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<SEC-DOCUMENT>0000950170-01-000394.txt : 20010327
<SEC-HEADER>0000950170-01-000394.hdr.sgml : 20010327
ACCESSION NUMBER: 0000950170-01-000394
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 6
CONFORMED PERIOD OF REPORT: 20001231
FILED AS OF DATE: 20010326
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-K
SEC ACT:
SEC FILE NUMBER: 001-04364
FILM NUMBER: 1579034
BUSINESS ADDRESS:
STREET 1: 3600 NW 82ND AVE
CITY: MIAMI
STATE: FL
ZIP: 33166
BUSINESS PHONE: 3055003283
MAIL ADDRESS:
STREET 1: 3600 NW 82 AVENUE
CITY: MIAMI
STATE: FL
ZIP: 33166
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>12/31/2000
<TEXT>
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
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
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 number 1-4364
RYDER SYSTEM, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-0739250
----------------------------------------------- -------------------------
(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
----------------------------------------------- -------------------------
(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 and non-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, 2001, was $1,208,800,623. The number of shares
of Ryder System, Inc. Common Stock ($.50 par value) outstanding as of January
31, 2001, was 60,049,481.
DOCUMENTS INCORPORATED BY PART OF FORM 10-K INTO WHICH
REFERENCE INTO THIS REPORT DOCUMENT IS INCORPORATED
Ryder System, Inc. 2001 Proxy Part III
Statement
- --------------------------------------------------------------------------------
[Cover page 1 of 3 pages]
1
<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]
2
<PAGE>
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]
3
<PAGE>
RYDER SYSTEM, INC.
Form 10-K Annual Report
TABLE OF CONTENTS
PAGE NO.
--------
PART I
Item 1 Business..................................................... 5
Item 2 Properties................................................... 8
Item 3 Legal Proceedings............................................ 8
Item 4 Submission of Matters to a Vote of Security Holders.......... 8
PART II
Item 5 Market for Registrant's Common Equity and Related
Stockholder Matters........................................ 9
Item 6 Selected Financial Data...................................... 9
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 10
Item 7A Quantitative and Qualitative Disclosures About Market Risk... 22
Item 8 Financial Statements and Supplementary Data.................. 23
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
4
<PAGE>
PART I
ITEM 1. BUSINESS
GENERAL
Ryder System, Inc. (the "Company") was incorporated in Florida in 1955. The
Company operates in three reportable business segments: (1) Fleet Management
Solutions (FMS), which provides full service leasing, commercial rental and
programmed maintenance of trucks, tractors and trailers to customers,
principally in the U.S., Canada and the United Kingdom; (2) Supply Chain
Solutions (SCS), which provides comprehensive supply chain consulting and lead
logistics management solutions that support customers' entire supply chains,
from inbound raw materials through distribution of finished goods throughout
North America, in Latin America, Europe and Asia and (3) Dedicated Contract
Carriage (DCC), which provides vehicles and drivers as part of a dedicated
transportation solution, principally in North America. As of December 31, 2000,
the Company and its subsidiaries had a fleet of 176,300 vehicles and 33,089
employees.(1)
On September 13, 1999, the Company sold its public transportation services
business (RPTS). The disposal of this business has been accounted for as
discontinued operations and, accordingly, its operating results and cash flows
are segregated and reported as discontinued operations in the Company's
consolidated financial statements.
Financial information about business segments is included in Item 8 on pages 45
through 47 of this report.
TRANSPORTATION AND LOGISTICS BUSINESS UNITS
FLEET MANAGEMENT SOLUTIONS
The FMS business segment provides full service truck leasing to over 14,000
customers globally ranging from large national enterprises to small companies,
with a fleet of 130,700 vehicles. Under a full service lease, The Company
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, the
Company provides contract maintenance to service customer 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 42,200 vehicles, ranging from heavy-duty tractors
and trailers to light-duty trucks, is available for commercial short-term
rental. In 2000, the FMS business segment 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.
The Company 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 gives customers the flexibility
to choose a full service lease or the combination of a finance lease and
contract maintenance for their vehicles.
SUPPLY CHAIN SOLUTIONS
The SCS business segment provides global integrated logistics support of
customers' entire supply chains, from in-bound raw materials supply through
finished goods distribution, the management of carriers, and inventory
deployment and overall supply chain design and management. Services include
varying combinations of logistics system and information technology 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. Supply chain solutions includes 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 supply chain 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 2000, SCS continued to expand its presence in the logistics market through
internal growth, increased emphasis on global account management and initiation
of strategic alliances. Ongoing expansion initiatives included the establishment
of e-Commerce services and increased capabilities in Asia and the Pacific Rim.
_____________________
(1) This number does include drivers obtained by certain subsidiaries of the
Company under driver leasing agreements.
5
<PAGE>
DEDICATED CONTRACT CARRIAGE
The DCC business segment combines the equipment, maintenance and administrative
services of a full service lease with additional services in order to provide a
customer with a dedicated transportation solution. Such additional services
include driver hiring and training, routing and scheduling, fleet sizing and
other technical support. Ryder has sought to expand its DCC operations in 2000
through internal growth.
DISPOSITION OF REVENUE EARNING EQUIPMENT
The Company's FMS segment has historically disposed of used revenue earning
equipment at prices in excess of book value. However, during 2000 an
industry-wide downturn in the market for new and used tractors and trucks,
particularly "Class 8" vehicles (the largest heavy-duty tractors and straight
trucks), combined with higher average book values per unit, led to the Company
recording reduced gains on the sale of revenue earning equipment. Additionally,
the company recorded impairment charges related to class 8 vehicles. See further
discussion under item 7.
The gains on the sale of revenue earning equipment were approximately 5%, 12%
and 12% of earnings from continuing operations before interest, taxes and
unusual items in 2000, 1999 and 1998, 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.
The FMS and DCC business segments compete with companies providing similar
services on 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, service
and geographical coverage and, with respect to DCC, driver and operations
expertise. Ryder also competes, to an extent and particularly in the U.K., 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, contract and non-contract truck maintenance service and DCC offerings
has been, and will continue to be, Ryder's emphasis.
In the SCS business segment, Ryder competes with companies providing similar
services on an international, 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. Competitive factors include price, service, 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's overriding strategy.
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 and operating 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.
6
<PAGE>
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 5, 2000 in conjunction with the Company's 2000 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 58 Chairman of the Board
Dwight D. Denny 57 Executive Vice President, Asset
Management
Bobby J. Griffin 52 Executive Vice President, Global
Supply Chain Operations
Tracy A. Leinbach 41 Executive Vice President, Fleet
Management Solutions
Challis M. Lowe 55 Executive Vice President, Human
Resources, Public Affairs and
Corporate Communications
Corliss J. Nelson 56 Senior Executive Vice President and
Chief Financial Officer
Vicki A. O'Meara 43 Executive Vice President, General
Counsel and Secretary
Lisa A. Rickard 45 Senior Vice President, Government
Relations
Richard G. Rodick 42 Senior Vice President and Controller
Gregory T. Swienton 52 President and Chief Executive Officer
Gene R. Tyndall 61 Executive Vice President, Global
Markets and e-Commerce
M. Anthony Burns has been Chairman of the Board since May 1985 and a director
since December 1979. He also served as the Company's Chief Executive Officer
from January 1983 until November 2000 and President from December 1979 until
June 1999.
Dwight D. Denny has been Executive Vice President, Asset Management since
February 2000. Mr. Denny was Executive Vice President, Development from December
1995 to February 2000, and was President, Ryder Commercial Leasing and 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 also 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.
Bobby J. Griffin has been Executive Vice President, Global Supply Chain
Operations since March 2001. Prior to this appointment, Mr. Griffin was Senior
Vice President, Field Management West from January 2000 to March 2001. Mr.
Griffin was Vice President, Operations of Ryder Transportation Services from
1997 to December 1999. Mr. Griffin also served Ryder as Vice President and
General Manager of ATE Management and Service Company, Inc. and of Managed
Logistics Systems, Inc. operating units of the former Ryder Public
Transportation Services, positions he held from 1993 to 1997. Mr. Griffin was
Executive Vice President, Western Operations of Ryder/ATE from 1987 to 1993. He
joined Ryder as Executive Vice President, Consulting of ATE in 1986 after Ryder
acquired ATE Management and Service Company.
Tracy A. Leinbach has been Executive Vice President, Fleet Management Solutions
since March 2001. Ms. Leinbach served as Senior Vice President, Sales and
Marketing from September 2000 to March 2001, and she was Senior Vice President
Field Management from July 2000 to September 2000. Ms. Leinbach also served as
Managing Director Europe of Ryder Transportation Services from January 1999 to
July 2000 and previously she had served Ryder Transportation Services as Senior
Vice President and Chief Financial Officer from 1998 to January 1999, Senior
Vice President, Business Services from 1997 to 1998, and Senior Vice President,
Purchasing and Asset Management for six months during 1996. From 1985 to 1996,
Ms. Leinbach held various financial positions in Ryder subsidiaries.
7
<PAGE>
Challis M. Lowe has served as Executive Vice President, Human Resources, Public
Affairs and Corporate Communications since November 2000. Before joining Ryder,
Ms. Lowe was Executive Vice President, Human Resources and Administrative
Services at Beneficial Management Corp., a financial services company, from 1997
to 1998. Previously, she was Executive Vice President at Heller International, a
financial services company, from 1993 to 1997 where she was responsible for
Human Resources and Communications.
Corliss J. Nelson has been Senior Executive Vice President and Chief Financial
Officer since April 1999. Previously, Mr. Nelson was President of Koch Capital
Services and was a Vice President of Koch Industries, Inc., a diversified
company.
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 a
partner with the Chicago office of the law firm of Jones Day Reavis & Pogue.
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.
Richard G. Rodick has been Senior Vice President and Controller at Ryder System,
Inc. since March 1999 and he was Vice President and Controller, Business
Services of Ryder Transportation Services from June 1998 to March 1999. Mr.
Rodick served as Field Finance Director of Commercial Leasing and Services from
January 1997 to June 1998 and as District Controller from August 1994 to January
1997. From 1988 to 1994, Mr. Rodick held various financial positions at Ryder
subsidiaries.
Gregory T. Swienton has been President since June 1999 and Chief Executive
Officer since November 2000. Previously, Mr. Swienton was Chief Operating
Officer from June 1999 to November 2000. Before joining Ryder, Mr. Swienton was
Senior Vice President of Growth Initiatives of Burlington Northern Santa Fe
Corporation (BSNF) and before that Mr. Swienton was BNSF's Senior Vice
President, Coal and Agricultural Commodities Business Unit.
Gene R. Tyndall has been Executive Vice President, Global Markets and e-Commerce
since June 2000. Previously, he served as Senior Vice President, Global Customer
Solutions from 1999 to 2000. Prior to joining Ryder, Mr. Tyndall was senior
partner and leader of the Ernst & Young Global Supply Chain Management
Consulting Practice were he spent twenty years providing logistic consulting
services and developing the global supply chain consulting practice.
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 of this Form 10-K. The Company maintains its
property records based on legal entities, which are different from the Company's
business segments.
Ryder Integrated Logistics, Inc. has nearly 880 locations in the United States
and Canada. Almost all of these facilities are leased. Such locations generally
include a warehouse and administrative offices.
Ryder Transportation Services has approximately 780 locations in the United
States, Puerto Rico and Canada; nearly 390 of these facilities are owned and the
remainder are leased. Such locations generally include a repair shop and
administrative offices.
The Company's international operations (locations outside of North America) have
over 120 locations. These locations are in the United Kingdom, Germany, the
Netherlands, Sweden, Hungary, Poland, Mexico, Argentina, Brazil and Singapore.
Almost all of these facilities 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, 2000.
8
<PAGE>
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
Years ended December 31 2000 1999 1998 1997 1996
- --------------------------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Revenue $5,336,792 4,952,204 4,606,976 4,368,148 4,496,373
Earnings from continuing operations
before unusual items/(a)/:
Before income taxes $ 183,335 193,637 238,942 213,042 134,335
After income taxes $ 115,501 121,129 149,292 130,019 79,158
Per diluted common share/(a)/ $ 1.93 1.76 2.03 1.66 0.97
Earnings (loss) from continuing operations:
Before income taxes $ 141,321 117,494 204,564 209,550 (47,653)
After income taxes $ 89,032 72,917 127,812 127,888 (43,845)
Per diluted common share/(a)/ $ 1.49 1.06 1.74 1.64 (0.54)
Net earnings (loss)/(b)/ $ 89,032 419,678 159,071 175,685 (41,318)
Per diluted common share/(b)/ $ 1.49 6.11 2.16 2.25 (0.51)
Cash dividends per common share $ 0.60 0.60 0.60 0.60 0.60
Average common shares - diluted
(in thousands) 59,759 68,732 73,645 78,192 81,263
Average shareholders' equity,
excluding unusual items $1,225,910 1,122,698 1,106,133 1,126,519 1,261,101
Return on average common equity (%) 7.3 7.2 14.5 12.4 (5.6)
Book value per common share $ 20.86 20.29 15.37 14.39 14.19
Market price - high $ 25.13 28.75 40.56 37.13 31.13
Market price - low $ 14.81 18.81 19.44 27.13 22.63
Total debt $2,016,980 2,393,389 2,583,031 2,568,915 2,436,968
Long-term debt $1,604,242 1,819,136 2,099,697 2,267,554 2,237,010
Debt-to-equity (%) 161 199 236 242 220
Year-end assets $5,474,923 5,770,450 5,708,601 5,509,060 5,645,389
Return on average assets (%)/(c)/ 1.6 1.3 2.4 2.5 (0.8)
Average asset turnover (%)/(c)/ 93.8 85.4 86.5 83.7 83.4
Cash flow from continuing operating
activities and asset sales/(d)/ $1,245,441 671,721 1,212,172 908,845 839,945
Capital expenditures, including
capital leases/(c)/ $1,288,784 1,734,566 1,333,352 992,408 1,210,372
Number of vehicles/(c)/ 176,300 171,500 162,700 152,800 152,800
Number of employees/(c)/ 33,089 30,340 29,166 27,516 27,924
- -=========================================================================================================================
</TABLE>
(a) Unusual items represent Year 2000 expense, 2000, 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 $42 million ($26 million after-tax,
or $0.44 per diluted common share) in 2000, $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.
(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 (loss)
for 1999, 1998, 1997 and 1996 include the results of discontinued
operations.
(c) Excludes discontinued operations.
(d) Excludes sale-leaseback transactions.
9
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company operates in three reportable business segments: (1) Fleet Management
Solutions (FMS), which provides full service leasing, commercial rental and
programmed maintenance of trucks, tractors and trailers to customers,
principally in the U.S., Canada and the United Kingdom; (2) Supply Chain
Solutions (SCS), which provides comprehensive supply chain consulting and lead
logistics management solutions that support customers' entire supply chains,
from inbound raw materials through distribution of finished goods throughout
North America, in Latin America, Europe and Asia; and (3) Dedicated Contract
Carriage (DCC), which provides vehicles and drivers as part of a dedicated
transportation solution, principally in North America. During 1999, the Company
sold its public transportation services business (RPTS). The following
discussion excludes the results of RPTS, which has been classified as
discontinued operations.
CONSOLIDATED RESULTS
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Earnings from continuing
operations before
unusual items* $115,501 121,129 149,292
Per diluted common share 1.93 1.76 2.03
Earnings from continuing
operations 89,032 72,917 127,812
Per diluted common share 1.49 1.06 1.74
Weighted average shares
outstanding - diluted 59,759 68,732 73,645
================================================================================
*Year 2000 expense and restructuring and other charges.
Earnings from continuing operations increased 22 percent in 2000 and decreased
43 percent in 1999. See "Operating Results by Business Segments" for a further
discussion of operating results in the past three years. Earnings per share
growth rates have exceeded earnings growth rates over the last two years because
the average number of shares outstanding has decreased during these periods. The
decrease in average shares outstanding reflects the impact of the Company's
various stock repurchase programs conducted through the end of 1999.
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Revenue
Fleet management
solutions $3,555,990 3,307,244 3,162,910
Supply chain solutions 1,604,862 1,449,871 1,242,664
Dedicated contact
carriage 542,096 522,800 512,800
Eliminations (366,156) (327,711) (311,398)
---------------------------------------------------
Total revenue $5,336,792 4,952,204 4,606,976
================================================================================
Revenue from continuing operations increased 8 percent in 2000 compared with
1999, led by SCS, which grew 11 percent. FMS posted revenue gains of 8 percent,
due primarily to increased fuel revenue resulting from increases in related fuel
prices. However, the Company did not realize additional contribution margin as a
result of these increases. Revenue from continuing operations increased 7
percent in 1999 compared with 1998, led by SCS, which grew 17 percent. FMS
posted revenue gains of 5 percent due primarily to full service leasing and
programmed maintenance. The FMS segment leases revenue earning equipment, sells
fuel and provides maintenance and other ancillary services to the SCS and DCC
segments. Inter-segment sales are accounted for at approximate fair value as if
the sales were made to third parties. Eliminations reflect the elimination of
revenue for these services and sales.
10
<PAGE>
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Operating expense $3,623,450 3,320,687 3,079,940
Percentage of revenue 68% 67% 67%
================================================================================
Operating expense increased 9 percent in 2000 compared with 1999. The increase
was primarily attributable to higher fuel costs due to fuel price increases.
Operating expense increased 8 percent in 1999 compared with 1998, due to higher
compensation and employee benefits expense, outside driver costs, vehicle
liability and technology costs primarily as a result of higher business volumes
and higher fuel costs due to fuel price increases, particularly in the second
half of 1999.
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Freight under
management expense $421,644 425,769 330,124
Percentage of revenue 8% 9% 7%
================================================================================
Freight under management (FUM) expense represents subcontracted freight costs on
logistics contracts for which the Company purchases transportation. FUM expense
decreased $4 million, or 1 percent, in 2000. The Company's vehicle-based SCS
revenue in 2000 was flat compared with 1999, which led to a similar trend
related to FUM expense. FUM expense increased $96 million, or 29 percent, in
1999 compared with 1998, reflecting growth in related logistics contracts. The
Company focused its efforts to expand its SCS business in 2000 on service-based,
rather than vehicle-based revenue and expects to continue this strategy in 2001.
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Depreciation expense $580,356 622,726 626,293
Gains on vehicle sales (19,307) (55,961) (56,631)
Equipment rental 385,763 266,995 205,990
================================================================================
Depreciation expense decreased by $42 million, or 7 percent, compared with 1999.
The decrease resulted principally from sale-leaseback and other leasing
transactions which increased the number of leased (as opposed to owned) vehicles
in the Company's fleet. Consistent with the charges recorded in the third
quarter of 2000 (described in "Restructuring and Other Charges") to reflect
decreases in the market value of used tractors, the Company reduced residual
values for certain vehicles, principally tractors, currently in use and expected
to be disposed of during the next two years. In light of this change, the
Company expects to record additional depreciation and rent expense over the next
two years on a declining basis.
Depreciation expense decreased 1 percent in 1999 compared with 1998, due to 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.
Gains on vehicle sales decreased to $19 million in 2000 from $56 million in
1999. During 2000, average sales proceeds per unit decreased for certain classes
of tractors and have generally been stable for other tractors and types of
trucks compared with 1999. However, the average book value per unit of units
sold in 2000 was generally greater than that of units sold in 1999.
Gains on vehicle sales 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.
The Company periodically reviews and adjusts the residual values, reserves for
guaranteed lease termination values and useful lives of revenue earning
equipment based on current and expected operating trends and projected
realizable values. The Company believes that its carrying values and estimated
sales proceeds for revenue earning equipment are appropriate. However, a greater
than anticipated decline in the market for used vehicles may require the Company
to further adjust such values and estimates.
Equipment rental primarily consists of rental costs on revenue earning
equipment. Equipment rental costs have increased in 2000 and 1999 compared with
prior years as a result of sale-leaseback and securitization transactions
completed in the last two years.
11
<PAGE>
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Interest expense $154,009 187,176 187,786
Percentage of revenue 3% 4% 4%
================================================================================
Interest expense decreased 18 percent in 2000, compared with 1999, due primarily
to lower commercial paper interest rates, debt reductions associated with the
use of proceeds from the RPTS sale and the impact of sale-leaseback transactions
completed since December 1998. Interest expense was virtually unchanged in 1999
compared with 1998. In 1999, the effect of debt reductions associated with the
use of proceeds from the RPTS sale and the impact of sale-leaseback transactions
completed since December 1998 was offset by the impact of higher average
outstanding debt levels, particularly during the second and third quarters of
1999, primarily from increased levels of capital sending.
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Miscellaneous expense
(income), net $7,542 (8,825) (5,468)
================================================================================
The Company recorded net miscellaneous expense in 2000 compared with net
miscellaneous income in 1999. The growth in expense was due to an increase of $7
million in fees (due to an increase in dollar volume) related to the Company's
trade receivables sale facility in 2000. Additionally, in 1999, such fees were
offset by a $5 million gain on the sale of non-operating property and $4 million
of interest income earned on temporarily investing the proceeds from the RPTS
sale.
Miscellaneous income increased in 1999 compared to 1998.
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Unusual items:
Restructuring and
other charges, net $42,014 52,093 (3,040)
Year 2000 expense -- 24,050 37,418
-------------------------------------------------------
$42,014 76,143 34,378
================================================================================
Unusual items represent restructuring and other charges, which include asset
impairment charges, and Year 2000 expense. Restructuring and other charges
totaled $42 million in 2000 compared with $52 million in 1999. Incremental Year
2000 expense totaled $24 million in 1999 compared with $37 million in 1998. See
the "Restructuring and Other Charges" section of this Financial Review for a
further discussion of these matters.
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Provision for
income taxes $52,289 44,577 76,752
================================================================================
The effective income tax rate is the provision for income taxes as a percentage
of income from continuing operations before income taxes. The Company's
effective tax rate was 37.0 percent in 2000, 37.9 percent in 1999 and 37.5
percent in 1998. The lower effective tax rates in 2000 and 1998 resulted
primarily from lower state income taxes and lower net non-deductible items.
12
<PAGE>
RESTRUCTURING AND OTHER CHARGES
In 2000, the Company recorded a pre-tax charge of $42 million. The components of
the charge were as follows (in thousands):
Impairment - tractors identified for
accelerated disposal $15,100
Impairment - other tractors:
Owned 3,475
Leased 23,095
Asset impairment charges 3,339
Other charges 958
Recovery of prior year charges (3,953)
-------------------------------
Total $42,014
================================================================================
The most significant portion of the charge was a result of the industry-wide
downturn in the market for new and used "Class 8" vehicles (the largest
heavy-duty tractors and straight trucks) which led to a decrease in the market
value of used tractors during the second half of 2000. The Company's unsold
Class 8 inventory consists of units previously used by customers of the FMS
segment. Tractors identified for accelerated disposal represent revenue earning
equipment held for sale that the
Company identified in the third quarter of 2000 as increasingly undesirable and
unmarketable due to lower-powered engines or a potential lack of future support
for parts and service. Impairment of other tractors reflects owned and leased
units for which estimated fair value less costs to sell declined below carrying
value (or termination value, which represents the final payment due to lessors,
in the case of leased units) in the third and fourth quarters of 2000.
The Company was involved in litigation with a former customer, OfficeMax,
relating to a logistics services agreement that was terminated in 1997. In
October 2000, the Company agreed to an out-of-court settlement with OfficeMax,
ending this litigation. Asset impairment charges relate to the write-off, net of
recoveries in the fourth quarter 2000, of certain assets related to the
OfficeMax contract.
Other charges of $958,000 represent consulting fees incurred during 2000 related
to the completion of the Company's 1999 profitability improvement study.
Recovery of prior year charges represents both the reversal of severance and
employee-related charges and gains on vehicles sold in the United Kingdom during
the third quarter of 2000, for which an impairment charge had been recorded in
the 1999 restructuring. Prior year severance and employee-related charges were
reversed due to refinements in estimates.
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 FMS operations in the United Kingdom following the December
1998 decision to retain the business. As a result of these initiatives, the
Company recorded pre-tax restructuring and other charges in 1999 of $52 million.
The 1999 restructuring initiatives resulted in identification of approximately
250 employees whose jobs were terminated. Severance benefits totaled $17 million
and were 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 are
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.
Restructuring and other charges in 1998 amounted to a credit of $3 million and
included the reversal of charges resulting from the 1996 restructuring as well
as unusual items incurred that year.
See the "Restructuring and Other Charges" note to the consolidated financial
statements for additional discussion.
13
<PAGE>
OPERATING RESULTS BY BUSINESS SEGMENT
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Revenue
Fleet management solutions:
Full service lease and
programmed
maintenance $1,865,345 1,816,599 1,762,621
Commercial rental 523,776 540,734 505,558
Fuel 773,320 587,193 542,140
Other 393,549 362,718 352,591
--------------------------------------------------
3,555,990 3,307,244 3,162,910
Supply chain solutions 1,604,862 1,449,871 1,242,664
Dedicated contract
carriage 542,096 522,800 512,800
Eliminations (366,156) (327,711) (311,398)
--------------------------------------------------
Total revenue $5,336,792 4,952,204 4,606,976
================================================================================
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Contribution margin
Fleet management
solutions $382,851 372,164 395,828
Supply chain solutions 70,242 56,365 56,914
Dedicated contract
carriage 59,669 58,100 59,600
Eliminations (41,888) (40,280) (39,666)
-----------------------------------------------------
470,874 446,349 472,676
Central support services (287,539) (252,712) (233,734)
Restructuring and
other charges (42,014) (52,093) 3,040
Year 2000 expense -- (24,050) (37,418)
-----------------------------------------------------
Earnings from
continuing operations
before income taxes $141,321 117,494 204,564
================================================================================
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 (see "Restructuring and
Other Charges"). As part of the restructuring, the Company changed how it
manages and measures the business during the first quarter of 2000. Prior to the
1999 restructuring, the Company's three reportable business segments were
Transportation Services, Integrated Logistics and International. The principal
changes from prior management and measurement are (1) management of the business
along product lines, without regard to geography; (2) discrete management and
presentation of the DCC business; and (3) segment profitability measured by
contribution margin. The business segment information presented reflects such
changes. Prior year information has been restated to conform to the current year
presentation.
Management evaluates business segment financial performance based upon several
factors, of which the primary measure is contribution margin. Contribution
margin represents each business segment's revenue, less direct costs and direct
overheads related to the segment's operations. Business segment contribution
margin for all segments (net of eliminations), less Central Support Services
(CSS) expenses and unusual items, is equal to earnings from continuing
operations before income taxes. CSS are those costs incurred to support all
business segments, including sales and marketing, human resources, finance,
shared management information systems (MIS), customer solutions, health and
safety, legal and communications. CSS also includes expenses of certain new
business initiatives, Ryder Capital Services and e-Commerce, which may be
reported as business segments in the future once such operations become
material.
Contribution margin related to inter-segment equipment and services billed to
customers (equipment contribution) is included in both FMS and the business
segment which served the customer, then eliminated. Equipment contribution
included in SCS contribution margin was $20 million in 2000 and $19 million in
1999 and 1998. Equipment contribution included in DCC contribution margin was
$22 million in 2000 and $21 million in 1999 and 1998. Interest expense is
primarily allocated to the FMS business segment.
14
<PAGE>
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.
FLEET MANAGEMENT SOLUTIONS
FMS revenue increased 8 percent in 2000 compared with 1999 and 5 percent in 1999
compared with 1998. The results for both years were impacted by increases in
fuel revenue, which were due to increases in fuel prices. FMS realized minimal
changes in margin as a result of fuel price increases. Full service lease and
programmed maintenance revenue increased in 2000 and 1999 compared with the
previous years as a result of growth in both fleet size and average revenue per
unit.
Commercial rental revenue decreased in 2000 and increased in 1999 compared with
the previous years. In 1999, rental revenue grew due to a backlog in the arrival
of new vehicles for full service lease customers. Rental vehicles were provided
to these customers until new full service lease vehicles arrived and were
prepared for use.
In 2000, such backlog was reduced to levels more comparable with 1998, which
reduced the demand for rental vehicles by full service lease customers. Pure
rental revenue (total rental revenue less rental revenue related to units
provided to full service lease customers), increased 5 percent in 2000 compared
with the prior year. Rental fleet utilization was 71 percent in 2000 and 1999
and 72 percent in 1998. Pure rental revenue and rental fleet utilization
statistics are monitored for the U.S. only; however, management believes such
metrics to be indicative of rental product performance for the Company as a
whole. Other revenue, which relates to non-contractual maintenance, tractor
rentals and other ancilliary revenue, increased 9 and 3 percent in 2000 and
1999, respectively, compared with prior years.
Contribution margin as a percentage of dry revenue (revenue excluding fuel) was
flat in 2000 compared with 1999 and decreased to 14 percent in 1999 from 15
percent in 1998. In 2000, improvements in full service lease margins, decreased
running costs and the impact of pension income on benefits costs were offset by
reduced gains in vehicle sales when compared with 1999. Decreased running costs
in 2000 were generally attributable to a decrease in the average age of the
fleet. Pension income attributable to FMS from the Company's principal pension
plan in the U.S. increased by $27 million in 2000 compared with 1999.
The decrease in contribution margin in 1999 compared with 1998 was primarily due
to reduced operating efficiencies in commercial rental, higher compensation,
environmental and vehicle liability expenses, the impact of lost business and
delays of in-service and out-service processing of vehicles.
The Company expects the rate of revenue growth for FMS to slow in 2001 as the
Company focuses on contribution margin. The Company anticipates that pension
income will decrease to 1999 levels in 2001, due principally to market
performance of pension investments. The Company also anticipates that gains on
sales of used vehicles will be less than those recorded in 2000. The Company
plans to compensate for the impact of the foregoing on contribution margin by
attempting to reduce costs, improve pricing discipline and better utilize
assets. There is no assurance that such strategy will be effective in offsetting
anticipated reductions in contribution margin in FMS in 2001.
15
<PAGE>
The Company's fleet of owned and leased revenue earning equipment is summarized
as follows:
Years ended December 31 2000 1999
- --------------------------------------------------------------------------------
Number of units
By type:
Trucks 66,800 65,600
Tractors 56,400 54,700
Trailers 48,500 46,700
Other 4,600 4,500
------------------------------------------
176,300 171,500
================================================================================
Years ended December 31 2000 1999
- --------------------------------------------------------------------------------
Number of units
By business:
Full service lease 130,700 125,400
Commercial rental 42,200 43,200
Service vehicles and other 3,400 2,900
------------------------------------------
176,300 171,500
================================================================================
The totals in each of the tables above include the following non-revenue earning
equipment:
Years ended December 31 2000 1999
- --------------------------------------------------------------------------------
Number of units
Not yet earning revenue 2,400 3,200
No longer earning revenue 8,300 6,300
-----------------------------------------
10,700 9,500
================================================================================
SUPPLY CHAIN SOLUTIONS
SCS revenue increased 11 percent in 2000 and 17 percent in 1999 compared with
the previous years. Revenue growth in each year was due to expansion of business
with existing customers and addition of new customers, particularly automotive
suppliers, aerospace, electronics and technology companies.
Contribution margin as a percentage of operating revenue increased to 6 percent
in 2000 compared with 5 percent in 1999 and decreased in 1999 compared with 6
percent in 1998. The improved contribution margin percentage in 2000 compared
with 1999 was the result of improved performance in the Company's operations
outside the U.S. The decrease in contribution margin percentage in 1999 compared
with 1998 was due to numerous factors including lower margins in
volume-sensitive accounts, increased operating expenses on several start-up
accounts and increased overhead and technology costs to support product
development.
The Company expects revenue growth in 2001 to come principally from electronics
and technology companies as automotive-related growth is expected to slow in
response to cutbacks in 2001 production announced by customers.
DEDICATED CONTRACT CARRIAGE
DCC revenue increased 4 percent in 2000 and 2 percent in 1999 compared with the
previous years. DCC revenue growth was due to increased fuel costs billed to
customers and net business growth in both years. DCC contribution margin as a
percentage of operating revenue was flat in 2000 compared with 1999.
Contribution margin decreased to 11 percent of operating revenue in 1999
compared with 12 percent in 1998 due to reduced profitability on certain
accounts in 1999, some of which were terminated prior to 2000. The Company
expects trends in DCC noted in 2000 to continue in 2001.
CENTRAL SUPPORT SERVICES
CSS increased 14 percent in 2000 and 8 percent in 1999 compared with the prior
years. CSS increased in 2000 due to increased spending for MIS and new
initiatives such as electronic commerce. Additionally, in 1999, CSS was reduced
by a $5 million gain on a real estate sale as well as $4 million of interest
income earned on temporarily investing the proceeds from the RPTS sale. CSS
increased in 1999 compared with 1998 due to increased MIS and employee
compensation costs and lower gains on land sales compared to 1998.
16
<PAGE>
DISCONTINUED OPERATIONS
Years ended December 31 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Earnings from discontinued
operations, less income taxes $ 11,831 31,259
Gain on sale of discontinued
operations, less income taxes 339,323 --
================================================================================
On September 13, 1999, the Company completed the sale of RPTS for $940 million
in cash and realized a $339 million after-tax gain ($4.94 per diluted common
share). The transaction generated gains from the settlement and curtailment of
certain employee benefit and postretirement plans, offset by provisions for
severance and direct transaction and other costs. The RPTS disposal has been
accounted for as discontinued operations and accordingly, its operating results
and cash flows are segregated and reported as discontinued operations in the
accompanying consolidated financial statements.
FINANCIAL RESOURCES AND LIQUIDITY
CASH FLOWS
The following is a summary of the Company's cash flows from continuing
operating, financing and investing activities:
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Net cash provided by
(used in):
Operating activities $1,015,533 269,819 890,210
Financing activities (363,599) (527,848) (124,549)
Investing activities (642,957) 228,067 (727,126)
------------------------------------------------------
Net cash flows from
continuing operations $ 8,977 (29,962) 38,535
================================================================================
Cash provided by operating activities increased in 2000 compared with 1999
primarily due to increases in trade receivables sold in 2000 and lower capital
working needs in 1999. Cash used in financing activities decreased in 2000
compared with 1999. 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. The stock repurchase program was completed in 1999 and there
was no such program in 2000. Cash used in investing activities was $643 million
compared with cash provided by investing activities of $228 million in 1999. In
1999, cash provided by investing activities was the result of proceeds from the
RPTS sale. After adjusting for such proceeds, cash used in investing activities
decreased in 2000 compared with 1999 primarily as a result of reduced levels of
capital expenditures.
The decrease in cash flow from continuing operating activities in 1999 compared
with 1998 was 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
of the RPTS sale.
During 1999, receivables also increased in conjunction with revenue growth, and
accounts payable for vehicle purchases decreased due to the timing of vehicle
deliveries.
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. Since
1996, the Company has repurchased 27 million shares of common stock. The Company
utilized proceeds from the RPTS sale, the automotive carrier and the consumer
truck rental businesses to fund these programs.
The following is a summary of capital expenditures:
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Revenue earning
equipment $1,186,787 1,627,206 1,221,014
Operating property
and equipment 101,997 107,013 112,127
----------------------------------------------------------
$1,288,784 1,734,219 1,333,141
================================================================================
17
<PAGE>
The decrease in capital spending in 2000 was planned based upon the significant
increase in capital spending and fleet replacement in FMS that took place during
the first half of 1999.
The overall increase in 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. The excess spending
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.
The Company expects to reduce capital expenditures in 2001 by approximately 13
percent compared with 2000 due to improved controls over early replacement of
units and increased pricing discipline over new business.
During the past three years, the Company completed a number of acquisitions,
each of which has been accounted for using the purchase method of accounting.
Total consideration for these acquisitions was $28 million in 2000, $13 million
in 1999 and $53 million in 1998. The Company will continue to evaluate selective
acquisitions in FMS and SCS in 2001.
The Company's cash requirements are funded principally through operations and
the sale of revenue earning equipment.
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, including asset-backed securities and operating leases, as well as
variable-rate financing available through bank credit facilities, commercial
paper and receivable conduits. The Company also periodically enters into sale
and leaseback agreements on revenue earning equipment, which are accounted for
as operating leases. In 1999, the Company utilized a portion of the proceeds
from the RPTS sale and proceeds from the sale and leaseback of revenue earning
equipment to reduce debt.
The Company's debt ratings as of December 31, 2000 were as follows:
Commercial Unsecured
Paper Notes
- --------------------------------------------------------------------------------
Moody's Investors Service P2 Baa1
Standard & Poor's Ratings Group A2 BBB
Fitch F2 A -
================================================================================
Debt totaled $2.0 billion at the end of 2000 compared with $2.4 billion at the
end of 1999. The decrease in debt in 2000 was principally due to repayment of
$426 million in medium-term notes, net of an increase of $108 million in
commercial paper borrowing. The Company's reduced debt in 2000 is also due to an
increase of $270 million of trade receivables sold in 2000 compared with 1999.
Debt decreased to $2.4 billion at the end of 1999 from $2.6 billion at the end
of 1998. Debt decreased in 1999 due to repayments of debt using a portion of the
proceeds received from the RPTS sale, net of increased borrowings to support
capital expenditures. In 1999, the Company made unsecured note payments of $530
million, which were partially offset by an increase in commercial paper
borrowings of $149 million and issuance of $174 million in medium-term notes.
The Company's debt-to-equity ratio at December 31, 2000 decreased to 161 percent
from 199 percent at December 31, 1999.
The Company has a $720 million global revolving credit facility, which expires
in June 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, 2000, foreign borrowings of $97 million
were outstanding under the credit facility. The Company is negotiating a new
facility which will mature in 2006.
At the end of 2000, $187 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 (SEC).
Proceeds from debt issues under the shelf registration are available for capital
expenditures, debt refinancing and general corporate purposes. As of December
31, 2000, 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 2004. At December 31, 2000 and
1999, the outstanding balance of receivables sold pursuant to this agreement was
$345 million and $75 million, respectively.
18
<PAGE>
Proceeds from sale-leaseback transactions were $373 million in 2000 and $594
million in 1999. The sale-leaseback transactions in 1999 include vehicle
securitization transactions in which the Company sold a beneficial interest in
certain leased vehicles to separately rated and unconsolidated vehicle lease
trusts. Such securitizations generated cash proceeds of $294 million in 1999.
The vehicles were sold for approximately 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 the capital markets.
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, in certain circumstances, the use of a
variety of derivative financial instruments when deemed prudent. The Company
does not enter into leveraged derivative 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. From time to time, the Company also uses interest rate
swap and cap agree-ments to manage its fixed rate and variable rate exposure and
to better match the repricing of its debt instru-ments to that of its portfolio
of assets. No interest rate swap or cap agreements were outstanding at December
31, 2000 or 1999.
The following tables summarize debt obligations outstanding as of December 31,
2000 and 1999 expressed in U.S. dollar equivalents. The tables show the amount
of debt, including current portion, 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, 2000 and 1999. 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
- ------------------------------------------------------------------------------------------------------------------------------
2000 Years ended December 31
- ------------------------------------------------------------------------------------------------------------------------------
(in thousands) 2001 2002 2003 2004 2005 Thereafter Total Fair Value
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed-rate debt:
Dollar denominated $264,300 166,324 75,591 72,099 199,962 406,973 1,185,249 1,120,611
Average interest rate 7.00% 6.96% 7.04% 7.13% 7.21% 7.52%
Pound Sterling denominated 22,397 74,655 -- -- -- -- 97,052 98,186
Average interest rate 8.13% 7.91% -- -- -- --
Canadian Dollar denominated 10,008 33,360 30,024 13,344 -- -- 86,736 90,325
Average interest rate 6.64% 6.57% 6.24% 6.25% -- --
Other 4,238 1,363 1,360 723 723 723 9,130 9,070
Average interest rate 6.77% 5.97% 6.11% 6.31% 6.31% 6.31%
Variable-rate debt:
Dollar denominated(a) -- 447,340 5,000 -- -- -- 452,340 452,340
Average interest rate 6.21% 5.61% -- -- -- --
Pound Sterling denominated 8,212 61,217 -- -- -- -- 69,429 69,429
Average interest rate 5.78% 5.64% -- -- -- --
Canadian Dollar denominated 67,387 -- -- -- -- -- 67,387 67,387
Average interest rate 6.22% -- -- -- -- --
Other 27,440 1,596 123 -- -- -- 29,159 29,159
Average interest rate 6.77% 6.64% 9.25% -- -- --
-----------------------------------------------------------------------------------------
Total Debt (excluding capital leases) $1,996,482 1,936,507
==============================================================================================================================
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Expected Maturity Date
- ------------------------------------------------------------------------------------------------------------------------------
1999 Years ended December 31
- ------------------------------------------------------------------------------------------------------------------------------
(in thousands) 2001 2002 2003 2004 2005 Thereafter Total Fair Value
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed-rate debt:
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
==============================================================================================================================
</TABLE>
(a) Includes commercial paper which is 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, 2000 and 1999.
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 from time to time to hedge foreign currency
transactional exposure. No foreign currency option contracts or forward
agreements were outstanding at December 31, 2000 or 1999.
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 a portion
of the Company's service contracts for which the cost of fuel is integral to
service delivery and the service contract does not have a mechanism to adjust
for increases in fuel prices. As of December 31, 2000, the Company had various
fuel purchase arrangements in place to ensure delivery of fuel at market rates
in the event of fuel shortages. None of the Company's current fuel purchase
arrangements fix the price of fuel to be purchased and as such the Company is
exposed to fluctuations in fuel prices. The Company believes the exposure to
fuel price fluctuations would not materially impact the Company's results of
operations, cash flows or financial position.
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.
20
<PAGE>
Capital expenditures related to these programs totaled approximately $2 million
in 2000 and $5 million in 1999. The Company incurred $5 million of environmental
expenses in 2000, compared with $10 million in 1999 and $4 million in 1998,
which included normal recurring expenses, such as licensing, testing and waste
disposal fees. The decrease in expenses in 2000 was due to increased claim
recoveries and a decrease in the number of projects compared with 1999. 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 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 2000 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 for a further discussion.
EURO CONVERSION
On January 1, 1999, the participating countries of the European Union adopted
the euro as their common legal currency. Introduction of the euro is scheduled
to phase in over a period ending January 1, 2002, with the participating
countries' existing national currencies continuing as legal tender through
February 28, 2002, at which time the existing national currencies will be
completely removed from circulation. 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, cash flows or financial position.
OTHER MATTERS
In January 2001, the Company revised its vacation policy in the U.S. Starting
January 1, 2001, employees will earn vacation based on the calendar year rather
than their anniversary date. Additionally, unused earned vacation may not be
carried forward into the next calendar year. At December 31, 2000, the Company's
vacation accrual for affected employees was approximately $20 million. As a
result of the policy change, the balance will be zero at December 31, 2001.
RECENT ACCOUNTING PRONOUNCEMENTS
In September 2000, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,"
which replaces SFAS No. 125. SFAS No. 140 provides consistent standards for
distinguishing transfers of financial assets that are sales from transfers that
are secured borrowings. SFAS No. 140 is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after March 31,
2001, and is effective for recognition and reclassification of collateral and
for disclosures relating to securitization transactions and collateral for
fiscal years ending after December 15, 2000. The Company believes the impact of
SFAS No. 140 will not be material to the Company's results of operations, cash
flows or its financial position.
21
<PAGE>
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133, as amended, requires all
derivatives, including certain derivatives imbedded in other contracts, to be
recognized at fair value as either assets or liabilities on the balance sheet
and establishes new accounting rules for hedging instruments. The Company
adopted SFAS No. 133 on January 1, 2001. Adoption of this Statement did not have
a material impact on the Company's financial position and did not impact cash
flows or results of operations.
In March 2000, the FASB issued FASB Interpretation No. 44, "Accounting for
Certain Transactions involving Stock Compensation-an interpretation of APB
Opinion No. 25" (FIN 44). This interpretation provides guidance for issues that
have arisen in applying APB Opinion No. 25, "Accounting for Stock Issued to
Employees." The Company's existing accounting policies conformed to FIN 44;
therefore, adoption did not impact the Company's results of operations, cash
flows or financial position.
In December 1999, the SEC issued Staff Accounting Bulletin (SAB) No. 101,
"Revenue Recognition in Financial Statements." SAB No. 101 provides guidance on
applying generally accepted accounting principles to revenue recognition issues
in financial statements. SAB No. 101, as amended, was adopted by the Company in
the fourth quarter of 2000. The Company's existing accounting policies conformed
to SAB No. 101; therefore, adoption did not impact the Company's results of
operations, cash flows or financial position.
FORWARD-LOOKING STATEMENTS
This Annual Report contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are based
on the Company's current plans and expectations and involve risks and
uncertainties that may cause actual results to differ materially from the
forward-looking statements. Generally, the words "believe," "expect," "intend,"
"estimate," "anticipate," "will" and similar expressions identify
forward-looking statements.
Important factors that could cause such differences include, among others:
general economic conditions in the U.S. and worldwide; the market for the
Company's used equipment; the highly competitive environment applicable to the
Company's operations (including competition in supply chain solutions from other
logistics companies as well as from air cargo, shippers, railroads and motor
carriers and competition in full service leasing and commercial rental from
companies providing similar services as well as truck and trailer manufacturers
that provide leasing, extended warranty maintenance, rental and other
transportation services); greater than expected expenses associated with the
Company's activities (including increased cost of fuel, freight and
transportation) or personnel needs; availability of equipment; changes in
customers' business environments (or the loss of a significant customer) 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.
Accordingly, the Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by ITEM 7A is included in ITEM 7 (pages 19 through20)
of PART II of this report.
22
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
FINANCIAL STATEMENTS
Page
No.
Independent Auditors' Report............................. 24
Consolidated Statements of Earnings...................... 25
Consolidated Balance Sheets.............................. 26
Consolidated Statements of Cash Flows.................... 27
Consolidated Statements of Shareholders' Equity.......... 28
Notes to Consolidated Financial Statements............... 29
SUPPLEMENTARY DATA
Quarterly Financial and Common Stock Data................ 49
23
<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, 2000 and 1999, 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, 2000. 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 auditing standards generally accepted
in the United States of America. 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, 2000 and 1999, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States of America.
/s/ KPMG LLP
Miami, Florida
February 7, 2001
24
<PAGE>
Ryder System, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Years ended December 31 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------
(in thousands, except per share amounts)
<S> <C> <C> <C>
Revenue $5,336,792 4,952,204 4,606,976
- ----------------------------------------------------------------------------------------------------------------
Operating expense 3,623,450 3,320,687 3,079,940
Freight under management expense 421,644 425,769 330,124
Depreciation expense 580,356 622,726 626,293
Gains on vehicle sales (19,307) (55,961) (56,631)
Equipment rental 385,763 266,995 205,990
Interest expense 154,009 187,176 187,786
Miscellaneous expense (income), net 7,542 (8,825) (5,468)
Unusual items:
Restructuring and other charges, net 42,014 52,093 (3,040)
Year 2000 expense -- 24,050 37,418
- ----------------------------------------------------------------------------------------------------------------
5,195,471 4,834,710 4,402,412
Earnings from continuing operations before income taxes 141,321 117,494 204,564
Provision for income taxes 52,289 44,577 76,752
- ----------------------------------------------------------------------------------------------------------------
Earnings from continuing operations 89,032 72,917 127,812
Earnings from discontinued operations, less income taxes -- 11,831 31,259
Gain on disposal of discontinued operations, less income taxes -- 339,323 --
- ----------------------------------------------------------------------------------------------------------------
Earnings before extraordinary loss 89,032 424,071 159,071
Extraordinary loss on early extinguishment of debt -- (4,393) --
- ----------------------------------------------------------------------------------------------------------------
Net earnings $ 89,032 419,678 159,071
================================================================================================================
Earnings per common share - Basic:
Continuing operations $ 1.49 1.06 1.75
Discontinued operations -- 0.17 0.43
Gain on sale of discontinued operations -- 4.95 --
Extraordinary loss on early extinguishment of debt -- (0.06) --
- ----------------------------------------------------------------------------------------------------------------
Net earnings $ 1.49 6.12 2.18
================================================================================================================
Earnings per common share - Diluted:
Continuing operations $ 1.49 1.06 1.74
Discontinued operations -- 0.17 0.42
Gain on sale of discontinued operations -- 4.94 --
Extraordinary loss on early extinguishment of debt -- (0.06) --
- ----------------------------------------------------------------------------------------------------------------
Net earnings $ 1.49 6.11 2.16
================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
25
<PAGE>
Ryder System, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31 2000 1999
- ------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share amounts)
Assets
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 121,970 112,993
Receivables, net of allowance for doubtful accounts of $9,236 and $10,254, respectively 399,623 725,815
Inventories 77,810 69,845
Tires in service 158,854 162,877
Prepaid expenses and other current assets 170,019 137,861
- ------------------------------------------------------------------------------------------------------------------------------
Total current assets 928,276 1,209,391
Revenue earning equipment, net of accumulated depreciation of
$1,416,062 and $1,483,084, respectively 3,012,806 3,095,451
Operating property and equipment, net of accumulated
depreciation of $632,216 and $574,784, respectively 612,626 581,105
Direct financing leases and other assets 693,097 652,270
Intangible assets and deferred charges 228,118 232,233
- ------------------------------------------------------------------------------------------------------------------------------
$5,474,923 5,770,450
==============================================================================================================================
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt $ 412,738 574,253
Accounts payable 379,155 334,103
Accrued expenses 510,411 541,156
- ------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 1,302,304 1,449,512
Long-term debt 1,604,242 1,819,136
Other non-current liabilities 298,365 285,802
Deferred income taxes 1,017,304 1,011,095
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities 4,222,215 4,565,545
- ------------------------------------------------------------------------------------------------------------------------------
Shareholders' equity:
Common stock of $0.50 par value per share
Authorized, 400,000,000; outstanding, 2000 - 60,044,479; 1999 - 59,395,050 524,432 513,083
Retained earnings 767,802 714,544
Deferred compensation (3,818) --
Accumulated other comprehensive loss (35,708) (22,722)
- ------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 1,252,708 1,204,905
- ------------------------------------------------------------------------------------------------------------------------------
$5,474,923 5,770,450
==============================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
26
<PAGE>
Ryder System, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASHFLOWS
<TABLE>
<CAPTION>
Years ended December 31 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Continuing operations
Cash flows from operating activities:
Earnings from continuing operations $ 89,032 72,917 127,812
Depreciation expense 580,356 622,726 626,293
Gains on vehicle sales (19,307) (55,961) (56,631)
Amortization expense and other non-cash charges, net 32,927 26,236 (792)
Deferred income tax expense 73,239 250,041 100,432
Changes in operating assets and liabilities, net of acquisitions:
Increase (decrease) in aggregate balance of trade
receivables sold 270,000 (125,000) 125,000
Receivables 57,250 (129,516) (30,948)
Inventories (7,809) (10,380) (1,474)
Prepaid expenses and other assets (73,299) (33,285) (39,829)
Accounts payable 48,064 (56,261) 90,038
Accrued expenses and other non-current liabilities (34,920) (291,698) (49,691)
- ----------------------------------------------------------------------------------------------------------------------------
1,015,533 269,819 890,210
- ----------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net change in commercial paper borrowings 109,317 147,671 (150,162)
Debt proceeds 121,027 314,821 474,969
Debt repaid, including capital lease obligations (565,424) (682,517) (328,368)
Dividends on common stock (35,774) (40,878) (43,841)
Common stock issued 7,255 7,949 32,393
Common stock repurchased -- (274,894) (109,540)
- ----------------------------------------------------------------------------------------------------------------------------
(363,599) (527,848) (124,549)
- ----------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchases of property and revenue earning equipment (1,288,784) (1,734,219) (1,333,141)
Sales of property and revenue earning equipment 229,908 401,902 321,962
Sale and leaseback of revenue earning equipment 372,953 593,680 312,230
Acquisitions, net of cash acquired (28,127) (12,699) (52,792)
Collections on direct finance leases 67,462 78,408 62,681
Proceeds from sale of public transportation services business -- 940,000 --
Other, net 3,631 (39,005) (38,066)
- ----------------------------------------------------------------------------------------------------------------------------
(642,957) 228,067 (727,126)
- ----------------------------------------------------------------------------------------------------------------------------
Net cash flows from continuing operations 8,977 (29,962) 38,535
Net cash flows from discontinued operations -- 4,602 21,448
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents 8,977 (25,360) 59,983
Cash and cash equivalents at January 1 112,993 138,353 78,370
- ----------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at December 31 $ 121,970 112,993 138,353
============================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
27
<PAGE>
Ryder System, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Accumulated
Other
Comprehensive Common Retained Comprehensive Deferred
Income Stock Earnings Loss Compensation Total
- --------------------------------------------------+--------------------------------------------------------------------------
(dollars in thousands) |
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1998 |$ 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 stock option and stock |
purchase plans (1,388,021 |
shares)* | 32,393 -- -- -- 32,393
Common stock repurchased |
(3,800,000 shares) | (32,158) (77,382) -- -- (109,540)
Tax benefit from employee |
stock options | 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 stock option and stock |
purchase plans (417,410 |
shares) | 8,687 -- -- -- 8,687
Common stock repurchased |
(12,302,607 shares) | (106,533) (168,361) -- -- (274,894)
Tax benefit from employee |
stock options | 386 -- -- -- 386
- --------------------------------------------------+--------------------------------------------------------------------------
Balance at December 31, 1999 | 513,083 714,544 (22,722) -- 1,204,905
Net earnings $ 89,032 | -- 89,032 -- -- 89,032
Foreign currency translation |
adjustments (12,986) | -- -- (12,986) -- (12,986)
-------- |
Comprehensive income $ 76,046 |
======== |
Common stock dividends |
declared - $0.60 per share | -- (35,774) -- -- (35,774)
Common stock issued under |
employee stock option and stock |
purchase plans (649,528 |
shares) | 10,957 -- -- (4,315) 6,642
Tax benefit from employee |
stock options | 392 -- -- -- 392
Amortization of restricted stock | -- -- -- 497 497
- --------------------------------------------------+-------------------------------------------------------------------------
Balance at December 31, 2000 | $ 524,432 767,802 (35,708) (3,818) 1,252,708
============================================================================================================================
</TABLE>
*Net of common stock purchased from employees exercising stock options.
See accompanying notes to consolidated financial statements.
28
<PAGE>
Ryder System, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 accounting principles generally accepted in the United States of
America 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
The Company recognizes revenue when persuasive evidence of an arrangement
exists, delivery has occurred, the revenue amount is fixed or determinable and
collectibility is probable. Operating lease and rental revenue is recognized as
vehicles are used over the terms of the related agreements. Direct financing
lease revenue is recognized by the interest method over the terms of the lease
agreements. Fuel revenue is recognized when fuel is delivered to customers.
Revenue from Supply Chain Solutions (SCS) and Dedicated Contract Carriage (DCC)
contracts is recognized as services are provided at billing rates specified in
the underlying contracts.
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. In accordance with SOP 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use," certain direct development costs in connection with developing or
obtaining internal use software are capitalized. Costs incurred during the
preliminary project stage, as well as maintenance and training costs, 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 33 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 operating property and equipment sales are reflected
in miscellaneous expense (income), net.
Intangible Assets
Intangible assets consist principally of goodwill totaling $206 million in 2000
and $203 million in 1999. Goodwill is amortized on a straight-line basis over
appropriate periods ranging from 10 to 40 years. Accumulated amortization was
approximately $121 million and $110 million at December 31, 2000 and 1999,
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 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.
29
<PAGE>
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 and independent
appraisal.
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. No interest rate swap or cap agreements were
outstanding at December 31, 2000 or 1999.
The Company uses foreign currency option contracts and forward agreements from
time to time to hedge foreign currency transactional exposure. No foreign
currency option contracts or forward agreements were outstanding at December 31,
2000 or 1999. 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 fluctuations is included in other comprehensive loss 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 and restricted stock grants.
30
<PAGE>
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.
Fair Value of Financial Instruments
The fair value of debt is presented in the debt footnote. The fair values of all
other financial instruments approximate their carrying amounts.
Accounting Changes
In March 2000, the Financial Accounting Standards Board (FASB), issued FASB
Interpretation No. 44, "Accounting for Certain Transactions involving Stock
Compensation--an interpretation of APB Opinion No. 25" (FIN 44). This
interpretation provides guidance for issues that have arisen in applying APB
Opinion No. 25, "Accounting for Stock Issued to Employees." The Company's
existing accounting policies conformed to FIN 44; therefore, adoption did not
impact the Company's results of operations, cash flows or financial position.
In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial
Statements." SAB No. 101 provides guidance on applying generally accepted
accounting principles to revenue recognition issues in financial statements. SAB
No. 101, as amended, was adopted by the Company in the fourth quarter of 2000.
The Company's existing accounting policies conformed to SAB No. 101; therefore,
adoption did not impact the Company's results of operations, cash flows or
financial position.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year
presentation.
Recent Accounting Pronouncements
In September 2000, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," which replaces SFAS No. 125. SFAS No. 140
provides consistent standards for distinguishing transfers of financial assets
that are sales from transfers that are secured borrowings. SFAS No. 140 is
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after March 31, 2001, and is effective for recognition and
reclassification of collateral and for disclosures relating to securitization
transactions and collateral for fiscal years ending after December 15, 2000. The
Company believes the impact of SFAS No. 140 will not be material to the
Company's results of operations, cash flows or its financial position.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133, as amended, requires all
derivatives, including certain derivatives imbedded in other contracts, to be
recognized at fair value as either assets or liabilities on the balance sheet
and establishes new accounting rules for hedging instruments. The Company
adopted SFAS No. 133 on January 1, 2001. Adoption of this statement did not have
a material impact on the Company's financial position and did not impact cash
flows or results of operations.
ACQUISITIONS
Over the last three years, the Company completed a number of acquisitions, 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 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Net assets acquired $ 9,024 10,413 21,975
Goodwill 19,103 2,286 30,817
-------------------------------------------------------
Purchase price $28,127 12,699 52,792
================================================================================
31
<PAGE>
DIVESTITURES
On September 13, 1999, the Company completed the sale of its public
transportation services business (RPTS) for $940 million in cash and realized a
$339 million after-tax gain ($4.94 per diluted common share). The RPTS disposal
has been accounted for as discontinued operations and accordingly, its 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 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Revenue $411,743 581,748
Earnings before income taxes 20,050 52,392
Provision for income taxes 8,219 21,133
------------------------------------
Earnings from discontinued operations 11,831 31,259
------------------------------------
Gain on disposal 573,178 --
Income taxes 233,855 --
------------------------------------
Net gain on disposal $339,323 --
================================================================================
Interest expense was allocated to discontinued operations based upon an assumed
debt-to-equity ratio consistent with the Company's historical interest
allocation method for segment reporting. Interest expense of $8 million and $11
million was included in the operating results of discontinued operations in 1999
and 1998, respectively. The results of discontinued operations exclude
management fees and branch overhead charges allocated by the Company and
previously included in segment reporting. The gain on disposal of discontinued
operations is net of direct transaction costs, gains on the settlement and
curtailment 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 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Restructuring charges
(recoveries):
Employee severance
and benefits $ (1,077) 16,500 724
Facilities and related
costs (2,009) 4,478 --
--------------------------------------------
(3,086) 20,978 724
Other charges:
Asset write-downs
and valuation
allowances, net 41,100 14,215 (8,264)
Start-up costs -- 7,970 --
Other 4,000 8,930 4,500
--------------------------------------------
$ 42,014 52,093 (3,040)
================================================================================
Fleet management
solutions $38,992 24,403 2,069
Supply chain solutions 2,422 5,773 (5,109)
Dedicated contract
carriage -- -- --
Central support services 600 21,917 --
--------------------------------------------
$ 42,014 52,093 (3,040)
================================================================================
32
<PAGE>
In 2000, the Company recorded a pre-tax charge of $42 million. The components of
the charge were as follows (in thousands):
Impairment--tractors identified for
accelerated disposal $ 15,100
Impairment--other tractors:
Owned 3,475
Leased 23,095
Asset impairment charges 3,339
Other charges 958
Recovery of prior year charges (3,953)
--------------------------------
Total $ 42,014
================================================================================
The most significant portion of the charge was a result of the industry-wide
downturn in the market for new and used "Class 8" vehicles (the largest
heavy-duty tractors and straight trucks) which led to a decrease in the market
value of used tractors during the second half of 2000. The Company's unsold
Class 8 inventory consists of units previously used by customers of the Fleet
Management Solutions (FMS) segment. Tractors identified for accelerated disposal
represent revenue earning equipment held for sale that the Company identified in
the third quarter of 2000 as increasingly undesirable and unmarketable due to
lower-powered engines or a potential lack of future support for parts and
service. Impairment of other tractors reflects owned and leased units for which
estimated fair value less costs to sell declined below carrying value (or
termination value, which represents the final payment due to lessors, in the
case of leased units) in the third and fourth quarters of 2000. The Company
believes that vehicle carrying values and estimated sales proceeds are
appropriate. However, if conditions in the used truck market deteriorate further
than anticipated, the Company may be required to further adjust such amounts in
the future.
The Company was involved in litigation with a former customer, OfficeMax,
relating to a logistics services agreement that was terminated in 1997 (see
"Other Matters"). Asset impairment charges relate to the write-off, net of
recoveries in the fourth quarter 2000, of certain assets related to the
OfficeMax contract.
Other charges of $958,000 represent consulting fees incurred during 2000
related to the completion of the Company's 1999 profitability improvement study.
Recovery of prior year charges represents both the reversal of severance and
employee-related charges and gains on vehicles sold in the United Kingdom during
the third quarter of 2000, for which an impairment charge had been recorded in
the 1999 restructuring. Prior year severance and employee-related charges were
reversed due to refinements in estimates.
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 FMS 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 pre-tax charges in 1999 of $52 million.
The 1999 restructuring initiatives resulted in identification of approximately
250 employees whose jobs were terminated. The employees terminated and positions
eliminated were principally corporate officers and staff, field operations
personnel and sales force positions. Severance benefits totaled $17 million and
were 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.
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 are
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.
Restructuring and other charges in 1998 included the reversal of 1996
restructuring and other charges for $3 million of excess facility impairment
charges and the reversal of a valuation allowance of $8 million due to the
Company's decision to retain a foreign business. These reversals were offset by
$5 million in transaction costs related to the retained business and $3 million
of severance and asset impairment charges incurred in 1998.
33
<PAGE>
The following tables display a rollforward of the activity and balances of the
restructuring reserve account for the years ended December 31, 2000 and 1999:
Dec. 31,
1999 2000 Dec. 31,
----------------------- 2000
Balance Additions Deductions Balance
- --------------------------------------------------------------------------------
(in thousands)
Employee severance
and benefits $13,017 -- 9,109 3,908
Facilities and
related costs 7,182 -- 5,170 2,012
-----------------------------------------------------
$20,199 -- 14,279 5,920
================================================================================
Dec. 31,
1998 1999 Dec. 31,
----------------------- 1999
Balance Additions Deductions Balance
- --------------------------------------------------------------------------------
(in thousands)
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
================================================================================
Deductions include cash payments of $11 million and prior year charge reversals
of $3 million in 2000 and none in 1999.
At December 31, 2000, the remaining balances of restructuring reserves relate to
severance and lease obligations for closed facilities contractually required to
be paid over the next three years.
RECEIVABLES
December 31 2000 1999
- ------------------------------------------------------------------------------
(in thousands)
Gross trade receivables $ 667,953 736,555
Receivables sold (345,000) (75,000)
--------------------------------------------
Net trade receivables 322,953 661,555
Financing Lease 60,534 54,570
Other 25,372 19,944
--------------------------------------------
408,859 736,069
Allowance (9,236) (10,254)
--------------------------------------------
$ 399,623 725,815
==============================================================================
The Company participates in an agreement to sell, with limited recourse, up to
$375 million of trade receivables on a revolving basis through July 2004. 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. The
Company is responsible for servicing receivables sold but has no retained
interests. At December 31, 2000 and 1999, the outstanding balance of receivables
sold pursuant to this agreement was $345 million and $75 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 $17 million in 2000, $10 million in 1999 and $8 million in 1998 and are
included in miscellaneous expense (income), net. The Company maintains an
allowance for doubtful receivables based on the expected collectibility of all
receivables, including receivables sold.
34
<PAGE>
REVENUE EARNING EQUIPMENT
December 31 2000 1999
- --------------------------------------------------------------------------------
(in thousands)
Full service lease $ 3,227,830 3,442,205
Commercial rental 1,201,038 1,136,330
----------------------------------------------
4,428,868 4,578,535
Accumulated depreciation (1,416,062)(1,483,084)
----------------------------------------------
$ 3,012,806 3,095,451
================================================================================
OPERATING PROPERTY AND EQUIPMENT
December 31 2000 1999
- --------------------------------------------------------------------------------
(in thousands)
Land $ 107,853 105,794
Buildings and improvements 559,707 521,746
Machinery and equipment 462,631 439,352
Other 114,651 88,997
---------------------------------------------
1,244,842 1,155,889
Accumulated depreciation (632,216) (574,784)
---------------------------------------------
$ 612,626 581,105
================================================================================
DIRECT FINANCING LEASES AND
OTHER ASSETS
December 31 2000 1999
- --------------------------------------------------------------------------------
(in thousands)
Direct financing leases $ 427,862 391,346
Prepaid benefit cost 145,546 95,074
Vehicle securitization
credit enhancement 27,741 28,697
Investments held in Rabbi Trust 37,661 36,961
Deposits 1,301 17,151
Other 52,986 83,041
--------------------------------------------
$ 693,097 652,270
================================================================================
ACCRUED EXPENSES AND OTHER
NON-CURRENT LIABILITIES
December 31 2000 1999
- --------------------------------------------------------------------------------
(in thousands)
Salaries and wages $ 104,166 102,250
Employee benefits 22,397 21,228
Interest 19,682 27,859
Operating taxes 75,595 82,646
Income taxes -- 42,734
Self-insurance reserves 227,130 227,456
Postretirement benefits
other than pensions 38,274 41,766
Vehicle rent and related accruals 160,579 118,672
Environmental liabilities 14,174 18,462
Restructuring 5,920 20,199
Other 140,859 123,686
--------------------------------------------
808,776 826,958
Non-current portion (298,365) (285,802)
--------------------------------------------
Accrued expenses $ 510,411 541,156
================================================================================
35
<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 2000, 1999 and 1998 were $268 million, $263
million and $243 million, respectively.
Direct Financing Leases
The Company also leases revenue earning equipment to customers as direct
financing leases. The net investment in direct financing leases consisted of:
December 31 2000 1999
- --------------------------------------------------------------------------------
(in thousands)
Minimum lease payments receivable $ 915,914 796,838
Executory costs and unearned income (506,880) (420,455)
Unguaranteed residuals 79,362 69,533
--------------------------------------------
Net investment in direct financing
leases 488,396 445,916
Current portion (60,534) (54,570)
--------------------------------------------
Non-current portion $ 427,862 391,346
================================================================================
Contingent rentals included in income were $30 million in 2000 and $26 million
in 1999 and 1998.
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 2000, 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 $373 million in 2000,
$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 and pledged a portion of the beneficial interests in the underlying
customer leases 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 approximately 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, 2000 and 1999, credit enhancements maintained by the Company
totaled $28 million and $29 million, respectively, and are included in "Direct
financing leases and other assets."
During 2000, 1999 and 1998, rent expense (excluding contingent rentals) was $344
million, $285 million and $242 million, respectively. Contingent rentals on
securitized vehicles were $65 million in 2000, $28 million in 1999 and $10
million in 1998.
36
<PAGE>
Lease Payments
Future minimum payments for leases in effect at December 31, 2000 were as
follows:
As Lessor As Lessee
- --------------------------------------------------------------------------------
Direct
Operating Financing Operating
(in thousands) Leases Leases Leases
- --------------------------------------------------------------------------------
2001 $1,050,241 158,653 348,145
2002 913,722 148,612 357,948
2003 738,464 137,052 279,812
2004 547,221 123,816 121,605
2005 348,753 105,676 59,443
Thereafter 174,571 242,106 140,158
----------------------------------------------------------
$3,772,972 915,915 1,307,111
================================================================================
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 earnings before income taxes and the provision for income
taxes attributable to continuing operations were as follows:
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Earnings before
income taxes:
United States $101,727 92,003 184,476
Foreign 39,594 25,491 20,088
--------------------------------------------------------
$141,321 117,494 204,564
================================================================================
Current tax benefit:
Federal $(40,204) (183,470) (24,173)
State 4,652 (24,392) (6,357)
Foreign 14,602 2,398 6,850
--------------------------------------------------------
(20,950) (205,464) (23,680)
--------------------------------------------------------
Deferred tax expense:
Federal 66,062 210,542 88,173
State 3,351 31,596 11,729
Foreign 3,826 7,903 530
--------------------------------------------------------
73,239 250,041 100,432
--------------------------------------------------------
Provision for income
taxes $ 52,289 44,577 76,752
================================================================================
A reconciliation of the Federal statutory tax rate with the effective tax rate
for continuing operations follows:
% of Pre-tax Income
- --------------------------------------------------------------------------------
2000 1999 1998
- --------------------------------------------------------------------------------
Federal statutory tax rate 35.0 35.0 35.0
Impact on deferred taxes
for changes in tax rates -- -- (0.8)
State income taxes, net of
Federal income tax benefit 3.7 4.0 1.7
Miscellaneous items, net (1.7) (1.1) 1.6
------------------------------------------
Effective tax rate 37.0 37.9 37.5
================================================================================
37
<PAGE>
The components of the net deferred income tax liability were as follows:
December 31 2000 1999
- --------------------------------------------------------------------------------
(in thousands)
Deferred income tax assets:
Self-insurance reserves $ 74,388 51,667
Net operating loss carryforwards 99,271 --
Alternative minimum taxes 31,109 6,011
Accrued compensation and benefits 31,445 30,484
Lease accruals and reserves 43,365 28,378
Miscellaneous other accruals 36,451 48,447
------------------------------------------
316,029 164,987
Valuation allowance (12,815) (12,822)
------------------------------------------
303,214 152,165
------------------------------------------
Deferred income tax liabilities:
Property and equipment
bases difference (1,155,110) (1,039,023)
Other items (130,481) (102,173)
------------------------------------------
(1,285,591) (1,141,196)
------------------------------------------
Net deferred income tax liability* $ (982,377) (989,031)
================================================================================
*Deferred tax assets of $35 million and $22 million have been included in the
consolidated balance sheet caption "Prepaid expenses and other current assets"
at December 31, 2000 and 1999, 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 $112 million at December 31, 2000. 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 net operating loss carryforwards (tax effected) for Federal and
state income tax purposes of $99 million at December 31, 2000, expiring through
2015. The Company expects that the results of future operations will generate
sufficient taxable income to realize the deferred tax assets and that these
carryforwards will be utilized before their expiration dates.
The Company had unused alternative minimum tax credits, for tax purposes, of $31
million at December 31, 2000, 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 $(7) million in 2000, $72 million in 1999,
and $(23) million in 1998 and include amounts related to both continuing and
discontinued operations.
38
<PAGE>
DEBT
December 31 2000 1999
- --------------------------------------------------------------------------------
(in thousands)
U.S. commercial paper $ 441,106 320,000
Canadian commercial paper 31,692 45,006
Unsecured U.S. notes:
Debentures, 6.50% to 9.88%,
due 2001 to 2017 425,610 453,244
Medium-term notes, 5.00% to 8.37%,
due 2001 to 2025 755,863 1,181,443
Unsecured foreign obligations
(principally pound sterling),
4.84% to 14.25%,
due 2001 to 2006 332,680 335,343
Other debt, including capital leases 30,029 58,353
-------------------------------------
Total debt 2,016,980 2,393,389
Current portion (412,738) (574,253)
-------------------------------------
Long-term debt $ 1,604,242 1,819,136
================================================================================
Debt maturities (including sinking fund requirements) during the five years
subsequent to December 31, 2000 are as follows:
Debt
Maturities
- --------------------------------------------------------------------------------
(in thousands)
2001 $412,738
2002 788,986
2003 114,447
2004 88,931
2005 203,870
================================================================================
The Company can borrow up to $720 million through an unsecured global revolving
credit facility, which expires in June 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 this 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, 2000, foreign
borrowings of $97 million were outstanding under the credit facility and the
Company had $187 million available under this agreement.
The weighted average interest rates for outstanding U.S. commercial paper at
December 31, 2000 and 1999 were 7.38 percent and 6.60 percent, respectively. The
weighted average interest rates for outstanding Canadian commercial paper at
December 31, 2000 and 1999 were 5.91 percent and 5.17 percent, respectively.
U.S. commercial paper is classified as long-term debt since it is backed by the
long-term revolving credit facility previously discussed.
The Company has issued unsecured medium-term notes under various shelf
registration statements filed with the SEC. In 1998, the Company registered an
additional $800 million for future debt issues. As of December 31, 2000, the
Company had $487 million of debt securities available for issuance under the
latest registration statement. The Company had unamortized original issue
discounts of $17 million and $18 million for the medium-term notes and
debentures at December 31, 2000 and 1999, 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, 2000 and 1999, the Company also had letters of credit
outstanding totaling $133 million and $134 million, respectively, which
primarily guarantee various insurance activities.
Interest paid in 2000 totaled $163 million. Interest paid for both continuing
and discontinued operations totaled $206 million in 1999 and $201 million in
1998.
39
<PAGE>
The carrying amount of debt (excluding capital leases) was $2.0 billion and $2.3
billion as of December 31, 2000 and 1999, 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, 2000
and 1999 was estimated at $1.9 billion and $2.3 billion, respectively.
SHAREHOLDERS' EQUITY
In December 1999, the Company completed a $200 million stock repurchase program
announced in September 1999 in conjunction with the RPTS sale. 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, 2000, the Company had 59,915,079 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. The value of the restricted stock and stock units, equal
to fair market value at the time of grant, is recorded in shareholders' equity
and recognized as compensation expense as the restricted stock and stock units
vest over the periods established for each grant. In 2000 and 1999, the Company
granted 194,400 and 45,650 shares of restricted stock at a weighted average
grant date fair value of $18.19 and $26.33, respectively. No grants were made in
1998. Awards under a non-employee director plan may also be granted in tandem
with restricted stock units at no cost to the grantee; 3,975 units, 4,013 units
and 2,850 units were granted in 2000, 1999 and 1998, respectively. This
compensation expense was not significant in 2000, 1999 or 1998.
The following table summarizes the status of the Company's stock option plans
(shares in thousands):
- --------------------------------------------------------------------------------
2000 1999 1998
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
- --------------------------------------------------------------------------------
Beginning
of year 6,762 $27.77 5,253 $28.06 6,000 $27.18
Granted 2,969 18.61 2,200 26.76 246 33.21
Exercised (73) 14.11 (92) 22.44 (911) 23.60
Forfeited (886) 27.97 (599) 27.47 (82) 27.01
-------------------------------------------------------------
End of year 8,772 $24.76 6,762 $27.77 5,253 $28.06
=============================================================
Exercisable at
end of year 4,123 $28.25 4,099 $27.59 3,610 $26.12
=============================================================
Available for
future grant 2,477 N/A 2,258 N/A 3,907 N/A
================================================================================
40
<PAGE>
Information about options in various price ranges at December 31, 2000 follows
(shares in thousands):
Options Options
Outstanding Exercisable
- --------------------------------------------------------------------------------
Remaining Weighted Weighted
Price Life Average Average
Ranges Shares (in years) Price Shares Price
- --------------------------------------------------------------------------------
$10 - 20 2,388 8.7 $17.71 176 $17.25
20 - 25 1,423 6.4 22.03 523 22.55
25 - 30 3,818 5.4 27.01 2,369 27.14
30 - 38 1,143 5.9 35.34 1,055 35.40
================================================================================
8,772 6.5 $24.76 4,123 $28.25
================================================================================
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 to 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 stock purchase plan
currently in effect provides for quarterly purchase periods. The U.K. Stock
Purchase Scheme provides for periodic offerings to substantially all United
Kingdom employees to subscribe to 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):
2000 1999 1998
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
- --------------------------------------------------------------------------------
Beginning
of year 72 $27.00 82 $27.05 571 $24.46
Granted 379 16.03 300 18.43 146 20.31
Exercised (379) 16.03 (300 19.71 (586) 23.05
Forfeited (9) 28.34 (10) 27.66 (49) 24.54
------------------------------------------------------------
End of year 63 $26.81 72 $27.00 82 $27.05
============================================================
Exercisable at
end of year 22 $20.66 -- N/A -- N/A
============================================================
Available for
future grant 2,066 N/A 2,436 N/A 226 N/A
================================================================================
Pro Forma Information
The Company accounts for stock-based compensation using the intrinsic value
method. Stock options are issued at fair market value at the date of grant.
Accordingly, no compensation expense has been recognized for stock options
granted. 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 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands, except per share amounts)
Net earnings:
As reported $89,032 419,678 159,071
Pro forma 81,350 412,789 150,958
Earnings per share:
Basic:
As reported 1.49 6.12 2.18
Pro forma 1.37 6.02 2.07
Diluted:
As reported 1.49 6.11 2.16
Pro forma 1.37 6.02 2.06
================================================================================
The fair values of options granted were estimated as of the dates of grant using
the Black-Scholes option pricing model.
41
<PAGE>
The option pricing assumptions were as follows:
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
Dividend yield 3.5% 2.5% 2.3%
Expected volatility 26.9% 25.7% 25.1%
Option Plans:
Risk-free interest rate 6.3% 5.4% 5.4%
Weighted average
expected life 7 years 7 years 9 years
Weighted average grant -
date fair value per option $5.01 $7.77 $11.05
Purchase plans:
Risk-free interest rate 5.8% 4.9% 5.3%
Weighted average
expected life .25 year .25 year .25 year
Weighted average grant -
date fair value per option $4.08 $4.99 $5.50
================================================================================
EARNINGS PER SHARE INFORMATION
A reconciliation of the number of shares used in computing basic and diluted EPS
follows:
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Weighted average shares
outstanding - Basic 59,567 68,536 73,068
Effect of dilutive options
and unvested restricted
stock 192 196 577
------------------------------------------
Weighted average shares
outstanding - Diluted 59,759 68,732 73,645
==========================================
Anti-dilutive options not
included above 6,446 5,750 1,485
================================================================================
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.
42
<PAGE>
Pension income (expense) was as follows:
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Company-administered plans:
Service cost $ (23,836) (32,649) (26,067)
Interest cost (54,047) (50,087) (48,356)
Expected return on plan
assets 97,064 85,422 75,680
Amortization of transition
asset 3,746 3,818 3,848
Recognized net actuarial
gain 23,890 2,323 2,334
Amortization of prior
Service cost (2,501) (2,382) (2,368)
-----------------------------------------------
44,316 6,445 5,071
Union-administered plans (2,610) (2,591) (2,488)
-----------------------------------------------
Net pension income $ 41,706 3,854 2,583
================================================================================
Plan transfers relate to obligations assumed and assets received in 2000 related
to a customer's employees who were hired by the Company as a result of a new
contract in the United Kingdom. Additionally, in 2000, the Company's dominant
plan was amended to increase certain benefit levels and resulted in an
additional benefit obligation of $7 million. The Company recorded settlement and
curtailment gains of $4 million in 1999 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 2000 1999
- --------------------------------------------------------------------------------
(in thousands)
Change in benefit obligations:
Benefit obligations at January 1, $ 701,776 787,729
Service cost 23,836 32,649
Interest cost 54,047 50,087
Amendments 7,747 --
Actuarial loss (gain) 37,444 (7,047)
Benefits paid (36,229) (34,905)
Settlement and curtailment -- (21,331)
Change in discount rate assumption 22,502 (104,019)
Plan transfers 15,627 --
Foreign currency exchange rate
changes (6,581) (1,387)
--------------------------------------
Benefit obligations at December 31, 820,169 701,776
--------------------------------------
Change in plan assets:
Fair value of plan assets
at January 1, 1,054,123 929,161
Actual return on plan assets (41,672) 167,229
Employer contribution 2,293 10,084
Plan participants' contributions 2,692 3,025
Benefits paid (36,229) (34,905)
Settlement -- (19,183)
Plan transfers 20,110 --
Foreign currency exchange rate
changes (7,824) (1,288)
--------------------------------------
Fair value of plan assets
at December 31, 993,493 1,054,123
--------------------------------------
Funded status 173,324 352,347
Unrecognized transition asset (267) (4,036)
Unrecognized prior service cost 17,950 12,795
Unrecognized net actuarial gain (59,933) (278,761)
--------------------------------------
Prepaid benefit cost $ 131,074 82,345
================================================================================
43
<PAGE>
Amounts recognized in the balance sheet consist of:
December 31 2000 1999
- --------------------------------------------------------------------------------
(in thousands)
Other assets (prepaid pension
benefit cost) $ 145,546 95,074
Accrued expenses (14,472) (12,729)
--------------------------------------------
$ 131,074 82,345
================================================================================
The following table sets forth the actuarial assumptions used for the Company's
dominant plan:
December 31 2000 1999
- --------------------------------------------------------------------------------
Discount rate 7.50% 7.75%
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 6 8
Gain and loss amortization in years 6 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 $14
million in 2000, $11 million in 1999 and $12 million in 1998.
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 $19 million and $15 million at December 31, 2000 and 1999, respectively.
The accrued pension expense liability related to this plan was $14 million and
$13 million at December 31, 2000 and 1999, respectively. Pension expense for
this plan totaled $2 million in 2000, 1999 and 1998.
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 at December 31, 2000 and
1999.
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, 2000 and 1999 amounted to $38
million and $37 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 expense
(income), net.
Postretirement Benefits Other than Pensions
The Company sponsors plans that provide retired employees with certain
healthcare and life insurance benefits. Substantially all employees not covered
by union-administered health and welfare plans are eligible for these benefits.
Healthcare 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.
44
<PAGE>
Total periodic postretirement benefit expense was as follows:
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Service cost $ 975 1,360 1,117
Interest cost 2,233 2,210 2,535
Curtailment gain (1,148) -- --
Recognized net
actuarial gain (801) (94) --
Amortization of prior
service cost (1,166) (1,043) (1,091)
--------------------------------------------------------
Postretirement benefit
expense $ 93 2,433 2,561
================================================================================
During 2000, the Company amended its postretirement benefit plan to eliminate
the retiree life insurance benefit for active employees as of December 31, 2000.
The amendment led to a curtailment gain of $1 million in 2000.
The Company also recorded settlement and curtailment gains of $1 million in 1999
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 2000 1999
- --------------------------------------------------------------------------------
(in thousands)
Benefit obligations at January 1, $ 29,639 38,976
Service cost 975 1,360
Interest cost 2,233 2,210
Amendment (4,318) --
Actuarial loss (gain) 2,699 (3,830)
Benefits paid (3,585) (3,847)
Settlement and curtailment (1,148) (2,271)
Change in discount rate assumption 437 (2,959)
------------------------------------------
Benefit obligations at December 31, 26,932 29,639
Unrecognized prior service credit 8,708 5,556
Unrecognized net actuarial gain 2,634 6,571
------------------------------------------
Accrued postretirement
benefit obligation $ 38,274 41,766
================================================================================
Discount rate 7.50% 7.75%
------------------------------------------
The actuarial assumptions include healthcare cost trend rates projected at 7
percent for 2001 and 2002, and 6 percent thereafter. Changing the assumed
healthcare 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, 2000 or postretirement benefit expense for 2000.
ENVIRONMENTAL MATTERS
The Company's operations involve storing and dispensing petroleum products,
primarily diesel fuel. In 1988, the Environmental Protection Agency (EPA) 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 EPA and others that it has been identified as a potentially responsible
party 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 27 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 $5 million in 2000, $10 million in 1999 and $4 million in 1998.
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
45
<PAGE>
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 was involved in litigation with a former customer, OfficeMax,
relating to a logistics services agreement that was terminated in 1997. In
October 2000, the Company agreed to an out-of-court settlement with OfficeMax,
ending this litigation. In the final settlement, OfficeMax will pay the Company
a total of $5 million over the next five years. The Company will not pay
anything to OfficeMax. Further, the settlement is backed by a $5 million letter
of credit, obtained by OfficeMax, naming the Company as the beneficiary.
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
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 (see "Restructuring and
Other Charges"). As part of the restructuring, the Company changed how it
manages and measures the business during the first quarter of 2000. Prior to the
1999 restructuring, the Company's three reportable business segments were
Transportation Services, Integrated Logistics and International. The principal
changes from prior management and measurement are (1) management of the business
along product lines, without regard to geography; (2) discrete management and
presentation of the DCC business; and (3) segment profitability measured by
contribution margin. The business segment information presented below reflects
such changes. Prior year information has been restated, where practical, to
conform to the current year presentation.
The Company's operating segments are aggregated into the following reportable
business segments based primarily upon similar economic characteristics,
products, services and delivery methods. The Company operates in three
reportable business segments: (1) FMS, which provides full service leasing,
commercial rental and programmed maintenance of trucks, tractors and trailers to
customers, principally in the U.S., Canada and the United Kingdom; (2) SCS,
which provides comprehensive supply chain consulting and lead logistics
management solutions that support customers' entire supply chains, from inbound
raw materials through distribution of finished goods throughout North America,
in Latin America, Europe and Asia; and (3) DCC, which provides vehicles and
drivers as part of a dedicated transportation solution, principally in North
America.
Business segment revenue and contribution margin are presented below:
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Revenue
Fleet management solutions:
Full service lease and
programmed
maintenance $1,865,345 1,816,599 1,762,621
Commercial rental 523,776 540,734 505,558
Fuel 773,320 587,193 542,140
Other 393,549 362,718 352,591
------------------------------------------------
3,555,990 3,307,244 3,162,910
Supply chain solutions 1,604,862 1,449,871 1,242,664
Dedicated contract
carriage 542,096 522,800 512,800
Eliminations (366,156) (327,711) (311,398)
------------------------------------------------
Total revenue $5,336,792 4,952,204 4,606,976
================================================================================
46
<PAGE>
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Contribution margin
Fleet management
solutions $ 382,851 372,164 395,828
Supply chain solutions 70,242 56,365 56,914
Dedicated contract
carriage 59,669 58,100 59,600
Eliminations (41,888) (40,280) (39,666)
--------------------------------------------------
470,874 446,349 472,676
Central support services (287,539) (252,712) (233,734)
Restructuring and
other charges (42,014) (52,093) 3,040
Year 2000 expense -- (24,050) (37,418)
--------------------------------------------------
Earnings from
continuing operations
before income taxes $ 141,321 117,494 204,564
================================================================================
Management evaluates business segment financial performance based upon several
factors, of which the primary measure is contribution margin. Contribution
margin represents each business segment's revenue, less direct costs and direct
overheads related to the segment's operations. Business segment contribution
margin for all segments (net of eliminations), less Central Support Services
(CSS) expenses and unusual items, is equal to earnings from continuing
operations before income taxes. CSS are those costs incurred to support all
business segments, including sales and marketing, human resources, finance,
shared management information systems, customer solutions, health and safety,
legal and communications. CSS also includes expenses of certain new business
initiatives, Ryder Capital Services and e-Commerce, which may be reported as
business segments in the future once such operations become material.
The FMS segment leases revenue earning equipment, sells fuel and provides
maintenance and other ancillary services to the SCS and DCC segments.
Inter-segment revenues and contribution margin are accounted for at approximate
fair value as if the transactions were made with third parties. Contribution
margin related to inter-segment equipment and services billed to customers
(equipment contribution) is included in both FMS and the business segment which
served the customer, then eliminated. Equipment contribution included in SCS
contribution margin was $20 million in 2000 and $19 million in 1999 and 1998.
Equipment contribution included in DCC contribution margin was $22 million in
2000 and $21 million in 1999 and 1998. Interest expense is primarily allocated
to the FMS business segment.
Each business segment follows the same accounting policies as described in the
Summary of Significant Accounting Policies. 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.
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Depreciation
Fleet management
solutions $534,758 572,784 576,286
Supply chain solutions 25,080 24,835 23,908
Dedicated contract
carriage 1,809 2,259 2,515
Central support services 18,709 22,848 23,584
----------------------------------------------------
Total depreciation $580,356 622,726 626,293
================================================================================
Gains on sales of revenue earning equipment, net of selling and equipment
preparation cost reflected in FMS, totaled $19 million, $56 million and $57
million in 2000, 1999 and 1998, respectively.
47
<PAGE>
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Amortization expense and
other non-cash
charges, net
Fleet management
solutions $ 15,973 17,147 4,680
Supply chain solutions 14,624 11,072 (1,552)
Dedicated contract carriage -- -- --
Central support services 2,330 (1,983) (3,920)
-------------------------------------------------
Total amortization and other
non-cash charges, net $ 32,927 26,236 (792)
================================================================================
Interest expense related to the Company's business segments in 2000 was $153
million for FMS, $5 million for SCS, none for DCC and a credit of $4 million for
CSS. As a result of the change in reportable business segments, the prior year
disclosure of interest expense included in contribution margin under the new
reportable segments is impracticable. Interest expense for the previously
reportable business segments is presented below:
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Interest expense
Transportation services $141,487 169,082 162,070
Integrated logistics 2,289 2,368 1,588
International 16,914 22,187 25,564
-----------------------------------------------
Total reportable segments 160,690 193,637 189,222
Other, primarily corporate (6,681) (6,461) (1,436)
-----------------------------------------------
Total interest expense $154,009 187,176 187,786
================================================================================
Asset information, including capital expenditures, is not maintained on the new
segment basis nor provided to the chief operating decision maker and as such is
not presented.
Geographic Information
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Revenue
United States $4,445,842 4,078,087 3,764,309
Foreign 890,950 874,117 842,667
----------------------------------------------------------
Total $5,336,792 4,952,204 4,606,976
================================================================================
Years ended December 31 2000 1999 1998
- --------------------------------------------------------------------------------
(in thousands)
Long-lived assets
United States $3,026,644 3,072,892 3,209,027
Foreign 598,788 603,664 600,893
----------------------------------------------------------
Total $3,625,432 3,676,556 3,809,920
================================================================================
48
<PAGE>
Ryder System, Inc. and Subsidiaries
SUPPLEMENTARY DATA
QUARTERLY FINANCIAL AND COMMON STOCK DATA
<TABLE>
<CAPTION>
Per Common Share
-------------------------------------------------------------
Earning from Dividends
From Continuing Per
Earnings Operations Net Earnings Stock Prices Common
Continuing Net -------------------------------------------------------------
Revenue Operations Earnings Basic Diluted Basic Diluted High Low Share
- ------------------------------------------------------------------------------------------------------------------------------------
(in thousands, except share data)
2000
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First quarter $ 1,308,608 19,824 19,824 0.33 0.33 0.33 0.33 25.13 17.44 .15
Second quarter 1,332,190 29,640 29,640 0.50 0.50 0.50 0.50 24.88 17.94 .15
Third quarter 1,338,817 12,144 12,144 0.20 0.20 0.20 0.20 23.00 18.31 .15
Fourth quarter 1,357,177 27,424 27,424 0.46 0.46 0.46 0.46 20.31 14.81 .15
- ------------------------------------------------------------------------------------------------------------------------------------
Total $ 5,336,792 89,032 89,032 1.49 1.49 1.49 1.49 25.13 14.81 .60
====================================================================================================================================
1999
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
====================================================================================================================================
</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 the first two quarters of
1999 has been restated to reflect RPTS 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 2000
were impacted, in part, by after-tax restructuring and other charges of $23
million and $3 million, respectively. 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.
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, 2001, there were 14,492 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.
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 F are presented on the following pages of this Form 10-K:
<TABLE>
<CAPTION>
Page No.
<S> <C>
A) Independent Auditors' Report ...................... 24
B) Consolidated Statements of Earnings for year
December 31, 2000, 1999 and 1998................... 25
C) Consolidated Balance Sheets as of December 3 1999.. 26
D) Consolidated Statements of Cash Flows for year
ended December 31, 2000, 1999 and 1998............. 27
E) Consolidated Statements of Shareholders' Equity for
years ended December 31, 2000, 1999 and 1998....... 28
F) Notes to Consolidated Financial Statements......... 29
</TABLE>
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.
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 February
16, 2001.
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 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.
51
<PAGE>
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.
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.
10.3(d) The Ryder System, Inc. 2000 Incentive Compensation Plan for
Headquarters Executive Management Levels MS 11 and Higher.
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.
10.4(e) The Ryder System, Inc. 1995 Stock Incentive Plan, as
amended and restated as of May 4, 2000
52
<PAGE>
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.
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.
53
<PAGE>
24.1 Manually executed powers of attorney for each of:
M. Anthony Burns
Joseph L. Dionne
Edward T. Foote II
David I. Fuente
John A. Georges
Vernon E. Jordan, Jr.
David T. Kearns
Lynn M. Martin
Christine A. Varney
Alva O. Way
(b) Reports on Form 8-K:
During the first quarter of 2001, the Company filed a report on Form 8-K on
March 12, 2001.
Item 9. REGULATION FD DISCLOSURE
The Company made the 8-K filing to provide answers to question
that were submitted by analysts and investors prior and
subsequent to the Company's February 7, 2001, earnings conference
call. The Company also published the question and answer document
(Q and A) on its web site (www.ryder.com).
(c) Executive Compensation Plans and Arrangements:
Please refer to the description of Exhibits 10.1 through 10.12 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 23, 2001 RYDER SYSTEM, INC.
By: /S/ GREGORY T. SWIENTON
-------------------------------------
Gregory T. Swienton
President 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 23, 2001 By: /S/ GREGORY T. SWIENTON
-------------------------------------
Gregory T. Swienton
President and Chief Executive Officer
(Principal Executive Officer)
Date: March 23, 2001 By: /S/ CORLISS J. NELSON
-------------------------------------
Corliss J. Nelson
Senior Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
Date: March 23, 2001 By: /S/ RICHARD G. RODICK
-------------------------------------
Richard G. Rodick
Senior Vice President
and Controller
(Principal Accounting Officer)
Date: March 23, 2001 By: /S/ M. ANTHONY BURNS *
-------------------------------------
M. Anthony Burns
Chairman
Date: March 23, 2001 By: /S/ JOSEPH L. DIONNE *
-------------------------------------
Joseph L. Dionne
Director
Date: March 23, 2001 By: /S/ EDWARD T. FOOTE II *
-------------------------------------
Edward T. Foote II
Director
Date: March 23, 2001 By: /S/ DAVID I. FUENTE *
-------------------------------------
David I. Fuente
Director
Date: March 23, 2001 By: /S/ JOHN A. GEORGES *
-------------------------------------
John A. Georges
Director
Date: March 23, 2001 By: /S/ VERNON E. JORDAN, JR. *
-------------------------------------
Vernon E. Jordan, Jr.
Director
Date: March 23, 2001 By: /S/ DAVID T. KEARNS *
-------------------------------------
David T. Kearns
Director
Date: March 23 , 2001 By: /S/ LYNN M. MARTIN *
-------------------------------------
Lynn M. Martin
Director
55
<PAGE>
Date: March 23, 2001 By: /S/ CHRISTINE A. VARNEY *
-------------------------------------
Christine A. Varney
Director
Date: March 23, 2001 By: /S/ ALVA O. WAY *
-------------------------------------
Alva O. Way
Director
*By: /S/ CARLOS J. ABARCA
-------------------------------------
Carlos J. Abarca
Attorney-in-Fact
56
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>BY LAWS
<TEXT>
<PAGE>
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
Amended December 14, 2000
Amended February 16, 2001
<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 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
2
<PAGE>
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, or by transmitting by electronic mail or any other type of electronic
transmission, or by any other method permitted by law, to each stockholder
entitled to vote no less than ten days nor more than sixty days before the date
set for such meeting. Such notice shall be deemed to be delivered (1) 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, or (2) at the time the notice is electronically transmitted to
the stockholder in a manner authorized by the stockholder if such authorization
is required by law, or (3) at such other time as provided by law with respect to
other methods of giving such notice as are permitted by law.
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 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.
3
<PAGE>
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 signed or otherwise authorized by the stockholder
or by the stockholder's attorney-in-fact in writing or in any other manner
permitted by law.
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.
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.
4
<PAGE>
(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.
(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.
5
<PAGE>
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 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
6
<PAGE>
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 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
7
<PAGE>
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.
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.
8
<PAGE>
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.
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. 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. He shall perform such other duties as the Board of Directors
may from time to time prescribe.
Section 8.
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
9
<PAGE>
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 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 Chief Executive Officer, 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 Chief Executive Officer 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. 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.
10
<PAGE>
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.
b. 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.
c. 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.
d. 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.
e. 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.
f. 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.
g. 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.
h. 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.
11
<PAGE>
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.
i. 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.
j. 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.
He shall perform such other duties as the Board of Directors or the
President may from time to time prescribe.
k. 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.
l. 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.
m. 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.
12
<PAGE>
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.
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.
13
<PAGE>
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.
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
14
<PAGE>
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 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,
15
<PAGE>
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.
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.
16
<PAGE>
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:
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).
17
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3D
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>INCENTIVE COMPENSATION PLAN
<TEXT>
<PAGE>
- --------------------------------------------------------------------------------
[LOGO] Ryder CORPORATE MANAGEMENT
EXECUTIVE MANAGEMENT
2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
PLAN DESCRIPTION PAGE 1
- --------------------------------------------------------------------------------
Supersedes all applicable 1999 Ryder Incentive Compensation Plans and any and
all oral representations, promises, or guarantees. No exceptions to this plan
will be honored without written approval of the Compensation Committee of the
RSI Board of Directors. Any manager or officer who authorizes such an exception
without prior approval of the Compensation Committee will be subject to
disciplinary action including demotion, forfeiture of bonus and/or termination.
INTRODUCTION
- ------------
The following material explains the operation and administration of the 2000
Incentive Compensation Plan (the "Plan") for eligible Ryder System, Inc. ("RSI"
or "the Company") Officers and Directors whose positions are evaluated at
Management Level 11 (MS11) or higher and other members of the Company's
Executive Committee ("participants"). The Plan is intended to serve as a
single, comprehensive source of information that will explain your bonus for
achieving various levels of performance.
The Plan is based on the Economic Value Added ("EVA") performance measurement
system. EVA is a measurement tool that determines whether a business is earning
more than its true cost of capital by incorporating the cost of equity capital
as well as debt capital. EVA will assess financial performance and will also
serve as a management tool for setting goals, evaluating strategies, and
analyzing results.
EVA can be expressed in the following formula: EVA = NAT minus "An Equity
Charge"
DEFINITIONS OF KEY TERMS
- ------------------------
Wherever used herein the following terms shall have the meanings hereinafter set
forth:
. "Participant" means any employee of the Company designated to be eligible to
participate in this Annual Incentive Plan.
. "Target Bonus Award" means the target Bonus Payout per Participant and is
expressed as a percentage of the Participant's Eligible Base Salary.
. "Bonus Payout" means final bonus payment to be received by Participant.
. "Eligible Base Salary" means, for the purpose of bonus calculations, the
average annual rate of pay for the calendar year, excluding all other
compensation paid to the employee during the year, e.g. bonus, commissions,
employee benefits, moving expenses, and any imputed income for which the
Participant may be eligible.
1
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2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
PLAN DESCRIPTION PAGE 2
- --------------------------------------------------------------------------------
DEFINITIONS OF KEY TERMS (Continued)
- ------------------------------------
. "Target EVA" means the level of EVA performance required to earn a Target
Bonus Award.
. "Threshold" means the minimum level of performance required to receive a
Bonus Payout.
. "Bonus Interval" means the performance above Target EVA or the performance
below Target EVA that will cause a 2x Bonus Contribution or a Zero Bonus
Contribution.
. "Bonus Multiple" means the difference (positive or negative) between Actual
performance and Targeted performance, divided by the Bonus Interval, plus
One.
. "Bonus Contribution" is the potential Bonus Payout determined by multiplying
the Participant's Target Bonus Award, the Bonus Weighting, and the Bonus
Multiple.
. "Line-Of-Sight" is the relationship between corporate objectives and the
employee's direct control over those objectives.
. "Scorecard" is an individualized set of performance measures that seeks to
achieve strategic objectives in one or more of the following areas:
financial, customer, internal process, people, or other.
. "Scorecard Potential Bonus" is a maximum 20% of the Target Bonus Award.
. "Scorecard Award" means the percent of the Scorecard Potential Bonus that is
earned. This award % will be based on how well Scorecard goals are achieved.
. "Declared Bonus" means the bonus dollars available for payment or reserve
after all declarations have been made.
. "Bonus Reserve" All bonus payments are made from the Bonus Reserve. Each
Participant's beginning Bonus Reserve balance in his/her first year of
participation is zero. The Bonus Reserve is increased or decreased for any
plan year by the amount of the Declared Bonus. The Participant will be paid
from such Available Balance up to the Target Bonus Award amount, plus one
half of any such balance that remains after subtracting the Target Bonus
Award from the available Bonus Reserve balance. The Bonus Reserve is
applicable only for Director and Officer level Plans.
. "Available Balance" means the Bonus Declared plus the Beginning Bonus Reserve
Balance.
. "NAT" means the consolidated Net Earnings After Tax for the bonus year,
including appropriate accruals for all incentive awards estimated to be
payable for that bonus year.
. "Equity Charge" means the Average Equity times the Cost of Equity as
determined by the Chief Financial Officer.
2
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EXECUTIVE MANAGEMENT
2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
PLAN DESCRIPTION PAGE 3
- --------------------------------------------------------------------------------
ELIGIBLE POSITIONS
- ------------------
Employees in Management Level 11 (MS11) or higher positions are eligible to
participate in this Plan.
TARGET BONUS AWARD
- ------------------
Target Bonus Award is expressed as a percentage of base salary for each
Participant. The following table summarizes the Target Bonus Award for each
participating management level:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Management Level Target Bonus Award
- -----------------------------------------------------------------------------------------------
<S> <C>
Chief Executive Officer 85%
- -----------------------------------------------------------------------------------------------
Chief Operating Officer 80%
- -----------------------------------------------------------------------------------------------
Management Levels 17 - 20 75%
- -----------------------------------------------------------------------------------------------
Management Levels 14 - 16 70%
- -----------------------------------------------------------------------------------------------
Management Level 13 40%
- -----------------------------------------------------------------------------------------------
Management Levels 11 - 12 30%
- -----------------------------------------------------------------------------------------------
</TABLE>
3
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2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
PLAN DESCRIPTION PAGE 4
- --------------------------------------------------------------------------------
BONUS AWARD OPPORTUNITY
- -----------------------
The Plan has uncapped bonus award opportunity. Bonus award opportunity will
increase as EVA exceeds the expected level. Participants in this Plan will be
subject to the Bonus Reserve which is discussed later in this document.
BASE SALARY CALCULATION
- -----------------------
For the purpose of bonus calculations, Eligible Base Salary is defined as the
average annual rate of pay for the calendar year, excluding all other
compensation paid to the employee during the year, e.g. bonus, commissions,
employee benefits, moving expenses, and any imputed income for which the
Participant may be eligible.
Employees who are newly hired, promoted or transferred into or out of eligible
positions, and those who move from one eligibility level to another will receive
pro-rata bonus awards based on the average annual rate of pay and Target Bonus
in eligible positions, provided they are employed in good standing at the time
bonus awards are distributed.
The average annual rate of pay for a Participant whose base salary changes
within the bonus year is calculated below. Salaried employees are paid semi-
monthly, each check representing 1/24 of the annual base salary. Daily pay for
a salaried employee is calculated by dividing the annual salary by 366 (Year
2000 is a leap year) working days per year.
Base Salary Calculation Example
-------------------------------
Average annual rate of pay would be calculated as follows for a Participant
who begins a bonus year with a base salary of $100,000, then effective
April 1, 2000 receives an increase to a base salary of $104,000:
January 1 through March 31, 2000:
---------------------------------
Total # of days = 91 = 0.249 x $100,000 = $ 24,900
--------------- ---
366 days 366
April 1 through December 31, 2000:
----------------------------------
366 - 91 = 275 = 0.751 x $104,000 = $ 78,104
-------- --- --------
366 days 366
Average Annual Rate of Pay for Bonus Year = $103,004
4
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2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
PLAN DESCRIPTION PAGE 5
- --------------------------------------------------------------------------------
BONUS PAYOUT MECHANISM
- ----------------------
In 2000, the bonus payouts will be distributed to participants based 80% on RSI
EVA and 20% on the relative performance of Scorecard goals. See the document
entitled "Bonus Calculation", for an explanation of how Bonus payouts are
determined.
The following diagram illustrates the Bonus Payout process.
[CHART]
PERFORMANCE TARGETS
- -------------------
The Plan is intended to provide Participants with competitive compensation for
achieving and exceeding targeted performance levels. Target Bonus Awards are
expressed as a percentage of a Participant's base salary and will be declared
when performance above threshold is achieved.
The following chart highlights target and payout multiples for each component
used in the Bonus Payout calculation.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Weight Bonus Payout Components Interval Threshold Target 2 Times
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
80% RSI EVA ($MM) $34 ($50.8) ($16.8) $17.2
- -----------------------------------------------------------------------------------------------------
20% Scorecard N/A ($50.8)/1/ N/A N/A
- -----------------------------------------------------------------------------------------------------
</TABLE>
____________________________
/1/ RSI EVA
5
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EXECUTIVE MANAGEMENT
2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
PLAN DESCRIPTION PAGE 6
- --------------------------------------------------------------------------------
2000 PLAN SCALE - RSI EVA
- -------------------------
The following scale illustrates how the Plan will work. Noted are the points
where Target Bonus, two times Target Bonus, and Zero Bonus are achieved. Bonus
amounts are dependent on the multiple declared.
[GRAPHIC]
SCORECARD MEASURES
- ------------------
The Scorecards will be individualized for each Plan Participant by including
only measures that are within the Plan Participant's control. The Scorecards
will include measures that seek to achieve strategic objectives in one or more
of the following areas: financial, customer, internal process, and people.
Both the Plan Participant and his/her manager will develop the Scorecard goals
based on the Participant's job responsibilities.
Scorecard performance will account for 20% of the 2000 Bonus Award Opportunity.
The Scorecard will be worth 20 points, with each point representing one
percentage point of Bonus Payout. At the end of the year, the Plan
Participant's manager will render a performance rating based on the
Participant's attainment of the specified measures. The total points earned
will equal the Participant's Scorecard Bonus Payout percentage.
FORFEITURE
- ----------
If RSI 2000 Actual EVA does not surpass the threshold of ($50.8) MM,
participants will not receive a Bonus Payout.
6
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EXECUTIVE MANAGEMENT
2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
PLAN DESCRIPTION PAGE 7
- --------------------------------------------------------------------------------
BONUS RESERVE
- -------------
The Bonus Reserve promotes a long-term perspective for the Plan and aligns
Participants with shareholders by simulating ownership. Sustained performance
improvements are rewarded over time and consistently exceeding performance
targets increases the Bonus Reserve balance.
The Bonus Declared in any year is added to the Bonus Reserve. The Bonus Reserve
will then pay Participants up to their Target Bonus Award levels plus one-half
of any residual balance. The remaining one-half is carried forward and will be
held in the Bonus Reserve.
The Bonus Reserve is specifically identified with each Participant and will
follow that Participant through other positions within the Company. The Bonus
Reserve balance will not exceed 3 times Target Bonus and any residual balance
above 3 times Target Bonus will be immediately paid out to the Participant.
The Bonus Reserve is illustrated below:
[CHART]
The Bonus Reserve Balance, while linked to each Plan Participant, is not
considered "earned" by that individual until performance is sustained over time.
The Bonus Reserve is designed to reward long-term performance, and Participants
will receive one-half of any excess over target levels in any given year. The
remaining balance in the Bonus Reserve will be distributed in future years if
performance improvements are sustained, and will be used to pay up to the Target
Bonus Award in years where performance falls short of target financial
performance.
7
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2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
PLAN DESCRIPTION PAGE 8
- --------------------------------------------------------------------------------
PLAN RULES
- ----------
The following rules apply to Plan Participants. The Company reserves the right
to alter, modify, change or terminate any of the provisions described below at
any time.
. Eligibility: Employees whose positions are designated on page 1 and who are
employed in good standing at the time bonus payments are made are eligible
to participate in this Plan. Individuals who have written agreements which
specifically provide for incentive compensation other than that which is
provided in this Plan or who are Participants in any other incentive
compensation plan of RSI, its subsidiaries or affiliates are not eligible to
participate in this Plan.
Employees who are newly hired, promoted or transferred into or out of
eligible positions, and those who move from one eligibility level to another
will receive pro-rata bonus awards based on the average annual rate of pay
and Target Bonus Award opportunity in eligible positions, provided they are
employed in good standing at the time bonus awards are distributed.
. Promotion: A Participant who is promoted during the bonus year will receive
a pro-rata bonus declaration based on the average annual rate of pay and
bonus award opportunity in the eligible positions. The Participant will
receive a pro-rata bonus based on the appropriate Plan for his/her
management level, position and the portion of time spent in each position
during the year.
. Workers' Compensation or Leave of Absence ("LOA"): A Participant who leaves
the payroll due to a workers' compensation leave or LOA will receive no
additional bonus declarations while off the payroll, but will be eligible to
receive a pro-rata bonus for the year in which they leave the payroll. Such
payment may be made in a lump sum or over time at the discretion of the
Company, the Board of Directors or the Compensation Committee of the Board
of Directors.
. Demotion: If an individual is demoted from MS level 11 or above to MS level
10 or below, the person will no longer be subject to the Bonus Reserve
mechanism. The Bonus Reserve balance will be paid out one half over each of
the next 2 years in accordance with the other provisions of this Plan.
8
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EXECUTIVE MANAGEMENT
2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
PLAN DESCRIPTION PAGE 9
- --------------------------------------------------------------------------------
PLAN RULES (Continued)
- ----------------------
. Termination (Dismissal): Participants leaving the Company under any
conditions other than those outlined in the Eligibility or Change of Control
sections of this Plan are not eligible for bonus awards for the bonus year in
which they leave, nor are they eligible for awards for the preceding bonus
year, if such awards have not yet been distributed unless otherwise required
by law. A Participant who is terminated and who has a positive Bonus Reserve
Balance will forfeit any Bonus Reserve Balance. Unless terminated for cause,
the individual may be eligible for severance if he/she meets the criteria.
The severance package may include a provision for bonus.
. Resignations: Except as provided otherwise in this Plan or required by law,
voluntary termination of employment with the Company will result in
forfeiture of any unpaid Declared Bonuses and of the balance in a
Participant's Bonus Reserve.
. Retirement or Permanent Disability Retirement: A Participant who retires or
takes disability retirement from the Company will receive full payment of
their Bonus Reserve Balance and a pro-rata bonus for the year in which they
retire. Such payment will be made in a lump sum or over time at the
Company's discretion.
. Death: The estate of a Participant who dies while in the employ of the
Company will receive full payment of their Bonus Reserve Balance and a pro-
rata bonus for the year in which they die. Such payment will be made at the
regular time for making bonus payments in respect to the year of such death,
and will be paid to the designated beneficiary or estate.
. Sale of Business: If a business is sold, the Participants of the sold
business will receive full payment of their Bonus Reserve Balance and a pro-
rata Bonus Award for the year in which the business in sold. Such payment
will be made in a lump sum or over time at the Company's discretion.
. No Guarantee: Participation provides no guarantee that a bonus will be paid.
The success of the Company, its operating locations and individual
Participants, as measured by the achievement of EVA, will determine the
extent to which Participants will be entitled to receive bonuses hereunder;
provided, however, all bonuses are subject to the sole discretion of the
Board of Directors or the Compensation Committee of the Board of Directors of
the Company.
. Exclusion Criteria: Participation in the Plan is not a right, but a privilege
subject to annual review by the Company. RSI retains the right to withhold
payment from any Participant who violates any Company principle or policy, or
the rules contained in this Plan.
9
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EXECUTIVE MANAGEMENT
2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
PLAN DESCRIPTION PAGE 10
- --------------------------------------------------------------------------------
ADMINISTRATION
- --------------
Both the Chairman and Chief Executive Officer and the President and Chief
Operating Officer of RSI will administer this Plan, except for bonus awards to
the Chief Executive Officer and Chief Operating Officer, which will be
administered by the Compensation Committee of the Board of Directors of RSI.
BONUS YEAR
- ----------
The bonus year is defined as the calendar year in which bonus awards are earned.
BONUS ELIGIBILITY ON CHANGE OF CONTROL
- --------------------------------------
Notwithstanding anything in this Plan to the contrary, in the event of a Change
of Control of the Company (as defined and adopted by the Board of Directors on
August 18, 1995), the funds necessary to pay incentive awards, including the
Bonus Reserve Balances, will be placed in a trust administered by an outside
financial institution.
The amount of each Participant's incentive award will be determined in
accordance with the provisions of the Plan by a "Big 5" accounting firm chosen
by the Company.
Should a Change of Control occur during 2000, Participants will receive
instructions regarding the collection of incentive awards.
BONUS PAYMENT
- -------------
Shortly after the end of the calendar year and after considering the
recommendations of the Administrator of the Plan, the Compensation Committee of
the Board of Directors or the Board of Directors of RSI will, in its sole
discretion, determine the Participants, if any, who will receive bonus awards
and the amounts of such awards. Bonus award payments will be distributed to
eligible Participants following such Board or Committee approval and subsequent
to certification of consolidated financial statements by an independent auditor.
10
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EXECUTIVE MANAGEMENT
2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
PLAN DESCRIPTION PAGE 11
- --------------------------------------------------------------------------------
BONUS FUNDING
- -------------
Bonus Payout maximums are limited by the lower of the total Declared Bonus
provided under this Plan, the amount of the accrual at the time of any bonus
payment, or the maximum funding limitation. Should the funding limitation or
accrual not provide for bonus allotments under this Plan, proration will be
performed at the discretion of both the Chairman and Chief Executive Officer and
the President and Chief Operating Officer of RSI. Unused funds may not be
carried forward for subsequent bonus years.
DISCRETIONARY AWARDS
- --------------------
With the approval of the Board of Directors or the Compensation Committee of the
Board of Directors of RSI, the Chairman and Chief Executive Officer and the
President and Chief Operating Officer of RSI have the authority to grant
discretionary bonus awards for exemplary performance to non-Participants or to
enhance the awards of Participants. Discretionary awards are not subject to the
funding limitations of this Plan.
While it is common to grant discretionary awards at the same time as regular
awards, it may be appropriate, on occasion, to recognize an employee off-cycle
due to extremely unusual performance. Off-cycle discretionary awards must be
approved by both the Chairman and Chief Executive Officer and the President and
Chief Operating Officer of RSI.
The total of all discretionary awards for Participants under all RSI incentive
compensation plans, including this Plan as well as awards granted off-cycle, may
not exceed $500,000 per year.
AMENDMENTS
- ----------
The Board of Directors of RSI, or the Compensation Committee, reviews RSI's, its
subsidiaries' and affiliates' incentive compensation plans annually to ensure
equitability both within the Company, and in relation to current economic
conditions.
The Board of Directors, or the Compensation Committee, reserves the right to
amend, suspend, terminate or make exceptions to this Plan at any time.
11
<PAGE>
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EXECUTIVE MANAGEMENT
2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
BONUS CALCULATION PAGE 1
- --------------------------------------------------------------------------------
OVERVIEW
- --------
Bonus Payouts will be distributed based on 80% RSI EVA and 20% Scorecard
performance. This total is then subject to the Bonus Reserve.
Before we can begin a sample calculation, it is important to understand the
concepts of Bonus Interval, Bonus Multiple and Bonus Contribution.
BONUS INTERVAL
- --------------
The Bonus Interval ("Interval") is the Improvement needed, over and above
Targeted performance, to declare a double bonus. It is also the shortfall from
Target that will cause a zero bonus being declared. The following chart
illustrates the Interval concept.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
2000 2000 1x Payout
Measure Target Interval Zero Payout (Target) 2x Payout
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RSI EVA ($MM) ($16.8) $ 34 ($16.8) - $34 = ($50.8) ($16.8) ($16.8) + $34 = $17.2
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
BONUS MULTIPLE
- --------------
The Bonus Multiple for each measure is the difference (positive or negative)
between Actual and Target, divided by the Interval, plus One. For example,
assume RSI's 2000 Actual EVA is ($10.0) MM. The RSI Bonus Multiple would be
calculated as follows:
2000 Actual RSI EVA ($10.0) MM
- 2000 Target RSI EVA - ($16.8) MM
------------------- ----------
= Variance from Target RSI EVA = $ 6.8 MM
+ 2000 RSI Bonus Interval $ 34.0 MM
----------------------- ----------
= Bonus Above Target = 0.20x
+ Target Bonus Multiple + 1.00x
--------------------- ----------
= RSI Bonus Multiple = 1.20x
BONUS CONTRIBUTION
- ------------------
The Bonus Contribution is the amount each funding component contributes to the
bonus pool. It is determined by multiplying the Target Bonus Award, applicable
weighting criteria, and the Bonus Multiple. This process is applied to each
bonus pool funding component with the exception of the Scorecard component.
The Scorecard Bonus Contribution is calculated by multiplying the Percentage of
Scorecard bonus percentage points earned by the Target Bonus Award.
The sum of the Bonus Contributions is the total Bonus Payout.
12
<PAGE>
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[LOGO] RYDER CORPORATE MANAGEMENT
EXECUTIVE MANAGEMENT
2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
BONUS CALCULATION PAGE 2
- --------------------------------------------------------------------------------
BONUS CALCULATION EXAMPLE
- -------------------------
For this sample bonus calculation, the following assumptions were used:
----------------------------------------------------------------
MS Level MS11
----------------------------------------------------------------
Eligible Base Salary $100,000
----------------------------------------------------------------
Target Bonus Award 30% of salary or $30,000
----------------------------------------------------------------
2000 RSI EVA Actual ($10.0) MM
----------------------------------------------------------------
2000 RSI EVA Target ($16.8) MM
----------------------------------------------------------------
2000 RSI Bonus Interval $34.0 MM
----------------------------------------------------------------
Scorecard Points Earned 16.2
----------------------------------------------------------------
Beginning Bonus Reserve $ 2,000
----------------------------------------------------------------
- --------------------------------------------------------------------------------
Part I: RSI EVA Bonus Contribution
- --------------------------------------------------------------------------------
1. Calculate the Variance from Target RSI EVA:
Determine the difference between 2000 Actual RSI EVA and 2000 Target RSI
EVA. This is the Variance from Target RSI EVA.
2000 Actual RSI EVA ($10.0) MM
- 2000 Target RSI EVA - ($16.8) MM
------------------- ----------
= Variance from Target RSI EVA = $ 6.8 MM
2. Calculate RSI Bonus Multiple:
The variance from target is divided by the EVA Bonus Interval to determine
the amount of Bonus to be added to Target. Next, add the Bonus Above Target
to the Target Bonus Award multiple of 1.0 to determine the RSI Bonus
Multiple.
Variance from Target RSI EVA $ 6.8 MM
+ 2000 RSI Bonus Interval / $ 34.0 MM
----------------------- ----------
= Bonus Above Target = 0.20x
+ Target Bonus Multiple + 1.00x
--------------------- ----------
= RSI Bonus Multiple = 1.20x
3. Calculate RSI Bonus Contribution:
The RSI Bonus Multiple is multiplied by the Target Bonus Award and the RSI
Bonus weight to determine the RSI Bonus Contribution in dollars.
Target Bonus Award $30,000
X RSI Bonus Weighting X 80%
X RSI Bonus Multiple X 1.20
---------------------------- -------
= Total RSI Bonus Contribution $28,800
13
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EXECUTIVE MANAGEMENT
2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
BONUS CALCULATION PAGE 3
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Part II: Scorecard Bonus Contribution
- --------------------------------------------------------------------------------
4. Calculate the Scorecard Bonus Contribution
In this example, 16.2 out of 20.0 total bonus points were earned on the
Scorecard. Thus, the Participant has earned a 16.2% Scorecard Bonus Payout.
Scorecard Bonus Percentage Points Earned 16.2%
X Target Bonus Award X $30,000
-------
= Total Scorecard Bonus Contribution = $ 4,860
- --------------------------------------------------------------------------------
Part III: Declared Bonus
- --------------------------------------------------------------------------------
5. Calculate Total Declared Bonus:
Add the two components together to determine the total Declared Bonus. This
total is then subject to the Bonus Reserve.
RSI EVA Bonus Contribution $28,800
+ Scorecard Bonus Contribution + $ 4,860
---------------------------- -------
Total Declared Bonus $33,660
=======
- --------------------------------------------------------------------------------
Part IV: Bonus Payout and Bonus Reserve
- --------------------------------------------------------------------------------
6. Calculate the Bonus Payout and Bonus Reserve:
The Bonus Reserve only applies to those in MS 11 positions and above. Before
any Bonus can be paid, the Declared Bonus must flow through the Bonus
Reserve. First, the Declared Bonus is added to the Beginning Reserve Balance
to determine how much is available to be paid. For this example, assume the
Beginning Reserve Balance is $2,000.
Total 2000 Declared Bonus $33,660
+ Beginning Reserve Balance + $ 2,000
------------------------- -------
= Available Balance $35,660
Next, the reserve pays out up to Target Bonus Award. If the Available
Balance is less than the Target Bonus Award, the entire Bonus Reserve is
paid out.
Available Balance $35,660
- (Up to) Target Bonus Award - $30,000
-------------------------- -------
= Residual Balance $ 5,660
14
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EXECUTIVE MANAGEMENT
2000 INCENTIVE COMPENSATION PLAN LEVELS MS11 AND HIGHER
BONUS CALCULATION PAGE 4
- --------------------------------------------------------------------------------
Next, one-half of any residual balance is paid out...
Residual Balance $ 5,660
X 1/2 X 1/2
--- -------
= Additional Payment $ 2,830
Target Bonus $30,000
+ Additional Payment $ 2,830
------------------ -------
= Total Bonus Payout $32,830
...with the remaining one-half staying in the reserve.
Residual Balance $ 5,660
- Additional Payment - $ 2,830
------------------ -------
= Ending Reserve Balance $ 2,830
The Ending Reserve Balance from 2000 then becomes the Beginning Reserve
Balance for 2001.
- --------------------------------------------------------------------------------
In this example, for 2000 the participant will receive a total Bonus Payout of
$32,830. An additional payment of $2,830 will be placed in the participant's
Bonus Reserve account for disbursement in future years.
- --------------------------------------------------------------------------------
15
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>STOCK INCENTIVE PLAN
<TEXT>
<PAGE>
RYDER SYSTEM, INC.
1995 STOCK INCENTIVE PLAN
(as amended on May 5, 2000)
1. Purpose.
-------
The purpose of this Plan is to enable the Company to recruit and retain those
key executives most responsible for the Company's continued success and
progress, and by offering comparable incentives, to compete with other
organizations in attracting, motivating and retaining such executives, thereby
furthering the interests of the Company and its shareholders by giving such
executives a greater personal stake in and commitment to the Company and its
future growth and prosperity.
2. Definitions.
-----------
For the purpose of this Plan:
(a) The term "Award" shall mean and include any Stock Option, SAR, Limited
SAR, Performance Unit or Restricted Stock Right granted under this Plan.
(b) During the three (3) year period following a Change of Control, the
term "cause" as used in Section 7 and Section 14(a) of this Plan with respect to
any Stock Option shall mean (i) an act or acts of fraud, misappropriation or
embezzlement on the Grantee's part which result in or are intended to result in
his personal enrichment at the expense of the Company, (ii) conviction of a
felony, (iii) conviction of a misdemeanor involving moral turpitude, or (iv)
willful failure to report to work for more than thirty (30) continuous days not
supported by a licensed physician's statement, all as determined only by a
majority of the Incumbent Board or the Committee, as the case may be.
(c) A "Change of Control" shall be deemed to have occurred if:
(i) any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"1934 Act")) (a "Person") becomes the beneficial owner, directly or indirectly,
of twenty percent (20%) or more of the combined voting power of RSI's
outstanding voting securities ordinarily having the right to vote for the
election of directors of RSI; provided, however, that for purposes of this
subparagraph (i), the following acquisitions shall not constitute a Change of
Control: (A) any acquisition by any employee benefit plan or plans (or related
trust) of RSI and its subsidiaries and affiliates or (B) any acquisition by any
corporation pursuant to a transaction which complies with clauses (A), (B) and
(C) of subparagraph (iii) of this Section 2(c); or
(ii) the individuals who, as of August 18, 1995, constituted the
Board of Directors of RSI (the "Board" generally and as of August 18, 1995 the
"Incumbent Board") cease for any reason to constitute at least two-thirds (2/3)
of the Board, provided that any person becoming a director subsequent to August
18, 1995 whose election, or nomination for election, was approved by a vote of
the persons comprising at least two-thirds (2/3) of the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act)
shall be, for purposes of this Plan, considered as though such person were a
member of the Incumbent Board; or
(iii) there is a reorganization, merger or consolidation of RSI (a
"Business Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of RSI's outstanding Common Stock and
outstanding voting securities ordinarily having the right to vote for the
election of directors of RSI immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then
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outstanding voting securities ordinarily having the right to vote for the
election of directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a corporation which as
a result of such transaction owns RSI or all or substantially all of RSI's
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination, of RSI's outstanding Common Stock and outstanding voting securities
ordinarily having the right to vote for the election of directors of RSI, as the
case may be, (B) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan or plans (or related trust) of
RSI or such corporation resulting from such Business Combination and their
subsidiaries and affiliates) beneficially owns, directly or indirectly, 20% or
more of the combined voting power of the then outstanding voting securities of
the corporation resulting from such Business Combination and (C) at least two-
thirds (2/3) of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(iv) there is a liquidation or dissolution of RSI approved by the
shareholders; or
(v) there is a sale of all or substantially all of the assets of
RSI.
If a Change of Control occurs and if a Grantee's employment is terminated prior
to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Grantee that such termination of employment (A) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change of Control or (B) otherwise arose in connection with or in anticipation
of a Change of Control, a Change of Control shall be deemed to have
retroactively occurred on the date immediately prior to the date of such
termination of employment.
(d) The term "Code" shall mean the Internal Revenue Code of 1986 as it may
be amended from time to time.
(e) The term "Committee" shall mean the Compensation Committee of the
Board of Directors of RSI constituted as provided in Section 5 of this Plan.
(f) The term "Common Stock" shall mean the common stock of RSI as from
time to time constituted.
(g) The term "Company" shall mean RSI and its Subsidiaries.
(h) The term "Disability" shall mean total physical or mental disability
of a Grantee as determined by the Committee upon the basis of such evidence as
the Committee in its discretion deems necessary and appropriate.
(i) The term "Employee" shall mean a full-time salaried employee of RSI or
any Subsidiary (which term shall include salaried officers).
(j) The term "Fair Market Value" shall mean, with respect to the Common
Stock, the mean between the highest and lowest sale price for shares as reported
by the composite transaction reporting system for securities listed on the New
York Stock Exchange on the date as of which such determination is being made or
on the most recently preceding date on which there was such a sale.
(k) The term "Grantee" shall mean an Employee who is selected by the
Committee to receive an Award under this Plan and in the case of a deceased
Employee shall mean the beneficiary of the Employee.
(l) The term "Incentive Stock Option" shall mean a Stock Option granted
under this Plan or a previously granted Stock Option that is redesignated by the
Committee as an Incentive Stock Option which is intended to constitute an
incentive stock option within the meaning of Section 422(b) of the Code.
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(m) The term "Limited SAR" shall mean a Limited Stock Appreciation Right
granted by the Committee pursuant to Section 9 of this Plan.
(n) The term "Non-employee Director" shall mean any person who qualifies
as a non-employee director as defined in Rule 16b-3, as promulgated under the
1934 Act, or any successor definition.
(o) The term "Non-qualified Stock Option" shall mean a Stock Option
granted under this Plan which is not intended to qualify under Section 422(b) of
the Code.
(p) The term "Offer" shall mean any tender offer or exchange offer for
Shares, other than one made by the Company, including all amendments and
extensions of any such Offer.
(q) The term "Option" shall mean any stock option granted under this Plan.
(r) The term "Performance Goals" shall have the meaning set forth in
Section 10(c) of this Plan.
(s) The term "Performance Period" shall have the meaning set forth in
Section 10(d) of this Plan.
(t) The term "Performance Units" shall mean Performance Units granted by
the Committee pursuant to Section 10 of this Plan.
(u) The term "Plan" shall mean the Ryder System, Inc. 1995 Stock Incentive
Plan as the same shall be amended.
(v) The term "Price" shall mean, upon the occurrence of a Change of
Control, the excess of the highest of:
(i) the highest closing price of the Common Stock reported by the
composite transaction reporting system for securities listed on the New York
Stock Exchange within the sixty (60) days preceding the date of exercise;
(ii) the highest price per share of Common Stock included in a filing
made by any Person on any Schedule 13D pursuant to Section 13(d) of the 1934 Act
as paid within the sixty (60) days prior to the date of such report; and
(iii) the value of the consideration to be received by the holders of
Common Stock, expressed on a per share basis, in any transaction referred to in
subparagraph (iii), (iv) or (v) of Section 2(c), with all noncash consideration
being valued in good faith by the Incumbent Board; over the purchase price per
Share at which the related Option is exercisable as applicable, except that
Incentive Stock Options and, if and to the extent required in order for the
related Option to be treated as an Incentive Stock Option, SARs and Limited SARs
granted with respect to Incentive Stock Options, are limited to the spread
between the Fair Market Value of Common Stock on the date of exercise and the
purchase price per Share at which the related Option is exercisable.
(w) The term "Restricted Period" shall have the meaning set forth in
Section 11(a) of this Plan.
(x) The term "RSI" shall mean Ryder System, Inc.
(y) The term "Restricted Stock Rights" shall mean a Restricted Stock Right
granted by the Committee pursuant to Section 11 of this Plan.
(z) The term "Retirement" shall mean retirement under the provisions of
the various retirement plans of the Company (whichever is appropriate to a
particular Grantee) as then in effect, or in the absence of any such retirement
plan being applicable, as determined by the Committee.
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(aa) The term "SAR" shall mean a Stock Appreciation Right granted by the
Committee pursuant to the provisions of Section 8 of this Plan.
(bb) The term "Shares" shall mean shares of the Common Stock and any shares
of stock or other securities received as a result of the adjustment provided for
in Section 12 of this Plan.
(cc) The term "Spread" with respect to a SAR shall have the meaning set
forth in Section 8(b) of this Plan, and with respect to a Limited SAR, the
meanings set forth in Sections 9(c) and 9(d) of this Plan.
(dd) The term "Stock Option" shall mean any stock option granted under this
Plan.
(ee) The term "Subsidiary" shall mean any corporation, other than RSI, or
other form of business entity more than fifty percent (50%) of the voting
interest of which is owned or controlled, directly or indirectly, by RSI and
which the Committee designates for participation in this Plan.
(ff) The term "Termination Date" shall mean the date that a Grantee ceases
to be employed by RSI or any Subsidiary for any reason; provided, however, it
shall mean the end of any severance period applicable to a Grantee with respect
to any Non-qualified Stock Options held by such Grantee.
(gg) The term "Year" shall mean a calendar year.
3. Shares of Stock Subject to this Plan.
------------------------------------
(a) Subject to the provisions of Paragraph (b) of this Section 3, no more
than 8,300,000 Shares shall be issuable pursuant to grants under this Plan.
Shares issued pursuant to this Plan may be either authorized but unissued or
reacquired Shares purchased on the open market or otherwise.
(b) In the event any Stock Option or Restricted Stock Right expires or
terminates unexercised or any Restricted Stock Right is forfeited or cancelled,
the number of Shares subject to such Stock Option or Restricted Stock Right
shall again become available for issuance under this Plan, subject to the
provisions of Sections 7(a), 8(a), 9(b) and 10(i) of this Plan.
(c) No Grantee shall be eligible to receive any Stock Option or series of
Stock Options covering, in the aggregate, more than 800,000 Shares during the
term of this Plan.
4. Participation.
-------------
Awards under this Plan shall be limited to key executive Employees selected from
time to time by the Committee.
5. Administration.
--------------
This Plan shall be administered by the Compensation Committee of the Board of
Directors of RSI which shall consist of two or more members of the Board of
Directors, each of whom shall be a Non-employee Director. All members of the
Committee shall be "outside directors" as defined or interpreted for purposes of
Section 162(m) of the Code. The Committee shall have plenary authority, subject
to the express provisions of this Plan, to (i) select Grantees; (ii) establish
and adjust Performance Goals and Performance Periods for Performance Units;
(iii) determine the nature, amount, time and manner of payment of Awards made
under this Plan, and the terms and conditions applicable thereto; (iv) interpret
this Plan; (v) prescribe, amend and rescind rules and regulations relating to
this Plan; (vi) determine whether and to what extent Stock Options previously
granted under this Plan shall be redesignated as Incentive Stock Options and, in
this connection, amend any Stock Option Agreement or make or authorize any
reports or elections or take any other action to the extent necessary to
implement the redesignation of any Stock Option as an Incentive Stock Option,
provided that any redesignation of a previously granted Stock Option as an
Incentive Stock Option shall not be effective unless and until consented to by
the Grantee; and (vii) make all other determinations deemed necessary or
advisable for the administration of this Plan. The Committee's
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determination on the foregoing matters shall be conclusive. A majority of the
Committee shall constitute a quorum, and the acts of a majority of the members
present at any meeting at which a quorum is present, or acts approved in writing
by all members of the Committee without a meeting, shall be the acts of the
Committee.
6. Awards.
------
Subject to the provisions of Section 3 of this Plan, the Committee shall
determine Awards taking into consideration, as it deems appropriate, the
responsibility level and performance of each Grantee. The Committee may grant
the following types of Awards: Stock Options pursuant to Section 7 hereof, SARs
pursuant to Section 8 hereof, Limited SARs pursuant to Section 9 hereof,
Performance Units pursuant to Section 10 hereof and Restricted Stock Rights
pursuant to Section 11 hereof. Unless otherwise determined by the Committee, a
Grantee may not be granted in any Year both (i) a Restricted Stock Right and
(ii) a Stock Option, SAR, Limited SAR or Performance Unit.
7. Stock Options.
-------------
(a) The Committee from time to time may grant Stock Options either alone
or in conjunction with and related to SARs, Limited SARs and/or Performance
Units to key executive Employees selected by the Committee as being eligible
therefor. The Stock Options may be of two types, Incentive Stock Options and
Non-qualified Stock Options. Each Stock Option shall cover such number of Shares
and shall be on such other terms and conditions not inconsistent with this Plan
as the Committee may determine and shall be evidenced by a Stock Option
Agreement setting forth such terms and conditions executed by the Company and
the Grantee. The Committee shall determine the number of Shares subject to each
Stock Option. The number of Shares subject to an outstanding Stock Option shall
be reduced on a one for one basis to the extent that any related SAR, Limited
SAR or Performance Unit is exercised and such Shares shall not again become
available for issuance pursuant to this Plan.
In the case of Stock Options, the aggregate Fair Market Value
(determined as of the date of grant) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by an Employee during
any Year under this Plan or any other plan of the Company shall not exceed
$100,000. To the extent, if any, that the Fair Market Value of such Common Stock
with respect to which Incentive Stock Options are exercisable exceeds $100,000,
such Incentive Stock Options shall be treated as separate Non-qualified Stock
Options. For purposes of the two immediately preceding sentences of this
subparagraph (a), Stock Options shall be taken into account in the order in
which they were granted.
(b) Unless the Committee shall determine otherwise, each Stock Option may
be exercised only if the Grantee has been continuously employed by RSI or any
Subsidiary for a period of at least one (1) year commencing on the date the
Stock Option is granted; provided, however, that this provision shall not apply
in the event of a Change of Control.
(c) Each Stock Option shall be for such term (but, in no event for greater
than ten years) and shall be exercisable in such installments as shall be
determined by the Committee at the time of grant of the Stock Option.
The Committee may, at any time, provide for the acceleration of
installments or any part thereof.
(d) The price per Share at which Shares may be purchased upon the exercise
of a Stock Option shall be determined by the Committee on the grant of the Stock
Option, but such price shall not be less than one hundred percent (100%) of the
Fair Market Value on the date of grant of the Stock Option. If a Grantee owns
(or is deemed to own under applicable provisions of the Code and rules and
regulations promulgated thereunder) more than ten percent (10%) of the combined
voting power of all classes of the stock of the Company and a Stock Option
granted to such Grantee is intended to qualify as an Incentive Stock Option, the
Incentive Stock Option price shall be no less than one hundred and ten percent
(110%) of the Fair
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Market Value of the Common Stock on the date the Incentive Stock Option is
granted and the term of such Incentive Stock Option shall be no more than five
years.
(e) Except as provided in Paragraphs (h) and (l) of this Section 7, no
Stock Option may be exercised unless the Grantee, at the time of exercise, is an
Employee and has continuously been an Employee of RSI or any Subsidiary since
the grant of such Stock Option. A Grantee shall not be deemed to have terminated
his period of continuous employ with RSI or any Subsidiary if he leaves the
employ of RSI or any Subsidiary for immediate reemployment with RSI or any
Subsidiary.
(f) To exercise a Stock Option, the Grantee shall (i) give written notice
to the Company in form satisfactory to the Committee indicating the number of
Shares which he elects to purchase, (ii) deliver to the Company payment of the
full purchase price of the Shares being purchased (A) in cash or a certified or
bank cashier's check payable to the order of the Company, or (B) with the
approval of the Committee, in Shares of the Common Stock having a Fair Market
Value on the date of exercise equal to the purchase price, or a combination of
the foregoing having an aggregate Fair Market Value equal to such purchase
price, and (iii) deliver to the Secretary of the Company such written
representations, warranties and covenants as the Company may require under
Section 16(a) of this Plan.
(g) A Grantee of any Stock Option shall not have any rights as a
shareholder until the close of business on the date on which the Stock Option
has been exercised.
(h) Notwithstanding any other provision of this Plan, unless otherwise
determined by the Committee prior to a Change of Control, in the event of a
Change of Control, each Stock Option not previously exercised or expired under
the terms of this Plan shall become immediately exercisable in full and shall
remain exercisable to the full extent of the Shares available thereunder,
regardless of any installment provisions applicable thereto, for the remainder
of its term, unless Section 14(a) of this Plan applies or the Grantee has been
terminated for cause, in which case the Stock Options shall automatically
terminate as of the Incumbent Board's determination pursuant to Section 14(a) or
the Grantee's Termination Date, as appropriate.
(i) If the Committee so determines prior to or during the thirty (30) day
period following the occurrence of a Change of Control, Grantees of Stock
Options not otherwise exercised or expired under the terms of this Plan as to
which no SARs or Limited SARs are then exercisable may, in lieu of exercising,
require RSI to purchase for cash all such Stock Options or portions thereof for
a period of sixty (60) days following the occurrence of a Change of Control at
the Price specified in Section 2(v).
(j) Any determination made by the Committee pursuant to Section 7(h) or
7(i) may be made as to all eligible Stock Options or only as to certain of such
Stock Options specified by the Committee. Once made, any determination by the
Committee pursuant to Section 7(h) or 7(i) shall be irrevocable.
(k) The Company intends that this Section 7 shall comply with the
requirements of Rule 16b-3 under the 1934 Act (the "Rule") during the term of
this Plan. Should any provision of this Section 7 not be necessary to comply
with the requirements of the Rule, or should any additional provisions be
necessary for this Section 7 to comply with the requirements of the Rule, the
Committee may amend this Plan or any Stock Option agreement to add to or modify
the provisions thereof accordingly.
(l) Notwithstanding any of the provisions of this Section 7, a Stock
Option shall in all cases terminate and not be exercisable after the expiration
of the term of the Stock Option established by the Committee. Except as provided
in Section 7(h), Stock Options shall be exercisable after the Grantee ceases to
be employed by RSI or any Subsidiary as follows, unless otherwise determined by
the Committee:
(i) In the event that a Grantee ceases to be employed by RSI or any
Subsidiary by reason of Disability or Retirement, (A) any Non-qualified Stock
Option not previously exercised or expired shall continue to vest and be
exercisable during the three (3) year period following the Grantee's Termination
Date, and to the extent it is exercisable at the expiration of such three (3)
year period, it shall continue to be exercisable by such Grantee or such
Grantee's legal representatives, heirs or legatees for the term of such
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Non-qualified Stock Option, and (B) any Incentive Stock Option shall, to the
extent it was exercisable on the Termination Date, continue to be exercisable by
such Grantee or such Grantee's legal representatives, heirs or legatees for the
term of such Incentive Stock Option; provided, however, that in order to qualify
for the special tax treatment afforded by Section 421 of the Code, Incentive
Stock Options must be exercised within the three (3) month period commencing on
the Termination Date (the exercise period shall be one (1) year in the case of
termination by reason of disability, within the meaning of Section 22(e)(3) of
the Code). Incentive Stock Options not exercised within such three (3) month
period shall be treated as Non-qualified Stock Options.
(ii) In the event that a Grantee ceases to be employed by RSI or any
Subsidiary by reason of death, any Stock Option shall, to the extent it was
exercisable on the Termination Date, continue to be exercisable by such
Grantee's legal representatives, heirs or legatees for the term of such Stock
Option.
(iii) Except as otherwise provided in subparagraph (i) or (ii) above,
in the event that a Grantee ceases to be employed by RSI or any Subsidiary for
any reason other than termination for cause, any Stock Option shall, to the
extent it was exercisable on the Termination Date, continue to be exercisable
for a period of three (3) months commencing on the Termination Date and shall
terminate at the expiration of such period; provided, however, that in the event
of the death of the Grantee during such three (3) month period, such Stock
Option shall, to the extent it was exercisable on the Termination Date, be
exercisable by the Grantee's personal representatives, heirs or legatees for a
period of one (1) year commencing on the date of the Grantee's death and shall
terminate at the expiration of such period.
(m) Except as otherwise provided in Section 7, a Stock Option shall
automatically terminate as of the Termination Date, provided that if a Grantee's
employment is interrupted by reason of Disability or a leave of absence (as
determined by the Committee) the Committee may permit the exercise of some or
all of the Stock Options granted on such terms and for such period of time as it
shall determine.
8. Stock Appreciation Rights.
-------------------------
(a) The Committee shall have authority in its discretion to grant a SAR to
any Grantee of a Stock Option with respect to all or some of the Shares covered
by such Stock Option. Each SAR shall be on such terms and conditions not
inconsistent with this Plan as the Committee may determine and shall be
evidenced by a SAR Agreement setting forth such terms and conditions executed by
the Company and the holder of the SAR. A SAR may be granted either at the time
of grant of a Stock Option or at any time thereafter during its term. A SAR may
be granted to a Grantee irrespective of whether such Grantee has a Limited SAR.
Each SAR shall be exercisable only if and to the extent that the related Stock
Option is exercisable. Upon the exercise of a SAR, the related Stock Option
shall cease to be exercisable to the extent of the Shares with respect to which
such SAR is exercised and shall be considered to have been exercised to that
extent for purposes of determining the number of Shares available for the grant
of further Awards pursuant to this Plan. Upon the exercise or termination of a
Stock Option, the SAR related to such Stock Option shall terminate to the extent
of the Shares with respect to which such Stock Option was exercised or
terminated.
(b) The term "Spread" as used in this Section 8 shall mean, with respect
to the exercise of any SAR, an amount equal to the product computed by
multiplying (i) the excess of (A) the Fair Market Value per Share on the date
such SAR is exercised over (B) the purchase price per Share at which the related
Stock Option is exercisable by (ii) the number of Shares with respect to which
such SAR is being exercised, provided; however, that the Committee may at the
grant of any SAR limit the maximum amount of the Spread to be paid upon the
exercise thereof.
(c) Only if and to the extent required in order for the related Stock
Option to be treated as an Incentive Stock Option, a SAR may be exercised only
when there is a positive Spread, that is, when the Fair Market Value per Share
exceeds the purchase price per Share at which the related Stock Option is
exercisable. Upon the exercise of a SAR, the Committee shall pay to the Grantee
exercising the SAR an amount equivalent to the Spread. The Committee shall have
the sole and absolute discretion to determine whether payment for such SAR will
be made in cash, Shares or a combination of cash and Shares,
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provided, that any Shares used for payment shall be valued at their Fair Market
Value on the date of the exercise of the SAR.
(d) The Company intends that this Section 8 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision of
this Section 8 not be necessary to comply with the requirements of the Rule or
should any additional provisions be necessary for this Section 8 to comply with
the requirements of the Rule, the Committee may amend this Plan or any Award
agreement to add to or modify the provisions thereof accordingly.
(e) To exercise a SAR, the Grantee shall (i) give written notice to the
Company in form satisfactory to the Committee specifying the number of Shares
with respect to which such holder is exercising the SAR and (ii) deliver to the
Company such written representations, warranties and covenants as the Company
may require under Section 16(a) of this Plan.
(f) A person exercising a SAR shall not be treated as having become the
registered owner of any Shares issued on such exercise until such Shares are
issued.
(g) The exercise of a SAR shall reduce the number of Shares subject to the
related Stock Option on a one for one basis.
9. Limited SARs.
------------
(a) The Committee shall have authority in its discretion to grant a
Limited SAR to the holder of any Stock Option with respect to all or some of the
Shares covered by such Stock Option; provided, however, that in the case of
Incentive Stock Options, the Committee may grant Limited SARs only if and to the
extent that the grant of such Limited SARs is consistent with the treatment of
the Stock Option as an Incentive Stock Option. Each Limited SAR shall be on such
terms and conditions not inconsistent with this Plan as the Committee may
determine and shall be evidenced by a Limited SAR Agreement setting forth such
terms and conditions executed by the Company and the holder of the Limited SAR.
A Limited SAR may be granted to a Grantee irrespective of whether such Grantee
has a SAR.
(b) Limited SARs may be exercised only during the sixty (60) day period
commencing after the occurrence of a Change of Control.
Each Limited SAR shall be exercisable only if and to the extent that
the related Option is exercisable. Upon the exercise of a Limited SAR, the
related Stock Option shall cease to be exercisable to the extent of the Shares
with respect to which such Limited SAR is exercised, and the Stock Option shall
be considered to have been exercised to that extent for purposes of determining
the number of Shares available for the grant of further Awards pursuant to this
Plan. Upon the exercise or termination of an Option, the Limited SAR with
respect to such Option shall terminate to the extent of the Shares with respect
to which the Option was exercised or terminated.
(c) For any Limited SAR, the term "Spread" as used in this Section 9 shall
mean an amount equal to the product computed by multiplying (A) the Price
specified in Section 2(v) by (B) the number of Shares with respect to which such
Limited SAR is being exercised.
(d) Only if and to the extent required in order for the related Stock
Option to be treated as an Incentive Stock Option, a Limited SAR may be
exercised only when there is a positive Spread, that is, when the Fair Market
Value per Share exceeds the purchase price per Share at which the related Stock
Option is exercisable. Upon the exercise of a Limited SAR, the holder thereof
shall receive an amount in cash equal to the Spread.
(e) Notwithstanding any other provision of this Plan, no SAR or
Performance Unit may be exercised with respect to any Stock Option at a time
when any Limited SAR with respect to such Stock Option held by the Grantee of
such SAR or Performance Unit may be exercised.
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(f) The Company intends that this Section 9 shall comply with the
requirements of the Rule during the term of this Plan. Should any provision of
this Section 9 not be necessary to comply with the requirements of the Rule, or
should any additional provisions be necessary for this Section 9 to comply with
the requirements of the Rule, the Committee may amend this Plan or any Award
agreement to add to or modify the provisions thereof accordingly.
(g) To exercise a Limited SAR, the holder shall give written notice to the
Company in form satisfactory to the Committee specifying the number of Shares
with respect to which he is exercising the Limited SAR.
(h) The exercise of a Limited SAR shall reduce on a one for one basis the
number of Shares subject to the related Stock Option.
10. Performance Units.
-----------------
(a) In conjunction with the granting of Stock Options under this Plan, the
Committee may grant Performance Units relating to such Stock Options; provided,
however, that in the case of Incentive Stock Options, the Committee may grant
Performance Units only if and to the extent that the grant of such Performance
Units is consistent with the treatment of the Stock Option as an Incentive Stock
Option. Each grant of Performance Units shall cover such number of Shares and
shall be on such other terms and conditions not inconsistent with this Plan as
the Committee may determine and shall be evidenced by a Performance Unit
Agreement setting forth such terms and conditions executed by the Company and
the Grantee of the Performance Units. The number of Performance Units granted
shall be equal to a specified number of Shares subject to the related Stock
Options. The Committee shall value such Units to the extent that Performance
Goals are achieved; provided, however, that in no event shall the value per
Performance Unit exceed one hundred and fifty percent (150%) of the purchase
price per Share at which the related Stock Option is exercisable.
(b) The Committee shall have full and final authority to establish
Performance Goals for each Performance Period on the basis of such criteria, and
the attainment of such objectives, as the Committee may from time to time
determine. In setting Performance Goals, the Committee may take into
consideration such matters which it deems relevant and such financial and other
criteria including but not limited to projected cumulative compounded rate of
growth in earnings per Share and average return on equity. During any
Performance Period, the Committee shall have the authority to adjust Performance
Goals for the Performance Period as it deems equitable in recognition of
extraordinary or nonrecurring events experienced by the Company during the
Performance Period including, but not limited to, changes in applicable
accounting rules or principles or changes in the Company's methods of accounting
during the Performance Period or significant changes in tax laws or regulations
which affect the financial results of the Company.
(c) The term "Performance Goals" as used in this Section 10 shall mean the
performance objectives established by the Committee for the Company for a
Performance Period for the purpose of determining if, as well as the extent to
which, a Performance Unit shall be earned.
(d) The term "Performance Period" as used in this Section 10 shall mean
the period of time selected by the Committee (which period shall be not more
than five nor less than three years) commencing on January 1 of the Year in
which the grant of Performance Units is made, during which the performance of
the Company is measured for the purpose of determining the extent to which
Performance Units have been earned.
(e) Performance Units shall be earned to the extent that Performance Goals
and other conditions established in accordance with Paragraph (b) of this
Section 10 are met. The Company shall promptly notify each Grantee of the extent
to which Performance Units have been earned by such Grantee. A Performance Unit
may be exercised only during the period following such notice and prior to
expiration of the related option. Performance Units which have been earned shall
be paid after exercise by the Grantee pursuant to Paragraph (h) of this Section
10. The Committee shall have the sole and absolute discretion to
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determine whether payment for such Performance Unit will be made in cash, Shares
or a combination of cash and Shares, provided that any Shares used for payment
shall be valued at their Fair Market Value on the date of the exercise of the
Performance Unit.
(f) Unless otherwise determined by the Committee, in the event that a
Grantee of Performance Units ceases to be employed by RSI or any Subsidiary
during the term of the related Stock Option, the Performance Units held by him
shall be exercisable only to the extent the related Stock Option is exercisable
and shall be forfeited to the extent that the related Stock Option was not
exercisable on the Termination Date.
(g) The Company intends that this Section 10 shall comply with the
requirements of Section 16(b) of the 1934 Act and the rules thereunder, as from
time to time in effect, including the Rule. Should any provision of this Section
10 not be necessary to comply with the requirements of said Section 16(b) and
the rules thereunder or should any additional provision be necessary for this
Section 10 to comply with the requirements of Section 16(b) and the rules
thereunder, the Committee may amend this Plan or any Award agreement to add to
or modify the provisions thereof accordingly.
(h) To exercise Performance Units, the Grantee shall give written notice
to the Company in form satisfactory to the Committee addressed to the Secretary
of the Company specifying the number of Shares with respect to which he is
exercising Performance Units.
(i) The exercise of Performance Units shall reduce on a one for one basis
the number of Shares subject to the related Stock Option.
11. Restricted Stock Rights.
-----------------------
(a) The Committee from time to time may grant Restricted Stock Rights to
key executive Employees selected by the Committee as being eligible therefor,
which would entitle a Grantee to receive a stated number of Shares subject to
forfeiture of such Rights if such Grantee failed to remain continuously in the
employ of RSI or any Subsidiary for the period stipulated by the Committee (the
"Restricted Period").
(b) Restricted Stock Rights shall be subject to the following restrictions
and limitations:
(i) The Restricted Stock Rights may not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed of;
(ii) Except as otherwise provided in Paragraph (d) of this Section
11, the Restricted Stock Rights and the Shares subject to such Restricted Stock
Rights shall be forfeited and all rights of a Grantee to such Restricted Stock
Rights and Shares shall terminate without any payment of consideration by the
Company if the Grantee fails to remain continuously as an Employee of RSI or any
Subsidiary for the Restricted Period. A Grantee shall not be deemed to have
terminated his period of continuous employment with RSI or any Subsidiary if he
leaves the employ of RSI or any Subsidiary for immediate reemployment with RSI
or any Subsidiary.
(c) The Grantee of Restricted Stock Rights shall not be entitled to any of
the rights of a holder of the Common Stock with respect to the Shares subject to
such Restricted Stock Rights prior to the issuance of such Shares pursuant to
this Plan. During the Restricted Period, for each Share subject to a Restricted
Stock Right, the Company will pay the holder an amount in cash equal to the cash
dividend declared on a Share during the Restricted Period on or about the date
the Company pays such dividend to the stockholders of record.
(d) In the event that the employment of a Grantee terminates by reason of
death, Disability or Retirement, such Grantee shall be entitled to receive the
number of Shares subject to the Restricted Stock Right multiplied by a fraction
(x) the numerator of which shall be the number of days between the date of grant
of such Restricted Stock Right and the date of such termination of employment,
and (y) the denominator of which shall be the number of days in the Restricted
Period, provided, however, that any
10
<PAGE>
fractional Share shall be cancelled. If a Grantee's employment is interrupted by
reason of Disability or a leave of absence (as determined by the Committee),
then the Committee may permit the delivery of the Shares subject to the
Restricted Stock Right in such amounts as the Committee may determine.
(e) Notwithstanding Paragraphs (a) and (b) of this Section 11, unless
otherwise determined by the Committee prior to the occurrence of a Change of
Control, in the event of a Change of Control all restrictions on Restricted
Stock shall expire and all Shares subject to Restricted Stock Rights shall be
issued to the Grantees. Additionally, the Committee may, at any time, provide
for the acceleration of the Restricted Period and of the issuance of all or part
of the Shares subject to Restricted Stock Rights. Any determination made by the
Committee pursuant to this Section 11(e) may be made as to all Restricted Stock
Rights or only as to certain Restricted Stock Rights specified by the Committee.
Once made, any determination by the Committee pursuant to this Section 11(e)
shall be irrevocable.
(f) When a Grantee shall be entitled to receive Shares pursuant to a
Restricted Stock Right, the Company shall issue the appropriate number of Shares
registered in the name of the Grantee.
12. Dilution and Other Adjustments.
------------------------------
If there shall be any change in the Shares subject to this Plan or any Award
granted under this Plan as a result of merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or other change in the corporate
structure, adjustments may be made by the Committee, as it may deem appropriate,
in the aggregate number and kind of Shares subject to this Plan or to any
outstanding Award, and in the terms and provisions of this Plan and any Awards
granted hereunder, in order to reflect, on an equitable basis, any such change
in the Shares contemplated by this Section 12. Any adjustment made by the
Committee pursuant to this Section 12 shall be conclusive and binding upon the
Grantee, the Company and any other related person.
13. Substitute Options.
------------------
Incentive and/or Non-qualified Stock Options may be granted under this Plan from
time to time in substitution for either incentive or non-qualified stock options
or both held by employees of other corporations who are about to become
employees of the Company as the result of a merger, consolidation or
reorganization of the employing corporation with the Company, or the acquisition
by the Company of the assets of the employing corporation, or the acquisition by
the Company of stock of the employing corporation as the result of which it
becomes a Subsidiary of the Company. The terms and conditions of the Stock
Options so granted may vary from the terms and conditions set forth in this Plan
to such extent as the Committee at the time of grant may deem appropriate to
conform, in whole or in part, to the provisions of the stock options in
substitution for which they are granted, but, in the event that the option for
which a substitute Stock Option is being granted is an incentive stock option,
no variation shall adversely affect the status of any substitute Stock Option as
an incentive stock option under the Code.
14. Miscellaneous Provisions.
------------------------
(a) Notwithstanding any other provision of this Plan, no Stock Option,
SAR, Limited SAR or Restricted Stock Right granted hereunder may be exercised
nor shall any payment in respect of any Performance Unit granted hereunder be
made and all rights of the Grantee thereof, or of the Grantee's legal
representatives, heirs or legatees, shall be forfeited if, prior to the time of
such exercise or payment, the Committee (or in the event of a Change of Control,
the Incumbent Board) determines that the Grantee has (i) used for profit or
disclosed confidential information or trade secrets of the Company to
unauthorized persons, or (ii) breached any contract with, or violated any legal
obligation to, the Company, or (iii) engaged in any other activity which would
constitute grounds for termination for cause of the Grantee by the Company. The
Committee (or the Incumbent Board) shall give a Grantee written notice of such
determination prior to making any such forfeiture. The Committee (or the
Incumbent Board) may waive the conditions of this Paragraph in full or in part
if, in its sole judgment, such waiver will have no substantial adverse effect
upon the Company. The determination of the Committee (or the Incumbent
11
<PAGE>
Board) as to the occurrence of any of the events specified above and to the
forfeiture, if any, shall be conclusive and binding upon the Grantee, the
Company and any other related person.
(b) The Grantee of an Award shall have no rights as a stockholder with
respect thereto, except as otherwise expressly provided in this Plan, unless and
until certificates for Shares are issued.
(c) No Award or any rights or interests therein shall be assignable or
transferable by the Grantee except by will or the laws of descent and
distribution. During the lifetime of the Grantee, an Award shall be exercisable
only by the Grantee or the Grantee's guardian or legal representative.
(d) The Company shall have the right to deduct from all Awards granted
hereunder to be distributed in cash any Federal, state, local or foreign taxes
required by law to be withheld with respect to such cash payments. In the case
of Awards to be distributed in Shares, the holder or other person receiving such
Common Stock shall be required, as a condition of such distribution, either to
pay to the Company at the time of distribution thereof the amount of any such
taxes which the Company is required to withhold with respect to such Shares or
to have the number of the Shares, valued at their Fair Market Value on the date
of distribution, to be distributed reduced by an amount equal to the value of
such taxes required to be withheld.
(e) No Employee shall have any claim or right to be granted an Award under
this Plan, nor having been selected as a Grantee for one Year, any right to be a
Grantee in any other Year. Neither this Plan nor any action taken hereunder
shall be construed as giving any Grantee any right to be retained in the employ
of RSI or any Subsidiary, and the Company expressly reserves its right at any
time to dismiss any Grantee with or without cause.
(f) The costs and expense of administering this Plan shall be borne by the
Company and not charged to any Award nor to any Grantee.
(g) This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under this Plan, and payment of Awards
shall be subordinate to the claims of the Company's general creditors.
(h) Whenever used in this Plan, the masculine gender shall include the
feminine or neuter wherever necessary or appropriate and vice versa and the
singular shall include the plural and vice versa.
(i) With respect to Grantees subject to Section 16 of the 1934 Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of this Plan or action by the Committee fails to so comply, it shall
be deemed null and void, to the extent permitted by law and deemed advisable by
the Committee. Moreover, in the event this Plan does not include a provision
required by Rule 16b-3 to be stated herein, such provision (other than one
relating to eligibility requirements, or the price and amount of Awards) shall
be deemed automatically to be incorporated by reference into this Plan insofar
as Grantees subject to Section 16 are concerned.
15. Indemnification of the Committee.
--------------------------------
Service on the Committee shall constitute service as a director of the Company
and members of the Committee shall be entitled to indemnification, advancement
of expenses and reimbursement as directors of the Company pursuant to its
Restated Articles of Incorporation, By-Laws, resolutions of the Board of
Directors of RSI or otherwise.
16. Compliance with Law.
-------------------
(a) Each Grantee, to permit the Company to comply with the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable blue sky or state
securities laws, shall represent in writing to the Company at the time of the
grant of an Award and at the time of the issuance of any Shares thereunder that
such Grantee does not contemplate and shall not make any transfer of any Shares
to be acquired under an
12
<PAGE>
Award except in compliance with the 1933 Act and such Grantee shall enter into
such agreements and make such other representations as, in the opinion of
counsel to the Company, shall be sufficient to enable the Company legally to
issue the Shares without registration thereof under the 1933 Act. Certificates
representing Shares to be acquired under Awards shall bear legends as counsel
for the Company may indicate are necessary or appropriate to accomplish the
purposes of this Section 16.
(b) If at any time the Committee shall determine that the listing,
registration or qualification of the Shares subject to any Award upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of or issuance of Shares under
such Award, such Shares shall not be issued unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.
17. Amendment of the Plan.
---------------------
The Committee may at any time (i) terminate this Plan or (ii) modify or amend
this Plan in any respect, except that, to the extent required to maintain the
qualification of this Plan under Section 16 of the 1934 Act, or as otherwise
required to comply with applicable law or the regulations of any stock exchange
on which the Shares are listed, the Committee may not, without shareholder
approval, (A) materially increase the benefits accruing to Grantees under this
Plan, (B) materially increase the number of securities which may be issued under
this Plan or (C) materially modify the requirements as to eligibility for
participation in this Plan. Should this Plan require amendment to maintain full
legal compliance because of rules, regulations, opinions or statutes issued by
the SEC, the U.S. Department of the Treasury or any other governmental or
governing body, then the Committee or the Board may take whatever action,
including but not limited to amending or modifying this Plan, is necessary to
maintain such compliance. The termination or any modification or amendment of
this Plan shall not, without the consent of any Grantee involved, adversely
affect his rights under an Award previously granted to him.
18. Effective Date and Term of the Plan.
-----------------------------------
(a) This Plan shall become effective on May 5, 1995, subject to the
approval of the shareholders of RSI.
(b) Unless previously terminated in accordance with Section 17 of this
Plan, this Plan shall terminate on the close of business on May 4, 2005, after
which no Awards shall be granted under this Plan. Such termination shall not
affect any Awards granted prior to such termination.
13
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>AUDITOR'S CONSENT
<TEXT>
<PAGE>
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 7, 2001, relating to the consolidated balance sheets of Ryder System,
Inc. and subsidiaries as of December 31, 2000 and 1999, 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, 2000, which report
appears in the December 31, 2000 annual report on Form 10-K of Ryder System,
Inc.:
Form S-3:
. Registration Statement No. 33-20359 covering $1,000,000,000 aggregate
principal amount of debt securities.
. Registration Statement No. 33-58667 covering $800,000,000 aggregate
principal amount of debt securities.
. Registration Statement No. 333-63049 covering $800,000,000 aggregate
principal amount of debt securities.
. Registration Statement No. 33-1623 covering $500,000,000 aggregate
principal amount of debt securities.
. Registration Statement No. 33-13962 covering $500,000,000 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.
<PAGE>
The Board of Directors and Shareholders
Ryder System, Inc.
Page 2
. 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. 33-61509 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.
. Registration Statement No. 333-19515 covering the Ryder System, Inc.
1997 Deferred Compensation Plan.
. Registration Statement No. 333-26653 covering the Ryder System, Inc.
Board of Directors Stock Award Plan.
. Registration Statement No. 333-57593 covering the Ryder System, Inc.
Stock Purchase Plan for Employees.
. Registration Statement No. 333-57595 covering the Ryder System, Inc.
1995 Stock Incentive Plan.
/s/ KPMG LLP
Miami, Florida
March 23, 2001
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24.1
<SEQUENCE>6
<FILENAME>0006.txt
<DESCRIPTION>MANUALLY EXECUTED POWERS OF ATTORNEY
<TEXT>
<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 Carlos J.
Abarca, 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, 2000 (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/ M. Anthony Burns
----------------------------------
M. Anthony Burns
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
Before me appeared M. Anthony Burns, 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 16 day of February, 2001 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
__________________________________
Notary Public
My commission expires:
<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 Carlos J.
Abarca, 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, 2000 (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 16 day of February, 2001 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
__________________________________
Notary Public
My commission expires:
<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 Carlos J.
Abarca, 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, 2000 (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 16 day of February, 2001 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
__________________________________
Notary Public
My commission expires:
<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 Carlos J.
Abarca, 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, 2000 (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 16 day of February, 2001 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
__________________________________
Notary Public
My commission expires:
<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 Carlos J.
Abarca, 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, 2000 (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 16 day of February, 2001 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
__________________________________
Notary Public
My commission expires:
<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 Carlos J.
Abarca, 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, 2000 (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 FLORIDA )
) ss:
COUNTY OF DADE )
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 16 day of February, 2001 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
__________________________________
Notary Public
My commission expires:
<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 Carlos J.
Abarca, 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, 2000 (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 16 day of February, 2001 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
__________________________________
Notary Public
My commission expires:
<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 Carlos J.
Abarca, 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, 2000 (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 16 day of February, 2001 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
__________________________________
Notary Public
My commission expires:
<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 Carlos J.
Abarca, 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, 2000 (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
STATE OF FLORIDA )
) ss:
COUNTY OF DADE )
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 16 day of February, 2001 that he or she
executed said instrument for the purposes therein expressed.
Witness my hand and official seal:
__________________________________
Notary Public
My commission expires:
<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 Carlos J.
Abarca, 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, 2000 (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 16 day of February, 2001 that he or she executed said
instrument for the purposes therein expressed.
Witness my hand and official seal:
__________________________________
Notary Public
My commission expires:
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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