
pursuant to such plans, and Employee's Last Day Worked with respect to Incentive
Stock Options granted thereunder. For purposes of the 1980 and 1995 Plans, the
phrase "Termination Date" shall mean the end of the Severance Period with
respect to Non-Qualified Stock Options
-4-
<PAGE>
granted pursuant to such plans, unless, on Employee's Last Day Worked, Employee
shall be eligible for retirement in which event the retirement provisions of
such plans shall be applicable.
11. INCENTIVE COMPENSATION. Employee shall receive a (i) bonus multiple payment
in the amount of Three Hundred Twenty Thousand Fifty-four Dollars ($320,054.00)
and (ii) a tenure-related cash bonus payment in the amount of Three Hundred
Twenty Thousand Fifty-four Dollars ($320,054.00) no later than five (5) business
days following the later to occur of (i) Employee's Last Day Worked, or (ii) the
end of the Revocation Period. Otherwise, Employee is not entitled to receive any
bonus multiple or cash bonus payment pursuant to any other incentive
compensation plan of the Company.
12. OUTPLACEMENT; PERQUISITE AND FINANCIAL PLANNING/TAX PREPARATION ALLOWANCE;
COMPANY EQUIPMENT.
(a) OUTPLACEMENT. The Company shall provide Employee with a program of
professional outplacement services approved by the Company through the office of
Right Associates. In addition, the Company shall reimburse Employee for
documented and approved incidental outplacement expenses directly related to job
search such as resume mailing and interviewing trips subject to a maximum cost
of Thirty Thousand Dollars ($30,000.00).
Professional outplacement services and/or the reimbursed incidental
outplacement expense allowance shall only be available to Employee after the end
of the Revocation Period, as defined in Paragraph 34 hereof, and until such date
as Employee secures employment with another employer or becomes self-employed,
or the end of the approved program, whichever occurs first. In addition,
Employee shall not be entitled to receive cash in lieu of the professional
outplacement services or reimbursed incidental outplacement expense allowance.
(b) PERQUISITE AND FINANCIAL PLANNING/TAX PREPARATION ALLOWANCE. The
Company shall provide Employee, if not yet paid, with the following allowances
for which Employee would have been entitled to receive payment or reimbursement
pursuant to the plans and programs of the Company:
o Perquisite allowance for calendar year 2001; and
o Financial planning/tax preparation for calendar year 2000 and 2001.
13. COMPANY CAR ALLOWANCE; COMPANY EQUIPMENT
(a) COMPANY CAR ALLOWANCE. Employee shall receive a Company car
allowance of Eight Hundred Dollars ($800.00) per month during the Severance
Period.
(b) COMPANY EQUIPMENT. As soon as practicable before Employee's Last
Day Worked, Employee shall return to the Company all of the Company's property,
documents, and equipment currently in Employee's possession or under Employee's
control, if any.
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<PAGE>
14. OTHER BENEFITS. Any benefits not specifically stated in this Severance
Agreement and Release to continue beyond Employee's Last Day Worked shall cease
on Employee's Last Day Worked, unless provided otherwise in the relevant plan or
policy or by law.
15. UNEMPLOYMENT COMPENSATION. Should Employee apply for Unemployment Benefits
and should the Company be requested to complete any documents in connection
therewith, the Company shall complete such necessary documents and will not
contest Employee's receipt of such benefits.
16. COVENANT OF CONFIDENTIALITY. Employee agrees that Employee will keep
confidential and not divulge to any other party any of the Company's or its
subsidiaries' or affiliates' confidential information, trade and business
secrets, including, but not limited to, such matters as costs, profits, markets,
sales, products, product lines, key personnel, pricing policies, operational
methods, computer programs, processes or services, bids and quotations,
customer, vendor and supplier lists, contracts with other parties, customer
requirements, suppliers, plans for future developments, and other business
affairs and methods and other information not readily available to the public,
except as required by law. Additionally, Employee agrees that upon Employee's
termination of employment, Employee shall promptly return to the Company any and
all confidential and proprietary information that is in Employee's possession.
17. COVENANT OF NON-SOLICITATION. During the thirty-six (36) months following
the Employee's employment, Employee shall not directly or indirectly in any
manner or capacity whatsoever:
(a) take away, interfere with relations with, divert or attempt to
divert from the Company or any of its subsidiaries or affiliates any business
with any customer or account which (i) has been solicited or serviced within one
(1) year prior to the termination of Employee's employment or (ii) with which
the Employee had any contact or association; which was under the supervision of
Employee, or the identity of which was learned by Employee as a result of
Employee's employment with the Company or any of its subsidiaries or affiliates;
and (iii) which remains a customer at the time of the termination of employment,
or
(b) induce or cause any Employee or independent contractor of the
Company or any of its subsidiaries or affiliates to leave his/her employment or
refrain from providing services to the Company or any of its subsidiaries or
affiliates.
18. COVENANT OF NON-DISPARAGEMENT AND COOPERATION. Employee agrees not to make
any remarks disparaging the conduct or character of the Company or any of its
subsidiaries or affiliates, their current or former agents, employees, officers,
directors, successors or assigns ("Ryder"). In addition, Employee agrees to
cooperate with Ryder in any litigation, administrative proceedings (e.g., EEOC
charges) or other Company related issues involving any matters with which
Employee was involved during Employee's employment with the Company. The Company
shall reimburse Employee for travel expenses approved by the Company incurred in
providing such assistance.
The Company shall also abide by any indemnification obligations stated
in the Company's current by-laws. Further, Employee does not waive any rights
under this Severance Agreement and Release or any rights to indemnification from
the Company under the applicable provisions of the
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<PAGE>
Company's articles of incorporation or by-laws, under applicable liability
insurance policies, or pursuant to the provisions of the Florida General
Corporation Act (Chapter 607, Florida Statutes).
19. COVENANT AGAINST COMPETITION. During the thirty-six (36) months following
Employee's Last Day Worked, Employee shall not engage or become a partner,
director, officer, principal, or Employee in the same or similar capacity as
Employee worked for the Company and/or any of its subsidiaries or affiliates
directly or indirectly, in/for any business, proprietorship, association, firm
or corporation not owned or controlled by the Company and/or any of its
subsidiaries or affiliates which is engaged or proposes to engage or hereafter
engages in a business competitive directly or indirectly with the business
conducted by the Company and/or any of its subsidiaries or affiliates in any
geographic area where Employee worked or had customer contact without the prior
written consent of the Company's President. However, Employee is not prohibited
from owning one percent (1%) or less of the outstanding capital stock of any
corporation whose stock is listed on a national securities exchange.
20. SPECIFIC REMEDY. Employee acknowledges and agrees that if Employee commits a
material breach of the Covenant of Confidentiality (Paragraph 16), Covenant of
Non-Solicitation (Paragraph 17), Covenant of Non-Disparagement and Cooperation
(Paragraph 18) or Covenant Against Competition (Paragraph 19), the Company shall
have the right to have the obligations of Employee specifically enforced by any
court having appropriate jurisdiction on the grounds that any such breach will
cause irreparable injury to the Company, and that money damages will not provide
an adequate remedy to the Company. Employee further acknowledges and agrees that
the obligations contained in Paragraphs 16, 17, 18 and 19 of this Severance
Agreement and Release are fair, do not unreasonably restrict Employee's future
employment and business opportunities, and are commensurate with the
compensation arrangements set out in this Severance Agreement and Release.
21. APPLICABLE LAW. This Severance Agreement and Release shall be governed by
and construed according to the laws of the state of Florida, notwithstanding the
conflict of laws principles applied in that jurisdiction.
22. WITHHOLDING AND TAXATION. All payments under this Severance Agreement and
Release shall be less applicable withholding taxes and other proper deductions
consented to in writing by Employee or required by applicable law or regulation.
Additionally, the payments and benefits under this Severance Agreement and
Release may result in imputed income to Employee and may be included in either
Employee's W-2 earnings statements or 1099 statements.
23. ASSIGNMENT. This Severance Agreement and Release is personal to Employee and
Employee does not have the right to assign this Severance Agreement and Release
or any interest herein. This Severance Agreement and Release shall be binding on
and inure to the benefit of the successors and assigns of the Company.
24. SEVERABILITY. In the event that one or more terms or provisions of this
Severance Agreement and Release are found to be invalid or unenforceable for any
reason or to any extent, each remaining term and provision shall continue to be
valid and effective and shall be enforceable to the fullest extent permitted by
law.
-7-
<PAGE>
25. UNSECURED, UNFUNDED OBLIGATIONS. The payments and benefits provided to
Employee pursuant to this Severance Agreement and Release may be unsecured,
unfunded obligations of the Company.
26. DEATH OF EMPLOYEE. If Employee dies during the Severance Period, this
Severance Agreement and Release will end at the conclusion of the month in which
the death occurs and only the payment owed by the Company to Employee in the
month of death will be paid to the estate of Employee. Death of the Employee
during the Severance Period will cause the payment in Paragraph 4 to be made, if
applicable, pursuant to the terms and conditions of the Company's group life
insurance plan.
27. BREACH OF THE AGREEMENT. Except as provided in Paragraph 29 ("Survival"),
the Severance Period, this Severance Agreement and Release, and all liabilities
and obligations hereunder shall terminate on the date Employee commits a
material breach of the provisions of this Severance Agreement and Release.
Employee shall be provided written notice of a breach along with a 15 day period
to cure the breach before the Company terminates Employee's benefits hereunder.
28. ARBITRATION. Should any dispute arise relating to the meaning or application
of this Severance Agreement and Release, such dispute shall be settled in Miami,
Florida, or another mutually agreed upon location in accordance with the rules
of the American Arbitration Association applicable to the resolution of
employment disputes. Judgment shall be entered and enforced in a court of
competent jurisdiction.
29. SURVIVAL. Paragraphs 17 ("Covenant of Non-Solicitation) and 19 ("Covenant
Against Competition") of this Severance Agreement and Release shall survive
termination for a material breach by Employee of the provisions of this
Severance Agreement and Release for the full period set forth in Paragraphs 17
and 19. Paragraphs 16 ("Covenant of Confidentiality"), 18 ("Covenant of
Non-Disparagement and Cooperation"), 20 ("Specific Remedy"), and 31 ("Release")
shall survive termination of this Severance Agreement and Release for any
reason.
30. COUNTERPARTS. This Severance Agreement and Release may be executed in any
number of counterparts and/or duplicate originals, any of which shall be deemed
to be an original, and all of which together shall be deemed one and the same
document.
31. RELEASE. FOR AND IN CONSIDERATION OF THE SEVERANCE BENEFITS PROVIDED TO
EMPLOYEE BY THE COMPANY, EMPLOYEE, ON BEHALF OF EMPLOYEE, EMPLOYEE'S HEIRS,
EXECUTORS, SUCCESSORS AND ASSIGNS, HEREBY RELEASES AND FOREVER DISCHARGES RYDER
FROM ANY AND ALL CLAIMS, DEMANDS, OBLIGATIONS, LOSSES, CAUSES OF ACTION, COSTS,
EXPENSES, ATTORNEYS' FEES AND ALL LIABILITIES WHATSOEVER, WHETHER KNOWN OR
UNKNOWN, SUSPECTED OR UNSUSPECTED, FIXED OR CONTINGENT, WHICH EMPLOYEE HAS OR
MAY HAVE AGAINST RYDER AS A RESULT OF EMPLOYEE'S EMPLOYMENT BY AND SUBSEQUENT
TERMINATION AS AN EMPLOYEE OF THE COMPANY, UP TO THE LATER TO OCCUR OF (I)
EMPLOYEE'S LAST DAY WORKED, OR (II) THE DATE OF THE EXECUTION OF THIS SEVERANCE
AGREEMENT AND RELEASE.
-8-
<PAGE>
THIS INCLUDES BUT IS NOT LIMITED TO CLAIMS AT LAW OR EQUITY OR SOUNDING IN
CONTRACT (EXPRESS OR IMPLIED) OR TORT ARISING UNDER FEDERAL, STATE, OR LOCAL
LAWS PROHIBITING AGE, SEX, RACE, DISABILITY, VETERAN OR ANY OTHER FORMS OF
DISCRIMINATION. THIS FURTHER INCLUDES ANY AND ALL CLAIMS ARISING UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT, THE AMERICANS WITH DISABILITIES ACT OF 1990,
TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, OR THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT (ERISA), AS AMENDED, OR CLAIMS GROWING OUT OF ANY LEGAL
RESTRICTIONS ON THE COMPANY'S RIGHT TO TERMINATE ITS EMPLOYEES. EMPLOYEE
COVENANTS AND AGREES THAT EMPLOYEE WILL NOT SUE OR FILE ANY LAWSUIT OR ACTION
AGAINST RYDER IN THE FUTURE WITH RESPECT TO ANY CLAIM OR CAUSE OF ACTION
RELEASED AS PART OF THIS SEVERANCE AGREEMENT AND RELEASE. EMPLOYEE FURTHER
AGREES THAT IF EMPLOYEE VIOLATES THIS COVENANT OR ANY OTHER PROVISION OF THIS
SEVERANCE AGREEMENT AND RELEASE, EMPLOYEE SHALL INDEMNIFY RYDER FOR ALL COSTS
AND ATTORNEYS FEES INCURRED BY RYDER IN ENFORCING THIS SEVERANCE AGREEMENT AND
RELEASE. IN ADDITION, EMPLOYEE SHALL BE INDEMNIFIED BY THE COMPANY FOR ALL
ATTORNEYS FEES INCURRED BY EMPLOYEE IN ENFORCING THIS SEVERANCE AGREEMENT AND
RELEASE IF IT IS DETERMINED BY A COURT OF COMPETENT JURISDICTION THAT THE
COMPANY VIOLATED THIS COVENANT OR ANY OTHER PROVISION OF THIS SEVERANCE
AGREEMENT AND RELEASE.
32. NON-ADMISSION. This Severance Agreement and Release shall not in any way be
construed as an admission by the Company of any unlawful or wrongful acts
whatsoever against Employee or any other person, and the Company specifically
disclaims any liability to or wrongful acts against Employee or any other
person, on the part of Ryder.
33. ENTIRE AGREEMENT. Employee understands that this document constitutes the
entire agreement concerning severance pay and related benefits between Employee
and the Company, that this document may not be modified except by a written
document signed by Employee and the Company, and that no other promises have
been made concerning the subject matter covered herein. Employee understands and
agrees that the Company has no obligations to Employee beyond the terms of this
Severance Agreement and Release and Employee acknowledges that Employee has not
relied upon any representations or statements, written or oral, not set forth in
this document. Employee further acknowledges that the severance pay and benefits
set forth in this Severance Agreement and Release (with the exception of any
accrued vacation) are not otherwise owed to Employee as a result of Employee's
employment with the Company, and therefore are a material inducement for
Employee's execution of this Severance Agreement and Release.
34. REVOCATION PERIOD. EMPLOYEE UNDERSTANDS AND ACKNOWLEDGES THAT EMPLOYEE HAS
SEVEN (7) CALENDAR DAYS FOLLOWING EMPLOYEE'S EXECUTION OF THIS SEVERANCE
AGREEMENT AND RELEASE TO REVOKE EMPLOYEE'S ACCEPTANCE OF THIS SEVERANCE
AGREEMENT AND RELEASE (THE "REVOCATION PERIOD") AND THAT THIS SEVERANCE
AGREEMENT AND RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
REVOCATION PERIOD HAS EXPIRED. REVOCATION OF THIS SEVERANCE AGREEMENT AND
RELEASE MUST BE MADE BY DELIVERING A WRITTEN NOTICE OF REVOCATION TO M. ANTHONY
BURNS. FOR THIS REVOCATION TO BE EFFECTIVE, WRITTEN NOTICE MUST BE RECEIVED BY
M. ANTHONY BURNS NO
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<PAGE>
LATER THAN THE CLOSE OF BUSINESS ON THE SEVENTH DAY AFTER EMPLOYEE SIGNS THIS
SEVERANCE AGREEMENT AND RELEASE. IN ADDITION, EMPLOYEE UNDERSTANDS AND
ACKNOWLEDGES THAT NO MONIES WILL BE PAID UNDER THE TERMS OF THIS SEVERANCE
AGREEMENT AND RELEASE UNTIL THE END OF THE REVOCATION PERIOD, EXCEPT FOR
EMPLOYEE'S VACATION ENTITLEMENT.
EMPLOYEE CERTIFIES THAT EMPLOYEE HAS FULLY READ, HAS RECEIVED AN EXPLANATION OF,
HAS NEGOTIATED AND COMPLETELY UNDERSTANDS THE PROVISIONS OF THIS SEVERANCE
AGREEMENT AND RELEASE, THAT EMPLOYEE HAS BEEN ADVISED BY THE COMPANY TO CONSULT
WITH AN ATTORNEY BEFORE SIGNING THIS SEVERANCE AGREEMENT AND RELEASE, THAT
EMPLOYEE HAS BEEN GIVEN AT LEAST TWENTY-ONE (21) CALENDAR DAYS TO REVIEW AND
CONSIDER THE PROVISIONS OF THIS SEVERANCE AGREEMENT AND RELEASE, AND THAT
EMPLOYEE IS SIGNING FREELY AND VOLUNTARILY, WITHOUT DURESS, COERCION OR UNDUE
INFLUENCE.
WITNESSES: EDWIN A. HUSTON
("Employee")
/s/ DIANA L. TIBBETS /s/ EDWIN A. HUSTON 2/15/00
- ----------------------------------- -----------------------------------
Signature Date Signature Date
Diana L. Tibbets 2/15/00
- -----------------------------------
Print Name Social Security No. ###-##-####
6771 Stonemango Rd., Miami Lakes, FL
- -----------------------------------
Address
/s/ LOUISA CHICCARINO 2/15/00
- -----------------------------------
Signature Date
Louisa Chiccarino
- -----------------------------------
Print Name
11955 N.W. 11th Street
Pembroke Pines, FL 33026
- -----------------------------------
Address
ATTEST: RYDER SYSTEM, INC.
("Company")
H. JUDITH CHOZIANIN 2/17/00
- ----------------------------------- By: /s/ VICKI O'MEARA
Signature Date --------------------------------
Signature Date
ASSISTANT SECRETARY EVP, GENERAL COUNSEL AND SECRETARY
- ----------------------------------- -----------------------------------
Title Title
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<PAGE>
[RYDER LOGO]
DATE: January 18, 2000
TO: Edwin A. Huston
FROM: M. Anthony Burns
RE: Severance Agreement and Release
In accordance with the Older Workers Benefit Protection Act, I am required to
inform you of the following regarding your execution of the attached Severance
Agreement and Release.
1. You should consult with an attorney before signing the Severance
Agreement and Release.
2. You will have twenty-one (21) days from the day you receive the
Severance Agreement and Release to execute it. If you have not executed
the Severance Agreement and Release by the twenty-first day, it will
automatically be declared null and void and revoked.
3. After you have executed the Severance Agreement and Release, you have
seven (7) calendar days to revoke your acceptance of it. If you revoke
the Severance Agreement and Release within the seven (7) calendar days,
it is null and void. For the revocation of the Severance Agreement and
Release to be effective, written notice must be received by me no later
than the close of business on the seventh day after you sign the
Severance Agreement and Release.
4. If you do not revoke your execution of the Severance Agreement and
Release within the seven (7) calendar days, it will become effective
and payments will commence in accordance with the terms of the
Severance Agreement and Release.
Please acknowledge below your receipt of this document and the attached
Severance Agreement and Release and that you have read and understand this page
of conditions.
Acknowledged:
/s/ EDWIN A. HUSTON
- ------------------------
- ------------------------
Date 2/15/00
Attachment
Ryder System, Inc.
3600 NW 82nd Avenue
Miami, FL 33166
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<PAGE>
January 18, 2000
TO THE BOARD OF DIRECTORS
OF RYDER SYSTEM, INC.
Dear Members of the Board:
Effective June 30, 2000, I hereby resign as an officer and/or director of Ryder
System, Inc. and/or its subsidiaries and affiliates and, to the extent
applicable, from all committees of which I am a member.
Sincerely,
/s/ EDWIN A. HUSTON
Edwin A. Huston
-12-
EXHIBIT 21.1
RYDER SYSTEM, INC.
SUBSIDIARIES AS OF DECEMBER 1, 1999
STATE/COUNTRY OF
NAME OF COMPANY INCORPORATION
- --------------- -------------
1318359 Ontario Limited (1) Canada
Associated Ryder Capital Services, Inc. Florida
Companhia Transportadora e Comercial Translor Brazil
Disposition Holding Corp. Florida
Far East Freight, Inc. Florida
Forrest Rental Services Limited England
Globe Master Insurance Company Vermont
Manufacturing Holding Corp. Florida
Mitchell Self Drive Limited England
Network Vehicle Central, Inc. Florida
Northern Carriers, Inc. Illinois
Phaseking Limited England
Road Master, Limited Bermuda
RSI Acquisition Corp. Delaware
RSI Holding B.V. Netherlands
RSI Purchase Corp. Delaware
RTR Leasing I, Inc. Delaware
RTR Leasing II, Inc. Delaware
Rycom II, LLC Delaware
Ryder Airport Operations Corp. Florida
Ryder Argentina S.A. Argentina
Ryder Capital S.A. de C.V. Mexico
Ryder Capital Services Corporation Delaware
RYDERCORP Florida
RYDERCORP, Inc. Delaware
Ryder de Mexico S.A. de C.V. Mexico
Ryder Dedicated Capacity, Inc. Tennessee
Ryder Dedicated Logistics, Inc. Delaware
Ryder Dedicated Logistics Limited England
Ryder Deutschland GmbH West Germany
Ryder Distribution Services Limited England
Ryder do Brasil Ltda. Brazil
Ryder Driver Leasing, Inc. Florida
Ryder Energy Distribution Corporation Florida
Ryder (Europe) Limited England
Ryder FleetProducts.com, Inc. Tennessee
Ryder Funding LP Delaware
Ryder Holding, LLC Delaware
Ryder Integrated Logistics Limited England
Ryder Integrated Logistics, Inc. (2) (3) Delaware
Ryder International Acquisition Corp. Florida
Page 1 of 3 Pages
<PAGE>
Ryder International, Inc. Florida
Ryder Lease Co. II, Inc. Florida
Ryder Mexicana, S.A. de C.V. Mexico
Ryder Netherlands B.V. Netherlands
Ryder Pension Fund Limited England
Ryder Plc England
Ryder Polska Sp. z o.o. Poland
Ryder Puerto Rico, Inc. Delaware
Ryder Realty, Inc. Delaware
Ryder Services Corporation (4) Florida
Ryder Servicios do Brasil Ltda. Brazil
Ryder Servicios S.A. de C.V. Mexico
Ryder St. Louis Redevelopment Corporation Missouri
Ryder System B.V. Netherlands
Ryder System Holdings (UK) Limited England
Ryder System Limited England
Ryder Transport Services Limited England
Ryder Transportation Limited England
Ryder Truck Rental, Inc. (5) Florida
Ryder Truck Rental I LLC Delaware
Ryder Truck Rental II LLC Delaware
Ryder Truck Rental III LLC Delaware
Ryder Truck Rental I LP Delaware
Ryder Truck Rental II LP Delaware
Ryder Truck Rental Canada Ltd. (6) Canada
Ryder Truck Rental Limited England
Ryder Truck Rental LT Delaware
Ryder Truckstops, Inc. Florida
Ryder Vehicle Lease Trust 1998-A Delaware
Ryder Vehicle Leasing & Sales Corp. Barbados
Ryhert Holding, Inc. Delaware
Rymar Holding, Inc. Delaware
Rynew II, Inc. Delaware
Saunders Leasing System of Canada Limited - BEING DISSOLVED Canada
Spring Hill Integrated Logistics Management, Inc. Delaware
Surplus Property Holding Corp. Florida
Tandem Transport, L.P. Georgia
Truck Transerv, Inc. Delaware
Unilink Contract Hire Limited England
UniRyder Limited England
United Contract Hire Limited England
Westside Corporate Center, Inc. Florida
Page 2 of 3 Pages
<PAGE>
- ----------
(1) Ontario, Canada: D/B/A RYDER GROCERY SERVICES
(2) California, Delaware, Iowa, North Dakota, North Carolina, Virginia,
Texas, Utah: D/B/A TRIANGLE SERVICES CORPORATION
(3) Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida,
Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland,
Michigan, Missouri, Nebraska, Nevada, New Jersey, New York, North
Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South
Dakota, Tennessee, Texas, Virginia and Washington: D/B/A LOGICORP.
Florida: d/b/a UniRyder
(4) Ohio and Texas: D/B/A RYDER CLAIMS SERVICES CORPORATION
(5) Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut,
Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho,
Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana,
Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North
Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode
Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont,
Virginia, Washington, West Virginia, Wisconsin and Wyoming: D/B/A RYDER
TRANSPORTATION SERVICES
Maryland and Virginia: D/B/A RYDER/JACOBS
Michigan: D/B/A ATLAS TRUCKING, INC.
Michigan: D/B/A RYDER ATLAS OF WESTERN MICHIGAN
(6) French Name: Location de Camions Ryder du Canada Ltee.
Canadian Provinces: Ryder Integrated Logistics
Ryder Dedicated Logistics
Ryder Canada
Page 3 of 3 Pages
EXHIBIT 23.1
The Board of Directors and Shareholders of
Ryder System, Inc.:
We consent to incorporation by reference in the following Registration
Statements on Forms S-3 and S-8 of Ryder System, Inc. of our report dated
February 2, 2000, relating to the consolidated balance sheets of Ryder System,
Inc. and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of earnings, shareholders' equity and cash flows for
each of the years in the three-year period ended December 31, 1999, which report
appears in the December 31, 1999 annual report on Form 10-K of Ryder System,
Inc.:
Form S-3:
o Registration Statement No. 33-20359 covering $1,000,000,000
aggregate principal amount of debt securities.
o Registration Statement No. 33-50232 covering $800,000,000
aggregate principal amount of debt securities.
o Registration Statement No. 33-58667 covering $800,000,000
aggregate principal amount of debt securities.
o Registration Statement No. 333-63049 covering $800,000,000
aggregate principal amount of debt securities.
Form S-8:
o Registration Statement No. 33-20608 covering the Ryder System
Employee Stock Purchase Plan.
o Registration Statement No. 33-4333 covering the Ryder Employee
Savings Plan.
o Registration Statement No. 1-4364 covering the Ryder System
Profit Incentive Stock Plan.
o Registration Statement No. 33-69660 covering the Ryder System,
Inc. 1980 Stock Incentive Plan.
o Registration Statement No. 33-37677 covering the Ryder System
UK Stock Purchase Scheme.
<PAGE>
The Board of Directors and Shareholders
Ryder System, Inc.
Page 2
o Registration Statement No. 33-63990 covering the Ryder System,
Inc. Directors' Stock Plan.
o Registration Statement No. 33-58001 covering the Ryder System,
Inc. Employee Savings Plan A.
o Registration Statement No. 33-58003 covering the Ryder System,
Inc. Employee Savings Plan B.
o Registration Statement No. 33-61509 covering the Ryder System,
Inc. Stock for Merit Increase Replacement Plan.
o Registration Statement No. 33-62013 covering the Ryder System,
Inc. 1995 Stock Incentive Plan.
o Registration Statement No. 333-19515 covering the Ryder
System, Inc. 1997 Deferred Compensation Plan.
o Registration Statement No. 333-26653 covering the Ryder
System, Inc. Board of Directors Stock Award Plan.
o Registration Statement No. 333-57593 covering the Ryder
System, Inc. Stock Purchase Plan for Employees.
o Registration Statement No. 333-57595 covering the Ryder
System, Inc. 1995 Stock Incentive Plan.
/s/ KPMG LLP
Miami, Florida
March 13, 2000
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Vicki A. O'Meara, David M. Beilin and Kevin K.
Ross, and each of them, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for the undersigned and in
his or her name, place and stead, in any and all capacities, to sign the Ryder
System, Inc. Form 10-K (Annual Report pursuant to the Securities Exchange Act of
1934) for the fiscal year ended December 31, 1999 (the "Form 10-K"), and any and
all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission and with the New York Stock Exchange, Chicago Stock Exchange and
Pacific Stock Exchange, granting unto each said attorney-in-fact and agent full
power and authority to perform every act requisite and necessary to be done in
connection with the execution and filing of the Form 10-K and any and all
amendments thereto, as fully for all intents and purposes as he or she might or
could do in person, hereby ratifying all that each said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
/s/ CHRISTINE A. VARNEY
-----------------------------
Christine A. Varney
)
DISTRICT OF COLUMBIA ) ss:
)
Before me appeared Christine A. Varney, personally known to me and known to me
to be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 1st day of March, 2000 that he or
she executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ Elizabeth L. Bapst
-----------------------------
Notary Public
My commission expires:
[Stamped]
Official Notary Seal
Elizabeth L. Bapst
Notary Public District of Columbia
My commission expires June 30, 2001
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Vicki A. O'Meara, David M. Beilin and Kevin K.
Ross, and each of them, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for the undersigned and in
his or her name, place and stead, in any and all capacities, to sign the Ryder
System, Inc. Form 10-K (Annual Report pursuant to the Securities Exchange Act of
1934) for the fiscal year ended December 31, 1999 (the "Form 10-K"), and any and
all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission and with the New York Stock Exchange, Chicago Stock Exchange and
Pacific Stock Exchange, granting unto each said attorney-in-fact and agent full
power and authority to perform every act requisite and necessary to be done in
connection with the execution and filing of the Form 10-K and any and all
amendments thereto, as fully for all intents and purposes as he or she might or
could do in person, hereby ratifying all that each said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
/s/ ALVA O. WAY
-----------------------------
Alva O. Way
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Alva O. Way, personally known to me and known to me to be the
person described in and who executed the foregoing instrument, and acknowledged
to and before me this 18th day of February, 2000 that he or she executed said
instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
-----------------------------
Notary Public
[Stamped]
Official Notary Seal
H. Judith Chozianin
Notary Public State of Florida
Commission No. CC609712
My commission expires January 7, 2001
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Vicki A. O'Meara, David M. Beilin and Kevin K.
Ross, and each of them, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for the undersigned and in
his or her name, place and stead, in any and all capacities, to sign the Ryder
System, Inc. Form 10-K (Annual Report pursuant to the Securities Exchange Act of
1934) for the fiscal year ended December 31, 1999 (the "Form 10-K"), and any and
all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission and with the New York Stock Exchange, Chicago Stock Exchange and
Pacific Stock Exchange, granting unto each said attorney-in-fact and agent full
power and authority to perform every act requisite and necessary to be done in
connection with the execution and filing of the Form 10-K and any and all
amendments thereto, as fully for all intents and purposes as he or she might or
could do in person, hereby ratifying all that each said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
/s/ PAUL J. RIZZO
-----------------------------
Paul J. Rizzo
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Paul J. Rizzo, personally known to me and known to me to be
the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 18th day of February, 2000 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
-----------------------------
Notary Public
[Stamped]
Official Notary Seal
H. Judith Chozianin
Notary Public State of Florida
Commission No. CC609712
My commission expires January 7, 2001
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Vicki A. O'Meara, David M. Beilin and Kevin K.
Ross, and each of them, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for the undersigned and in
his or her name, place and stead, in any and all capacities, to sign the Ryder
System, Inc. Form 10-K (Annual Report pursuant to the Securities Exchange Act of
1934) for the fiscal year ended December 31, 1999 (the "Form 10-K"), and any and
all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission and with the New York Stock Exchange, Chicago Stock Exchange and
Pacific Stock Exchange, granting unto each said attorney-in-fact and agent full
power and authority to perform every act requisite and necessary to be done in
connection with the execution and filing of the Form 10-K and any and all
amendments thereto, as fully for all intents and purposes as he or she might or
could do in person, hereby ratifying all that each said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
/s/ LYNN M. MARTIN
-----------------------------
Lynn M. Martin
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Lynn M. Martin, personally known to me and known to me to be
the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 18th day of February, 2000 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
-----------------------------
Notary Public
[Stamped]
Official Notary Seal
H. Judith Chozianin
Notary Public State of Florida
Commission No. CC609712
My commission expires January 7, 2001
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Vicki A. O'Meara, David M. Beilin and Kevin K.
Ross, and each of them, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for the undersigned and in
his or her name, place and stead, in any and all capacities, to sign the Ryder
System, Inc. Form 10-K (Annual Report pursuant to the Securities Exchange Act of
1934) for the fiscal year ended December 31, 1999 (the "Form 10-K"), and any and
all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission and with the New York Stock Exchange, Chicago Stock Exchange and
Pacific Stock Exchange, granting unto each said attorney-in-fact and agent full
power and authority to perform every act requisite and necessary to be done in
connection with the execution and filing of the Form 10-K and any and all
amendments thereto, as fully for all intents and purposes as he or she might or
could do in person, hereby ratifying all that each said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
/s/ DAVID T. KEARNS
-----------------------------
David T. Kearns
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared David T. Kearns, personally known to me and known to me to be
the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 18th day of February, 2000 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
-----------------------------
Notary Public
[Stamped]
Official Notary Seal
H. Judith Chozianin
Notary Public State of Florida
Commission No. CC609712
My commission expires January 7, 2001
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Vicki A. O'Meara, David M. Beilin and Kevin K.
Ross, and each of them, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for the undersigned and in
his or her name, place and stead, in any and all capacities, to sign the Ryder
System, Inc. Form 10-K (Annual Report pursuant to the Securities Exchange Act of
1934) for the fiscal year ended December 31, 1999 (the "Form 10-K"), and any and
all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission and with the New York Stock Exchange, Chicago Stock Exchange and
Pacific Stock Exchange, granting unto each said attorney-in-fact and agent full
power and authority to perform every act requisite and necessary to be done in
connection with the execution and filing of the Form 10-K and any and all
amendments thereto, as fully for all intents and purposes as he or she might or
could do in person, hereby ratifying all that each said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
/s/ VERNON E. JORDAN, JR.
-----------------------------
Vernon E. Jordan, Jr.
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
Before me appeared Vernon E. Jordan, Jr., personally known to me and known to me
to be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 9th day of March, 2000 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
-----------------------------
Notary Public
[Stamped]
Official Notary Seal
H. Judith Chozianin
Notary Public State of Florida
Commission No. CC609712
My commission expires January 7, 2001
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Vicki A. O'Meara, David M. Beilin and Kevin K.
Ross, and each of them, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for the undersigned and in
his or her name, place and stead, in any and all capacities, to sign the Ryder
System, Inc. Form 10-K (Annual Report pursuant to the Securities Exchange Act of
1934) for the fiscal year ended December 31, 1999 (the "Form 10-K"), and any and
all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission and with the New York Stock Exchange, Chicago Stock Exchange and
Pacific Stock Exchange, granting unto each said attorney-in-fact and agent full
power and authority to perform every act requisite and necessary to be done in
connection with the execution and filing of the Form 10-K and any and all
amendments thereto, as fully for all intents and purposes as he or she might or
could do in person, hereby ratifying all that each said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
/s/ JOHN A. GEORGES
-----------------------------
John A. Georges
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared John A. Georges, personally known to me and known to me to be
the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 18th day of February, 2000 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
-----------------------------
Notary Public
[Stamped]
Official Notary Seal
H. Judith Chozianin
Notary Public State of Florida
Commission No. CC609712
My commission expires January 7, 2001
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Vicki A. O'Meara, David M. Beilin and Kevin K.
Ross, and each of them, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for the undersigned and in
his or her name, place and stead, in any and all capacities, to sign the Ryder
System, Inc. Form 10-K (Annual Report pursuant to the Securities Exchange Act of
1934) for the fiscal year ended December 31, 1999 (the "Form 10-K"), and any and
all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission and with the New York Stock Exchange, Chicago Stock Exchange and
Pacific Stock Exchange, granting unto each said attorney-in-fact and agent full
power and authority to perform every act requisite and necessary to be done in
connection with the execution and filing of the Form 10-K and any and all
amendments thereto, as fully for all intents and purposes as he or she might or
could do in person, hereby ratifying all that each said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
/s/ EDWARD T. FOOTE II
-----------------------------
Edward T. Foote II
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Edward T. Foote II, personally known to me and known to me to
be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 18th day of February, 2000 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
-----------------------------
Notary Public
[Stamped]
Official Notary Seal
H. Judith Chozianin
Notary Public State of Florida
Commission No. CC609712
My commission expires January 7, 2001
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Vicki A. O'Meara, David M. Beilin and Kevin K.
Ross, and each of them, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for the undersigned and in
his or her name, place and stead, in any and all capacities, to sign the Ryder
System, Inc. Form 10-K (Annual Report pursuant to the Securities Exchange Act of
1934) for the fiscal year ended December 31, 1999 (the "Form 10-K"), and any and
all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission and with the New York Stock Exchange, Chicago Stock Exchange and
Pacific Stock Exchange, granting unto each said attorney-in-fact and agent full
power and authority to perform every act requisite and necessary to be done in
connection with the execution and filing of the Form 10-K and any and all
amendments thereto, as fully for all intents and purposes as he or she might or
could do in person, hereby ratifying all that each said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
/s/ JOSEPH L. DIONNE
-----------------------------
Joseph L. Dionne
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared Joseph L. Dionne, personally known to me and known to me to
be the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 18th day of February, 2000 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
-----------------------------
Notary Public
[Stamped]
Official Notary Seal
H. Judith Chozianin
Notary Public State of Florida
Commission No. CC609712
My commission expires January 7, 2001
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Vicki A. O'Meara, David M. Beilin and Kevin K.
Ross, and each of them, his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for the undersigned and in
his or her name, place and stead, in any and all capacities, to sign the Ryder
System, Inc. Form 10-K (Annual Report pursuant to the Securities Exchange Act of
1934) for the fiscal year ended December 31, 1999 (the "Form 10-K"), and any and
all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission and with the New York Stock Exchange, Chicago Stock Exchange and
Pacific Stock Exchange, granting unto each said attorney-in-fact and agent full
power and authority to perform every act requisite and necessary to be done in
connection with the execution and filing of the Form 10-K and any and all
amendments thereto, as fully for all intents and purposes as he or she might or
could do in person, hereby ratifying all that each said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
/s/ DAVID I. FUENTE
-----------------------------
David I. Fuente
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared David I. Fuente, personally known to me and known to me to be
the person described in and who executed the foregoing instrument, and
acknowledged to and before me this 18th day of February, 2000 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
/s/ H. Judith Chozianin
-----------------------------
Notary Public
[Stamped]
Official Notary Seal
H. Judith Chozianin
Notary Public State of Florida
Commission No. CC609712
My commission expires January 7, 2001
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
RYDER SYSTEM, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED CONDENSED BALANCE
SHEET AND STATEMENT OF EARNINGS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 112,993
<SECURITIES> 0
<RECEIVABLES> 725,815
<ALLOWANCES> 0
<INVENTORY> 69,845
<CURRENT-ASSETS> 1,209,391
<PP&E> 5,734,424
<DEPRECIATION> 2,057,868
<TOTAL-ASSETS> 5,770,450
<CURRENT-LIABILITIES> 1,449,512
<BONDS> 1,819,136
0
0
<COMMON> 513,083
<OTHER-SE> 691,822
<TOTAL-LIABILITY-AND-EQUITY> 5,770,450
<SALES> 0
<TOTAL-REVENUES> 4,952,204
<CGS> 0
<TOTAL-COSTS> 4,651,034
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 183,676
<INCOME-PRETAX> 117,494
<INCOME-TAX> 44,577
<INCOME-CONTINUING> 72,917
<DISCONTINUED> 351,154
<EXTRAORDINARY> (4,393)
<CHANGES> 0
<NET-INCOME> 419,678
<EPS-BASIC> 6.12
<EPS-DILUTED> 6.11
</TABLE>
