-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P7bNHMUBoggZ95kPrVgB9RnCPIHhdatLkHUjG25bDvR3kLz3NBptBghjuwgKBGlL RoDNw9mHNBbThdHbOpv10A== 0000950170-95-000218.txt : 19951109 0000950170-95-000218.hdr.sgml : 19951109 ACCESSION NUMBER: 0000950170-95-000218 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951108 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: RYDER SYSTEM INC CENTRAL INDEX KEY: 0000085961 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AUTO RENTAL & LEASING (NO DRIVERS) [7510] IRS NUMBER: 590739250 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04364 FILM NUMBER: 95588129 BUSINESS ADDRESS: STREET 1: 3600 NW 82ND AVE CITY: MIAMI STATE: FL ZIP: 33166 BUSINESS PHONE: 3055933726 MAIL ADDRESS: STREET 1: 3600 NW 82 AVENUE CITY: MIAMI STATE: FL ZIP: 33166 10-Q 1 QUARTERLY REPORT FOR PERIOD ENDED 9/30/95 - -------------------------------------------------------------------------------- FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File No. 1-4364 ------------------------------------- RYDER SYSTEM, INC. (a Florida corporation) 3600 N. W. 82nd Avenue Miami, Florida 33166 Telephone (305) 593-3726 I.R.S. Employer Identification No. 59-0739250 ------------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: YES X NO --- --- Ryder System, Inc. (the "Registrant" or the "Company") had 79,211,058 shares of common stock ($0.50 par value per share) outstanding as of October 31, 1995. - ------------------------------------------------------------------------------ PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS Ryder System, Inc. and Consolidated Subsidiaries - ------------------------------------------------------------------------------------------------------------------------------------ Periods ended September 30, 1995 and 1994 THIRD QUARTER NINE MONTHS -------------------------- ------------------------ (In thousands, except per share amounts) 1995 1994 1995 1994 - ------------------------------------------------------------------------------------------------------------------------------------ REVENUE $1,264,049 1,194,675 3,821,974 3,442,851 - ------------------------------------------------------------------------------------------------------------------------------------ Operating expense 1,003,975 930,047 3,023,076 2,698,326 Depreciation expense, net of gains (quarter, 1995 - $20,756, 1994 - $16,696; nine months, 1995 - $70,713, 1994 - $53,285) 172,853 153,950 487,018 440,443 Interest expense 50,251 38,069 141,697 105,648 Miscellaneous expense (income) (7) 1,411 1,161 2,375 - ------------------------------------------------------------------------------------------------------------------------------------ 1,227,072 1,123,477 3,652,952 3,246,792 - ------------------------------------------------------------------------------------------------------------------------------------ Earnings before income taxes and cumulative effect of change in accounting 36,977 71,198 169,022 196,059 Provision for income taxes 16,046 29,241 70,026 80,522 - ------------------------------------------------------------------------------------------------------------------------------------ Earnings before cumulative effect of change in accounting 20,931 41,957 98,996 115,537 Cumulative effect of change in accounting -- -- (7,759) -- - ------------------------------------------------------------------------------------------------------------------------------------ NET EARNINGS $ 20,931 41,957 91,237 115,537 ==================================================================================================================================== Earnings per common share: Earnings before cumulative effect of change in accounting $ 0.26 0.53 1.25 1.47 Cumulative effect of change in accounting -- -- (0.10) -- - ------------------------------------------------------------------------------------------------------------------------------------ EARNINGS PER COMMON SHARE $ 0.26 0.53 1.15 1.47 - ------------------------------------------------------------------------------------------------------------------------------------ Cash dividends per common share $ 0.15 0.15 0.45 0.45 - ------------------------------------------------------------------------------------------------------------------------------------ Average common and common equivalent shares 79,511 79,177 79,264 78,669 ====================================================================================================================================
See accompanying notes to consolidated condensed financial statements. ITEM 1. Financial Statements (continued)
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS Ryder System, Inc. and Consolidated Subsidiaries - ------------------------------------------------------------------------------------------------------------------------------------ Nine months ended September 30, 1995 and 1994 (In thousands) 1995 1994 - ------------------------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 91,237 115,537 Cumulative effect of change in accounting 7,759 -- Depreciation expense, net of gains 487,018 440,443 Deferred income taxes 51,231 36,957 Proceeds from sales of receivables 30,000 -- Decrease (increase) in other working capital items and other, net 5,427 (47,276) - ------------------------------------------------------------------------------------------------------------------------------------ 672,672 545,661 - ------------------------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM FINANCING ACTIVITIES: Debt proceeds 965,788 479,103 Debt repaid, including capital lease obligations (439,519) (143,222) Common stock issued 7,968 27,389 Dividends on common stock (35,486) (35,112) - ------------------------------------------------------------------------------------------------------------------------------------ 498,751 328,158 - ------------------------------------------------------------------------------------------------------------------------------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and revenue earning equipment (1,742,084) (1,301,318) Sales of property and revenue earning equipment 262,292 198,377 Sale and leaseback of revenue earning equipment 300,000 300,000 Acquisitions, net of cash acquired -- (94,664) Other, net 29,130 28,993 - ------------------------------------------------------------------------------------------------------------------------------------ (1,150,662) (868,612) - ------------------------------------------------------------------------------------------------------------------------------------ INCREASE IN CASH AND CASH EQUIVALENTS 20,761 5,207 Cash and cash equivalents at January 1 75,878 56,691 - ------------------------------------------------------------------------------------------------------------------------------------ CASH AND CASH EQUIVALENTS AT SEPTEMBER 30 $ 96,639 61,898 ====================================================================================================================================
See accompanying notes to consolidated condensed financial statements. ITEM 1. Financial Statements (continued)
CONSOLIDATED CONDENSED BALANCE SHEETS Ryder System, Inc. and Consolidated Subsidiaries - -------------------------------------------------------------------------------- SEPTEMBER 30, DECEMBER 31, (Dollars in thousands, except per share amounts) 1995 1994 - -------------------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 96,639 75,878 Receivables 304,276 316,855 Inventories 60,099 57,124 Tires in service 191,733 164,347 Deferred income taxes 39,954 51,619 Prepaid expenses and other current assets 112,537 92,999 - -------------------------------------------------------------------------------- Total current assets 805,238 758,822 - -------------------------------------------------------------------------------- Revenue earning equipment 5,838,335 5,330,586 Less accumulated depreciation (2,147,736) (2,195,522) - -------------------------------------------------------------------------------- Net revenue earning equipment 3,690,599 3,135,064 - -------------------------------------------------------------------------------- Operating property and equipment 1,148,141 1,044,808 Less accumulated depreciation (500,472) (450,480) - -------------------------------------------------------------------------------- Net operating property and equipment 647,669 594,328 - -------------------------------------------------------------------------------- Direct financing leases and other assets 260,989 223,680 Intangible assets and deferred charges 303,890 302,579 - -------------------------------------------------------------------------------- $ 5,708,385 5,014,473 ================================================================================ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 168,344 118,103 Accounts payable 398,604 422,532 Accrued expenses 546,558 552,518 - -------------------------------------------------------------------------------- Total current liabilities 1,113,506 1,093,153 - -------------------------------------------------------------------------------- Long-term debt 2,317,942 1,794,795 Other non-current liabilities 471,810 426,848 Deferred income taxes 607,633 570,653 Shareholders' equity: Common stock of $0.50 par value per share (shares outstanding at September 30, 1995 - 79,130,770; December 31, 1994 - 78,760,742) 547,332 539,101 Retained earnings 658,977 603,226 Translation adjustment (8,815) (13,303) - -------------------------------------------------------------------------------- Total shareholders' equity 1,197,494 1,129,024 - -------------------------------------------------------------------------------- $ 5,708,385 5,014,473 ================================================================================
See accompanying notes to consolidated condensed financial statements. ITEM 1. Financial Statements (continued) NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (A) INTERIM FINANCIAL STATEMENTS The accompanying unaudited consolidated condensed financial statements have been prepared by the Company in accordance with the accounting policies described in the 1994 Annual Report and should be read in conjunction with the consolidated financial statements and notes which appear in that report. These statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. (B) ACCOUNTING CHANGE Effective January 1, 1995, the Company adopted Statement of Financial Accounting Standards No. 116, "Accounting for Contributions Received and Contributions Made," which requires that promises to make contributions be recognized in the financial statements as an expense and a liability when a promise is made. As a result, a pretax charge of $12.2 million ($7.8 million after tax, or $0.10 per common share) was recorded as the cumulative effect of a change in accounting principle to establish a liability for the present value of the Company's total outstanding charitable commitments as of January 1, 1995. Prior to the adoption of the new statement, charitable contributions were recorded in the financial statements in the period in which they were paid. Approximately two-thirds of the charitable commitments recognized as a result of adopting the new statement will be paid in 1995 with the remainder payable from 1996 through 1999. KPMG PEAT MARWICK LLP CERTIFIED PUBLIC ACCOUNTANTS One Biscayne Tower Telephone 305-358-2300 Suite 2900 Telecopier 305-577-0544 2 South Biscayne Boulevard Miami, FL 33131 INDEPENDENT ACCOUNTANTS' REVIEW REPORT The Board of Directors and Shareholders Ryder System, Inc.: We have reviewed the accompanying consolidated condensed balance sheet of Ryder System, Inc. and subsidiaries as of September 30, 1995, and the related consolidated condensed statements of earnings for the three- and nine-month periods ended September 30, 1995 and 1994 and the consolidated condensed statements of cash flows for the nine-month periods ended September 30, 1995 and 1994. These consolidated condensed financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the consolidated condensed financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Ryder System, Inc. and subsidiaries as of December 31, 1994, and the related consolidated statements of earnings and cash flows for the year then ended (not presented herein); and in our report dated February 7, 1995, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated condensed balance sheet as of December 31, 1994, is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived. As discussed in the notes to the consolidated condensed financial statements, in 1995, Ryder System, Inc. and subsidiaries changed its method of accounting for contributions received and contributions made. KPMG PEAT MARWICK LLP Miami, Florida October 19, 1995 ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition -- Three and nine months ended September 30, 1995 and 1994 RESULTS OF OPERATIONS The Company reported earnings before income taxes of $37 million in the third quarter of 1995, compared with $71 million in last year's third quarter. Earnings before income taxes and cumulative effect of change in accounting in the first nine months of 1995 were $169 million, compared with $196 million in the first nine months of 1994. Third quarter pretax earnings were significantly impacted by a strike by the International Brotherhood of Teamsters against the Automotive Carrier Division and separation and relocation costs of $12 million in the Vehicle Leasing & Services Division. As a result of the strike, Automotive Carriers reported a pretax loss of $14 million in the third quarter of 1995 compared with a pretax profit of $10 million in last year's third quarter. Net earnings in the third quarter of 1995 were $21 million, or $0.26 per common share, compared with $42 million, or $0.53 per common share, in the third quarter of 1994. Earnings before cumulative effect of change in accounting in the first nine months of 1995 were $99 million, or $1.25 per common share, compared with $116 million, or $1.47 per common share, in the first nine months of 1994. Net earnings in the first nine months of 1995 were $91 million, or $1.15 per common share, which included a first quarter after tax charge of $8 million for the cumulative effect of a change in accounting for charitable contributions (see "Accounting Change and Recent Accounting Pronouncements" below). The Company's effective tax rate in the first nine months of 1995 was relatively unchanged compared with the same period in 1994. Vehicle Leasing & Services revenue increased 10% in the third quarter and 14% in the first nine months of 1995, compared with the same periods in 1994. Revenue growth was led by the division's two primary contractual product lines, full service truck leasing and dedicated logistics. Automotive Carriers revenue was 26% and 8% lower in the third quarter and first nine months of 1995, respectively, compared with the same periods last year due to the impact of the Teamsters strike. Total operating expense as a percentage of revenue was higher in both the third quarter and first nine months of 1995 compared with the same periods in 1994. These increases were due primarily to the growth of the logistics business, higher equipment rental costs due to an increase in the number of vehicles leased by the Company as lessee under operating lease agreements and higher proportionate costs at Automotive Carriers due to the impact of the Teamsters strike on revenue. Depreciation expense (before gains on vehicle sales) increased 13% in both the third quarter and first nine months of 1995 compared with the same periods last year. Higher depreciation resulted from an increase in the size of the vehicle fleet, primarily as a result of strong sales of new contractual business within the full service lease and dedicated logistics product lines over the past several quarters. Gains on vehicle sales were $4 million and $17 million higher in the third quarter and first nine months of 1995, respectively, compared with the same periods in 1994. Higher gains in both 1995 periods reflected an ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition (continued) -- Three and nine months ended September 30, 1995 and 1994 increase in the number of units sold compared with the same periods in 1994. The average gain per vehicle sold in 1995 was about the same as in 1994. Interest expense increased $12 million and $36 million in the third quarter and first nine months of 1995, respectively, compared with the same periods in 1994. These increases were due primarily to higher outstanding debt levels, as a result of expanded investment in the vehicle fleet, combined with higher average rates on the Company's variable-rate debt. Less than one-third of the Company's financing obligations at September 30, 1995 have variable interest rates. VEHICLE LEASING & SERVICES Revenue in the third quarter and first nine months of 1995 for Vehicle Leasing & Services increased 10% and 14%, respectively, compared with the same periods in 1994. Revenue from full service truck leasing, the division's largest product line, increased 10% in the third quarter and 13% in the first nine months of 1995 compared with the same periods last year. Dedicated logistics revenue increased 30% and 39% in the third quarter and first nine months of 1995, respectively, over the same 1994 periods. Revenue increases for both product lines were primarily due to strong new business sales over the past several quarters. New business sales for dedicated logistics for the nine months ended September 30, 1995 were nearly double last year's record pace at September 30, 1994. Although slightly behind last year's record pace, full service truck lease sales have also continued to be strong in 1995. Revenue from the division's public transportation services businesses increased 8% and 10% in the third quarter and first nine months of 1995, respectively, compared with the same periods last year, due primarily to the addition of new contracts. Commercial truck rental revenue increased 1% and 9% in the third quarter and first nine months of 1995, respectively, compared with the same periods in 1994. Higher demand created by new full service truck lease customers using rental vehicles while awaiting delivery of new lease vehicles was the largest contributing factor to the nine month increase. Revenue from consumer truck rental was about the same in both the third quarter and first nine months of 1995 compared with the same periods last year. Pretax profits for Vehicle Leasing & Services were $57 million in the third quarter of 1995 compared with $68 million in the third quarter of 1994. For the nine months ended September 30, 1995, pretax earnings were $171 million compared with $179 million last year. Pretax earnings in the third quarter and first nine months of 1995 were impacted by separation and relocation costs of approximately $12 million. These costs were incurred as a result of the third quarter consolidation of the division's twenty consumer truck rental administrative locations into two central locations as well as headcount reductions driven by the implementation of new systems and processes in the division's commercial businesses. ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition (continued) -- Three and nine months ended September 30, 1995 and 1994 Margin (revenue less direct operating expenses, depreciation and interest expense) from full service truck leasing was slightly higher and margin as a percentage of revenue was lower in the third quarter and first nine months of 1995 compared with the same periods last year. As a result of significant market competition, full service truck leasing margins continued to be impacted by lower prices on newer leases compared with prices on older and expiring leases. Higher interest costs in 1995 compared with 1994 also impacted margins. Dedicated logistics margin was higher in the third quarter and first nine months of 1995 compared with the same periods in 1994 as a result of strong revenue growth. Margin as a percentage of revenue for this product line in both 1995 periods was comparable with the same periods in 1994. Margin and margin as a percentage of revenue from the division's public transportation services businesses were higher in the first nine months of 1995 compared with the first nine months of 1994, due mainly to increased revenue and lower workers' compensation expense. Margins for this business unit in the third quarter, its seasonal low period, were comparable with those in last year's third quarter. Commercial truck rental margin and margin as a percentage of revenue were lower in the third quarter and first nine months of 1995 compared with the same periods last year. Lower margins were due primarily to higher interest expense and lower asset utilization as a result of slowing rental demand during 1995 on a larger fleet. Consumer truck rental margin and margin as a percentage of revenue were relatively unchanged in the third quarter and first nine months of 1995 compared with the same periods in 1994. Margins in both 1995 periods reflected lower asset utilization and higher interest expense, offset by lower vehicle liability expense. Total fleet levels in the rental product lines were reduced in the third quarter of 1995 from second quarter levels and continued fleet level reductions are planned for the fourth quarter. For the division as a whole, earnings in the third quarter and first nine months of 1995 benefited from higher overall margin dollars in both periods and increases in gains on vehicle sales of $4 million and $16 million, respectively, compared with the same periods in 1994. These items were offset by separation and relocation costs of $12 million, higher indirect operating expenses resulting from general increases in business activity, and continued spending related to reengineering and systems initiatives and the development of greater logistics design, operations and sales capabilities. AUTOMOTIVE CARRIERS Third quarter results for Automotive Carriers were significantly impacted by the International Brotherhood of Teamsters strike which began on September 7, 1995 and lasted for 32 days. In the third quarter of 1995, revenue and vehicle shipments were significantly lower than last year's third quarter and, as such, the division reported a pretax loss of $14 million. Prior to commencement of the strike, 1995 year-to-date revenue, vehicle shipments and earnings were comparable with 1994 levels. ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition (continued) -- Three and nine months ended September 30, 1995 and 1994 On October 9, 1995, the Teamsters and representatives of the automobile truckaway industry tentatively reached a four-year agreement (retroactive to May 21, 1995). The new agreement includes provisions for wage and benefit increases over the term of the agreement. The division is commencing negotiations with its customers for the purpose of obtaining rate relief relating to the new agreement. In the fourth quarter of 1995 the division expects to transport many of the vehicles manufactured during the strike which were not yet shipped as of the end of the strike. Increased vehicle shipments in the fourth quarter combined with other planned actions should allow the division to recover much of its third quarter loss. OTHER Other, which is comprised primarily of corporate administrative costs, reported net expenses in the third quarter and first nine months of 1995 of $6 million and $17 million, respectively, compared with net expenses of $6 million and $18 million, respectively, in the same periods last year. ACCOUNTING CHANGE AND RECENT ACCOUNTING PRONOUNCEMENTS The Company adopted Statement of Financial Accounting Standards No. 116, "Accounting for Contributions Received and Contributions Made," effective January 1, 1995. The Statement requires that promises to make contributions be recognized in the financial statements as an expense and a liability when a promise is made. As a result, the Company recorded a first quarter pretax charge of $12 million ($8 million after tax, or $0.10 per common share), to record the cumulative effect of the change in accounting principle and establish a liability for the present value of the Company's total outstanding charitable commitments as of January 1, 1995. In 1995, the Financial Accounting Standards Board issued Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" and Statement No. 123, "Accounting for Stock-Based Compensation." The Company will adopt both statements in the first quarter of 1996 and, based on current circumstances, does not believe the effect of the adoptions will be material to the Company's financial position or results of operations. ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition (continued) -- Three and nine months ended September 30, 1995 and 1994 LIQUIDITY AND CAPITAL RESOURCES Total capital expenditures in the first nine months of 1995 were $1.7 billion, compared with $1.3 billion in the first nine months of 1994, due primarily to growth within the Company's contractual product lines. Capital expenditures for full service truck leasing (which include the equipment required to service new dedicated logistics customers) were $1.0 billion in the first nine months of 1995, an increase of $292 million compared with last year's first nine months, due primarily to continued high levels of new business sales. Capital expenditures for commercial and consumer truck rental increased $71 million in the first nine months of 1995 compared with last year's first nine months, due primarily to the replacement of older units. Capital expenditures in Automotive Carriers increased $33 million in the first nine months of 1995 compared with the same period last year, also as a result of planned fleet replacement. The remaining increase in capital expenditures of $45 million in the first nine months of 1995 compared with the first nine months of 1994, reflected higher expenditures on operating property and equipment, primarily relating to reengineering and systems initiatives, and maintenance facilities improvements. An increase of $64 million in proceeds from sales of property and revenue earning equipment in the first nine months of 1995 compared with the same period last year offset a portion of the increase in capital expenditures. Total debt at September 30, 1995 was $2.5 billion, compared with $1.9 billion at December 31, 1994. The increase in debt was due to financing requirements associated with 1995 capital expenditures. During the first nine months of 1995 the Company issued $778 million of unsecured medium-term notes. U.S. commercial paper outstanding at the end of the third quarter of 1995 was $123 million, compared with $44 million at December 31, 1994. The Company redeemed $300 million of unsecured notes at par and made $70 million of scheduled unsecured note payments during the first nine months of 1995. The Company's foreign debt increased $88 million in the first nine months of 1995. The Company's debt to equity ratio at September 30, 1995 was 208%, compared with 205% at June 30, 1995 and 169% at December 31, 1994. Cash flow from operating activities in the first nine months of 1995 was $673 million compared with $546 million in the same period last year. The 1995 increase resulted primarily from higher non-cash charges for depreciation and deferred income taxes, proceeds of $30 million from sales of receivables as part of the Company's receivables securitization program and increased cash provided from changes in other working capital items. The lower level of cash provided from other working capital items in 1994 was primarily due to a lower balance of receivables sold at September 30, 1994 compared with December 31, 1993. Cash flow from operating activities (excluding sales of receivables) plus asset sales as a percentage of capital expenditures was 52% in the first nine months of 1995 compared with 57% in the same period last year. As part of its financing program, the Company periodically enters into sale and leaseback agreements for revenue earning equipment which are treated as operating leases. Proceeds from sale-leaseback transactions were $300 million in the first nine months of both 1995 and 1994. At September 30, 1995 and December 31, 1994, the Company had interest rate swap agreements with aggregate notional amounts outstanding of $773 million and $673 million, respectively. In the first ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition (continued) -- Three and nine months ended September 30, 1995 and 1994 nine months of 1995 the Company entered into three interest rate swap agreements with notional principal amounts totaling $100 million and terms ranging from six months to two years, which modify variable interest rate reset dates on certain obligations. The Company also had interest rate cap agreements with aggregate notional amounts totaling $350 million outstanding at September 30, 1995 and December 31, 1994. The interest rate swap and cap instruments have been assigned to specific financial obligations, and amounts to be paid or received under the agreements are recognized over the terms of the agreements as adjustments to earnings. The Company has no derivative instruments held for trading purposes or that are leveraged. The Company had contractual lines of credit totaling $693 million at September 30, 1995, of which $552 million was available. Also, at September 30, 1995, the Company had $457 million of debt securities available under a shelf registration filed in 1995. ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition (continued) -- Three and nine months ended September 30, 1995 and 1994
SELECTED FINANCIAL AND OPERATIONAL DATA (Dollars in thousands) THIRD QUARTER NINE MONTHS ---------------------- ---------------------- 1995 1994 1995 1994 - ------------------------------------------------------------------------------------------------ VEHICLE LEASING & SERVICES Revenue: Full service lease and programmed maintenance $ 526,957 477,426 1,551,127 1,378,671 Commercial and consumer rental 330,927 329,083 882,815 844,593 Dedicated logistics 234,834 181,038 688,776 495,058 Public transportation 76,120 70,357 287,698 261,088 Other and eliminations (5,718) (159) (15,567) (1,152) --------- --------- --------- --------- Total 1,163,120 1,057,745 3,394,849 2,978,258 Operating expense 891,409 802,489 2,618,166 2,272,750 Depreciation expense 184,435 162,651 527,540 466,495 Gains on sale of revenue earning equipment (20,151) (16,520) (68,916) (52,742) Interest expense 50,434 39,552 144,925 110,099 Miscellaneous expense, net 221 1,572 1,751 2,877 --------- --------- --------- --------- Earnings before income taxes $ 56,772 68,001 171,383 178,779 ========= ========= ========= ========= Fleet size (owned and leased): Full service lease 96,839 85,237 Commercial and consumer rental 84,880 76,763 Buses operated or managed 12,703 12,558 Ryder Truck Rental service locations 1,121 1,080 - ------------------------------------------------------------------------------------------------ AUTOMOTIVE CARRIERS Revenue $ 104,150 141,535 439,756 477,369 ========= ========= ========= ========= Earnings (loss) before income taxes $ (13,622) 9,646 14,834 34,863 ========= ========= ========= ========= Total units transported (000) 987 1,413 4,269 4,625 Total miles traveled (000) 40,583 54,102 165,633 175,966 Auto transports: Owned and leased 3,249 3,826 Owner-operators 458 507 Locations 83 91 - ------------------------------------------------------------------------------------------------
PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K: (a) EXHIBITS (3.1) The Ryder System, Inc. Restated Articles of Incorporation, dated November 8, 1985, as amended through May 18, 1990, previously filed with the Commission as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 1990, are incorporated by reference into this report. (3.2) The Ryder System, Inc. By-Laws, as amended through November 23, 1993, previously filed with the Commission as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 1993, are incorporated by reference into this report. (11) Statement regarding computation of per share earnings. (15) Letter regarding unaudited interim financial statements. (27) Financial data schedule (for SEC use only). (b) REPORTS ON FORM 8-K A report on Form 8-K, dated September 27, 1995, was filed by the Registrant with respect to a press release commenting on expected earnings for the three-month period ending September 30, 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RYDER SYSTEM, INC. (Registrant) Date: November 8, 1995 /S/ EDWIN A. HUSTON ------------------------------------- Edwin A. Huston Senior Executive Vice President-Finance and Chief Financial Officer (Principal Financial Officer) Date: November 8, 1995 /S/ ANTHONY G. TEGNELIA --------------------------------------- Anthony G. Tegnelia Senior Vice President and Controller (Principal Accounting Officer) EX-11 2 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS Exhibit 11 STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS Primary earnings per share are computed by dividing earnings available to common shares by the weighted average number of common and common equivalent shares outstanding during the period. For purposes of computing primary earnings per share, common equivalent shares include the average number of common shares issuable upon the exercise of all employee stock options and awards and outstanding employee stock subscriptions, if dilutive, less the common shares which could have been purchased at the average market price during the period, with the assumed proceeds, including "windfall" tax benefits, from the exercise of the options, awards and subscriptions. Fully-diluted earnings per share are computed by dividing the sum of earnings available to common shares by the weighted average number of common shares, common equivalent shares and common shares assumed converted from potentially dilutive securities outstanding during the period. For purposes of computing fully-diluted earnings per share, common equivalent shares are computed on a basis comparable to that for primary earnings per share, except that common shares are assumed to be purchased at the market price at the end of the period, if dilutive. EX-15 3 LETTER RE UNAUDITED INTERIM FINANCIAL STATEMENTS KPMG PEAT MARWICK LLP CERTIFIED PUBLIC ACCOUNTANTS One Biscayne Tower Telephone 305-358-2300 Suite 2900 Telecopier 305-577-0544 2 South Biscayne Boulevard Miami, FL 33131 The Board of Directors Ryder System, Inc.: We acknowledge our awareness of the incorporation by reference in the following Registration Statements of our report dated October 19, 1995 related to our review of interim financial information: Form S-3: -- Registration Statement No. 33-20359 covering $1,000,000,000 aggregate principal amount of debt securities. -- Registration Statement No. 33-50232 covering $800,000,000 aggregate principal amount of debt securities. -- Registration Statement No. 33-58667 covering $800,000,000 aggregate principal amount of debt securities. Form S-8: -- Registration Statement No. 33-20608 covering the Ryder System Employee Stock Purchase Plan. -- Registration Statement No. 33-4333 covering the Ryder Employee Savings Plan. -- Registration Statement No. 1-4364 covering the Ryder System Profit Incentive Stock Plan. -- Registration Statement No. 33-69660 covering the Ryder System, Inc. 1980 Stock Incentive Plan. -- Registration Statement No. 33-37677 covering the Ryder System UK Stock Purchase Scheme. The Board of Directors Ryder System, Inc. Page 2 -- Registration Statement No. 33-442507 covering the Ryder Student Transportation Services, Inc. Retirement/Savings Plan. -- Registration Statement No. 33-63990 covering the Ryder System, Inc. Directors' Stock Plan. -- Registration Statement No. 33-58001 covering the Ryder System, Inc. Employee Savings Plan A. -- Registration Statement No. 33-58003 covering the Ryder System, Inc. Employee Savings Plan B. -- Registration Statement No. 33-58045 covering the Ryder System, Inc. Savings Restoration Plan. -- Registration Statement No. 33-61509 covering the Ryder System, Inc. Stock for Merit Increase Replacement Plan. -- Registration Statement No. 33-62013 covering the Ryder System, Inc. 1995 Stock Incentive Plan. Pursuant to Rule 436 (c) under the Securities Act of 1933, such report is not considered a part of a registration statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Act. KPMG PEAT MARWICK LLP Miami, Florida November 8, 1995 EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RYDER SYSTEM, INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS AND STATEMENTS OF EARNINGS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 96,639 0 304,276 0 60,099 805,238 6,986,476 2,648,208 5,708,385 1,113,506 2,317,942 547,332 0 0 650,162 5,708,385 0 3,821,974 0 3,511,255 0 0 141,697 169,022 70,026 98,996 0 0 7,759 91,237 1.15 0
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