FORM 11-K
(Mark one)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___ to ___.
Commission file number #
RYDER SYSTEM, INC. SAVINGS RESTORATION PLAN
Ryder System, Inc.
3600 N.W. 82 Avenue
Miami, Florida 33166
REQUIRED INFORMATION
FINANCIAL STATEMENTS
Independent Auditors' Report
Statement of Financial Position, as of
December 31, 1996 and 1995
Statement of Income & Changes in Plan Equity, for December 31, 1996 and
the Period from April 1, 1995 (Date of Inception) to December 31,
1995
Notes to Financial Statements
EXHIBITS
Independent Auditors' Consent
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Ryder
System, Inc. Retirement Committee has duly caused this annual report to be
signed by the undersigned thereunto duly authorized.
RYDER SYSTEM, INC. SAVINGS RESTORATION PLAN
Date: June 26, 1997 By: /s/ Thomas E. McKinnon
--------------------------------------
Thomas E. McKinnon
Chairman - Retirement Committee
Executive Vice President - Human
Resources and Corporate Services
Peat Marwick LLP
One Biscayne Tower Telephone 305 358 2300 Telefax 305 577 0544
Suite 2900
2 South Biscayne Boulevard
Miami, FL 33131
INDEPENDENT AUDITORS' REPORT
The Participants and Administrator
Ryder System, Inc. Savings Restoration Plan:
We have audited the accompanying statements of financial position of Ryder
System, Inc. Savings Restoration Plan as of December 31, 1996 and 1995, and the
related statements of income and changes in plan equity for the year ended
December 31, 1996 and the period from April 1, 1995 (Date of Inception) to
December 31, 1995. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the plan equity available for benefits of the Plan as of
December 31, 1996 and 1995 and the changes in plan equity available for benefits
for each of the year ended December 31, 1996 and the period from April 1, 1995
(Date of Inception) to December 31, 1995, in conformity with generally accepted
accounting principles.
KPMG PEAT MARWICK LLP
Miami, Florida
June 11, 1997
F-1
RYDER SYSTEM, INC. SAVINGS RESTORATION PLAN
STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 1996
ASSETS
Receivable from Ryder System, Inc. $ 2,638,586
------------
Total assets $ 2,638,586
============
LIABILITIES AND PLAN EQUITY
Plan equity $ 2,638,586
------------
Total liabilities and plan equity $ 2,638,586
============
See accompanying notes to financial statements.
F-2
RYDER SYSTEM, INC. SAVINGS RESTORATION PLAN
STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 1995
ASSETS
Receivable from Ryder System, Inc. $ 1,406,232
------------
Total assets $ 1,406,232
============
LIABILITIES AND PLAN EQUITY
Plan equity $ 1,406,232
------------
Total liabilities and plan equity $ 1,406,232
============
See accompanying notes to financial statements.
F-3
RYDER SYSTEM, INC. SAVINGS RESTORATION PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1996
Net change in unrealized appreciation
on notional investments 249,073
Contributions:
Employer contributions 124,085
Employee contributions 889,991
------------
Total contributions 1,014,076
------------
Distributions (30,795)
Net increase in plan equity 1,232,354
Plan equity at begining of period 1,406,232
------------
Plan equity at end of period $ 2,638,586
============
See accompanying notes to financial statements.
F-4
RYDER SYSTEM, INC. SAVINGS RESTORATION PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
FOR THE PERIOD FROM APRIL 1, 1995 (DATE OF INCEPTION) TO DECEMBER 31, 1995
Net change in unrealized appreciation
on notional investments 78,494
Contributions:
Employer contributions 171,760
Employee contributions 1,155,978
------------
Total contributions 1,327,738
------------
Net increase in plan equity 1,406,232
Plan equity at begining of period 0
------------
Plan equity at end of period $ 1,406,232
============
See accompanying notes to financial statements.
F-5
RYDER SYSTEM, INC. SAVINGS RESTORATION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS
A. BASIS OF ACCOUNTING
The financial statements of the Ryder System, Inc. Savings Restoration
Plan (the "Plan") are prepared on the accrual basis of accounting.
B. USE OF ESTIMATES
The Plan administrator has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results
could differ from those estimates.
2. THE PLAN
The following description of the Plan reflects all Plan amendments through
December 31, 1996, and is provided for general purposes only. The Plan was
adopted effective April 1, 1995. Participation in the Plan is voluntary.
To participate in the Plan, an employee must (i) be a participant in the
Ryder System Inc. Savings Plan A or B (the "Savings Plan"), (ii) be part
of a select group of management or highly compensated employees with the
meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, and (iii) be
an eligible employee of Ryder System, Inc. (the "Company") with
tax-deferred contributions or Company matching contributions under the
Savings Plan limited by reason of limitations imposed by Section 402(g),
415 or 401(a)(17) of the Internal Revenue Code of 1986 (the "Code"), as
amended.
Effective January 1, 1997, the Plan was combined into a new Deferred
Compensation Plan with provision similar to the current Plan except where
otherwise indicated in the following sections.
The Plan is unfunded and is intended to be exempt from the participation,
vesting, funding, and fiduciary requirements of Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), but is
subject to certain reporting and disclosure requirements under ERISA.
Further, benefits under the Plan are not guaranteed under Title IV of
ERISA.
The right of a participant or his designated beneficiary to receive a
distribution under the Plan will be an unsecured claim against the general
assets of the Company, and neither the participant nor a designated
beneficiary will have any rights in or against any specific assets of the
Company.
F-6
Effective January 1, 1997, Plan contributions and match are not tied to
participation in the Ryder System, Inc. Savings Plans A nor B and members
of the Board of Directors will be allowed to participate in the new
Deferred Compensation Plan.
3. PLAN ASSETS
The Plan has a receivable from the Company which is equal to the deferral
of participants' compensation, the related company matching contributions,
and appreciation which is indexed to the market performance of the
participants' elections among the notional investment funds made available
under the Plan less administrative expenses, if any. The distribution of
participants' accounts based on their notional fund elections as of
December 31, 1996 is as follows:
Fund A - 37
Fund B - 40
Fund C - 57
Fund D - 92
Fund E - 74
Fund F - 47
Participants may elect to contribute to, or transfer among, any of the
notional funds. Participants may change notional investment options on a
daily basis. Earnings are allocated daily based on units of notional
investment.
Notional Investment Fund A ("Fund A") - Fund A is invested in Ryder
System, Inc. common stock, which is purchased on a regular and continuous
basis. Dividends are automatically reinvested in the common stock.
Notional Investment Fund B ("Fund B") - Fund B is comprised of high
quality investments including corporate notes, bonds, and similar debt
instruments, commercial paper, time deposits, certificates of deposit,
bankers acceptances, repurchase agreements, variable and indexed interest
notes, and obligations of US government agencies. Since Plan inception,
this fund has been invested solely in shares of the StateStreet Bank Seven
Seas Money Market Fund. Effective July 1, 1997, monies in the StateStreet
Bank Seven Seas Money Market Fund will be liquidated and reinvested in the
Fidelity Retirement Money Market Portfolio. The Fidelity Retirement Money
Market Portfolio seeks a high level of current income consistent with the
preservation of capital and liquidity by investing in high-quality U.S.
dollar-denominated money market instruments of U.S. and foreign issuers.
F-7
Notional Investment Fund C ("Fund C") - Fund C may normally be invested in
a variety of common, preferred or capital stocks, but may include
investments in bonds or securities convertible into common or capital
stocks, similar types of equity investments and bonds. Since Plan
inception, this fund has been invested solely in shares of the Lord Abbett
Affiliated Fund. Effective July 1, 1997, monies in the Lord Abbett
Affiliated Fund will be liquidated and reinvested in the Fidelity U.S.
Equity-Income Fund. This fund's goal is investment growth and income. This
fund invests primarily in income producing stock such as common and
preferred stocks. It may also invest in bonds for income.
Notional Investment Fund D ("Fund D") - Fund D may be invested primarily
in common or capital stocks, though it may invest in other types of
securities, including convertible bonds, convertible preferred stock,
warrants, preferred stock or debt securities. Since Plan inception, this
fund has been invested solely in shares of the Putnam Voyager Fund.
Notional Investment Fund E ("Fund E") - Fund E may be invested in
securities issued by US based companies that are selling below book value.
Up to 50% of the fund's portfolio may consist of securities of companies
involved in prospective mergers, consolidations, liquidations and
reorganizations. The fund may also engage in covered call option writing.
The primary objective of the fund is capital appreciation and not
necessarily the attainment of a balanced investment program. Since Plan
inception, this fund has been invested solely in shares of the Mutual
Series Fund, Inc., Qualified Income Fund. Effective July 1, 1997, monies
in this fund will be liquidated and reinvested in the Fidelity Contrafund.
This fund invests primarily in U.S. and foreign common stocks that the
fund manager believes are undervalued or out of favor. Investments can
include any type of security that may produce capital growth. These
out-of-favor stocks may have frequent and greater price changes than
stocks of other companies.
Notional Investment Fund F ("Fund F") - Fund F may be invested in all
types of securities. The fund invests primarily in common stock of
companies outside the United States. The fund maintains a flexible
investment policy and can invest in all types of securities in any foreign
country, developed or undeveloped. The fund's investment objective is
long-term capital growth. Since Plan inception, this fund has been
invested solely in shares of the Templeton Foreign Fund. Effective July 1,
1997, monies in this fund will be liquidated and reinvested in the
Fidelity Diversified International Fund. This fund invests primarily in
companies located outside the U.S. that are included in the Morgan Stanley
EAFE Index. The fund focuses on large companies with stock that is
undervalued compared to industry norms in their countries.
Investment Fund I ("Fund I") - Effective July 1, 1997, the Fidelity Asset
Manager Growth fund will be added as an investment option in the Plan.
This fund's goal is to provide high total return over the long term. This
fund invests in all basic types of U.S. and foreign investments: stocks,
bonds, and short-term and money market instruments. Over time, the fund
will generally aim for the following investment combination: 70% stock,
25% bonds, and 5% short-term/money market class. The
F-8
fund manager may adjust the mix of these investments depending of the
outlook for market conditions.
Investment Fund J ("Fund J") - Effective July 1, 1997, the Fidelity Asset
Manager fund will be added as an investment option in the Plan. This
fund's goal is to provide high total return with reduced risk over the
long term. This fund invests in all basic types of U.S. and foreign
investments: stocks, bonds, and short-term and money market instruments.
Over time, the fund will generally aim for the following investment
combination: 50% stock, 40% bonds, and 10% short-term/money market class.
The fund manager may adjust the mix of these investments depending of the
outlook for market conditions.
Investment Fund K ("Fund K") - Effective July 1, 1997, the Fidelity Asset
Manager Income fund will be added as an investment option in the Plan.
This fund's goal is to provide high current income, but also considers the
potential for long term growth. This fund invests in all basic types of
U.S. and foreign investments: stocks, bonds, and short-term and money
market instruments. Over time, the fund will generally aim for the
following investment combination: 20% stock, 50% bonds, and 30%
short-term/money market class. The fund manager may adjust the mix of
these investments depending of the outlook for market conditions.
Investment Fund L ("Fund L") - Effective July 1, 1997, the Fidelity U.S.
Bond Index Fund will be added as an investment option in the Plan. This
fund's goal is to provide investment results that correspond to the
aggregate price and interest performance of the debt securities in the
Lehman Brothers Aggregate Bond Index. The fund purchases investment-grade
securities with maturities of at least one year including U.S.Treasury and
U.S. or government securities, corporate bonds, asset-backed and
mortgage-backed securities, and U.S. dollar denominated foreign
securities.
Investment Fund M ("Fund M") - Effective July 1, 1997, the Spartan U.S.
Equity Index Fund will be added as an investment option in the Plan. This
fund's goal is to match the total return of the Standard & Poor's 500
Index. The fund invests in the 500 companies that make up the S&P 500 and
in other securities that are based on the value of the index. The fund's
manager focuses on duplicating the composition and performance of a
specific market index as opposed to a strategy of selecting attractive
stocks.
Investment Fund N ("Fund N") - Effective July 1, 1997, the Fidelity
Emerging Growth Fund will be added as an investment option in the Plan.
This fund's goal is long term capital growth. The fund invests mainly in
stocks of small and medium-sized companies in the developing stages of
their life cycle that the fund's manager believes have the potential for
accelerated earnings or revenue growth. Such stocks may be subject to
abrupt or erratic changes. This fund carries a `redemption fee", which is
charged to discourage short-term buying and selling of fund shares.
Currently the redemption fee is 0.75% of the value of the shares sold.
F-9
Investment Fund O ("Fund O") - Effective July 1, 1997, the Fidelity Growth
Company Fund will be added as an investment option in the Plan. This
fund's goal is long term capital growth. The fund invests in common stocks
of companies with earnings or gross sales that indicate the potential for
above-average growth.
The 1996 performance of participant's notional investment funds is as
follows:
Fund A 16.3%
Fund B 5.7%
Fund C 20.0%
Fund D 13.6%
Fund E 20.2%
Fund F 17.7%
4. CONTRIBUTIONS
Participants may elect to defer compensation by an amount equal to the
excess of (i) a minimum of 1% and a maximum of 10% of compensation, over
(ii) the amount of their tax-deferred contributions under the Savings Plan
for the Plan year, after taking into account Savings Plan limitations. In
no event shall any amounts be deferred under the Plan for any Plan year
until the participant's tax deferred contributions under the Savings Plan
have reached the Savings Plan limitation for the Plan year. Compensation
deferral agreements are effective on a Plan year basis, and must be filed
before the beginning of the Plan year.
Effective January 1, 1997, participants may contribute up to 100% of
compensation less applicable earnings necessary to cover statutory taxes
and benefit elections.
The Company matches 50% of employee contributions up to 3% of
compensation, offset by any Company match received during the Plan year in
the Savings Plan. Participants are fully vested in the earnings of their
individual contributions to the Plan and vest 25% per year in the Company
contributions and the earnings attributable to such contributions. Upon
participant's distribution, related non-vested Company contributions are
forfeited and are used to offset future Company contributions.
5. DISTRIBUTIONS
The vested portion of a participant's account, less any applicable
withholding, shall be distributed at the participant's election, subject
to the limitations described in Note 2, as either a) a lump sum or b) up
to ten annual installments. Distributions shall be paid on the January 1
immediately following a participant's separation from employment, or as
soon as administratively practical thereafter.
F-10
Effective January 1, 1997, each year's deferral has a separate
distribution election and participants may elect up to 15 annual
installments or a fixed date distribution during employment.
6. HARDSHIP DISTRIBUTIONS
A participant may request a distribution of all or a portion of his
elective contribution account balance if he can demonstrate financial
hardship. The Committee appointed by the Board of Directors to administer
the Plan (the "Committee") must approve the request, and the amount
withdrawn cannot be subsequently repaid to the Company. Such amounts will
be considered distributions to the participant for tax purposes.
7. WITHDRAWAL ELECTION
Effective 1/1/97, participants may elect to withdraw all of the vested
portion of their account less a withdrawal penalty of 10% of such amount.
Once payment is made, the participant shall not be eligible to participate
in the Plan again.
8. PARTICIPANT LOANS
Participants are not permitted under the Plan to borrow from the Company
any portion of the amount credited to their participant's account under
the Plan.
9. TERMINATION
Effective January 1, 1997, the Plan was combined into a new Deferred
Compensation Plan with provision similar to the current Plan except where
otherwise indicated in the prior sections.
While it has not expressed any intention to do so, the Company may amend
or terminate the new Deferred Compensation Plan at any time. In the event
the new Deferred Compensation Plan is terminated, assets will be payable
to each participant on the January 1 immediately following a participant's
separation from employment in accordance with the participant's most
recent participant election and enrollment form which is effective at
least one year prior to the date of separation of employment. No
additional credits of contributions shall be made to the participant's
account for periods after termination of the new Deferred Compensation
Plan, but the Committee shall continue to credit gains and losses to the
participant's account, until the balance has been fully distributed.
10. FEDERAL INCOME TAX EFFECTS OF THE PLAN
A participant generally will not be taxed on the tax-deferred
contributions or the Company matching contributions to the Savings
Restoration Plan, or earnings thereon, allocable to his participant's
account until such amounts are distributed to the participant or his
beneficiary under the Plan. The value of the participant's account,
including any earnings, are deductible by the Company for federal tax
purposes in the year in which those amounts become taxable to the
participant or his beneficiary.
Participants or their beneficiaries generally will be taxed, at ordinary
income rates, on the amount they receive as a distribution from the Plan
at the time they receive the distribution. Since the Plan is not qualified
under Section 401(a) of the Code,
F-11
distributions from the Plan will not qualify for any of the favorable tax
rulings applicable to qualified tax distributions, such as tax-deferred
rollovers or five year averaging. On the other hand, distributions from
the Plan will not be subject to various excise taxes applicable to
qualified plan distributions, such as 10% excise tax on distribution prior
to age 59 1/2, or the 15% excise tax on excess benefit payments.
An employee's tax-deferred contributions to the Plan are subject to
federal social security and medicare taxes and federal unemployment taxes
when earned, and Company matching contributions, and any earnings thereon
prior to the time such amounts become vested, are subject to those taxes
as and when they become vested.
11. PLAN FEES AND EXPENSES
Although all expenses of administration relating to the Plan may be
charged against a participant's account, at the present time, the Company
has elected to pay all administrative and marketing expenses.
12. SUBSEQUENT EVENTS
The change in net unrealized gains or losses arising in the various
notional investment funds of the Plan after December 31, 1996 and prior to
May 1, 1997 are as follows:
UNREALIZED UNREALIZED NET CHANGE IN
APPRECIATION APPRECIATION UNREALIZED
AT DECEMBER 31, 1996 AT APRIL 30, 1997 APPRECIATION
-------------------- ----------------- ------------
$ 327,567 457,609 130,042
================= ================= ============
F-12
EXHIBIT INDEX
EXHIBIT DESCRIPTION
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23.1 Independent Auditors' Consent