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EXHIBIT 99.3
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information has been derived
from the historical financial statements of the Company and Ryder, and gives pro
forma effect to the Acquisition and the Offering as if they had occurred as of
January 1, 1996 with respect to the unaudited condensed pro forma statements of
operations and as of June 30, 1997 with respect to the unaudited condensed pro
forma balance sheet.
The unaudited pro forma financial information does not purport to represent
what the Company's results of operations actually would have been if each of
such transactions had occurred as of the dates indicated or will be for any
future periods. The unaudited pro forma financial information is based upon
assumptions believed appropriate by management of the Company and does not
reflect all potential cost savings or improvements in revenues that the Company
believes could be realized as a result of the Acquisition. However, there can be
no assurance that any of these anticipated savings can be achieved or that the
effects of any such savings will not be offset by unexpected, unforeseen
increases in other costs.
The Acquisition will be accounted for under the purchase method of
accounting. The total purchase price for the Acquisition will be allocated to
the assets and liabilities acquired based upon their relative fair values at the
closing of the Acquisition, based upon valuation and other studies which are not
yet complete. The allocation of the purchase price reflected herein is subject
to revision when additional information from the valuations and studies become
available. However, the Company does not expect that the effects of the final
allocation will differ materially from those set forth herein.
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PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
OFFERING
AND
PURCHASE
ACQUISITION ADJUSTED PRICE PRO FORMA
RYDER(1) ADJUSTMENTS RYDER ALLIED ADJUSTMENTS COMBINED
-------- ----------- -------- -------- ----------- ----------
REVENUES................... $315,156 $(2,663)(2) $315,696 $208,969 $ -- $524,665
3,203(3)
-------- ------- -------- -------- -------- --------
OPERATING EXPENSES
Depreciation and
amortization.......... 19,818 (190)(2) 19,636 13,786 108(5) 33,530
8(3)
Other operating
expenses.............. 285,497 (2,637)(2) 286,013 183,733 (6,340)(6) 463,406
3,153(3)
-------- ------- -------- -------- -------- --------
Total operating
expenses....... 305,315 334 305,649 197,519 (6,232) 496,936
-------- ------- -------- -------- -------- --------
OPERATING INCOME........... 9,841 206 10,047 11,450 6,232 27,729
-------- ------- -------- -------- -------- --------
OTHER INCOME (EXPENSE)
Interest expense......... (334) (1)(3) (335) (5,408) (5,827)(7) (11,570)
Interest income.......... 1,228 (137)(2) 1,091 357 -- 1,448
Other income (expense),
net................... 738 14(2) 752 -- -- 752
-------- ------- -------- -------- -------- --------
1,632 (124) 1,508 (5,051) (5,827) (9,370)
-------- ------- -------- -------- -------- --------
INCOME BEFORE INCOME
TAXES.................... 11,473 82 11,555 6,399 405 18,359
INCOME TAX PROVISION....... 3,818 724(4) 4,542 2,688 1,032(4) 8,262
-------- ------- -------- -------- -------- --------
NET INCOME (LOSS).......... $ 7,655 $ (642) $ 7,013 $ 3,711 $ (627) $ 10,097
======== ======= ======== ======== ======== ========
EARNINGS PER SHARE......... $ 0.48 $ 1.31
======== ========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING....... 7,725 7,725
EBITDA(8).................. $ 30,435 $ 25,236 $ 62,011
======== ======== ========
See accompanying notes to unaudited pro forma financial information.
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PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
OFFERING
AND
PURCHASE
ACQUISITION ADJUSTED PRICE PRO FORMA
RYDER(1) ADJUSTMENTS RYDER ALLIED ADJUSTMENTS COMBINED
-------- ----------- -------- -------- ----------- ---------
REVENUES................... $583,292 $(15,178)(2) $568,114 $392,547 $ -- $960,661
-------- -------- -------- -------- -------- --------
OPERATING EXPENSES
Depreciation and
amortization.......... 38,838 (718)(2) 38,120 26,425 115(5) 64,660
Restructuring charge..... 18,328 (7,023)(2) 11,305 -- -- 11,305
Other operating
expenses.............. 543,315 (25,216)(2) 518,099 347,527 (12,678)(6) 852,948
-------- -------- -------- -------- -------- --------
Total operating
expenses....... 600,481 (32,957) 567,524 373,952 (12,563) 928,913
-------- -------- -------- -------- -------- --------
OPERATING (LOSS) INCOME.... (17,189) 17,779 590 18,595 12,563 31,748
-------- -------- -------- -------- -------- --------
OTHER INCOME (EXPENSE)
Interest expense......... (866) -- (866) (10,720) (11,702)(7) (23,288)
Interest income.......... 895 (282)(2) 613 603 -- 1,216
Other income (expense),
net................... 2,470 2(2) 2,472 -- -- 2,472
-------- -------- -------- -------- -------- --------
2,499 (280) 2,219 (10,117) (11,702) (19,600)
-------- -------- -------- -------- -------- --------
(LOSS) INCOME BEFORE INCOME
TAXES AND EXTRAORDINARY
ITEM..................... (14,690) 17,499 2,809 8,478 861 12,148
INCOME TAX (BENEFIT)
PROVISION................ (1,256) 3,837(4) 2,581 3,557 336(4) 6,474
-------- -------- -------- -------- -------- --------
(LOSS) INCOME BEFORE
EXTRAORDINARY ITEM....... $(13,434) $ 13,662 $ 228 $ 4,921 $ 525 $ 5,674
======== ======== ======== ======== ======== ========
EARNINGS PER SHARE......... $ 0.64 $ 0.73
======== ========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING....... 7,725 7,725
EBITDA(8).................. $ 41,182 $ 45,020 $ 98,880
======== ======== ========
See accompanying notes to unaudited pro forma financial information.
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PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED)
AS OF JUNE 30, 1997
(IN THOUSANDS)
OFFERING
AND PURCHASE
ACQUISITION ADJUSTED PRICE PRO FORMA
RYDER(9) ADJUSTMENTS RYDER ALLIED ADJUSTMENTS COMBINED
-------- ----------- -------- ---------- ------------- ---------
ASSETS
CURRENT ASSETS
Cash and cash equivalents....... $ 6,047 $ 170(10) $ 1,217 $ 4,409 $ -- $ 5,626
(5,000)(11)
Short-term investments.......... -- -- -- 8,821 -- 8,821
Receivables, net of allowance
for doubtful accounts......... 46,396 650(10) 47,046 28,325 -- 75,371
Deferred income taxes........... 6,509 (293)(11) 11,608 -- -- 11,608
4,433(12)
959(13)
Other current assets............ 17,552 (7,861)(11) 9,691 18,469 -- 28,160
-------- -------- -------- -------- --------- --------
Total current assets..... 76,504 (6,942) 69,562 60,024 -- 129,586
-------- -------- -------- -------- --------- --------
PROPERTY AND EQUIPMENT, net....... 161,299 46(10) 159,122 126,364 14,500(17) 299,986
(2,223)(11)
-------- -------- -------- -------- --------- --------
OTHER ASSETS
Goodwill, net................... 42,550 -- 42,550 33,800 14,055(18) 90,405
Other........................... 10,862 (4,695)(11) 6,167 8,506 5,350(19) 20,023
-------- -------- -------- -------- --------- --------
Total other assets....... 53,412 (4,695) 48,717 42,306 19,405 110,428
-------- -------- -------- -------- --------- --------
Total assets............. $291,215 $(13,814) $277,401 $228,694 $ 33,905 $540,000
======== ======== ======== ======== ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term
debt.......................... $ -- $ -- $ -- $ 8,248 $ -- $ 8,248
Trade accounts payable.......... 21,246 710(10) 21,956 12,910 -- 34,866
Accrued liabilities............. 57,657 50(10) 69,845 37,433 13,082(20) 120,360
(3,329)(11)
12,909(14)
2,558(15)
-------- -------- -------- -------- --------- --------
Total current
liabilities............ 78,903 12,898 91,801 58,591 13,082 163,474
-------- -------- -------- -------- --------- --------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, less current
maturities...................... 805 -- 805 96,986 150,000(21) 223,541
(24,250)(22)
DEFERRED INCOME TAXES............. 26,300 765(11) 9,274 8,700 5,655(23) 23,629
(17,791)(12)
OTHER LONG-TERM LIABILITIES....... 20,615 79(10) 65,665 4,260 (726)(24) 69,199
(1,419)(11)
46,390(14)
STOCKHOLDERS' EQUITY.............. 164,592 (54,736)(16) 109,856 60,157 (109,856)(24) 60,157(25)
-------- -------- -------- -------- --------- --------
Total liabilities and
stockholders' equity... $291,215 $(13,814) $277,401 $228,694 $ 33,905 $540,000
======== ======== ======== ======== ========= ========
See accompanying notes to unaudited pro forma financial information.
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NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
(1) Represents the historical results of operations of Ryder Automotive Carrier
Services, Inc. ("RACS") for the period indicated.
(2) Elimination of the operations of RACS not included in the Acquisition.
(3) Addition of the operations of RC Management Corp. ("RCMC"), which will be
acquired as part of the Acquisition. RCMC began operations in January 1997.
(4) Reflects the income tax effect of the adjustments.
(5) Reflects the net effect of the change in goodwill amortization expense
related to the Acquisition, as follows:
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------- -----------------
(a) Increased goodwill amortization expense based upon the
preliminary purchase price allocation of the
Acquisition, using the straight-line method over a
40-year life........................................... $ 708 $ 1,415
(b) Elimination of goodwill amortization expense from
Ryder's operations..................................... (600) (1,300)
----- -------
$ 108 $ 115
===== =======
(6) Represents elimination of the following costs:
(a) Salaries and wages, rent expenses and other operating expenses to be
eliminated as a result of closing duplicate terminals and offices.
(b) Management and other fees allocated to Ryder by Ryder System which will
not be incurred by Ryder under the Company's ownership.
(7) Reflects interest expense at 8 5/8%, elimination of interest expense on
amounts under the revolving credit facility to be repaid with proceeds from
the Offering, and amortization of deferred debt costs incurred in
connection with the issuance of the Notes.
(8) Represents income before interest expense, interest income, income tax
provision and depreciation and amortization. EBITDA is presented because it
provides useful information regarding a company's ability to service and/or
incur debt. EBITDA should not be considered in isolation from or as a
substitute for net income, cash flows from operating activities and other
consolidated income or cash flow statement data prepared in accordance with
generally accepted accounting principles or as a measure of profitability
or liquidity.
(9) Represents the historical assets and liabilities of RACS as of June 30,
1997.
(10) Addition of the assets and liabilities of RCMC, which will be acquired as
part of the Acquisition.
(11) Elimination of the assets and liabilities of RACS not included in the
Acquisition.
(12) Deferred income tax assets and liabilities related to the assumption by
Ryder of certain insurance liabilities from Ryder System as part of the
Acquisition (see note 14).
(13) Effect on deferred income taxes related to severance liability (see note
15).
(14) Reflects the transfer to Ryder of certain insurance liabilities, including
workers' compensation, post employment benefits other than pensions, and
general liability, previously maintained on the books of Ryder System.
(15) Severance liability related to termination of certain Ryder personnel in
connection with the Acquisition.
(16) Effect on stockholders' equity of pro forma adjustments to assets and
liabilities as follows:
(a) Insurance liabilities assumed from Ryder System, net of
deferred taxes.............................................. $(37,075)
(b) Severance liability assumed from Ryder System, net of
deferred taxes.............................................. (1,599)
(c) Assets and liabilities of RACS not acquired................. (16,089)
(d) Assets and liabilities of RCMC acquired..................... 27
--------
Total effect on stockholders' equity........................ $(54,736)
========
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(17) Write-up of Ryder property and equipment to fair market value.
(18) Adjustment to goodwill reflects:
(a) Addition of goodwill related to the Acquisition............. $ 56,605
(b) Elimination of goodwill recorded by Ryder................... (42,550)
--------
Total effect on goodwill.................................... $ 14,055
========
(19) Estimated Offering expenses to be deferred and amortized over the life of
the Notes.
(20) Estimated additional liabilities incurred in connection with the
Acquisition, including severance and Acquisition costs.
(21) Reflects the issuance of the Notes.
(22) Repayment of amounts outstanding under the revolving credit facility with a
portion of the proceeds from the Offering.
(23) Deferred income taxes, recorded at 39%, related to the write-up of Ryder
property and equipment to fair market value.
(24) Elimination of Ryder advances to affiliates and stockholders' equity.
(25) Excludes an after-tax charge of approximately $5.0 million the Company
intends to record upon completion of the Acquisition to write down Company
Rigs and terminal facilities that will be idled or closed as a result of
the Acquisition.
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