Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2020shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2020 |
Document Transition Report | false |
Entity File Number | 1-4364 |
Entity Registrant Name | RYDER SYSTEM, INC. |
Entity Incorporation, State or Country Code | FL |
Entity Tax Identification Number | 59-0739250 |
Entity Address, Address Line One | 11690 N.W. 105th Street |
Entity Address, City or Town | Miami, |
Entity Address, State or Province | FL |
Entity Address, Postal Zip Code | 33178 |
City Area Code | (305) |
Local Phone Number | 500-3726 |
Title of 12(b) Security | Common Stock |
Trading Symbol | R |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 53,735,964 |
Entity Central Index Key | 0000085961 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lease & related maintenance and rental revenues | $ 927,756 | $ 899,559 |
Revenues | 2,161,306 | 2,180,327 |
Other operating expenses | 33,565 | 33,626 |
Selling, general and administrative expenses | 224,119 | 231,325 |
Non-operating pension costs | 1,221 | 6,462 |
Used vehicle sales, net | 20,684 | 8,217 |
Interest expense | 62,566 | 55,336 |
Miscellaneous (income) loss, net | 8,668 | (8,222) |
Restructuring and other items, net | 30,947 | 6,178 |
Total expenses | 2,274,940 | 2,112,176 |
Earnings (loss) from continuing operations before income taxes | (113,634) | 68,151 |
Provision for (benefit from) income taxes | (4,505) | 22,261 |
Earnings (loss) from continuing operations | (109,129) | 45,890 |
Earnings (loss) from discontinued operations, net of tax | (484) | (574) |
Net earnings (loss) | $ (109,613) | $ 45,316 |
Earnings (loss) per common share — Basic | ||
Continuing operations (in dollars per share) | $ (2.09) | $ 0.87 |
Discontinued operations (in dollars per share) | (0.01) | (0.01) |
Net earnings (loss) (in dollars per share) | (2.10) | 0.86 |
Earnings (loss) per common share — Diluted | ||
Continuing operations (in dollars per share) | (2.09) | 0.87 |
Discontinued operations (in dollars per share) | (0.01) | (0.01) |
Net earnings (loss) (in dollars per share) | $ (2.10) | $ 0.86 |
Service | ||
Revenues | $ 1,112,188 | $ 1,132,048 |
Cost of services sold | 954,429 | 971,690 |
Fuel Services | ||
Revenues | 121,362 | 148,720 |
Cost of services sold | 120,449 | 143,275 |
Lease, Related Maintenance and Rental | ||
Cost of services sold | $ 818,292 | $ 664,289 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings (loss) | $ (109,613) | $ 45,316 |
Other comprehensive income (loss): | ||
Changes in currency translation adjustment and other | (84,620) | 15,762 |
Amortization of pension and postretirement items | 7,779 | 7,468 |
Income tax expense related to amortization of pension and postretirement items | (1,613) | (2,014) |
Amortization of pension and postretirement items, net of tax | 6,166 | 5,454 |
Other comprehensive income (loss), net of taxes | (78,454) | 21,216 |
Comprehensive income | $ (188,067) | $ 66,532 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 397,235 | $ 73,584 |
Receivables, net | 1,202,819 | 1,228,490 |
Inventories | 65,422 | 80,822 |
Prepaid expenses and other current assets | 191,090 | 179,155 |
Total current assets | 1,856,566 | 1,562,051 |
Revenue earning equipment, net | 10,033,616 | 10,427,664 |
Operating property and equipment, net of accumulated depreciation of $1,226,339 and $1,224,216, respectively | 906,712 | 917,799 |
Goodwill | 474,179 | 475,025 |
Intangible assets, net | 48,673 | 50,905 |
Sales-type leases and other assets | 1,044,478 | 1,041,890 |
Total assets | 14,364,224 | 14,475,334 |
Current liabilities: | ||
Short-term debt and current portion of long-term debt | 853,527 | 1,154,564 |
Accounts payable | 522,612 | 594,712 |
Accrued expenses and other current liabilities | 820,257 | 876,077 |
Total current liabilities | 2,196,396 | 2,625,353 |
Long-term debt | 7,320,843 | 6,770,224 |
Other non-current liabilities | 1,472,284 | 1,442,003 |
Deferred income taxes | 1,131,965 | 1,161,444 |
Total liabilities | 12,121,488 | 11,999,024 |
Commitments and contingencies (Note 17) | ||
Shareholders’ equity: | ||
Preferred stock, no par value per share — authorized, 3,800,917; none outstanding, March 31, 2020 and December 31, 2019 | 0 | 0 |
Common stock, $0.50 par value per share — authorized, 400,000,000; outstanding, March 31, 2020 — 53,735,964 and December 31, 2019 — 53,278,316 | 26,867 | 26,639 |
Additional paid-in capital | 1,103,928 | 1,108,649 |
Retained earnings | 2,026,886 | 2,177,513 |
Accumulated other comprehensive loss | (914,945) | (836,491) |
Total shareholders’ equity | 2,242,736 | 2,476,310 |
Total liabilities and shareholders’ equity | $ 14,364,224 | $ 14,475,334 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 40,562 | $ 22,761 |
Accumulated depreciation | $ 1,226,339 | $ 1,224,216 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 3,800,917 | 3,800,917 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.50 | $ 0.50 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares outstanding (in shares) | 53,735,964 | 53,278,316 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities from continuing operations: | ||
Net earnings (loss) | $ (109,613) | $ 45,316 |
Less: Loss from discontinued operations, net of tax | (484) | (574) |
Earnings (loss) from continuing operations | (109,129) | 45,890 |
Depreciation expense | 523,223 | 377,357 |
Used vehicle sales, net | 20,684 | 8,217 |
Amortization expense and other non-cash charges, net | 42,698 | 27,131 |
Non-cash lease expense | 22,460 | 23,218 |
Non-operating pension costs and share-based compensation expense | 4,312 | 13,861 |
Deferred income tax expense (benefit) | (13,598) | 19,729 |
Collections on sales-type leases | 26,597 | 34,017 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Receivables | (14,634) | 26,181 |
Inventories | 15,409 | (756) |
Prepaid expenses and other assets | (36,482) | (27,645) |
Accounts payable | (25,707) | 18,586 |
Accrued expenses and other non-current liabilities | (17,247) | (80,456) |
Net cash provided by operating activities from continuing operations | 438,586 | 485,330 |
Cash flows from investing activities from continuing operations: | ||
Purchases of property and revenue earning equipment | (430,960) | (1,026,711) |
Sales of revenue earning equipment | 101,099 | 101,549 |
Sales of operating property and equipment | 1,883 | 1,918 |
Other | (5,000) | 0 |
Net cash used in investing activities from continuing operations | (332,978) | (923,244) |
Cash flows from financing activities from continuing operations: | ||
Net borrowings (repayments) of commercial paper and revolving credit facilities | 332,682 | 158,258 |
Debt proceeds | 556,849 | 799,300 |
Debt repaid | (627,701) | (478,411) |
Dividends on common stock | (30,594) | (29,301) |
Common stock issued | 2,795 | 3,108 |
Common stock repurchased | (11,924) | (14,156) |
Tax withholding on shares settled | (4,013) | (3,440) |
Debt issuance costs and other items | (474) | (1,070) |
Net cash provided by financing activities from continuing operations | 217,620 | 434,288 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 725 | (1,551) |
Increase (decrease) in cash, cash equivalents, and restricted cash from continuing operations | 323,953 | (5,177) |
Increase (decrease) in cash, cash equivalents, and restricted cash from discontinued operations | (302) | (147) |
Increase (decrease) in cash, cash equivalents, and restricted cash | 323,651 | (5,324) |
Cash, cash equivalents, and restricted cash at beginning of year | 73,584 | 68,111 |
Cash, cash equivalents, and restricted cash at end of period | $ 397,235 | $ 62,787 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Shareholders' Equity - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | |
Beginning balance at Dec. 31, 2018 | $ 2,536,568 | $ 0 | $ 26,559 | $ 1,084,391 | $ 2,337,252 | $ (911,634) | |
Beginning balance (in shares) at Dec. 31, 2018 | 53,116,485 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Comprehensive income | 66,532 | 45,316 | 21,216 | ||||
Common stock dividends declared and paid | (29,207) | (29,207) | |||||
Common stock issued under employee stock option and stock purchase plans | [1] | (342) | $ 205 | (547) | |||
Common stock issued under employee stock option and stock purchase plans (in shares) | [1] | 409,294 | |||||
Benefit plan stock sales (purchases), net | [2] | 10 | 10 | ||||
Benefit plan stock sales (purchases), net (in shares) | [2] | 270 | |||||
Common stock repurchases | (14,156) | $ (113) | (4,539) | (9,504) | |||
Common stock repurchases (in shares) | (225,844) | ||||||
Share-based compensation | 7,399 | 7,399 | |||||
Ending balance at Mar. 31, 2019 | 2,566,804 | 0 | $ 26,651 | 1,086,714 | 2,343,857 | (890,418) | |
Ending balance (in shares) at Mar. 31, 2019 | 53,300,205 | ||||||
Beginning balance at Dec. 31, 2019 | $ 2,476,310 | 0 | $ 26,639 | 1,108,649 | 2,177,513 | (836,491) | |
Beginning balance (in shares) at Dec. 31, 2019 | 53,278,316 | 53,278,316 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Comprehensive income | $ (188,067) | (109,613) | (78,454) | ||||
Common stock dividends declared and paid | (30,379) | (30,379) | |||||
Common stock issued under employee stock option and stock purchase plans | [1] | (1,257) | $ 380 | (1,637) | |||
Common stock issued under employee stock option and stock purchase plans (in shares) | [1] | 760,258 | |||||
Benefit plan stock sales (purchases), net | [2] | 39 | 39 | ||||
Benefit plan stock sales (purchases), net (in shares) | [2] | 488 | |||||
Common stock repurchases | (11,924) | $ (152) | (6,214) | (5,558) | |||
Common stock repurchases (in shares) | (303,098) | ||||||
Share-based compensation | 3,091 | 3,091 | |||||
Ending balance at Mar. 31, 2020 | $ 2,242,736 | $ 0 | $ 26,867 | $ 1,103,928 | $ 2,026,886 | $ (914,945) | |
Ending balance (in shares) at Mar. 31, 2020 | 53,735,964 | 53,735,964 | |||||
[1] | Net of common shares withheld as payment for the exercise price or to satisfy the holders’ withholding tax liability upon exercise of options. | ||||||
[2] | Represents open-market transactions of common shares by the trustee of our deferred compensation plans. |
Consolidated Condensed Statemen
Consolidated Condensed Statement of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared per common share (in dollars per share) | $ 0.56 | $ 0.54 |
GENERAL
GENERAL | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
GENERAL | GENERAL Interim Financial Statements The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Ryder System, Inc. (Ryder) and all entities in which Ryder has a controlling voting interest (subsidiaries) and variable interest entities (VIE) required to be consolidated in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the accounting policies described in our 2019 Annual Report on Form 10-K and should be read in conjunction with the Consolidated Financial Statements and notes thereto. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included and the disclosures herein are adequate. The operating results for interim periods are unaudited and are not necessarily indicative of the results that can be expected for a full year. The coronavirus (COVID-19) pandemic has negatively impacted several areas of our businesses, including lower demand for commercial rental and declines in volumes in our used vehicle sales, which we also expect to impact pricing (refer to Note 5, "Revenue Earning Equipment," for additional information), in our Fleet Management Solutions (FMS) business segment; deterioration in Supply Chain Solutions (SCS) volumes, primarily due to production shut downs in the automotive industry; sales growth opportunities in all of our businesses; and higher bad debt expenses related to increased concerns around customers' ability to pay invoices. With respect to our ChoiceLease product line, our customers have signed long-term lease contracts and, therefore, we do not expect our revenue and cash flows to be materially affected provided our customers remain solvent and continue to make their payments. We have attempted to mitigate the adverse impacts from the pandemic through cost reduction measures and reduction in capital expenditures. Depending on the extent and duration of the pandemic, it may have a further impact on our significant judgments and estimates, including those related to goodwill and other asset impairments, residual values and other depreciation assumptions, deferred income taxes and annual effective tax rates, variable revenue considerations, the valuation of our pension plans, and allowance for credit losses. Significant Accounting Policies |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Reference Rate Reform In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848). This update provides optional expedients for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued at the end of 2021 because of reference rate reform. The update is effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact on our consolidated financial position, results of operations, and cash flows. Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This pronouncement enhances and simplifies various aspects of income tax accounting guidance. Among other things, the amendment removes the year-to-date loss limitations in interim-period tax accounting and requires entities to reflect the effect of an enacted change in tax laws in the interim period that includes the enactment date of the new legislation. The standard is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. We have early adopted this update in the first quarter of 2020, under the modified retrospective basis and prospective transition approaches, and it did not have a material impact on our consolidated financial position, results of operations, and cash flows. Cloud Computing Arrangements In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal Use Software (Topic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which addresses a customer’s accounting for implementation costs incurred in a cloud computing arrangement (CCA) that is a service contract. The new standard aligns the accounting for costs incurred to implement a CCA that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The standard is effective for fiscal years beginning after December 15, 2019. We adopted the new standard prospectively on January 1, 2020 and it did not have a material impact on our consolidated financial position, results of operations, and cash flows. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326). The new standard modifies the measurement of expected credit losses of certain financial instruments, including accounts receivable (excluding those related to operating leases) and net investments in sales-type leases. Among other things, these amendments require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The standard is effective for fiscal years beginning after December 15, 2019. The standard requires a cumulative-effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is effective. Periods prior to the adoption date that are presented for comparative purposes are not adjusted. We adopted this new standard as of January 1, 2020 and it did not have a material impact on our consolidated financial position, results of operations, and cash flows. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Lease & related maintenance and rental revenues included non-lease revenue from maintenance services of $240 million and $239 million for the three months ended March 31, 2020 and 2019, respectively. Disaggregation of Revenue The following tables disaggregate our revenue recognized by primary geographical market by our FMS, SCS and DTS reportable business segments, as well as by industry for SCS. Refer to Note 19, "Segment Reporting," for the disaggregation of our revenue by major products/service line. Primary Geographical Markets Three months ended March 31, 2020 FMS SCS DTS Eliminations Total (In thousands) United States $ 1,197,521 $ 522,525 $ 334,888 $ (137,295) $ 1,917,639 Canada 70,765 53,552 — (4,971) 119,346 Europe 71,951 — — — 71,951 Mexico — 52,370 — — 52,370 Total Revenues $ 1,340,237 $ 628,447 $ 334,888 $ (142,266) $ 2,161,306 Three months ended March 31, 2019 FMS SCS DTS Eliminations Total (In thousands) United States $ 1,198,943 $ 529,393 $ 349,621 $ (151,163) $ 1,926,794 Canada 74,014 49,708 — (5,401) 118,321 Europe 78,642 — — — 78,642 Mexico — 53,277 — — 53,277 Singapore — 3,293 — — 3,293 Total Revenues $ 1,351,599 $ 635,671 $ 349,621 $ (156,564) $ 2,180,327 Industry Our SCS business segment includes revenue from the below industries: Three months ended March 31, 2020 2019 (In thousands) Automotive $ 249,925 $ 253,679 Technology and healthcare 91,133 113,668 Consumer package goods and retail 229,932 217,098 Industrial and other 57,457 51,226 Total SCS Revenues $ 628,447 $ 635,671 Contract Balances We record a receivable related to revenue recognized when we have an unconditional right to invoice. Refer to Note 4 for further information regarding our receivables. Contract liabilities primarily relate to payments received in advance of performance under the contract. Changes in contract liabilities are due to our performance under the contract. Deferred revenue related to the maintenance services component of our ChoiceLease product line was $590 million and $587 million as of March 31, 2020 and December 31, 2019, respectively. Revenue recognized during the three months ended March 31, 2020 and March 31, 2019 was $59 million and $58 million, respectively, for the amounts recorded as deferred revenue at the beginning of each year . In addition, we deferred consideration of $67 million and $57 million during the three months ended March 31, 2020 and March 31, 2019, respectively, which was received in advance of performance resulting in an increase in deferred revenue. Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (“contracted not recognized revenue”). Contracted not recognized revenue includes deferred revenue and amounts for full service ChoiceLease maintenance revenue that will be recognized as revenue in future periods as we provide maintenance services to our customers. Contracted not recognized revenue excludes variable consideration as it is not included in the transaction price consideration allocated at contract inception. Contracted not recognized revenue was $2.9 billion as of March 31, 2020. As practical expedients, we do not disclose information about remaining performance obligations that are part of a contract that has an original expected duration of one year or less, and we do not disclose information about remaining performance obligations when we have the right to invoice the customer and the revenue recognized corresponds directly with the value to the customer of our performance completed to date. Costs to Obtain and Fulfill a Contract We capitalize incremental sales commissions paid as a result of obtaining ChoiceLease, SCS and DTS service contracts as contract costs. Capitalized sales commissions were $101 million and $105 million as of March 31, 2020 and December 31, 2019, respectively. Capitalized sales commissions include initial direct costs of our leases of $53 million a nd $55 million as of March 31, 2020 and December 31, 2019, respectively, related to incremental sales commissions paid to our sales force as a result of obtaining ChoiceLease contracts. Capitalized sales commissions are presented in “Sales-type leases and other assets” in our Condensed Consolidated Balance Sheets. For both the three months ended March 31, 2020 and 2019, sales commission expense was $11 million. |
RECEIVABLES, NET
RECEIVABLES, NET | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
RECEIVABLES, NET | RECEIVABLES, NET March 31, 2020 December 31, 2019 (In thousands) Trade $ 1,039,932 $ 1,060,298 Sales-type leases 140,440 135,353 Other, primarily warranty and insurance 63,009 55,600 1,243,381 1,251,251 Allowance for credit losses and other (40,562) (22,761) Total $ 1,202,819 $ 1,228,490 On January 1, 2020, we adopted the new accounting guidance related to the allowance for credit losses on our trade receivables and sales-type leases. As a result of the adoption, we increased our allowance for credit allowances and reduced retained earnings by an immaterial amount as of January 1, 2020. We maintain an allowance for credit losses and an allowance for billing adjustments related to certain discounts and other customer concessions. Estimates are updated regularly based on our review of historical loss rates, as well as current and expected events of our business segments, current collection trends and billing adjustments processed. Accounts are charged against the allowance when determined to be uncollectible. When a business relationship with a customer is initiated, we evaluate collectibility from the customer and it is continuously monitored as services are provided. We have a credit rating system based on internally developed standards and ratings provided by third parties. Our credit rating system, along with monitoring for delinquent payments, allows us to make decisions as to whether collectibility is probable at the on-set of the relationship and subsequently as we offer services. Factors considered during this process include historical payment trends, industry risks, liquidity of the customer, years in business, and judgments, liens or bankruptcies. Payment terms vary by contract type, although terms generally include a requirement of payment within 30 to 90 days. When collectibility is not considered probable (typically when a customer is 120 days past due), revenue is not recognized until it is determined that the customer has the ability and intent to pay. Bad debt expense, which is recorded in selling, general and administrative expenses, was $19 million for the three months ended March 31, 2020, including impacts related to COVID-19. We continue to actively monitor the impact of the recent COVID-19 pandemic on expected credit losses. |
REVENUE EARNING EQUIPMENT, NET
REVENUE EARNING EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Earning Equipment [Abstract] | |
REVENUE EARNING EQUIPMENT, NET | REVENUE EARNING EQUIPMENT, NET March 31, 2020 December 31, 2019 Cost Accumulated Net Book Value (1) Cost Accumulated Net Book Value (1) (In thousands) Held for use: ChoiceLease $ 12,031,414 $ (4,173,629) $ 7,857,785 $ 12,223,179 $ (4,125,342) $ 8,097,837 Commercial rental 2,986,622 (1,000,206) 1,986,416 3,200,403 (1,049,850) 2,150,553 Held for sale 927,277 (737,862) 189,415 748,435 (569,161) 179,274 Total $ 15,945,313 $ (5,911,697) $ 10,033,616 $ 16,172,017 $ (5,744,353) $ 10,427,664 ———————————— (1) Revenue earning equipment, net includes vehicles under finance leases of $12 million, less accumulated depreciation of $8 million, as of March 31, 2020, and $12 million, less accumulated depreciation of $8 million, as of December 31, 2019. Revenue earning equipment held for sale is stated at the lower of carrying amount or fair value less costs to sell. Losses on vehicles held for sale for which carrying values exceeded fair value, which we refer to as "valuation adjustments," are recognized at the time they arrive at our used truck sales centers and are presented within “Used vehicle sales, net” in the Condensed Consolidated Statements of Earnings. For revenue earning equipment held for sale, we stratify our fleet by vehicle type (trucks, tractors and trailers), weight class, age and other relevant characteristics and create classes of similar assets for analysis purposes. For a certain population of our revenue earning equipment held for sale, fair value was determined based upon recent market prices obtained from our own sales experience for sales of each class of similar assets and vehicle condition. Expected declines in market prices were also considered when valuing the vehicles held for sale. In the first quarter of 2020, we revised our residual value estimates for vehicles that are expected to be sold in the near-term (mid-2021) and recorded valuation adjustments on our vehicles held for sale due to the expected negative impacts of the COVID-19 pandemic on pricing and volume of used vehicle sales. We now expect lower used vehicle pricing in the second half of 2020 due to lower demand rather than our previous expectations of a modest increase during that time. As a result of these changes in estimated residual values, we recorded additional accelerated depreciation of $27 million and valuation adjustments of $21 million, which negatively impacted our FMS business segment results. The following table presents our assets held for sale that are measured at fair value on a nonrecurring basis and considered a Level 3 fair value measurement: Total Losses (2) Three months ended March 31, March 31, 2020 December 31, 2019 2020 2019 (In thousands) Assets held for sale: Revenue earning equipment (1) : Trucks $ 46,129 $ 39,009 $ 11,062 $ 11,546 Tractors 85,302 73,359 8,453 4,968 Trailers 3,251 2,206 1,993 180 Total assets at fair value $ 134,682 $ 114,574 $ 21,508 $ 16,694 ———————————— (1) Assets held for sale in the table above only include the portion of revenue earning equipment held for sale where net book values exceeded fair values and fair value valuation adjustments were recorded. The net book value of assets held for sale that were less than fair value was $55 million and $65 million as of March 31, 2020 and December 31, 2019, respectively. (2) Total losses represent fair value valuation adjustments for all vehicles reclassified to held for sale throughout the period for which fair value was less than net book value. The components of used vehicle sales, net were as follows: Three months ended March 31, 2020 2019 (In thousands) Losses (gains) on vehicle sales, net $ (824) $ (8,477) Losses from valuation adjustments 21,508 16,694 Used vehicle sales, net $ 20,684 $ 8,217 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The carrying amount of goodwill attributable to each reportable business segment with changes therein was as follows: FMS SCS DTS Total (In thousands) Balance at December 31, 2019 $ 243,702 $ 190,515 $ 40,808 $ 475,025 Foreign currency translation adjustments (398) (448) — (846) Balance at March 31, 2020 $ 243,304 $ 190,067 $ 40,808 $ 474,179 We assess goodwill for impairment on October 1st of each year or more often if deemed necessary. In the first quarter of 2020, we performed an interim impairment test of our FMS North America reporting unit (“FMS NA”) as a result of the decline in market conditions and our updated outlook as a result of the impact of COVID-19. Our valuation of fair value for FMS NA was determined based on a discounted future cash flow model (income approach) and the application of current market multiples for comparable publicly-traded companies (market approach). Based on our analysis, we determined that FMS NA goodwill was not impaired as of March 31, 2020. The estimated fair value of the FMS NA reporting unit exceeded its carrying value by approximately 5% as of March 31, 2020. Given this level of fair value, in the event the financial performance of FMS NA does not meet our expectations in the future; we experience future prolonged market downturns, including in the used vehicle market or continued declines in our stock price; negative trends from the COVID-19 pandemic continue; or there are other negative revisions to key assumptions, we may be required to perform additional impairment analyses and could be required to recognize a non-cash goodwill impairment charge. As of March 31, 2020, there was $243 million of goodwill recorded related to FMS NA. The following table includes the carrying value of our intangible assets attributable to each reportable business segment (in thousands): March 31, 2020 FMS SCS DTS CSS Total Indefinite lived intangible assets - Trade name $ — $ — $ — $ 8,731 $ 8,731 Finite lived intangible assets: Customer relationship intangibles 56,050 49,518 7,582 — 113,150 Other intangibles, primarily trade name 1,636 731 — — 2,367 57,686 50,249 7,582 8,731 124,248 Accumulated amortization (49,970) (21,222) (4,383) — (75,575) Total $ 7,716 $ 29,027 $ 3,199 $ 8,731 $ 48,673 December 31, 2019 FMS SCS DTS CSS Total Indefinite lived intangible assets - Trade name $ — $ — $ — $ 8,731 $ 8,731 Finite lived intangible assets: Customer relationship intangibles 56,050 49,518 7,582 — 113,150 Other intangibles, primarily trade name 1,636 731 — — 2,367 57,686 50,249 7,582 8,731 124,248 Accumulated amortization (49,031) (20,047) (4,265) — (73,343) Total $ 8,655 $ 30,202 $ 3,317 $ 8,731 $ 50,905 |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | ACCRUED EXPENSES AND OTHER LIABILITIES March 31, 2020 December 31, 2019 Accrued Non-Current Total Accrued Non-Current Total (In thousands) Salaries and wages $ 95,604 $ — $ 95,604 $ 126,119 $ — $ 126,119 Deferred compensation 3,791 57,654 61,445 6,436 65,006 71,442 Pension benefits 3,829 411,684 415,513 3,863 413,829 417,692 Other postretirement benefits 1,464 19,624 21,088 1,478 20,187 21,665 Other employee benefits 6,629 — 6,629 21,577 — 21,577 Insurance obligations (1) 165,245 308,631 473,876 163,763 285,838 449,601 Operating taxes 116,514 — 116,514 116,003 — 116,003 Income taxes 7,590 17,972 25,562 2,873 17,484 20,357 Interest 45,224 — 45,224 46,032 — 46,032 Deposits, mainly from customers 78,033 3,250 81,283 82,573 3,065 85,638 Operating lease liabilities 70,314 157,581 227,895 72,285 151,361 223,646 Deferred revenue (2) 162,946 443,590 606,536 165,205 438,482 603,687 Restructuring liabilities (3) 5,012 — 5,012 6,765 — 6,765 Other 58,062 52,298 110,360 61,105 46,751 107,856 Total $ 820,257 $ 1,472,284 $ 2,292,541 $ 876,077 $ 1,442,003 $ 2,318,080 ———————————— (1) Insurance obligations are primarily comprised of self-insured claim liabilities. (2) Deferred revenue is primarily related to the non-lease maintenance services component of our ChoiceLease product line. (3) The reduction in restructuring liabilities from December 31, 2019 principally represents cash payments for employee termination costs. The majority of the balance remaining in restructuring liabilities is expected to be paid by the end of 2020. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESEffective Tax RateOur effective income tax rate from continuing operations for the first quarter of 2020 was a benefit of 4.0% as compared to an expense of 32.7% in the first quarter of 2019. In the first quarter of 2020, the tax rate was impacted by the reduction in earnings due to accelerated depreciation charges and the COVID-19 economic effects. Additionally, we recorded a valuation allowance of $13 million on the net deferred tax assets of our U.K. operations on a discrete basis. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
LEASES | LEASES Leases as Lessor The components of lease income were as follows: Three months ended March 31, 2020 2019 (In thousands) Operating leases Lease income related to ChoiceLease $ 399,588 $ 360,309 Lease income related to commercial rental (1) 195,695 219,171 Sales type leases Interest income related to net investment in leases $ 11,644 $ 11,456 Variable lease income excluding commercial rental (1) $ 65,507 $ 55,439 ———————————— (1) Lease income related to commercial rental includes both fixed and variable lease income. Variable lease income is approximately 15% to 25% of total commercial rental income based on management's internal estimates. The components of net investment in sales-type leases were as follows: March 31, 2020 December 31, 2019 (In thousands) Net investment in the lease — lease payment receivable $ 568,911 $ 553,076 Net investment in the lease — unguaranteed residual value in assets 42,920 44,952 611,831 598,028 Estimated loss allowance (1) (3,591) (673) Total (2) $ 608,240 $ 597,355 ———————————— (1) Amount as of March 31, 2020 reflects an immaterial cumulative-effect adjustment in connection with the adoption of the new credit loss standard (refer to Note 2 for further information). (2) Net investment in the sales-type lease are included in "Receivables, net" and "Sales-type leases and other assets" in the Condensed Consolidated Balance Sheets. |
LEASES | LEASES Leases as Lessor The components of lease income were as follows: Three months ended March 31, 2020 2019 (In thousands) Operating leases Lease income related to ChoiceLease $ 399,588 $ 360,309 Lease income related to commercial rental (1) 195,695 219,171 Sales type leases Interest income related to net investment in leases $ 11,644 $ 11,456 Variable lease income excluding commercial rental (1) $ 65,507 $ 55,439 ———————————— (1) Lease income related to commercial rental includes both fixed and variable lease income. Variable lease income is approximately 15% to 25% of total commercial rental income based on management's internal estimates. The components of net investment in sales-type leases were as follows: March 31, 2020 December 31, 2019 (In thousands) Net investment in the lease — lease payment receivable $ 568,911 $ 553,076 Net investment in the lease — unguaranteed residual value in assets 42,920 44,952 611,831 598,028 Estimated loss allowance (1) (3,591) (673) Total (2) $ 608,240 $ 597,355 ———————————— (1) Amount as of March 31, 2020 reflects an immaterial cumulative-effect adjustment in connection with the adoption of the new credit loss standard (refer to Note 2 for further information). (2) Net investment in the sales-type lease are included in "Receivables, net" and "Sales-type leases and other assets" in the Condensed Consolidated Balance Sheets. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Weighted Average Interest Rate March 31, 2020 Maturities March 31, December 31, (In thousands) Debt: U.S. commercial paper (1) 2.05% 2023 $ 713,464 $ 511,486 Canadian commercial paper (1) 1.72% 2023 33,409 136,199 Trade receivables program 1.46% 2021 300,000 — Global revolving credit facility 2.70% 2023 234,565 8,104 Unsecured U.S. notes — Medium-term notes (1)(2) 3.19% 2020-2026 5,570,822 5,965,064 Unsecured U.S. obligations 3.41% 2024 200,000 200,000 Unsecured foreign obligations 2.36% 2020-2024 310,634 270,719 Asset-backed U.S. obligations (3) 2.50% 2020-2026 784,632 807,374 Finance lease obligations and other 2020-2073 50,584 51,717 8,198,110 7,950,663 Debt issuance costs (23,740) (25,875) Total debt 8,174,370 7,924,788 Short-term debt and current portion of long-term debt (853,527) (1,154,564) Long-term debt $ 7,320,843 $ 6,770,224 ———————————— (1) Amounts are net of unamortized original issue discounts of $5 million and $6 million as of March 31, 2020 and December 31, 2019, respectively. (2) Amounts are inclusive of the fair market values of our hedging instruments on our notes of assets of $6 million as of March 31, 2020. The fair market values of our hedging instruments were not material as of December 31, 2019. The notional amount of the executed interest rate swaps designated as fair value hedges was $375 million and $525 million as of March 31, 2020 and December 31, 2019, respectively. (3) Asset-backed U.S. obligations are related to financing transactions backed by a portion of our revenue earning equipment. The following table includes our proceeds from borrowings and repayment of debt for the three months ended March 31, 2020. Debt Proceeds Debt Repayments (in thousands) (in thousands) Trade receivables program $ 300,000 2.65% Medium-term notes (due March 2020) $ 400,000 Unsecured foreign term loans (1.71% due February 2021 and 1.89% due February 2023) 177,926 Unsecured foreign term loans (1.71% due March 2020 and 1.89% due March 2020) 177,926 Canada term loans (2.94% due February 2021 and 2.99% due February 2022) 60,132 Asset-backed U.S. obligations 27,252 Canada term loan (3.44% due February 2023) 18,791 Canada term loan, finance lease obligations, and other repayments 22,523 Total debt proceeds $ 556,849 Total debt repaid $ 627,701 We maintain a $1.4 billion global revolving credit facility with a syndicate of twelve lending institutions, which matures in September 2023 . The agreement provides for annual facility fees that range from 7.5 basis points to 20 basis points based on our long-term credit ratings. The annual facility fee is 10 basis points as of March 31, 2020, which applies to the total facility size of $1.4 billion. The credit facility is primarily used to finance working capital, but can also be used to issue up to $75 million in letters of credit (there were no letters of credit outstanding against the facility at March 31, 2020). At our option, the interest rate on borrowings under the credit facility is based on LIBOR, prime, federal funds or local equivalent rates. The credit facility contains no provisions limiting its availability in the event of a material adverse change to our business operations; however, the credit facility does contain standard representations and warranties, events of default, cross-default provisions and certain affirmative and negative covenants. As of March 31, 2020, there was $419 million available under the credit facility. In order to maintain availability of funding, we must maintain a ratio of debt to consolidated net worth of less than or equal to 300%. Net worth, as defined in the credit facility, represents shareholders' equity excluding any accumulated other comprehensive income or loss associated with our pension and other postretirement plans. As of March 31, 2020, the ratio was 242%. Our global revolving credit facility enables us to refinance short-term obligations on a long-term basis. Short-term commercial paper obligations are classified as long-term as we have both the intent and ability to refinance on a long-term basis. As of March 31, 2020, we have reflected all maturities within the next twelve months in the current portion of long-term debt even though we may refinance these obligations on a long-term basis and have the ability to do so under our revolving credit facility. As of December 31, 2019, we classified $227 million of short-term commercial paper, $400 million of the current portion of long-term debt and $201 million of short-term debt as long-term debt as we had the intent and ability to refinance the current portion of these long-term debt on a long-term basis. In April 2020, we issued $400 million of unsecured 4.625% medium-term notes maturing in June 2025 and executed a $400 million senior floating-rate unsecured 364-day term loan. The proceeds of these notes were used to enhance our liquidity position and for working capital and other general corporate purposes. We have a trade receivables purchase and sale program, pursuant to which we sell certain of our domestic trade accounts receivable to a bankruptcy remote, consolidated subsidiary of Ryder, that in turn sells, on a revolving basis, an ownership interest in certain of these accounts receivable to a committed purchaser. The subsidiary is considered a VIE and is consolidated based on our control of the entity’s activities. We use this program to provide additional liquidity to fund our operations, particularly when it is cost effective to do so. The costs under the program may vary based on changes in interest rates. In February 2020, we increased the amount of available proceeds from our trade receivables purchase and sale program t o $300 million expiring in June 2020. In April, we extended the maturity of the trade receivables program to April 2021. We had letters of credit and surety bonds outstanding of $453 million as of both March 31, 2020 and December 31, 2019, which primarily guarantee the payment of insurance claims. The fair value of total debt (excluding capital lease and asset-backed U.S. obligations) was approximately $7 billion as of both March 31, 2020 and December 31, 2019. For publicly-traded debt, estimates of fair value were based on market prices. For other debt, fair value was estimated based on a model-driven approach using rates currently available to us for debt with similar terms and remaining maturities. The fair value measurements of our publicly-traded debt and other debt were classified within Level 2 of the fair value hierarchy. The carrying amounts reported in the Condensed Consolidated Balance Sheets for “Cash and cash equivalents,” “Receivables, net” and “Accounts payable” approximate fair value because of the immediate or short-term maturities of these financial instruments. |
SHARE REPURCHASE PROGRAMS
SHARE REPURCHASE PROGRAMS | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
SHARE REPURCHASE PROGRAMS | SHARE REPURCHASE PROGRAMS We maintain a share repurchase program intended to mitigate the dilutive impact of shares issued under our employee stock plans. In December 2019, our Board of Directors authorized management to have the ability to repurchase up to 1.5 million shares of common stock, the sum of which will not exceed the number of shares issued to employees under our employee stock plans from December 1, 2019 to December 11, 2021. Share repurchases of common stock are made periodically in open-market transactions and are subject to market conditions, legal requirements, and other factors. Management may establish prearranged written plans under Rule 10b5-1 of the Securities Exchange Act of 1934 as part of the program, which allow for share repurchases during our quarterly blackout periods as set forth in the trading plan. During the three months ended March 31, 2020 and March 31, 2019, we repurchased approximately 303,000 shares for $12 million and 226,000 shares for $14 million, respectively. The 2019 share repurchase program has been put on hold temporarily due to the impact of COVID-19. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The following summary sets forth the components of accumulated other comprehensive loss, net of tax: Currency Net Actuarial Loss (1) Prior Service Cost (1) Accumulated (In thousands) December 31, 2019 $ (169,032) $ (656,313) $ (11,146) $ (836,491) Amortization — 6,013 153 6,166 Other current period change (84,620) — — (84,620) March 31, 2020 $ (253,652) $ (650,300) $ (10,993) $ (914,945) Currency Net Actuarial Loss (1) Prior Service Cost (1) Accumulated (In thousands) December 31, 2018 $ (199,713) $ (700,384) $ (11,537) $ (911,634) Amortization — 5,307 147 5,454 Other current period change 15,762 — — 15,762 March 31, 2019 $ (183,951) $ (695,077) $ (11,390) $ (890,418) _______________________ (1) These amounts are included in the computation of net pension expense. See Note 15, "Employee Benefit Plans," for additional information. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table presents the calculation of basic and diluted earnings (loss) per common share from continuing operations: Three months ended March 31, 2020 2019 (In thousands, except per share amounts) Earnings (loss) per share — Basic: Earnings (loss) from continuing operations $ (109,129) $ 45,890 Less: Distributed and undistributed earnings allocated to unvested stock (118) (177) Earnings (loss) from continuing operations available to common shareholders — Basic $ (109,247) $ 45,713 Weighted average common shares outstanding — Basic 52,284 52,418 Earnings (loss) from continuing operations per common share — Basic $ (2.09) $ 0.87 Earnings (loss) per share — Diluted: Earnings (loss) from continuing operations $ (109,129) $ 45,890 Less: Distributed and undistributed earnings allocated to unvested stock (118) (177) Earnings (loss) from continuing operations available to common shareholders — Diluted $ (109,247) $ 45,713 Weighted average common shares outstanding — Basic 52,284 52,418 Effect of dilutive equity awards — 223 Weighted average common shares outstanding — Diluted 52,284 52,641 Earnings (loss) from continuing operations per common share — Diluted $ (2.09) $ 0.87 Anti-dilutive equity awards not included above 3,134 1,682 |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION PLANS | SHARE-BASED COMPENSATION PLANS The following table provides information on share-based compensation expense and income tax benefits recognized during the periods: Three months ended March 31, 2020 2019 (In thousands) Stock option and stock purchase plans $ 1,357 $ 1,819 Unvested stock awards 1,734 5,580 Share-based compensation expense 3,091 7,399 Income tax benefit (178) (1,160) Share-based compensation expense, net of tax $ 2,913 $ 6,239 Total unrecognized pre-tax compensation exp ense related to all share-based compensation arrangements at March 31, 2020 was $66 million and is expected to be recognized over a weighted-average period of 2.4 years . The following table is a summary of the awards granted under the Plans during the periods presented: Three months ended March 31, 2020 Shares Granted Weighted-Average (Shares in thousands) Performance-based restricted stock rights 292 $ 37.47 Time-vested restricted stock rights 557 38.45 Total 849 $ 38.11 Performance-based restricted stock awards (PBRSRs) include a performance-based vesting condition. PBRSRs are awarded based on various revenue, return-based and cash flow performance targets and a majority of PBRSRs include a total shareholder return (TSR) modifier. The fair values of the PBRSRs that include a TSR modifier are estimated using a lattice-based option-pricing valuation model that incorporates a Monte-Carlo simulation. The fair value of PBRSRs that do not include a TSR modifier is determined and fixed on the grant date based on our stock price on the date of grant. Share-based compensation expense is recognized on a straight-line basis over the vesting period, based upon the probability that the performance target will be met. Restricted stock awards are unvested stock rights that are granted to employees and entitle the holder to shares of common stock as the award vests. Time-vested restricted stock rights typically vest ratably over three years regardless of company performance. The fair value of the time-vested awards is determined and fixed based on our stock price on the date of grant. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Components of net pension expense were as follows: Three months ended March 31, 2020 2019 (In thousands) Pension Benefits Company-administered plans: Service cost $ 3,213 $ 3,032 Interest cost 17,532 21,469 Expected return on plan assets (24,263) (22,676) Amortization of: Net actuarial loss 7,715 7,610 Prior service cost 187 179 4,384 9,614 Union-administered plans 2,779 2,457 Net pension expense $ 7,163 $ 12,071 Company-administered plans: U.S. $ 6,778 $ 11,473 Non-U.S. (2,394) (1,859) 4,384 9,614 Union-administered plans 2,779 2,457 Net pension expense $ 7,163 $ 12,071 Non-operating pension costs include the amortization of net actuarial loss and prior service cost, interest cost and expected return on plan assets components of pension and postretirement benefit costs, as well as any significant charges for settlements or curtailments if recognized. During the three months ended March 31, 2020, we contributed |
OTHER ITEMS IMPACTING COMPARABI
OTHER ITEMS IMPACTING COMPARABILITY | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
OTHER ITEMS IMPACTING COMPARABILITY | OTHER ITEMS IMPACTING COMPARABILITY Our primary measure of segment performance as shown in Note 19, "Segment Reporting," excludes certain items we do not believe are representative of the ongoing operations of the segment. Excluding these items from our segment measure of performance allows for better year over year comparison: Three months ended March 31, 2020 2019 (In thousands) Restructuring and other, net $ 11,263 $ 2,588 ERP implementation costs 10,326 3,590 Total other items impacting comparability $ 21,589 $ 6,178 During the three months ended March 31, 2020 and 2019, other items impacting comparability included: • Restructuring and other, net — For the three months ended March 31, 2020, this primarily included expenses related to restructuring activities undertaken in late 2019 and professional fees related to the pursuit of a commercial claim, as well as net losses related to our ChoiceLease insurance liability program which was discontinued in January 2020. The exit of this program is estimated to be completed in the second quarter of 2021. For the three months ended March 31, 2019, this primarily related to consulting fees related to cost saving initiatives, professional fees related to the pursuit of a commercial claim, and income from our Singapore operations that shut down in 2019. • ERP implementation costs |
OTHER MATTERS
OTHER MATTERS | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
OTHER MATTERS | OTHER MATTERS We are a party to various claims, complaints and proceedings arising in the ordinary course of our continuing business operations including, but not limited to, those relating to commercial and employment claims, environmental matters, risk management matters (e.g., vehicle liability, workers’ compensation, etc.) and administrative assessments primarily associated with operating taxes. We have established loss provisions for matters in which losses are probable and can be reasonably estimated. We believe that the resolution of these claims, complaints and legal proceedings will not have a material effect on our condensed consolidated financial statements. Our estimates regarding potential losses and materiality are based on our judgment and assessment of the claims utilizing currently available information. Although we will continue to reassess our reserves and estimates based on future developments, our objective assessment of the legal merits of such claims may not always be predictive of the outcome and actual results may vary from our current estimates. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Three months ended March 31, 2020 2019 (In thousands) Interest paid $ 60,566 $ 52,490 Income taxes paid 5,096 3,611 Right-of-use assets obtained in exchange for lease obligations: Finance leases 3,744 2,026 Operating leases 23,877 16,605 March 31, 2020 December 31, 2019 (In thousands) Capital expenditures acquired but not yet paid $ 144,538 $ 185,264 |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Ryder is a global leader in transportation and supply chain management solutions. Our operating segments are aggregated into reportable business segments based upon similar economic characteristics, products, services, customers and delivery methods. We report our financial performance based on three business segments: (1) FMS, which provides full service leasing and leasing with flexible maintenance options, commercial rental, and contract or transactional maintenance services of trucks, tractors and trailers to customers principally in the U.S., Canada and the U.K.; (2) SCS, which provides integrated logistics solutions, including distribution, management, dedicated transportation and professional services in North America; and (3) DTS, which provides turnkey transportation solutions in the U.S. that includes dedicated vehicles, drivers and engineering, and administrative support. Dedicated transportation services provided as part of an operationally integrated, multi-service, supply chain solution to SCS customers are primarily reported in the SCS business segment. Our primary measurement of segment financial performance, defined as segment “Earnings from continuing operations before taxes” (EBT), includes an allocation of Central Support Services (CSS) and excludes non-operating pension costs and certain other items as discussed in Note 16, "Other Items Impacting Comparability." CSS represents those costs incurred to support all business segments, including finance and procurement, corporate services, human resources, information technology, public affairs, legal, marketing and corporate communications. The objective of the EBT measurement is to provide clarity on the profitability of each business segment and, ultimately, to hold leadership of each segment accountable for their allocated share of CSS costs. Certain costs are not attributable to any segment and remain unallocated in CSS, including costs for investor relations, public affairs and certain executive compensation. CSS costs attributable to the business segments are predominantly allocated to FMS, SCS and DTS as follows: • Finance, corporate services, and health and safety — allocated based upon estimated and planned resource utilization; • Human resources — allocated under various methods, including based on estimated utilization and number of personnel supported; • Information technology — principally allocated based upon utilization-related metrics such as number of users or minutes of CPU time. Customer-related project costs and expenses are allocated to the business segment responsible for the project; and • Other — represents legal and other centralized costs and expenses including certain share-based incentive compensation costs. Expenses, where allocated, are based primarily on the number of personnel supported. Our FMS segment leases revenue earning equipment as well as provides rental vehicles, fuel, maintenance and other ancillary services to the SCS and DTS segments. EBT related to inter-segment equipment and services billed to SCS and DTS customers (equipment contribution) are included in both FMS and the segment that served the customer and then eliminated upon consolidation (presented as “Eliminations”). Inter-segment EBT allocated to SCS and DTS includes earnings related to equipment used in providing services to SCS and DTS customers. Segment 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. We do not record right-of-use assets or liabilities for our intercompany operating leases between FMS and SCS and DTS business segments. The following table sets forth financial information for each of our segments and provide a reconciliation between segment EBT and earnings from continuing operations before income taxes. Three months ended March 31, 2020 2019 (In thousands) Revenue: Fleet Management Solutions: ChoiceLease $ 792,206 $ 740,059 SelectCare 136,146 135,779 Commercial rental 205,766 236,148 Other 23,426 23,227 Fuel services revenue 173,335 207,866 ChoiceLease liability insurance revenue (1) 9,358 8,520 Fleet Management Solutions 1,340,237 1,351,599 Supply Chain Solutions 628,447 635,671 Dedicated Transportation Solutions 334,888 349,621 Eliminations (142,266) (156,564) Total revenue $ 2,161,306 $ 2,180,327 Earnings (Loss) Before Taxes: Fleet Management Solutions $ (114,574) $ 60,911 Supply Chain Solutions 31,025 32,317 Dedicated Transportation Solutions 12,180 17,412 Eliminations (10,069) (17,302) (81,438) 93,338 Unallocated Central Support Services (9,386) (12,547) Non-operating pension costs (2) (1,221) (6,462) Other items impacting comparability, net (3) (21,589) (6,178) Earnings (loss) from continuing operations before income taxes $ (113,634) $ 68,151 _______________ (1) In the first quarter of 2020, we announced our plan to exit the extension of our liability insurance coverage for ChoiceLease customers. The exit of this program is estimated to be completed in the second quarter of 2021. We have reclassed the revenues associated with this program from our ChoiceLease revenues for better comparability of our on-going operations as this is now consistent with management reporting. (2) Non-operating pension costs include the amortization of net actuarial loss and prior service costs, interest cost and expected return on plan assets components of pension and postretirement benefit costs and pension settlement charges if one has occurred. (3) Refer to Note 16, “Other Items Impacting Comparability,” for a discussion of items excluded from our primary measure of segment performance. The following table sets forth the capital expenditures paid for each of our segments. FMS SCS DTS CSS Total (In thousands) Three months ended March 31, 2020 Capital expenditures paid $ 423,116 6,006 424 1,414 $ 430,960 Three months ended March 31, 2019 Capital expenditures paid $ 1,006,129 12,756 343 7,483 $ 1,026,711 |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Reference Rate Reform In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848). This update provides optional expedients for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued at the end of 2021 because of reference rate reform. The update is effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact on our consolidated financial position, results of operations, and cash flows. Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This pronouncement enhances and simplifies various aspects of income tax accounting guidance. Among other things, the amendment removes the year-to-date loss limitations in interim-period tax accounting and requires entities to reflect the effect of an enacted change in tax laws in the interim period that includes the enactment date of the new legislation. The standard is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. We have early adopted this update in the first quarter of 2020, under the modified retrospective basis and prospective transition approaches, and it did not have a material impact on our consolidated financial position, results of operations, and cash flows. Cloud Computing Arrangements In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal Use Software (Topic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which addresses a customer’s accounting for implementation costs incurred in a cloud computing arrangement (CCA) that is a service contract. The new standard aligns the accounting for costs incurred to implement a CCA that is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The standard is effective for fiscal years beginning after December 15, 2019. We adopted the new standard prospectively on January 1, 2020 and it did not have a material impact on our consolidated financial position, results of operations, and cash flows. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326). The new standard modifies the measurement of expected credit losses of certain financial instruments, including accounts receivable (excluding those related to operating leases) and net investments in sales-type leases. Among other things, these amendments require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The standard is effective for fiscal years beginning after December 15, 2019. The standard requires a cumulative-effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is effective. Periods prior to the adoption date that are presented for comparative purposes are not adjusted. We adopted this new standard as of January 1, 2020 and it did not have a material impact on our consolidated financial position, results of operations, and cash flows. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from External Customers by Geographic Areas | The following tables disaggregate our revenue recognized by primary geographical market by our FMS, SCS and DTS reportable business segments, as well as by industry for SCS. Refer to Note 19, "Segment Reporting," for the disaggregation of our revenue by major products/service line. Primary Geographical Markets Three months ended March 31, 2020 FMS SCS DTS Eliminations Total (In thousands) United States $ 1,197,521 $ 522,525 $ 334,888 $ (137,295) $ 1,917,639 Canada 70,765 53,552 — (4,971) 119,346 Europe 71,951 — — — 71,951 Mexico — 52,370 — — 52,370 Total Revenues $ 1,340,237 $ 628,447 $ 334,888 $ (142,266) $ 2,161,306 Three months ended March 31, 2019 FMS SCS DTS Eliminations Total (In thousands) United States $ 1,198,943 $ 529,393 $ 349,621 $ (151,163) $ 1,926,794 Canada 74,014 49,708 — (5,401) 118,321 Europe 78,642 — — — 78,642 Mexico — 53,277 — — 53,277 Singapore — 3,293 — — 3,293 Total Revenues $ 1,351,599 $ 635,671 $ 349,621 $ (156,564) $ 2,180,327 |
Disaggregation of Revenue | Our SCS business segment includes revenue from the below industries: Three months ended March 31, 2020 2019 (In thousands) Automotive $ 249,925 $ 253,679 Technology and healthcare 91,133 113,668 Consumer package goods and retail 229,932 217,098 Industrial and other 57,457 51,226 Total SCS Revenues $ 628,447 $ 635,671 |
RECEIVABLES, NET (Tables)
RECEIVABLES, NET (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Receivables, Net | March 31, 2020 December 31, 2019 (In thousands) Trade $ 1,039,932 $ 1,060,298 Sales-type leases 140,440 135,353 Other, primarily warranty and insurance 63,009 55,600 1,243,381 1,251,251 Allowance for credit losses and other (40,562) (22,761) Total $ 1,202,819 $ 1,228,490 |
REVENUE EARNING EQUIPMENT, NET
REVENUE EARNING EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Earning Equipment [Abstract] | |
Summary of revenue earning equipment | March 31, 2020 December 31, 2019 Cost Accumulated Net Book Value (1) Cost Accumulated Net Book Value (1) (In thousands) Held for use: ChoiceLease $ 12,031,414 $ (4,173,629) $ 7,857,785 $ 12,223,179 $ (4,125,342) $ 8,097,837 Commercial rental 2,986,622 (1,000,206) 1,986,416 3,200,403 (1,049,850) 2,150,553 Held for sale 927,277 (737,862) 189,415 748,435 (569,161) 179,274 Total $ 15,945,313 $ (5,911,697) $ 10,033,616 $ 16,172,017 $ (5,744,353) $ 10,427,664 ———————————— |
Fair value, assets | The following table presents our assets held for sale that are measured at fair value on a nonrecurring basis and considered a Level 3 fair value measurement: Total Losses (2) Three months ended March 31, March 31, 2020 December 31, 2019 2020 2019 (In thousands) Assets held for sale: Revenue earning equipment (1) : Trucks $ 46,129 $ 39,009 $ 11,062 $ 11,546 Tractors 85,302 73,359 8,453 4,968 Trailers 3,251 2,206 1,993 180 Total assets at fair value $ 134,682 $ 114,574 $ 21,508 $ 16,694 ———————————— (1) Assets held for sale in the table above only include the portion of revenue earning equipment held for sale where net book values exceeded fair values and fair value valuation adjustments were recorded. The net book value of assets held for sale that were less than fair value was $55 million and $65 million as of March 31, 2020 and December 31, 2019, respectively. (2) Total losses represent fair value valuation adjustments for all vehicles reclassified to held for sale throughout the period for which fair value was less than net book value. |
Gain and losses revenue earning equipment | The components of used vehicle sales, net were as follows: Three months ended March 31, 2020 2019 (In thousands) Losses (gains) on vehicle sales, net $ (824) $ (8,477) Losses from valuation adjustments 21,508 16,694 Used vehicle sales, net $ 20,684 $ 8,217 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill by Business Segment | The carrying amount of goodwill attributable to each reportable business segment with changes therein was as follows: FMS SCS DTS Total (In thousands) Balance at December 31, 2019 $ 243,702 $ 190,515 $ 40,808 $ 475,025 Foreign currency translation adjustments (398) (448) — (846) Balance at March 31, 2020 $ 243,304 $ 190,067 $ 40,808 $ 474,179 |
Schedule of Intangible Assets | The following table includes the carrying value of our intangible assets attributable to each reportable business segment (in thousands): March 31, 2020 FMS SCS DTS CSS Total Indefinite lived intangible assets - Trade name $ — $ — $ — $ 8,731 $ 8,731 Finite lived intangible assets: Customer relationship intangibles 56,050 49,518 7,582 — 113,150 Other intangibles, primarily trade name 1,636 731 — — 2,367 57,686 50,249 7,582 8,731 124,248 Accumulated amortization (49,970) (21,222) (4,383) — (75,575) Total $ 7,716 $ 29,027 $ 3,199 $ 8,731 $ 48,673 December 31, 2019 FMS SCS DTS CSS Total Indefinite lived intangible assets - Trade name $ — $ — $ — $ 8,731 $ 8,731 Finite lived intangible assets: Customer relationship intangibles 56,050 49,518 7,582 — 113,150 Other intangibles, primarily trade name 1,636 731 — — 2,367 57,686 50,249 7,582 8,731 124,248 Accumulated amortization (49,031) (20,047) (4,265) — (73,343) Total $ 8,655 $ 30,202 $ 3,317 $ 8,731 $ 50,905 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued Expenses and Other Liabilities | March 31, 2020 December 31, 2019 Accrued Non-Current Total Accrued Non-Current Total (In thousands) Salaries and wages $ 95,604 $ — $ 95,604 $ 126,119 $ — $ 126,119 Deferred compensation 3,791 57,654 61,445 6,436 65,006 71,442 Pension benefits 3,829 411,684 415,513 3,863 413,829 417,692 Other postretirement benefits 1,464 19,624 21,088 1,478 20,187 21,665 Other employee benefits 6,629 — 6,629 21,577 — 21,577 Insurance obligations (1) 165,245 308,631 473,876 163,763 285,838 449,601 Operating taxes 116,514 — 116,514 116,003 — 116,003 Income taxes 7,590 17,972 25,562 2,873 17,484 20,357 Interest 45,224 — 45,224 46,032 — 46,032 Deposits, mainly from customers 78,033 3,250 81,283 82,573 3,065 85,638 Operating lease liabilities 70,314 157,581 227,895 72,285 151,361 223,646 Deferred revenue (2) 162,946 443,590 606,536 165,205 438,482 603,687 Restructuring liabilities (3) 5,012 — 5,012 6,765 — 6,765 Other 58,062 52,298 110,360 61,105 46,751 107,856 Total $ 820,257 $ 1,472,284 $ 2,292,541 $ 876,077 $ 1,442,003 $ 2,318,080 ———————————— (1) Insurance obligations are primarily comprised of self-insured claim liabilities. (2) Deferred revenue is primarily related to the non-lease maintenance services component of our ChoiceLease product line. (3) The reduction in restructuring liabilities from December 31, 2019 principally represents cash payments for employee termination costs. The majority of the balance remaining in restructuring liabilities is expected to be paid by the end of 2020. |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Lease Income - Operating | The components of lease income were as follows: Three months ended March 31, 2020 2019 (In thousands) Operating leases Lease income related to ChoiceLease $ 399,588 $ 360,309 Lease income related to commercial rental (1) 195,695 219,171 Sales type leases Interest income related to net investment in leases $ 11,644 $ 11,456 Variable lease income excluding commercial rental (1) $ 65,507 $ 55,439 ———————————— (1) Lease income related to commercial rental includes both fixed and variable lease income. Variable lease income is approximately 15% to 25% of total commercial rental income based on management's internal estimates. |
Schedule of Lease Income - Sales Type | The components of net investment in sales-type leases were as follows: March 31, 2020 December 31, 2019 (In thousands) Net investment in the lease — lease payment receivable $ 568,911 $ 553,076 Net investment in the lease — unguaranteed residual value in assets 42,920 44,952 611,831 598,028 Estimated loss allowance (1) (3,591) (673) Total (2) $ 608,240 $ 597,355 ———————————— (1) Amount as of March 31, 2020 reflects an immaterial cumulative-effect adjustment in connection with the adoption of the new credit loss standard (refer to Note 2 for further information). (2) Net investment in the sales-type lease are included in "Receivables, net" and "Sales-type leases and other assets" in the Condensed Consolidated Balance Sheets. |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Weighted Average Interest Rate March 31, 2020 Maturities March 31, December 31, (In thousands) Debt: U.S. commercial paper (1) 2.05% 2023 $ 713,464 $ 511,486 Canadian commercial paper (1) 1.72% 2023 33,409 136,199 Trade receivables program 1.46% 2021 300,000 — Global revolving credit facility 2.70% 2023 234,565 8,104 Unsecured U.S. notes — Medium-term notes (1)(2) 3.19% 2020-2026 5,570,822 5,965,064 Unsecured U.S. obligations 3.41% 2024 200,000 200,000 Unsecured foreign obligations 2.36% 2020-2024 310,634 270,719 Asset-backed U.S. obligations (3) 2.50% 2020-2026 784,632 807,374 Finance lease obligations and other 2020-2073 50,584 51,717 8,198,110 7,950,663 Debt issuance costs (23,740) (25,875) Total debt 8,174,370 7,924,788 Short-term debt and current portion of long-term debt (853,527) (1,154,564) Long-term debt $ 7,320,843 $ 6,770,224 ———————————— (1) Amounts are net of unamortized original issue discounts of $5 million and $6 million as of March 31, 2020 and December 31, 2019, respectively. (2) Amounts are inclusive of the fair market values of our hedging instruments on our notes of assets of $6 million as of March 31, 2020. The fair market values of our hedging instruments were not material as of December 31, 2019. The notional amount of the executed interest rate swaps designated as fair value hedges was $375 million and $525 million as of March 31, 2020 and December 31, 2019, respectively. (3) Asset-backed U.S. obligations are related to financing transactions backed by a portion of our revenue earning equipment. The following table includes our proceeds from borrowings and repayment of debt for the three months ended March 31, 2020. Debt Proceeds Debt Repayments (in thousands) (in thousands) Trade receivables program $ 300,000 2.65% Medium-term notes (due March 2020) $ 400,000 Unsecured foreign term loans (1.71% due February 2021 and 1.89% due February 2023) 177,926 Unsecured foreign term loans (1.71% due March 2020 and 1.89% due March 2020) 177,926 Canada term loans (2.94% due February 2021 and 2.99% due February 2022) 60,132 Asset-backed U.S. obligations 27,252 Canada term loan (3.44% due February 2023) 18,791 Canada term loan, finance lease obligations, and other repayments 22,523 Total debt proceeds $ 556,849 Total debt repaid $ 627,701 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss, Net of Tax | The following summary sets forth the components of accumulated other comprehensive loss, net of tax: Currency Net Actuarial Loss (1) Prior Service Cost (1) Accumulated (In thousands) December 31, 2019 $ (169,032) $ (656,313) $ (11,146) $ (836,491) Amortization — 6,013 153 6,166 Other current period change (84,620) — — (84,620) March 31, 2020 $ (253,652) $ (650,300) $ (10,993) $ (914,945) Currency Net Actuarial Loss (1) Prior Service Cost (1) Accumulated (In thousands) December 31, 2018 $ (199,713) $ (700,384) $ (11,537) $ (911,634) Amortization — 5,307 147 5,454 Other current period change 15,762 — — 15,762 March 31, 2019 $ (183,951) $ (695,077) $ (11,390) $ (890,418) _______________________ (1) These amounts are included in the computation of net pension expense. See Note 15, "Employee Benefit Plans," for additional information. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Common Share from Continuing Operations | The following table presents the calculation of basic and diluted earnings (loss) per common share from continuing operations: Three months ended March 31, 2020 2019 (In thousands, except per share amounts) Earnings (loss) per share — Basic: Earnings (loss) from continuing operations $ (109,129) $ 45,890 Less: Distributed and undistributed earnings allocated to unvested stock (118) (177) Earnings (loss) from continuing operations available to common shareholders — Basic $ (109,247) $ 45,713 Weighted average common shares outstanding — Basic 52,284 52,418 Earnings (loss) from continuing operations per common share — Basic $ (2.09) $ 0.87 Earnings (loss) per share — Diluted: Earnings (loss) from continuing operations $ (109,129) $ 45,890 Less: Distributed and undistributed earnings allocated to unvested stock (118) (177) Earnings (loss) from continuing operations available to common shareholders — Diluted $ (109,247) $ 45,713 Weighted average common shares outstanding — Basic 52,284 52,418 Effect of dilutive equity awards — 223 Weighted average common shares outstanding — Diluted 52,284 52,641 Earnings (loss) from continuing operations per common share — Diluted $ (2.09) $ 0.87 Anti-dilutive equity awards not included above 3,134 1,682 |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation Expense and Income Tax Benefits Recognized During the Periods | The following table provides information on share-based compensation expense and income tax benefits recognized during the periods: Three months ended March 31, 2020 2019 (In thousands) Stock option and stock purchase plans $ 1,357 $ 1,819 Unvested stock awards 1,734 5,580 Share-based compensation expense 3,091 7,399 Income tax benefit (178) (1,160) Share-based compensation expense, net of tax $ 2,913 $ 6,239 |
Share-based Compensation, Activity | The following table is a summary of the awards granted under the Plans during the periods presented: Three months ended March 31, 2020 Shares Granted Weighted-Average (Shares in thousands) Performance-based restricted stock rights 292 $ 37.47 Time-vested restricted stock rights 557 38.45 Total 849 $ 38.11 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | Components of net pension expense were as follows: Three months ended March 31, 2020 2019 (In thousands) Pension Benefits Company-administered plans: Service cost $ 3,213 $ 3,032 Interest cost 17,532 21,469 Expected return on plan assets (24,263) (22,676) Amortization of: Net actuarial loss 7,715 7,610 Prior service cost 187 179 4,384 9,614 Union-administered plans 2,779 2,457 Net pension expense $ 7,163 $ 12,071 Company-administered plans: U.S. $ 6,778 $ 11,473 Non-U.S. (2,394) (1,859) 4,384 9,614 Union-administered plans 2,779 2,457 Net pension expense $ 7,163 $ 12,071 |
OTHER ITEMS IMPACTING COMPARA_2
OTHER ITEMS IMPACTING COMPARABILITY (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other Items Impacting Comparability Table | Excluding these items from our segment measure of performance allows for better year over year comparison: Three months ended March 31, 2020 2019 (In thousands) Restructuring and other, net $ 11,263 $ 2,588 ERP implementation costs 10,326 3,590 Total other items impacting comparability $ 21,589 $ 6,178 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Three months ended March 31, 2020 2019 (In thousands) Interest paid $ 60,566 $ 52,490 Income taxes paid 5,096 3,611 Right-of-use assets obtained in exchange for lease obligations: Finance leases 3,744 2,026 Operating leases 23,877 16,605 March 31, 2020 December 31, 2019 (In thousands) Capital expenditures acquired but not yet paid $ 144,538 $ 185,264 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Financial information of business segments | The following table sets forth financial information for each of our segments and provide a reconciliation between segment EBT and earnings from continuing operations before income taxes. Three months ended March 31, 2020 2019 (In thousands) Revenue: Fleet Management Solutions: ChoiceLease $ 792,206 $ 740,059 SelectCare 136,146 135,779 Commercial rental 205,766 236,148 Other 23,426 23,227 Fuel services revenue 173,335 207,866 ChoiceLease liability insurance revenue (1) 9,358 8,520 Fleet Management Solutions 1,340,237 1,351,599 Supply Chain Solutions 628,447 635,671 Dedicated Transportation Solutions 334,888 349,621 Eliminations (142,266) (156,564) Total revenue $ 2,161,306 $ 2,180,327 Earnings (Loss) Before Taxes: Fleet Management Solutions $ (114,574) $ 60,911 Supply Chain Solutions 31,025 32,317 Dedicated Transportation Solutions 12,180 17,412 Eliminations (10,069) (17,302) (81,438) 93,338 Unallocated Central Support Services (9,386) (12,547) Non-operating pension costs (2) (1,221) (6,462) Other items impacting comparability, net (3) (21,589) (6,178) Earnings (loss) from continuing operations before income taxes $ (113,634) $ 68,151 _______________ (1) In the first quarter of 2020, we announced our plan to exit the extension of our liability insurance coverage for ChoiceLease customers. The exit of this program is estimated to be completed in the second quarter of 2021. We have reclassed the revenues associated with this program from our ChoiceLease revenues for better comparability of our on-going operations as this is now consistent with management reporting. (2) Non-operating pension costs include the amortization of net actuarial loss and prior service costs, interest cost and expected return on plan assets components of pension and postretirement benefit costs and pension settlement charges if one has occurred. (3) Refer to Note 16, “Other Items Impacting Comparability,” for a discussion of items excluded from our primary measure of segment performance. The following table sets forth the capital expenditures paid for each of our segments. FMS SCS DTS CSS Total (In thousands) Three months ended March 31, 2020 Capital expenditures paid $ 423,116 6,006 424 1,414 $ 430,960 Three months ended March 31, 2019 Capital expenditures paid $ 1,006,129 12,756 343 7,483 $ 1,026,711 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Lease & related maintenance and rental revenues | $ 927,756 | $ 899,559 | |
Deferred revenue | 606,536 | $ 603,687 | |
Amount of revenue recognized, previously included in deferred revenue | 59,000 | 58,000 | |
Increase in deferred revenue during the period | 67,000 | 57,000 | |
Contracted not recognized revenue | 2,900,000 | ||
Capitalized sales commissions | 101,000 | 105,000 | |
Initial direct costs of leases | 53,000 | 55,000 | |
Amortization of capitalized sales commissions | 11,000 | 11,000 | |
Maintenance Services | |||
Disaggregation of Revenue [Line Items] | |||
Lease & related maintenance and rental revenues | 240,000 | $ 239,000 | |
ChoiceLease | |||
Disaggregation of Revenue [Line Items] | |||
Deferred revenue | $ 590,000 | $ 587,000 |
REVENUE Disaggregation of Reven
REVENUE Disaggregation of Revenue - Geographical (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 2,161,306 | $ 2,180,327 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,917,639 | 1,926,794 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 119,346 | 118,321 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 71,951 | 78,642 |
Mexico | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 52,370 | 53,277 |
Singapore | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3,293 | |
SCS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 628,447 | 635,671 |
Operating Segments | FMS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,340,237 | 1,351,599 |
Operating Segments | FMS | United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,197,521 | 1,198,943 |
Operating Segments | FMS | Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 70,765 | 74,014 |
Operating Segments | FMS | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 71,951 | 78,642 |
Operating Segments | FMS | Mexico | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | FMS | Singapore | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | |
Operating Segments | SCS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 628,447 | 635,671 |
Operating Segments | SCS | United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 522,525 | 529,393 |
Operating Segments | SCS | Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 53,552 | 49,708 |
Operating Segments | SCS | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | SCS | Mexico | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 52,370 | 53,277 |
Operating Segments | SCS | Singapore | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3,293 | |
Operating Segments | DTS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 334,888 | 349,621 |
Operating Segments | DTS | United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 334,888 | 349,621 |
Operating Segments | DTS | Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | DTS | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | DTS | Mexico | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | DTS | Singapore | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | |
Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | (142,266) | (156,564) |
Eliminations | United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | (137,295) | (151,163) |
Eliminations | Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | (4,971) | (5,401) |
Eliminations | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Eliminations | Mexico | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 0 | 0 |
Eliminations | Singapore | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 0 |
REVENUE Disaggregation of Rev_2
REVENUE Disaggregation of Revenue - Industry (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 2,161,306 | $ 2,180,327 |
SCS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 628,447 | 635,671 |
Automotive | SCS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 249,925 | 253,679 |
Technology and healthcare | SCS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 91,133 | 113,668 |
Consumer package goods and retail | SCS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 229,932 | 217,098 |
Industrial and other | SCS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 57,457 | $ 51,226 |
RECEIVABLES, NET - Summary (Det
RECEIVABLES, NET - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||
Trade | $ 1,039,932 | $ 1,060,298 |
Sales-type leases | 140,440 | 135,353 |
Other, primarily warranty and insurance | 63,009 | 55,600 |
Receivables, gross | 1,243,381 | 1,251,251 |
Allowance for credit losses and other | (40,562) | (22,761) |
Total | 1,202,819 | $ 1,228,490 |
Bad debt expense | $ 19,000 |
REVENUE EARNING EQUIPMENT, NE_2
REVENUE EARNING EQUIPMENT, NET - Schedule of Revenue Earning Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue Earning Equipment [Line Items] | ||
Cost | $ 15,945,313 | $ 16,172,017 |
Accumulated Depreciation | (5,911,697) | (5,744,353) |
Net Book Value | 10,033,616 | 10,427,664 |
ChoiceLease | ||
Revenue Earning Equipment [Line Items] | ||
Cost | 12,031,414 | 12,223,179 |
Accumulated Depreciation | (4,173,629) | (4,125,342) |
Net Book Value | 7,857,785 | 8,097,837 |
Commercial rental | ||
Revenue Earning Equipment [Line Items] | ||
Cost | 2,986,622 | 3,200,403 |
Accumulated Depreciation | (1,000,206) | (1,049,850) |
Net Book Value | 1,986,416 | 2,150,553 |
Held for sale | ||
Revenue Earning Equipment [Line Items] | ||
Cost | 927,277 | 748,435 |
Accumulated Depreciation | (737,862) | (569,161) |
Net Book Value | 189,415 | 179,274 |
Assets held under capital leases | ||
Revenue Earning Equipment [Line Items] | ||
Cost | 12,000 | 12,000 |
Accumulated Depreciation | $ (8,000) | $ (8,000) |
REVENUE EARNING EQUIPMENT, NE_3
REVENUE EARNING EQUIPMENT, NET - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Accelerated depreciation | $ 27 |
Valuation adjustments | $ 21 |
REVENUE EARNING EQUIPMENT, NE_4
REVENUE EARNING EQUIPMENT, NET - Level 3 Fair Value Measurement (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenue Earning Equipment [Line Items] | |||
Total losses | $ 21,508 | $ 16,694 | |
Net book value of assets held for sale | 55,000 | $ 65,000 | |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring | |||
Revenue Earning Equipment [Line Items] | |||
Assets held for sale | 134,682 | 114,574 | |
Total losses | 21,508 | 16,694 | |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring | Trucks | |||
Revenue Earning Equipment [Line Items] | |||
Assets held for sale | 46,129 | 39,009 | |
Total losses | 11,062 | 11,546 | |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring | Tractors | |||
Revenue Earning Equipment [Line Items] | |||
Assets held for sale | 85,302 | 73,359 | |
Total losses | 8,453 | 4,968 | |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring | Trailers | |||
Revenue Earning Equipment [Line Items] | |||
Assets held for sale | 3,251 | $ 2,206 | |
Total losses | $ 1,993 | $ 180 |
REVENUE EARNING EQUIPMENT, NE_5
REVENUE EARNING EQUIPMENT, NET - Recognized Gains on Used Vehicles (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue Earning Equipment [Abstract] | ||
Losses (gains) on vehicle sales, net | $ (824) | $ (8,477) |
Losses from valuation adjustments | 21,508 | 16,694 |
Used vehicle sales, net | $ 20,684 | $ 8,217 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill Summary (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, gross | $ 475,025 |
Foreign currency translation adjustments | (846) |
Goodwill, gross | 474,179 |
FMS | |
Goodwill [Roll Forward] | |
Goodwill, gross | 243,702 |
Foreign currency translation adjustments | (398) |
Goodwill, gross | 243,304 |
SCS | |
Goodwill [Roll Forward] | |
Goodwill, gross | 190,515 |
Foreign currency translation adjustments | (448) |
Goodwill, gross | 190,067 |
DTS | |
Goodwill [Roll Forward] | |
Goodwill, gross | 40,808 |
Foreign currency translation adjustments | 0 |
Goodwill, gross | $ 40,808 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Goodwill Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill [Line Items] | ||
Goodwill | $ 474,179 | $ 475,025 |
Fleet Management Solutions - North America | ||
Goodwill [Line Items] | ||
Percentage of fair value in excess of carrying amount | 5.00% | |
Goodwill | $ 243,000 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | $ 124,248 | $ 124,248 |
Accumulated amortization | (75,575) | (73,343) |
Intangible assets, net | 48,673 | 50,905 |
Customer relationship intangibles | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived intangible assets | 113,150 | 113,150 |
Other intangibles, primarily trade name | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived intangible assets | 2,367 | 2,367 |
Trade Names | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Indefinite lived intangible assets — Trade name | 8,731 | 8,731 |
FMS | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | 57,686 | 57,686 |
Accumulated amortization | (49,970) | (49,031) |
Intangible assets, net | 7,716 | 8,655 |
FMS | Customer relationship intangibles | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived intangible assets | 56,050 | 56,050 |
FMS | Other intangibles, primarily trade name | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived intangible assets | 1,636 | 1,636 |
FMS | Trade Names | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Indefinite lived intangible assets — Trade name | 0 | 0 |
SCS | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | 50,249 | 50,249 |
Accumulated amortization | (21,222) | (20,047) |
Intangible assets, net | 29,027 | 30,202 |
SCS | Customer relationship intangibles | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived intangible assets | 49,518 | 49,518 |
SCS | Other intangibles, primarily trade name | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived intangible assets | 731 | 731 |
SCS | Trade Names | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Indefinite lived intangible assets — Trade name | 0 | 0 |
DTS | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | 7,582 | 7,582 |
Accumulated amortization | (4,383) | (4,265) |
Intangible assets, net | 3,199 | 3,317 |
DTS | Customer relationship intangibles | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived intangible assets | 7,582 | 7,582 |
DTS | Other intangibles, primarily trade name | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived intangible assets | 0 | 0 |
DTS | Trade Names | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Indefinite lived intangible assets — Trade name | 0 | 0 |
CSS | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Intangible assets, gross | 8,731 | 8,731 |
Accumulated amortization | 0 | 0 |
Intangible assets, net | 8,731 | 8,731 |
CSS | Customer relationship intangibles | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived intangible assets | 0 | 0 |
CSS | Other intangibles, primarily trade name | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Finite lived intangible assets | 0 | 0 |
CSS | Trade Names | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Indefinite lived intangible assets — Trade name | $ 8,731 | $ 8,731 |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses | ||
Salaries and wages | $ 95,604 | $ 126,119 |
Deferred compensation | 3,791 | 6,436 |
Pension benefits | 3,829 | 3,863 |
Other postretirement benefits | 1,464 | 1,478 |
Other employee benefits | 6,629 | 21,577 |
Insurance obligations | 165,245 | 163,763 |
Operating taxes | 116,514 | 116,003 |
Income taxes | 7,590 | 2,873 |
Interest | 45,224 | 46,032 |
Deposits, mainly from customers | 78,033 | 82,573 |
Operating lease liabilities | 70,314 | 72,285 |
Deferred revenue | 162,946 | 165,205 |
Restructuring liabilities | 5,012 | 6,765 |
Other | 58,062 | 61,105 |
Total | 820,257 | 876,077 |
Non-Current Liabilities | ||
Salaries and wages | 0 | 0 |
Deferred compensation | 57,654 | 65,006 |
Pension benefits | 411,684 | 413,829 |
Other postretirement benefits | 19,624 | 20,187 |
Other employee benefits | 0 | 0 |
Insurance obligations | 308,631 | 285,838 |
Operating taxes | 0 | 0 |
Income taxes | 17,972 | 17,484 |
Interest | 0 | 0 |
Deposits, mainly from customers | 3,250 | 3,065 |
Operating lease liabilities | 157,581 | 151,361 |
Deferred revenue | 443,590 | 438,482 |
Restructuring liabilities | 0 | 0 |
Other | 52,298 | 46,751 |
Total | 1,472,284 | 1,442,003 |
Total | ||
Salaries and wages | 95,604 | 126,119 |
Deferred compensation | 61,445 | 71,442 |
Pension benefits | 415,513 | 417,692 |
Other postretirement benefits | 21,088 | 21,665 |
Other employee benefits | 6,629 | 21,577 |
Insurance obligations | 473,876 | 449,601 |
Operating taxes | 116,514 | 116,003 |
Income taxes | 25,562 | 20,357 |
Interest | 45,224 | 46,032 |
Deposits, mainly from customers | 81,283 | 85,638 |
Operating lease liabilities | 227,895 | 223,646 |
Deferred revenue | 606,536 | 603,687 |
Restructuring liabilities | 5,012 | 6,765 |
Other | 110,360 | 107,856 |
Total | $ 2,292,541 | $ 2,318,080 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate from continuing operations | 4.00% | 32.70% |
Valuation allowance recorded | $ 13 |
LEASES - Lease Income (Details)
LEASES - Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating leases | ||
Lease income related to ChoiceLease | $ 399,588 | $ 360,309 |
Lease income related to commercial rental | 195,695 | 219,171 |
Sales type leases | ||
Interest income related to net investment in leases | 11,644 | 11,456 |
Variable lease income excluding commercial rental | $ 65,507 | $ 55,439 |
Minimum | ||
Sales type leases | ||
Variable lease income as a percent of commercial rental income | 15.00% | |
Maximum | ||
Sales type leases | ||
Variable lease income as a percent of commercial rental income | 25.00% |
LEASES - Components of Net Inve
LEASES - Components of Net Investment in Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Net investment in the lease — lease payment receivable | $ 568,911 | $ 553,076 |
Net investment in the lease — unguaranteed residual value in assets | 42,920 | 44,952 |
Net investment in the lease, gross | 611,831 | 598,028 |
Estimated loss allowance | (3,591) | (673) |
Net investment in the lease | $ 608,240 | $ 597,355 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Debt: | ||
Long-term debt, gross | $ 8,198,110 | $ 7,950,663 |
Debt issuance costs | (23,740) | (25,875) |
Total debt | 8,174,370 | 7,924,788 |
Short-term debt and current portion of long-term debt | (853,527) | (1,154,564) |
Long-term debt | 7,320,843 | 6,770,224 |
Unamortized original issue discounts | 5,000 | 6,000 |
Fair market value adjustment on notes subject to hedging | 6,000 | |
Debt Proceeds | 556,849 | |
Debt Repayments | 627,701 | |
Interest Rate Swap | Fair Value Hedging | Designated as Hedging Instrument | ||
Debt: | ||
Notional amount | $ 375,000 | 525,000 |
U.S. commercial paper | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 2.05% | |
Long-term debt, gross | $ 713,464 | 511,486 |
Canadian commercial paper | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 1.72% | |
Long-term debt, gross | $ 33,409 | 136,199 |
Trade receivables program | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 1.46% | |
Long-term debt, gross | $ 300,000 | 0 |
Debt Proceeds | $ 300,000 | |
Global Revolving Credit Facility | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 2.70% | |
Long-term debt, gross | $ 234,565 | 8,104 |
Unsecured U.S. notes — Medium-term notes | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 3.19% | |
Long-term debt, gross | $ 5,570,822 | 5,965,064 |
Unsecured U.S. obligations | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 3.41% | |
Long-term debt, gross | $ 200,000 | 200,000 |
Unsecured foreign obligations | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 2.36% | |
Long-term debt, gross | $ 310,634 | 270,719 |
Asset-backed U.S. obligations | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 2.50% | |
Long-term debt, gross | $ 784,632 | 807,374 |
Finance lease obligations and other | ||
Debt: | ||
Long-term debt, gross | 50,584 | $ 51,717 |
Unsecured foreign term loans (1.71% due February 2021 and 1.89% due February 2023) | ||
Debt: | ||
Debt Proceeds | $ 177,926 | |
Unsecured Foreign Term Loans, Due February 2021 | ||
Debt: | ||
Stated interest rate | 1.71% | |
Unsecured Foreign Term Loans, Due February 2023 | ||
Debt: | ||
Stated interest rate | 1.89% | |
Canada term loans (2.94% due February 2021 and 2.99% due February 2022) | ||
Debt: | ||
Debt Proceeds | $ 60,132 | |
Canada Term Loan, Due February 2021 | ||
Debt: | ||
Stated interest rate | 2.94% | |
Canada Term Loan, Due February 2022 | ||
Debt: | ||
Stated interest rate | 2.99% | |
Canada Term Loan, Due February 2023 | ||
Debt: | ||
Stated interest rate | 3.44% | |
Debt Proceeds | $ 18,791 | |
2.65% Medium-term notes (due March 2020) | ||
Debt: | ||
Stated interest rate | 2.65% | |
Debt Repayments | $ 400,000 | |
Unsecured foreign term loans (1.71% due March 2020 and 1.89% due March 2020) | ||
Debt: | ||
Debt Repayments | $ 177,926 | |
Unsecured Foreign Term Loans, Due March 2020, 1.71% | ||
Debt: | ||
Stated interest rate | 1.71% | |
Unsecured Foreign Term Loans, Due March 2020, 1.89% | ||
Debt: | ||
Stated interest rate | 1.89% | |
Asset-backed U.S. obligations | ||
Debt: | ||
Debt Repayments | $ 27,252 | |
Canada term loan, finance lease obligations, and other repayments | ||
Debt: | ||
Debt Repayments | $ 22,523 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | 3 Months Ended | |||
Mar. 31, 2020USD ($)instution | Apr. 30, 2020USD ($) | Feb. 29, 2020USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||||
Commercial paper classified as long term debt | $ 227,000,000 | |||
Short-term debt classified as long-term | 201,000,000 | |||
Total available proceeds under trade receivables purchase and sale program | $ 300,000,000 | |||
Letters of credit and surety bonds outstanding | $ 453,000,000 | 453,000,000 | ||
Fair value of total debt | 7,000,000,000 | 7,000,000,000 | ||
Global Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 1,400,000,000 | |||
Number of lending institutions | instution | 12 | |||
Annual facility fees, percentage | 0.10% | |||
Ratio of debt to consolidated net worth | 3 | |||
Debt to consolidated tangible net worth ratio | 242.00% | |||
Current maturities classified as long-term debt | $ 400,000,000 | |||
Letter of Credit | Global Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 75,000,000 | |||
Letter of credit outstanding amount | 0 | |||
Line of credit remaining capacity | $ 419,000,000 | |||
Minimum | Global Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Annual facility fees, percentage | 0.075% | |||
Maximum | Global Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Annual facility fees, percentage | 0.20% | |||
Subsequent Event | Unsecured Medium-Term Notes, Due June 2025 | ||||
Debt Instrument [Line Items] | ||||
Debt issued | $ 400,000,000 | |||
Stated interest rate | 4.625% | |||
Subsequent Event | Senior Unsecured 364-Day Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt issued | $ 400,000,000 | |||
Debt term | 364 days |
SHARE REPURCHASE PROGRAMS (Deta
SHARE REPURCHASE PROGRAMS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Accelerated Share Repurchases [Line Items] | |||
Common stock repurchases | $ 11,924 | $ 14,156 | |
Common Stock | |||
Accelerated Share Repurchases [Line Items] | |||
Repurchased and retired shares (in shares) | 303,098 | 225,844 | |
Common stock repurchases | $ 152 | $ 113 | |
2019 Share Repurchase Program | Common Stock | |||
Accelerated Share Repurchases [Line Items] | |||
Maximum number of share repurchases authorization (in shares) | 1,500,000 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 2,476,310 | $ 2,536,568 |
Amortization | 6,166 | 5,454 |
Other current period change | (84,620) | 15,762 |
Ending balance | 2,242,736 | 2,566,804 |
Currency Translation Adjustments and Other | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (169,032) | (199,713) |
Amortization | 0 | 0 |
Other current period change | (84,620) | 15,762 |
Ending balance | (253,652) | (183,951) |
Currency Translation Adjustments and Other | British Pound | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Other current period change | (75,000) | |
Net Actuarial Loss | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (656,313) | (700,384) |
Amortization | 6,013 | 5,307 |
Other current period change | 0 | 0 |
Ending balance | (650,300) | (695,077) |
Prior Service Cost | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (11,146) | (11,537) |
Amortization | 153 | 147 |
Other current period change | 0 | 0 |
Ending balance | (10,993) | (11,390) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (836,491) | (911,634) |
Ending balance | $ (914,945) | $ (890,418) |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings (loss) per common share — Basic | ||
Earnings (loss) from continuing operations | $ (109,129) | $ 45,890 |
Less: Distributed and undistributed earnings allocated to unvested stock | (118) | (177) |
Earnings (loss) from continuing operations available to common shareholders — Basic | $ (109,247) | $ 45,713 |
Weighted average common shares outstanding - Basic (in shares) | 52,284 | 52,418 |
Earnings from continuing operations per common share - Basic (in dollars per share) | $ (2.09) | $ 0.87 |
Earnings (loss) per common share — Diluted | ||
Earnings (loss) from continuing operations | $ (109,129) | $ 45,890 |
Less: Distributed and undistributed earnings allocated to unvested stock | (118) | (177) |
Earnings (loss) from continuing operations available to common shareholders — Diluted | $ (109,247) | $ 45,713 |
Weighted average common shares outstanding - Basic (in shares) | 52,284 | 52,418 |
Effect of dilutive equity awards (in shares) | 0 | 223 |
Weighted average common shares outstanding — Diluted (in shares) | 52,284 | 52,641 |
Earnings (loss) from continuing operations per common share - Diluted (in dollars per share) | $ (2.09) | $ 0.87 |
Anti-dilutive equity awards not included above (in shares) | 3,134 | 1,682 |
SHARE-BASED COMPENSATION PLAN_2
SHARE-BASED COMPENSATION PLANS - Share-Based Compensation Expense and Income Tax Benefits Recognized During the Periods (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 3,091 | $ 7,399 |
Income tax benefit | (178) | (1,160) |
Share-based compensation expense, net of tax | 2,913 | 6,239 |
Stock option and stock purchase plans | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 1,357 | 1,819 |
Unvested stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 1,734 | $ 5,580 |
SHARE-BASED COMPENSATION PLAN_3
SHARE-BASED COMPENSATION PLANS - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Share-based Payment Arrangement [Abstract] | |
Compensation cost not yet recognized | $ 66 |
Compensation cost not yet recognized, period for recognition | 2 years 4 months 24 days |
SHARE-BASED COMPENSATION PLAN_4
SHARE-BASED COMPENSATION PLANS - Summary of Awards Granted in Period (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in period, other than options (in shares) | shares | 849 |
Grants in period, other than options, fair market value (in dollars per share) | $ / shares | $ 38.11 |
Performance-based restricted stock rights | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in period, other than options (in shares) | shares | 292 |
Grants in period, other than options, fair market value (in dollars per share) | $ / shares | $ 37.47 |
Time-vested restricted stock rights | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in period, other than options (in shares) | shares | 557 |
Grants in period, other than options, fair market value (in dollars per share) | $ / shares | $ 38.45 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Company-administered plans: | ||
Contribution to pension plans | $ 1,000 | |
Expected plan contributions | 37,000 | |
Pension Benefits | ||
Company-administered plans: | ||
Net pension expense | 7,163 | $ 12,071 |
Company Administered Plan | Pension Benefits | ||
Company-administered plans: | ||
Service cost | 3,213 | 3,032 |
Interest cost | 17,532 | 21,469 |
Expected return on plan assets | (24,263) | (22,676) |
Net actuarial loss | 7,715 | 7,610 |
Prior service cost | 187 | 179 |
Net pension expense | 4,384 | 9,614 |
Union Administered Plan | Pension Benefits | ||
Company-administered plans: | ||
Net pension expense | 2,779 | 2,457 |
U.S. | Company Administered Plan | Pension Benefits | ||
Company-administered plans: | ||
Net pension expense | 6,778 | 11,473 |
Non-U.S. | Company Administered Plan | Pension Benefits | ||
Company-administered plans: | ||
Net pension expense | $ (2,394) | $ (1,859) |
OTHER ITEMS IMPACTING COMPARA_3
OTHER ITEMS IMPACTING COMPARABILITY (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Income and Expenses [Abstract] | ||
Restructuring and other, net | $ 11,263 | $ 2,588 |
ERP implementation costs | 10,326 | 3,590 |
Total other items impacting comparability | $ 21,589 | $ 6,178 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |||
Interest paid | $ 60,566 | $ 52,490 | |
Income taxes paid | 5,096 | 3,611 | |
Right-of-use assets obtained in exchange for lease obligations: | |||
Finance leases | 3,744 | 2,026 | |
Operating leases | 23,877 | $ 16,605 | |
Capital expenditures acquired but not yet paid | $ 144,538 | $ 185,264 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of segments | segment | 3 | |
Non-lease revenue from maintenance services | $ 2,161,306 | $ 2,180,327 |
Revenues | 2,161,306 | 2,180,327 |
Earnings (Loss) Before Taxes | (81,438) | 93,338 |
Non-operating pension costs | (1,221) | (6,462) |
Other items impacting comparability, net | (30,947) | (6,178) |
Earnings (loss) from continuing operations before income taxes | (113,634) | 68,151 |
Capital expenditures paid | 430,960 | 1,026,711 |
SCS | ||
Segment Reporting Information [Line Items] | ||
Revenues | 628,447 | 635,671 |
Eliminations | ||
Segment Reporting Information [Line Items] | ||
Revenues | (142,266) | (156,564) |
Earnings (Loss) Before Taxes | (10,069) | (17,302) |
Operating Segments | FMS | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,340,237 | 1,351,599 |
Earnings (Loss) Before Taxes | (114,574) | 60,911 |
Capital expenditures paid | 423,116 | 1,006,129 |
Operating Segments | FMS | ChoiceLease | ||
Segment Reporting Information [Line Items] | ||
Lease, related maintenance and rental revenues | 792,206 | 740,059 |
Operating Segments | FMS | SelectCare | ||
Segment Reporting Information [Line Items] | ||
Lease, related maintenance and rental revenues | 136,146 | 135,779 |
Operating Segments | FMS | Commercial rental | ||
Segment Reporting Information [Line Items] | ||
Lease, related maintenance and rental revenues | 205,766 | 236,148 |
Operating Segments | FMS | Other | ||
Segment Reporting Information [Line Items] | ||
Lease, related maintenance and rental revenues | 23,426 | 23,227 |
Operating Segments | FMS | Fuel services revenue | ||
Segment Reporting Information [Line Items] | ||
Non-lease revenue from maintenance services | 173,335 | 207,866 |
Operating Segments | FMS | ChoiceLease liability insurance revenue (1) | ||
Segment Reporting Information [Line Items] | ||
Non-lease revenue from maintenance services | 9,358 | 8,520 |
Operating Segments | SCS | ||
Segment Reporting Information [Line Items] | ||
Revenues | 628,447 | 635,671 |
Earnings (Loss) Before Taxes | 31,025 | 32,317 |
Capital expenditures paid | 6,006 | 12,756 |
Operating Segments | DTS | ||
Segment Reporting Information [Line Items] | ||
Revenues | 334,888 | 349,621 |
Earnings (Loss) Before Taxes | 12,180 | 17,412 |
Capital expenditures paid | 424 | 343 |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Unallocated Central Support Services | (9,386) | (12,547) |
Non-operating pension costs | (1,221) | (6,462) |
Other items impacting comparability, net | (21,589) | (6,178) |
Capital expenditures paid | $ 1,414 | $ 7,483 |
Uncategorized Items - r-2020033
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (5,077,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (5,077,000) |