SEC Comment Letter for RYDER SYSTEM INC (R) (CIK 0000085961) (R) — Jul 3, 2008
RYDER SYSTEM INC (R) (CIK 0000085961)
Date: July 3, 2008 · CIK: 0000085961 · Accession: 0000000000-08-032911
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-04364
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION CF/AD5 100 F STREET, NE WASHINGTON, D.C. 20549-3561 DIVISION OF CORPORATION FINANCE June 26, 2008 Via Mail and Fax Art A. Garcia Senior Vice President and Controller Ryder System, Inc. 11690 NW 105th Street Miami, FL 33178
RE: Ryder System, Inc. Form 10-K for the Year Ended December 31, 2007 Form 10-Q for the Period Ended March 31, 2008 File Number: 001-04364
Dear Mr. Garcia:
We have reviewed the above referenced filings and have the following comments. We believe you should revise future filings in response to our comments where indicated. If you disagree, we will consider your explanation as to why a revision is unnecessary. Please be as detailed as nece ssary in your explanation. We also ask you to provide us with information so we may better understand your disclosure. Af ter reviewing this information, we may raise additional comments.
The purpose of our review process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filings. We look forward to working with you in thes e respects and welcome any questions. Feel free to call us at the telephone numbers listed at the end of this letter.
Please file your response to our comment s via EDGAR, under the label “corresp,” within 10 business days from the date of this letter.
Ryder System, Inc. June 26, 2008 Page 2 of 4 Form 10-K for the Year Ended December 31, 2007
Notes to Consolidated Financial Statements, page 64 Note 1. Summary of Significant Accounting Policies, page 64 Revenue Recognition, page 64
1. From your disclosures, it a ppears that your full service le asing is an all inclusive arrangement that encompasses multiple elements, such as vehicle leasing, maintenance, supplies and support services . However, based on your reporting and disclosures, it does not appear that revenue of such arrang ements is allocated to the respective individual elements within each arrangement and recognized for each element. In this regard, please explain to us, with a view to disclosing, the basis for your accounting treatment with respect to su ch arrangements. Also, tell us and disclose how amounts billable for such arrangements correlate to the respective services provided therein and the timing of when amounts due under these arrangements are billed.
2. We note that you recognize revenue from main tenance service contracts on a straight line basis over the terms of the related agreements. In this regard, describe for us, with a view to disclosing, the typical ac tivities performed under such contracts. Characterize for us and in your disclosu re whether each identified activity is considered to be a routine service perform ed on a recurring basis or is nonroutine performed on an as needed or upon request basis. Also, tell us if you make any distinction between maintenance and repair /overhaul services pe rformed under such contracts and the attri bution of arrangement consideration to each.
3. Please explain to us and disclose you r basis for recognizing revenue from maintenance service contracts on a straight -line basis over the te rms of the related agreements. In connection with this and in consideration of the t ypes of activities and their characteristics described in the preceding comm ent, explain to us your consideration of recognizing arrangement consideration as revenue on a proportional performance basis relative to the fair valu es of the associated outputs in your circumstances. Also, tell us and disclose how amounts billable for such arrangements correlate to the respective services provi ded therein and the timing of when amounts due under these arrangements are billed.
4. Please explain to us and disclose your acc ounting policy in regard to the methods used to recognize the respective costs associ ated with the various activities performed for full service leasing, contract mainte nance and contract related maintenance services.
Ryder System, Inc. June 26, 2008 Page 3 of 4 Form 10-Q for the Period Ended March 31, 2008
Management’s Discussion and Analysis …, page 17 Consolidated Results, page 17
5. We note the change effective January 1, 2008 in the contractual relationship with a significant customer that materially reduced the amount of subcontracted transportation expense reported in the cu rrent period. In this regard, please: (a) tell us the principal terms of the arrangeme nt that were revised, in terms of before and after the revisions; (b) tell us the basis for revising the arrangement; (c) explain to us how the effect of such revi sions changed your role from principal in the arrangement to that as an agent; (d) explain to us how your accounting of the related costs and revenues on a net basis complies with the requirements of EITF 99-19, with analysis of all of the indicators that support your accounting; and (e) tell us the principal favorable qualitative effects, if any, related to such change in your accounting, in particular, whether a ny operating, covenant related or other key metrics were favorably impacted as a result of your change in accounting and how favorably affected.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings to be certain that the filings include all information required under the Securities Exchange Act of 1934 and that they have provided all information investors require for an informed invest ment decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosures in the filings; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings; and the company may not assert staff comme nts as a defense in any proceeding initiated by the Commission or any person under the federal secu rities laws of the United States.
In addition, please be advi sed that the Division of En forcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filings or in response to our comments on your filings.
Ryder System, Inc. June 26, 2008 Page 4 of 4 You may contact Doug Jones at 202-551-3309 or Lyn Shenk at 202-551-3380 with any questions. You may also contact me at 202-551-3816.
Sincerely,
Joseph Foti
Senior Assistant Chief Accountant
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
CF/AD5
100 F STREET, NE
WASHINGTON, D.C. 20549-3561
DIVISION OF
CORPORATION FINANCE
June 26, 2008
Via Mail and Fax
Art A. Garcia
Senior Vice President and Controller
Ryder System, Inc.
11690 NW 105th Street
Miami, FL 33178
RE: Ryder System, Inc.
Form 10-K for the Year Ended December 31, 2007
Form 10-Q for the Period Ended March 31, 2008
File Number: 001-04364
Dear Mr. Garcia:
We have reviewed the above referenced filings and have the following comments.
We believe you should revise future filings in response to our comments where indicated.
If you disagree, we will consider your explanation as to why a revision is unnecessary. Please be as detailed as nece ssary in your explanation. We also ask you to provide us
with information so we may better understand your disclosure. Af ter reviewing this
information, we may raise additional comments.
The purpose of our review process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filings.
We look forward to working with you in thes e respects and welcome any questions. Feel
free to call us at the telephone numbers listed at the end of this letter.
Please file your response to our comment s via EDGAR, under the label “corresp,”
within 10 business days from the date of this letter.
Ryder System, Inc.
June 26, 2008
Page 2 of 4
Form 10-K for the Year Ended December 31, 2007
Notes to Consolidated Financial Statements, page 64
Note 1. Summary of Significant Accounting Policies, page 64
Revenue Recognition, page 64
1. From your disclosures, it a ppears that your full service le asing is an all inclusive
arrangement that encompasses multiple elements, such as vehicle leasing,
maintenance, supplies and support services . However, based on your reporting and
disclosures, it does not appear that revenue of such arrang ements is allocated to the
respective individual elements within each arrangement and recognized for each
element. In this regard, please explain to us, with a view to disclosing, the basis for
your accounting treatment with respect to su ch arrangements. Also, tell us and
disclose how amounts billable for such arrangements correlate to the respective
services provided therein and the timing of when amounts due under these arrangements are billed.
2. We note that you recognize revenue from main tenance service contracts on a straight
line basis over the terms of the related agreements. In this regard, describe for us, with a view to disclosing, the typical ac tivities performed under such contracts.
Characterize for us and in your disclosu re whether each identified activity is
considered to be a routine service perform ed on a recurring basis or is nonroutine
performed on an as needed or upon request basis. Also, tell us if you make any
distinction between maintenance and repair /overhaul services pe rformed under such
contracts and the attri bution of arrangement consideration to each.
3. Please explain to us and disclose you r basis for recognizing revenue from
maintenance service contracts on a straight -line basis over the te rms of the related
agreements. In connection with this and in consideration of the t ypes of activities and
their characteristics described in the preceding comm ent, explain to us your
consideration of recognizing arrangement consideration as revenue on a proportional
performance basis relative to the fair valu es of the associated outputs in your
circumstances. Also, tell us and disclose how amounts billable for such arrangements
correlate to the respective services provi ded therein and the timing of when amounts
due under these arrangements are billed.
4. Please explain to us and disclose your acc ounting policy in regard to the methods
used to recognize the respective costs associ ated with the various activities performed
for full service leasing, contract mainte nance and contract related maintenance
services.
Ryder System, Inc.
June 26, 2008
Page 3 of 4
Form 10-Q for the Period Ended March 31, 2008
Management’s Discussion and Analysis …, page 17
Consolidated Results, page 17
5. We note the change effective January 1, 2008 in the contractual relationship with a
significant customer that materially reduced the amount of subcontracted
transportation expense reported in the cu rrent period. In this regard, please:
(a) tell us the principal terms of the arrangeme nt that were revised, in terms of before
and after the revisions;
(b) tell us the basis for revising the arrangement;
(c) explain to us how the effect of such revi sions changed your role from principal in
the arrangement to that as an agent;
(d) explain to us how your accounting of the related costs and revenues on a net basis
complies with the requirements of EITF 99-19, with analysis of all of the
indicators that support your accounting; and
(e) tell us the principal favorable qualitative effects, if any, related to such change in
your accounting, in particular, whether a ny operating, covenant related or other
key metrics were favorably impacted as a result of your change in accounting and
how favorably affected.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filings to be certain that the filings include all information required under the Securities Exchange Act of 1934 and that they have provided all information
investors require for an informed invest ment decision. Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosures in the filings;
staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filings; and
the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.
In addition, please be advi sed that the Division of En forcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.
Ryder System, Inc.
June 26, 2008
Page 4 of 4
You may contact Doug Jones at 202-551-3309 or Lyn Shenk at 202-551-3380
with any questions. You may also contact me at 202-551-3816.
Sincerely,
Joseph Foti
Senior Assistant Chief Accountant