Cover Page
Cover Page | 6 Months Ended |
Jun. 30, 2020shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 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 | 53,818,841 |
Entity Central Index Key | 0000085961 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Lease & related maintenance and rental revenues | $ 868,660 | $ 933,833 | $ 1,796,416 | $ 1,833,392 |
Revenues | 1,895,282 | 2,244,993 | 4,056,588 | 4,425,320 |
Other operating expenses | 29,849 | 29,663 | 63,414 | 63,289 |
Selling, general and administrative expenses | 208,564 | 226,416 | 432,683 | 457,741 |
Non-operating pension costs | 936 | 6,713 | 2,157 | 13,175 |
Used vehicle sales, net | 9,488 | 18,140 | 30,172 | 26,357 |
Interest expense | 67,285 | 60,759 | 129,851 | 116,095 |
Miscellaneous (income) loss, net | (9,946) | (21,911) | (1,278) | (30,133) |
Restructuring and other items, net | 37,200 | 9,836 | 68,147 | 16,014 |
Total expenses | 1,990,059 | 2,141,924 | 4,264,999 | 4,254,100 |
Earnings (loss) from continuing operations before income taxes | (94,777) | 103,069 | (208,411) | 171,220 |
Provision for (benefit from) income taxes | (21,072) | 27,617 | (25,577) | 49,878 |
Earnings (loss) from continuing operations | (73,705) | 75,452 | (182,834) | 121,342 |
Earnings (loss) from discontinued operations, net of tax | (394) | (237) | (878) | (811) |
Net earnings (loss) | $ (74,099) | $ 75,215 | $ (183,712) | $ 120,531 |
Earnings (loss) per common share — Basic | ||||
Continuing operations (in dollars per share) | $ (1.41) | $ 1.44 | $ (3.50) | $ 2.31 |
Discontinued operations (in dollars per share) | (0.01) | 0 | (0.02) | (0.02) |
Net earnings (loss) (in dollars per share) | (1.42) | 1.43 | (3.52) | 2.29 |
Earnings (loss) per common share — Diluted | ||||
Continuing operations (in dollars per share) | (1.41) | 1.43 | (3.50) | 2.30 |
Discontinued operations (in dollars per share) | (0.01) | 0 | (0.02) | (0.02) |
Net earnings (loss) (in dollars per share) | $ (1.42) | $ 1.43 | $ (3.52) | $ 2.28 |
Service | ||||
Revenues | $ 942,267 | $ 1,159,100 | $ 2,054,455 | $ 2,291,148 |
Cost of services sold | 793,353 | 976,405 | 1,747,782 | 1,948,095 |
Fuel Services | ||||
Revenues | 84,355 | 152,060 | 205,717 | 300,780 |
Cost of services sold | 77,980 | 148,363 | 198,429 | 291,638 |
Lease, Related Maintenance and Rental | ||||
Cost of services sold | $ 775,350 | $ 687,540 | $ 1,593,642 | $ 1,351,829 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings (loss) | $ (74,099) | $ 75,215 | $ (183,712) | $ 120,531 |
Other comprehensive income (loss): | ||||
Changes in currency translation adjustment and other | 7,878 | (7,763) | (76,742) | 7,999 |
Amortization of pension and postretirement items | 7,371 | 7,377 | 15,150 | 14,845 |
Income tax expense related to amortization of pension and postretirement items | (1,492) | (1,381) | (3,105) | (3,395) |
Amortization of pension and postretirement items, net of tax | 5,879 | 5,996 | 12,045 | 11,450 |
Change in net actuarial loss and prior service cost | (4,539) | (9,440) | (4,539) | (9,440) |
Income tax benefit related to change in net actuarial loss and prior service cost | 1,087 | 2,237 | 1,087 | 2,237 |
Change in net actuarial loss and prior service cost, net of taxes | (3,452) | (7,203) | (3,452) | (7,203) |
Other comprehensive income (loss), net of taxes | 10,305 | (8,970) | (68,149) | 12,246 |
Comprehensive income | $ (63,794) | $ 66,245 | $ (251,861) | $ 132,777 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 831,469 | $ 73,584 |
Receivables, net | 1,087,639 | 1,228,490 |
Inventories | 62,282 | 80,822 |
Prepaid expenses and other current assets | 151,319 | 179,155 |
Total current assets | 2,132,709 | 1,562,051 |
Revenue earning equipment, net | 9,569,839 | 10,427,664 |
Operating property and equipment, net of accumulated depreciation of $1,246,069 and $1,224,216, respectively | 913,080 | 917,799 |
Goodwill | 474,480 | 475,025 |
Intangible assets, net | 46,694 | 50,905 |
Sales-type leases and other assets | 1,071,949 | 1,041,890 |
Total assets | 14,208,751 | 14,475,334 |
Current liabilities: | ||
Short-term debt and current portion of long-term debt | 1,460,604 | 1,154,564 |
Accounts payable | 425,686 | 594,712 |
Accrued expenses and other current liabilities | 869,315 | 876,077 |
Total current liabilities | 2,755,605 | 2,625,353 |
Long-term debt | 6,687,096 | 6,770,224 |
Other non-current liabilities | 1,496,471 | 1,442,003 |
Deferred income taxes | 1,110,487 | 1,161,444 |
Total liabilities | 12,049,659 | 11,999,024 |
Commitments and contingencies (Note 17) | ||
Shareholders’ equity: | ||
Preferred stock, no par value per share — authorized, 3,800,917; none outstanding, June 30, 2020 and December 31, 2019 | 0 | 0 |
Common stock, $0.50 par value per share — authorized, 400,000,000; outstanding, June 30, 2020 — 53,818,841 and December 31, 2019 — 53,278,316 | 26,909 | 26,639 |
Additional paid-in capital | 1,113,883 | 1,108,649 |
Retained earnings | 1,922,940 | 2,177,513 |
Accumulated other comprehensive loss | (904,640) | (836,491) |
Total shareholders’ equity | 2,159,092 | 2,476,310 |
Total liabilities and shareholders’ equity | $ 14,208,751 | $ 14,475,334 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 1,246,069 | $ 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) | 53,818,841 | 53,278,316 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities from continuing operations: | ||
Net earnings (loss) | $ (183,712) | $ 120,531 |
Less: Loss from discontinued operations, net of tax | (878) | (811) |
Earnings (loss) from continuing operations | (182,834) | 121,342 |
Depreciation expense | 1,056,171 | 768,030 |
Used vehicle sales, net | 30,172 | 26,357 |
Non-cash lease expense | 45,055 | 46,856 |
Non-operating pension costs and share-based compensation expense | 12,787 | 28,097 |
Other non-cash charges, net | 74,854 | 39,557 |
Deferred income tax expense (benefit) | (36,148) | 41,688 |
Collections on sales-type leases | 54,724 | 63,047 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Receivables | 69,212 | 8,196 |
Inventories | 18,680 | (1,524) |
Prepaid expenses and other assets | (7,338) | (6,175) |
Accounts payable | (54,434) | (3,965) |
Accrued expenses and other non-current liabilities | 17,884 | (86,447) |
Net cash provided by operating activities from continuing operations | 1,098,785 | 1,045,059 |
Cash flows from investing activities from continuing operations: | ||
Purchases of property and revenue earning equipment | (704,930) | (2,210,761) |
Sales of revenue earning equipment | 214,189 | 210,081 |
Sales of operating property and equipment | 4,231 | 46,189 |
Other | (5,756) | 0 |
Net cash used in investing activities from continuing operations | (492,266) | (1,954,491) |
Cash flows from financing activities from continuing operations: | ||
Net borrowings (repayments) of commercial paper and revolving credit facilities | (457,553) | 227,023 |
Debt proceeds | 1,756,497 | 1,691,906 |
Debt repaid | (1,064,096) | (902,814) |
Dividends on common stock | (60,155) | (57,651) |
Common stock issued | 5,542 | 6,244 |
Common stock repurchased | (11,924) | (21,220) |
Tax withholding on shares settled | (4,302) | (3,529) |
Debt issuance costs and other items | (9,277) | (2,920) |
Net cash provided by (used in) financing activities from continuing operations | 154,732 | 937,039 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (3,022) | (2,611) |
Increase (decrease) in cash, cash equivalents, and restricted cash from continuing operations | 758,229 | 24,996 |
Increase (decrease) in cash, cash equivalents, and restricted cash from discontinued operations | (344) | (605) |
Increase (decrease) in cash, cash equivalents, and restricted cash | 757,885 | 24,391 |
Cash, cash equivalents, and restricted cash at beginning of year | 73,584 | 68,111 |
Cash, cash equivalents, and restricted cash at end of period | $ 831,469 | $ 92,502 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Shareholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | 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 | 132,777 | 120,531 | 12,246 | ||||||
Common stock dividends declared and paid | (58,056) | (58,056) | |||||||
Common stock issued under employee stock option and stock purchase plans | [1] | 2,716 | $ 281 | 2,435 | |||||
Common stock issued under employee stock option and stock purchase plans (in shares) | [1] | 563,091 | |||||||
Benefit plan stock sales (purchases), net | [2] | (1) | (1) | ||||||
Benefit plan stock sales (purchases), net (in shares) | [2] | 50 | |||||||
Common stock repurchases | (21,220) | $ (173) | (6,940) | (14,107) | |||||
Common stock repurchases (in shares) | (345,114) | ||||||||
Share-based compensation | 14,922 | 14,922 | |||||||
Ending balance at Jun. 30, 2019 | 2,607,706 | 0 | $ 26,667 | 1,094,807 | 2,385,620 | (899,388) | |||
Ending balance (in shares) at Jun. 30, 2019 | 53,334,512 | ||||||||
Beginning balance at Mar. 31, 2019 | 2,566,804 | 0 | $ 26,651 | 1,086,714 | 2,343,857 | (890,418) | |||
Beginning balance (in shares) at Mar. 31, 2019 | 53,300,205 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Comprehensive income | 66,245 | 75,215 | (8,970) | ||||||
Common stock dividends declared and paid | (28,849) | (28,849) | |||||||
Common stock issued under employee stock option and stock purchase plans | [3] | 3,058 | $ 76 | 2,982 | |||||
Common stock issued under employee stock option and stock purchase plans (in shares) | [3] | 153,797 | |||||||
Benefit plan stock sales (purchases), net | [4] | (11) | (11) | ||||||
Benefit plan stock sales (purchases), net (in shares) | [4] | (220) | |||||||
Common stock repurchases | (7,064) | $ (60) | (2,401) | (4,603) | |||||
Common stock repurchases (in shares) | (119,270) | ||||||||
Share-based compensation | 7,523 | 7,523 | |||||||
Ending balance at Jun. 30, 2019 | 2,607,706 | 0 | $ 26,667 | 1,094,807 | 2,385,620 | (899,388) | |||
Ending balance (in shares) at Jun. 30, 2019 | 53,334,512 | ||||||||
Beginning balance at Dec. 31, 2019 | $ 2,476,310 | $ (5,077) | 0 | $ 26,639 | 1,108,649 | 2,177,513 | $ (5,077) | (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 | $ (251,861) | (183,712) | (68,149) | ||||||
Common stock dividends declared and paid | (60,226) | (60,226) | |||||||
Common stock issued under employee stock option and stock purchase plans | [1] | 1,213 | $ 422 | 791 | |||||
Common stock issued under employee stock option and stock purchase plans (in shares) | [1] | 843,403 | |||||||
Benefit plan stock sales (purchases), net | [2] | 27 | 27 | ||||||
Benefit plan stock sales (purchases), net (in shares) | [2] | 220 | |||||||
Common stock repurchases | (11,924) | $ (152) | (6,214) | (5,558) | |||||
Common stock repurchases (in shares) | (303,098) | ||||||||
Share-based compensation | 10,630 | 10,630 | |||||||
Ending balance at Jun. 30, 2020 | $ 2,159,092 | 0 | $ 26,909 | 1,113,883 | 1,922,940 | (904,640) | |||
Ending balance (in shares) at Jun. 30, 2020 | 53,818,841 | 53,818,841 | |||||||
Beginning balance at Mar. 31, 2020 | $ 2,242,736 | 0 | $ 26,867 | 1,103,928 | 2,026,886 | (914,945) | |||
Beginning balance (in shares) at Mar. 31, 2020 | 53,735,964 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Comprehensive income | (63,794) | (74,099) | 10,305 | ||||||
Common stock dividends declared and paid | (29,847) | (29,847) | |||||||
Common stock issued under employee stock option and stock purchase plans | [3] | 2,470 | $ 42 | 2,428 | |||||
Common stock issued under employee stock option and stock purchase plans (in shares) | [3] | 83,145 | |||||||
Benefit plan stock sales (purchases), net | [4] | (12) | (12) | ||||||
Benefit plan stock sales (purchases), net (in shares) | [4] | (268) | |||||||
Common stock repurchases | 0 | ||||||||
Share-based compensation | 7,539 | 7,539 | |||||||
Ending balance at Jun. 30, 2020 | $ 2,159,092 | $ 0 | $ 26,909 | $ 1,113,883 | $ 1,922,940 | $ (904,640) | |||
Ending balance (in shares) at Jun. 30, 2020 | 53,818,841 | 53,818,841 | |||||||
[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 | ||||||||
[3] | Net of common shares withheld as payment for the exercise price or to satisfy the holders’ withholding tax liability upon exercise of options. | ||||||||
[4] | 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 | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared per common share (in dollars per share) | $ 0.56 | $ 0.54 | $ 1.12 | $ 1.08 |
GENERAL
GENERAL | 6 Months Ended |
Jun. 30, 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. In our Fleet Management Solutions (FMS) business segment, we experienced lower demand for commercial rental and declines in the used vehicle market. 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. In our Supply Chain Solutions (SCS) business segment, there has been a deterioration in customer activity, primarily due to the temporary shutdowns in the automotive industry, which have restarted their operations during the second quarter of 2020. In addition, we have experienced a decline in our sales growth opportunities in all of our businesses. We have established additional bad debt reserves due to our expectations for COVID-19 related payment activity with certain customers as a result of increases in bankruptcies or insolvencies, or a delay in payments. We have attempted to mitigate the adverse impacts from the pandemic through cost reduction measures, including temporary employee furloughs, lower discretionary and overhead spending, and a reduction in capital expenditures. In addition, we took planned actions to reduce headcount, primarily in our North American and U.K. FMS operations. Depending on the extent and duration of the pandemic and the related economic impacts, it may have a further impact on our business and financial results, as well as on 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 | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [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 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 | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE For the quarter ended June 30, 2020 and 2019, we recognized non-lease revenue from maintenance services of $238 million and $236 million, respectively, included in lease & related maintenance and rental revenues. We recognized $478 million and $475 million for the six months ended June 30, 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 lines. Primary Geographical Markets Three months ended June 30, 2020 FMS SCS DTS Eliminations Total (In thousands) United States $ 1,081,448 $ 441,332 $ 293,944 $ (112,925) $ 1,703,799 Canada 60,480 40,288 — (3,232) 97,536 Europe 56,249 — — — 56,249 Mexico — 37,698 — — 37,698 Total Revenues $ 1,198,177 $ 519,318 $ 293,944 $ (116,157) $ 1,895,282 Three months ended June 30, 2019 FMS SCS DTS Eliminations Total (In thousands) United States $ 1,238,631 $ 539,623 $ 362,244 $ (152,010) $ 1,988,488 Canada 76,390 53,545 — (5,462) 124,473 Europe 75,889 — — — 75,889 Mexico — 56,143 — — 56,143 Singapore — — — — — Total Revenues $ 1,390,910 $ 649,311 $ 362,244 $ (157,472) $ 2,244,993 Six months ended June 30, 2020 FMS SCS DTS Eliminations Total (In thousands) United States $ 2,278,969 $ 963,857 $ 628,832 $ (250,220) $ 3,621,438 Canada 131,245 93,840 — (8,203) 216,882 Europe 128,200 — — — 128,200 Mexico — 90,068 — — 90,068 Total Revenues $ 2,538,414 $ 1,147,765 $ 628,832 $ (258,423) $ 4,056,588 Six months ended June 30, 2019 FMS SCS DTS Eliminations Total (In thousands) United States $ 2,437,574 $ 1,069,016 $ 711,865 $ (303,173) $ 3,915,282 Canada 150,404 103,253 — (10,863) 242,794 Europe 154,531 — — — 154,531 Mexico — 109,420 — — 109,420 Singapore — 3,293 — — 3,293 Total Revenues $ 2,742,509 $ 1,284,982 $ 711,865 $ (314,036) $ 4,425,320 Industry Our SCS business segment included revenue from the below industries: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Automotive $ 147,749 $ 261,288 $ 397,674 $ 514,967 Technology and healthcare 84,766 110,054 175,899 223,723 Consumer package goods and retail 236,499 225,582 466,431 442,679 Industrial and other 50,304 52,387 107,761 103,613 Total SCS Revenues $ 519,318 $ 649,311 $ 1,147,765 $ 1,284,982 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. Our contract liabilities consist of deferred revenue, which relates to payments received in advance of performance under the contract. Changes in contract liabilities are due to the collection of cash or the satisfaction of our performance obligation under the contract. Deferred revenue related to the maintenance services component of our ChoiceLease product line was $594 million and $587 million as of June 30, 2020 and December 31, 2019, respectively. Revenue recognized during the six months ended June 30, 2020 was $103 million for the amounts recorded as deferred revenue at the beginning of the year. In addition, we deferred consideration of $117 million during the six months ended June 30, 2020, 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, as well as revenues from our lease component of our ChoiceLease product and commercial rental product. Contracted not recognized revenue was $2.8 billion as of June 30, 2020. As a practical expedient, 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, such as our SCS and DTS contracts. 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 $94 million a nd $105 million as of June 30, 2020 and December 31, 2019, respectively. Capitalized sales commissions include initial direct costs of our leases of $49 million a nd $55 million as of June 30, 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 quarters ended June 30, 2020 and 2019, sales commission expense was $11 million. For both the six months ended June 30, 2020 and 2019, sales commission expense was $22 million. |
RECEIVABLES, NET
RECEIVABLES, NET | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
RECEIVABLES, NET | RECEIVABLES, NET June 30, 2020 December 31, 2019 (In thousands) Trade $ 950,466 $ 1,060,298 Sales-type leases 121,184 135,353 Other, primarily warranty and insurance 60,897 55,600 1,132,547 1,251,251 Allowance for credit losses and other (44,908) (22,761) Total $ 1,087,639 $ 1,228,490 The following table provides a reconciliation of our allowance for credit losses (in thousands): Balance at December 31, 2019 $ 10,500 Charges to provisions for credit losses 32,600 Impact of adoption of new accounting standard, write-offs, and other (8,300) Balance at June 30, 2020 $ 34,800 Allowance for credit memos 10,108 Allowance for credit losses and other $ 44,908 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 as of January 1, 2020, which was not material. We maintain an allowance for credit losses and an allowance for credit memos 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. Due to the COVID-19 pandemic, we have extended payment terms for certain customers, which we have elected to not assess as a lease modification. We continue to actively monitor the impact of the COVID-19 pandemic on expected credit losses. |
REVENUE EARNING EQUIPMENT, NET
REVENUE EARNING EQUIPMENT, NET | 6 Months Ended |
Jun. 30, 2020 | |
Revenue Earning Equipment [Abstract] | |
REVENUE EARNING EQUIPMENT, NET | REVENUE EARNING EQUIPMENT, NET June 30, 2020 December 31, 2019 Cost Accumulated Net Book Value (1) Cost Accumulated Net Book Value (1) (In thousands) Held for use: ChoiceLease $ 11,681,853 $ (4,188,226) $ 7,493,627 $ 12,223,179 $ (4,125,342) $ 8,097,837 Commercial rental 2,795,894 (954,648) 1,841,246 3,200,403 (1,049,850) 2,150,553 Held for sale 1,136,016 (901,050) 234,966 748,435 (569,161) 179,274 Total $ 15,613,763 $ (6,043,924) $ 9,569,839 $ 16,172,017 $ (5,744,353) $ 10,427,664 ———————————— (1) Revenue earning equipment, net includes vehicles under finance leases of $10 million, less accumulated depreciation of $8 million, as of June 30, 2020, and $12 million, less accumulated depreciation of $8 million, as of December 31, 2019. We periodically review and adjust, as appropriate, the estimated residual values and useful lives of existing revenue earning equipment for the purposes of recording depreciation expense. Our review of the estimated residual values and useful lives of revenue earning equipment is established with a long-term view, which we refer to as "policy depreciation," based on vehicle class, generally subcategories of trucks, tractors and trailers by weight and usage, as well as other factors. These other factors include, but are not limited to, historical market prices, current and expected future market prices, expected lives of vehicles, and expected sales of used vehicles in the wholesale and retail markets. Reductions in estimated residual values or useful lives will result in an increase in depreciation expense over the remaining life of the vehicle. We also assess estimates of residual values of vehicles expected to be made available for sale in the near-term (generally 12 to 24 months) based on near-term market rates and conditions and may adjust residual values for these vehicles, which we refer to as “accelerated depreciation.” Due to the COVID-19 pandemic and the impact on current and expected used vehicle market conditions, we performed a review of the estimated residual values of our FMS revenue earning equipment in the second quarter of 2020 for both accelerated and policy depreciation. Accelerated Depreciation In the first quarter of 2020, we revised our residual value estimates for vehicles that are expected to be sold in the near-term (through 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. At that time, we expected lower used vehicle pricing in the second half of 2020 due to lower demand rather than our previous expectations of a modest increase. As a result, we recorded accelerated depreciation of $27 million and recognized losses of $21 million for used vehicle sales results in the first quarter. We recorded additional accelerated depreciation of $31 million in the second quarter of 2020 related to the first quarter change. In the second quarter of 2020, we revised our residual value estimates further as we now expect a delayed recovery in the used vehicle market beyond our previous expectation of mid-2021. Due to the expected delayed recovery, we primarily extended accelerated depreciation by an additional year to now include vehicles expected to be sold through mid-2022. As a result of these changes in estimated residual values, we recorded additional accelerated depreciation of $31 million in the second quarter of 2020, which also included losses of $9 million for used vehicle sales results discussed further below. Policy Depreciation As a result of these factors related to COVID-19 and our lowered longer term outlook, we concluded that our residual value estimates likely exceeded the expected future values that would be realized upon the sale of vehicles in our fleet for vehicles expected to be sold after mid-2022. Therefore, we lowered our estimated residual values primarily for our truck fleet, and to a lesser extent, our tractor fleet, effective April 1, 2020. In evaluating our residual value estimates, we reviewed recent multi-year trends; management and third-party longer-term outlook for the used vehicle market, including impacts of COVID-19 and the demand and pricing of our used vehicles; expected sales volumes through our retail and wholesale channels; inventory levels; and other factors that management deemed necessary to appropriately reflect our expected long-term sales proceeds. Due to this change, we recorded additional policy depreciation of $18 million in the second quarter of 2020. The first quarter and second quarter changes in our residual value estimates and resulting increase in depreciation expense and impact on used vehicle results in 2020 resulted in the following negative impacts on our Condensed Consolidated Statement of Operations: Three months ended June 30, 2020 Six months ended June 30, 2020 (In millions, except for per share data) Pre-tax earnings (loss) from continuing operations $ 80 $ 128 Net earnings (loss) $ 59 $ 95 Diluted EPS $ 1.13 $ 1.81 Used Vehicle Sales and Valuation Adjustments 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 are deemed to meet the held for sale criteria 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 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. In addition, we also consider expected declines in market prices when valuing the vehicles held for sale, as well as the forecasted sales channel (retail/wholesale). As a result of the changes in our residual value estimates described above for accelerated and policy depreciation, we recorded valuation adjustments on our vehicles held for sale for the three and six months ended June 30, 2020 as noted in the table below. 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 June 30, Six months ended June 30, June 30, 2020 December 31, 2019 2020 2019 2020 2019 (In thousands) Revenue earning equipment held for sale (1) : Trucks $ 48,744 $ 39,009 $ 5,389 $ 8,740 $ 16,451 $ 20,287 Tractors 84,707 73,359 3,035 14,053 11,488 19,021 Trailers 3,256 2,206 2,592 1,485 4,585 1,664 Total assets at fair value $ 136,707 $ 114,574 $ 11,016 $ 24,278 $ 32,524 $ 40,972 ———————————— (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 $98 million and $65 million as of June 30, 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 June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Losses (gains) on vehicle sales, net $ (1,528) $ (6,138) $ (2,352) $ (14,615) Losses from valuation adjustments 11,016 24,278 32,524 40,972 Used vehicle sales, net $ 9,488 $ 18,140 $ 30,172 $ 26,357 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 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 (256) (289) — (545) Balance at June 30, 2020 $ 243,446 $ 190,226 $ 40,808 $ 474,480 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; worsening trends from the COVID-19 pandemic; 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 June 30, 2020, FMS NA goodwill was $243 million. We determined that there was no interim impairment trigger event during the second quarter of 2020. The following table includes the carrying value of our intangible assets attributable to each reportable business segment: June 30, 2020 FMS SCS DTS CSS Total (In thousands) 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 (50,655) (22,397) (4,502) — (77,554) Total $ 7,031 $ 27,852 $ 3,080 $ 8,731 $ 46,694 December 31, 2019 FMS SCS DTS CSS Total (In thousands) 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 | 6 Months Ended |
Jun. 30, 2020 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | ACCRUED EXPENSES AND OTHER LIABILITIES June 30, 2020 December 31, 2019 Accrued Non-Current Total Accrued Non-Current Total (In thousands) Salaries and wages $ 116,237 $ — $ 116,237 $ 126,119 $ — $ 126,119 Deferred compensation 4,375 66,533 70,908 6,436 65,006 71,442 Pension benefits 3,841 402,483 406,324 3,863 413,829 417,692 Other postretirement benefits 1,469 18,976 20,445 1,478 20,187 21,665 Other employee benefits 11,236 — 11,236 21,577 — 21,577 Insurance obligations (1) 166,905 300,372 467,277 163,763 285,838 449,601 Operating taxes 120,973 — 120,973 116,003 — 116,003 Income taxes 8,168 18,257 26,425 2,873 17,484 20,357 Interest 46,160 — 46,160 46,032 — 46,032 Deposits, mainly from customers 75,769 3,185 78,954 82,573 3,065 85,638 Operating lease liabilities 72,513 162,124 234,637 72,285 151,361 223,646 Deferred revenue (2) 167,281 446,691 613,972 165,205 438,482 603,687 Restructuring liabilities (3) 17,356 — 17,356 6,765 — 6,765 Other 57,032 77,850 134,882 61,105 46,751 107,856 Total $ 869,315 $ 1,496,471 $ 2,365,786 $ 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 increase in restructuring liabilities from December 31, 2019 principally represents certain severance actions in the second quarter of 2020. Refer to Note 16, "Other Items Impacting Comparability," for further information on restructuring activities during the second quarter. The majority of the balance remaining in restructuring liabilities is expected to be paid by mid-2021. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESEffective Tax RateOur effective income tax rate from continuing operations for the second quarter of 2020 was a benefit of 22.2% as compared to an expense of 26.8% in the second quarter of 2019 and a benefit of 12.3% in the six months ended June 30, 2020 as compared to an expense of 29.1% in the six months ended June 30, 2019. For the three and six months ended June 30, 2020, the tax rate was impacted by the reduction in earnings due to additional depreciation charges and the COVID-19 economic effects. Additionally, for the six months ended June 30, 2020, we recorded a valuation allowance in the first quarter of 2020 of $13 million on the net deferred tax assets of our U.K. operations on a discrete basis. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
LEASES | LEASES Leases as Lessor The components of lease income were as follows: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Operating leases Lease income related to ChoiceLease $ 385,639 $ 374,550 $ 785,227 $ 734,859 Lease income related to commercial rental (1) 161,220 239,068 356,915 458,240 Sales type leases Interest income related to net investment in leases $ 12,080 $ 10,432 $ 23,724 $ 21,888 Variable lease income excluding commercial rental (1) $ 58,882 $ 58,409 $ 124,389 $ 113,848 ———————————— (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: June 30, 2020 December 31, 2019 (In thousands) Net investment in the lease — lease payment receivable $ 561,795 $ 553,076 Net investment in the lease — unguaranteed residual value in assets 41,013 44,952 602,808 598,028 Estimated loss allowance (1) (3,226) (673) Total (2) $ 599,582 $ 597,355 ———————————— (1) Amount as of June 30, 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 June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Operating leases Lease income related to ChoiceLease $ 385,639 $ 374,550 $ 785,227 $ 734,859 Lease income related to commercial rental (1) 161,220 239,068 356,915 458,240 Sales type leases Interest income related to net investment in leases $ 12,080 $ 10,432 $ 23,724 $ 21,888 Variable lease income excluding commercial rental (1) $ 58,882 $ 58,409 $ 124,389 $ 113,848 ———————————— (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: June 30, 2020 December 31, 2019 (In thousands) Net investment in the lease — lease payment receivable $ 561,795 $ 553,076 Net investment in the lease — unguaranteed residual value in assets 41,013 44,952 602,808 598,028 Estimated loss allowance (1) (3,226) (673) Total (2) $ 599,582 $ 597,355 ———————————— (1) Amount as of June 30, 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 | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Weighted Average Interest Rate June 30, 2020 Maturities June 30, December 31, (In thousands) Debt: U.S. commercial paper (1) 0.69% 2023 $ 76,410 $ 511,486 Canadian commercial paper (1) 1.24% 2023 118,146 136,199 Trade receivables program 1.11% 2021 200,000 — Global revolving credit facility 1.20% 2023 1,800 8,104 Unsecured U.S. notes — Medium-term notes (1)(2) 3.33% 2020-2026 6,071,198 5,965,064 Unsecured U.S. obligations 2.33% 2021-2024 600,000 200,000 Unsecured foreign obligations 2.04% 2020-2024 309,627 270,719 Asset-backed U.S. obligations (3) 2.51% 2020-2026 751,567 807,374 Finance lease obligations and other 2020-2073 47,869 51,717 8,176,617 7,950,663 Debt issuance costs (28,917) (25,875) Total debt 8,147,700 7,924,788 Short-term debt and current portion of long-term debt (1,460,604) (1,154,564) Long-term debt $ 6,687,096 $ 6,770,224 ———————————— (1) Amounts are net of unamortized original issue discounts of $5 million and $6 million as of June 30, 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 June 30, 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 June 30, 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 six months ended June 30, 2020. Debt Proceeds Debt Repayments (In thousands) (In thousands) Floating-rate unsecured 364-day U.S. term loan $ 400,000 2.65% Medium-term notes (due March 2020) $ 400,000 4.625% Medium-term notes (due June 2025) 399,924 2.50% Medium-term notes (due May 2020) 300,000 3.35% Medium-term notes (due September 2025) 399,724 Unsecured foreign term loans (1.71% due March 2020 and 1.89% due March 2020) 177,926 Trade receivables program 300,000 Trade receivables program 100,000 Unsecured foreign term loans (1.71% due February 2021 and 1.89% due February 2023) 177,926 Asset-backed U.S. obligations 60,318 Unsecured foreign term loans (2.94% due February 2021 and 2.99% due February 2022) 60,132 Canadian term loan, finance lease obligations, and other repayments 25,852 Unsecured foreign term loan (3.44% due February 2023) 18,791 Total debt proceeds $ 1,756,497 Total debt repaid $ 1,064,096 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 15 basis points as of June 30, 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 June 30, 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 June 30, 2020, there was $1.2 billion 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. In the second quarter of 2020, Net Worth was amended to also (1) exclude currency translation adjustment as reported in our consolidated balance sheet; (2) add back the after-tax charge to shareholders' equity which resulted from our adoption of the new lease accounting standard as of December 31, 2018 (amortized quarterly to 50% of the charge over a 7 year period); and (3) add back any potential non-cash goodwill impairment charges, should they occur, up to a maximum amount. As of June 30, 2020, the ratio was 235%. 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. Starting in 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 February 2020, we increased the amount of maximum available proceeds from our trade receivables purchase and sale program from $225 million t o $300 million . In April 2020, we extended the maturity of the trade receivables program to April 2021. As of June 30, 2020, the available proceeds under the program were $93 million. We had letters of credit and surety bonds outstanding of $483 million and $453 million as of June 30, 2020 and December 31, 2019, respectively, 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 $7.7 billion and $7.0 billion as of June 30, 2020 and December 31, 2019, respectively. 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 | 6 Months Ended |
Jun. 30, 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 six months ended June 30, 2020 and June 30, 2019, we repurchased approximately 303,000 shares for $12 million and 345,000 shares for $21 million, respectively. In the second quarter of 2020, management decided to temporarily suspend the 2019 share repurchase program due to the impact of COVID-19. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 6 Months Ended |
Jun. 30, 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 and Prior Service Costs (1) Unrealized Gain/Loss from Cash Flow Hedges Accumulated (In thousands) December 31, 2019 $ (162,243) $ (667,459) $ (6,789) $ (836,491) Amortization — 12,045 — 12,045 Other current period change (65,878) (3,452) (10,864) (80,194) June 30, 2020 $ (228,121) $ (658,866) $ (17,653) $ (904,640) Currency Net Actuarial Loss and Prior Service Costs (1) Unrealized Gain/Loss from Cash Flow Hedges Accumulated (In thousands) December 31, 2018 $ (199,704) $ (711,921) $ (9) $ (911,634) Amortization — 11,450 — 11,450 Other current period change 15,388 (7,203) (7,389) 796 June 30, 2019 $ (184,316) $ (707,674) $ (7,398) $ (899,388) _______________________ (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 | 6 Months Ended |
Jun. 30, 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 June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands, except per share amounts) Earnings (loss) per share — Basic: Earnings (loss) from continuing operations $ (73,705) $ 75,452 $ (182,834) $ 121,342 Less: Distributed and undistributed earnings allocated to unvested stock (130) (286) (248) (464) Earnings (loss) from continuing operations available to common shareholders — Basic $ (73,835) $ 75,166 $ (183,082) $ 120,878 Weighted average common shares outstanding — Basic 52,355 52,337 52,320 52,377 Earnings (loss) from continuing operations per common share — Basic $ (1.41) $ 1.44 $ (3.50) $ 2.31 Earnings (loss) per share — Diluted: Earnings (loss) from continuing operations $ (73,705) $ 75,452 $ (182,834) $ 121,342 Less: Distributed and undistributed earnings allocated to unvested stock (130) (286) (248) (464) Earnings (loss) from continuing operations available to common shareholders — Diluted $ (73,835) $ 75,166 $ (183,082) $ 120,878 Weighted average common shares outstanding — Basic 52,355 52,337 52,320 52,377 Effect of dilutive equity awards — 212 — 218 Weighted average common shares outstanding — Diluted 52,355 52,549 52,320 52,595 Earnings (loss) from continuing operations per common share — Diluted $ (1.41) $ 1.43 $ (3.50) $ 2.30 Anti-dilutive equity awards not included above 3,612 1,724 3,498 1,703 |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS | 6 Months Ended |
Jun. 30, 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 June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Stock option and stock purchase plans $ 1,052 $ 1,656 $ 2,409 $ 3,475 Unvested stock awards 6,487 5,867 8,221 11,447 Share-based compensation expense 7,539 7,523 10,630 14,922 Income tax benefit (1,307) (1,374) (1,485) (2,534) Share-based compensation expense, net of tax $ 6,232 $ 6,149 $ 9,145 $ 12,388 Total unreco gnized pre-tax compensation expense related to all share-based compensation arrangements at June 30, 2020 was $50 million and is expected to be recognized over a weighted-average period of 2.2 years . We generally grant awards under our various share-based compensation plans in the first quarter of each year in the annual management grant. The following table is a summary of the awards granted in the annual management grant in the first quarter of 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 for PBRSRs 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. Share-based compensation expense for restricted stock awards is recognized on a straight-line basis over the vesting period. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Components of net pension expense were as follows: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Pension Benefits Company-administered plans: Service cost $ 2,741 $ 2,783 $ 5,954 $ 5,815 Interest cost 17,353 21,395 34,885 42,864 Expected return on plan assets (23,948) (22,589) (48,211) (45,265) Amortization of: Net actuarial loss 7,437 7,432 15,152 15,042 Prior service cost 185 187 372 366 3,768 9,208 8,152 18,822 Union-administered plans 2,798 2,701 5,577 5,158 Net pension expense $ 6,566 $ 11,909 $ 13,729 $ 23,980 Company-administered plans: U.S. $ 6,055 $ 10,659 $ 12,833 $ 22,132 Non-U.S. (2,287) (1,451) (4,681) (3,310) 3,768 9,208 8,152 18,822 Union-administered plans 2,798 2,701 5,577 5,158 Net pension expense $ 6,566 $ 11,909 $ 13,729 $ 23,980 |
OTHER ITEMS IMPACTING COMPARABI
OTHER ITEMS IMPACTING COMPARABILITY | 6 Months Ended |
Jun. 30, 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 June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Restructuring and other, net $ 18,760 $ 5,935 $ 30,023 $ 8,523 ERP implementation costs 11,032 3,901 21,358 7,491 Gain on sale of property — (18,614) — (18,614) Total other items impacting comparability $ 29,792 $ (8,778) $ 51,381 $ (2,600) During the three and six months ended June 30, 2020 and 2019, other items impacting comparability included: • Restructuring and other, net — For the three and six months ended June 30, 2020, this primarily included severance costs of $13 million for both periods and professional fees related to the pursuit of a commercial claim, as well as net losses in 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. The severance costs recorded in the second quarter related to planned actions to reduce headcount, primarily in our North American and U.K. FMS operations. For the three months ended June 30, 2019, this primarily included charges related to cost saving initiatives and the pursuit of a commercial claim. In addition, for the six months ended June 30, 2019, this also included income from our Singapore operations that were shut down during the second quarter of 2019. • ERP implementation costs — Related to charges with the implementation of an Enterprise Resource Planning (ERP) system. In July 2020, we went live with the first module of our ERP system for human resources. In addition, we recorded a gain on the sale of certain SCS properties during the three months ended June 30, 2019. The gain is reflected within "Miscellaneous Income" in our Condensed Consolidated Statements of Earnings. |
CONTINGENCIES AND OTHER MATTERS
CONTINGENCIES AND OTHER MATTERS | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES AND OTHER MATTERS | CONTINGENCIES AND OTHER MATTERS We are a party to various claims, complaints and proceedings incident to the operation of our business including, but not limited to, those relating to commercial and employment claims, securities class actions, derivative claims, environmental matters, risk management matters (e.g., vehicle liability, workers’ compensation, etc.) and administrative assessments primarily associated with operating taxes. Other than as described below, we believe that all current proceedings are routine in nature and incidental to the conduct of our business and that the ultimate resolution of these claims, complaints and proceedings will not have a material effect on our condensed consolidated financial statements. We will establish loss provisions for matters in which losses are probable and can be reasonably estimated. 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. Securities Litigation Relating to Residual Value Estimates On May 20, 2020, a putative class action on behalf of purchasers of our securities who purchased or otherwise acquired their securities between July 23, 2015 and February 13, 2020, inclusive (the “Class Period”), was commenced against us and certain of our current and former officers in the U.S. District Court for the Southern District of Florida. The complaint alleges, among other things, that the defendants misrepresented the Company’s depreciation policy and residual value estimates for its vehicles during the Class Period in violation of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and seeks to recover, among other things, unspecified compensatory damages and attorneys' fees and costs. In addition, on June 26, 2020, a shareholder derivative complaint purportedly on behalf of the Company was filed in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida, against us as nominal defendant and certain of our current and former officers and our current directors, relating to the allegations set forth in the securities class action complaint and alleging breaches of fiduciary duties and unjust enrichment. The plaintiff, on our behalf, is seeking an award of monetary damages and restitution to us, improvements in our corporate governance and internal procedures, and legal fees. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Six months ended June 30, 2020 2019 (In thousands) Interest paid $ 123,258 $ 104,829 Income taxes paid 4,997 10,782 Right-of-use assets obtained in exchange for lease obligations: Finance leases 5,511 6,633 Operating leases 52,640 40,911 June 30, 2020 December 31, 2019 (In thousands) Capital expenditures acquired but not yet paid $ 75,576 $ 185,264 |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 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 provides a reconciliation between segment EBT and earnings from continuing operations before income taxes. Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Revenue: Fleet Management Solutions: ChoiceLease $ 766,161 $ 757,271 $ 1,558,367 $ 1,497,329 SelectCare 125,851 136,360 261,997 272,138 Commercial rental 169,171 253,871 374,937 490,019 Other 12,332 22,996 35,758 46,225 Fuel services revenue 117,253 212,371 290,588 420,237 ChoiceLease liability insurance revenue (1) 7,409 8,041 16,767 16,561 Fleet Management Solutions 1,198,177 1,390,910 2,538,414 2,742,509 Supply Chain Solutions 519,318 649,311 1,147,765 1,284,982 Dedicated Transportation Solutions 293,944 362,244 628,832 711,865 Eliminations (2) (116,157) (157,472) (258,423) (314,036) Total revenue $ 1,895,282 $ 2,244,993 $ 4,056,588 $ 4,425,320 Earnings (Loss) Before Taxes: Fleet Management Solutions $ (103,735) $ 57,746 $ (218,309) $ 118,657 Supply Chain Solutions 36,916 45,774 67,941 78,091 Dedicated Transportation Solutions 21,233 27,132 33,413 44,544 Eliminations (7,745) (19,166) (17,814) (36,468) (53,331) 111,486 (134,769) 204,824 Unallocated Central Support Services (10,718) (10,482) (20,104) (23,029) Non-operating pension costs (3) (936) (6,713) (2,157) (13,175) Other items impacting comparability, net (4) (29,792) 8,778 (51,381) 2,600 Earnings (loss) from continuing operations before income taxes $ (94,777) $ 103,069 $ (208,411) $ 171,220 _______________ (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) Represents the elimination of intercompany revenues in our FMS business segment. (3) 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. (4) 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 June 30, 2020 Capital expenditures paid $ 256,216 13,868 339 3,547 $ 273,970 Three months ended June 30, 2019 Capital expenditures paid $ 1,161,089 12,738 517 9,706 $ 1,184,050 Six months ended June 30, 2020 Capital expenditures paid $ 679,332 19,874 763 4,961 $ 704,930 Six months ended June 30, 2019 Capital expenditures paid $ 2,167,218 25,494 860 17,189 $ 2,210,761 |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [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 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) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of 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 lines. Primary Geographical Markets Three months ended June 30, 2020 FMS SCS DTS Eliminations Total (In thousands) United States $ 1,081,448 $ 441,332 $ 293,944 $ (112,925) $ 1,703,799 Canada 60,480 40,288 — (3,232) 97,536 Europe 56,249 — — — 56,249 Mexico — 37,698 — — 37,698 Total Revenues $ 1,198,177 $ 519,318 $ 293,944 $ (116,157) $ 1,895,282 Three months ended June 30, 2019 FMS SCS DTS Eliminations Total (In thousands) United States $ 1,238,631 $ 539,623 $ 362,244 $ (152,010) $ 1,988,488 Canada 76,390 53,545 — (5,462) 124,473 Europe 75,889 — — — 75,889 Mexico — 56,143 — — 56,143 Singapore — — — — — Total Revenues $ 1,390,910 $ 649,311 $ 362,244 $ (157,472) $ 2,244,993 Six months ended June 30, 2020 FMS SCS DTS Eliminations Total (In thousands) United States $ 2,278,969 $ 963,857 $ 628,832 $ (250,220) $ 3,621,438 Canada 131,245 93,840 — (8,203) 216,882 Europe 128,200 — — — 128,200 Mexico — 90,068 — — 90,068 Total Revenues $ 2,538,414 $ 1,147,765 $ 628,832 $ (258,423) $ 4,056,588 Six months ended June 30, 2019 FMS SCS DTS Eliminations Total (In thousands) United States $ 2,437,574 $ 1,069,016 $ 711,865 $ (303,173) $ 3,915,282 Canada 150,404 103,253 — (10,863) 242,794 Europe 154,531 — — — 154,531 Mexico — 109,420 — — 109,420 Singapore — 3,293 — — 3,293 Total Revenues $ 2,742,509 $ 1,284,982 $ 711,865 $ (314,036) $ 4,425,320 |
Schedule of Disaggregation of Revenue | Our SCS business segment included revenue from the below industries: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Automotive $ 147,749 $ 261,288 $ 397,674 $ 514,967 Technology and healthcare 84,766 110,054 175,899 223,723 Consumer package goods and retail 236,499 225,582 466,431 442,679 Industrial and other 50,304 52,387 107,761 103,613 Total SCS Revenues $ 519,318 $ 649,311 $ 1,147,765 $ 1,284,982 |
RECEIVABLES, NET (Tables)
RECEIVABLES, NET (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Receivables, Net | June 30, 2020 December 31, 2019 (In thousands) Trade $ 950,466 $ 1,060,298 Sales-type leases 121,184 135,353 Other, primarily warranty and insurance 60,897 55,600 1,132,547 1,251,251 Allowance for credit losses and other (44,908) (22,761) Total $ 1,087,639 $ 1,228,490 |
Schedule of Allowance for Credit Loss | The following table provides a reconciliation of our allowance for credit losses (in thousands): Balance at December 31, 2019 $ 10,500 Charges to provisions for credit losses 32,600 Impact of adoption of new accounting standard, write-offs, and other (8,300) Balance at June 30, 2020 $ 34,800 Allowance for credit memos 10,108 Allowance for credit losses and other $ 44,908 |
REVENUE EARNING EQUIPMENT, NET
REVENUE EARNING EQUIPMENT, NET (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue Earning Equipment [Abstract] | |
Schedule of Revenue Earning Equipment | June 30, 2020 December 31, 2019 Cost Accumulated Net Book Value (1) Cost Accumulated Net Book Value (1) (In thousands) Held for use: ChoiceLease $ 11,681,853 $ (4,188,226) $ 7,493,627 $ 12,223,179 $ (4,125,342) $ 8,097,837 Commercial rental 2,795,894 (954,648) 1,841,246 3,200,403 (1,049,850) 2,150,553 Held for sale 1,136,016 (901,050) 234,966 748,435 (569,161) 179,274 Total $ 15,613,763 $ (6,043,924) $ 9,569,839 $ 16,172,017 $ (5,744,353) $ 10,427,664 ———————————— |
Schedule of Negative Impacts | The first quarter and second quarter changes in our residual value estimates and resulting increase in depreciation expense and impact on used vehicle results in 2020 resulted in the following negative impacts on our Condensed Consolidated Statement of Operations: Three months ended June 30, 2020 Six months ended June 30, 2020 (In millions, except for per share data) Pre-tax earnings (loss) from continuing operations $ 80 $ 128 Net earnings (loss) $ 59 $ 95 Diluted EPS $ 1.13 $ 1.81 |
Schedule of 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 June 30, Six months ended June 30, June 30, 2020 December 31, 2019 2020 2019 2020 2019 (In thousands) Revenue earning equipment held for sale (1) : Trucks $ 48,744 $ 39,009 $ 5,389 $ 8,740 $ 16,451 $ 20,287 Tractors 84,707 73,359 3,035 14,053 11,488 19,021 Trailers 3,256 2,206 2,592 1,485 4,585 1,664 Total assets at fair value $ 136,707 $ 114,574 $ 11,016 $ 24,278 $ 32,524 $ 40,972 ———————————— (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 $98 million and $65 million as of June 30, 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. |
Schedule of Gain and Losses Revenue Earning Equipment | The components of used vehicle sales, net were as follows: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Losses (gains) on vehicle sales, net $ (1,528) $ (6,138) $ (2,352) $ (14,615) Losses from valuation adjustments 11,016 24,278 32,524 40,972 Used vehicle sales, net $ 9,488 $ 18,140 $ 30,172 $ 26,357 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 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 (256) (289) — (545) Balance at June 30, 2020 $ 243,446 $ 190,226 $ 40,808 $ 474,480 |
Schedule of Intangible Assets | The following table includes the carrying value of our intangible assets attributable to each reportable business segment: June 30, 2020 FMS SCS DTS CSS Total (In thousands) 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 (50,655) (22,397) (4,502) — (77,554) Total $ 7,031 $ 27,852 $ 3,080 $ 8,731 $ 46,694 December 31, 2019 FMS SCS DTS CSS Total (In thousands) 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) | 6 Months Ended |
Jun. 30, 2020 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | June 30, 2020 December 31, 2019 Accrued Non-Current Total Accrued Non-Current Total (In thousands) Salaries and wages $ 116,237 $ — $ 116,237 $ 126,119 $ — $ 126,119 Deferred compensation 4,375 66,533 70,908 6,436 65,006 71,442 Pension benefits 3,841 402,483 406,324 3,863 413,829 417,692 Other postretirement benefits 1,469 18,976 20,445 1,478 20,187 21,665 Other employee benefits 11,236 — 11,236 21,577 — 21,577 Insurance obligations (1) 166,905 300,372 467,277 163,763 285,838 449,601 Operating taxes 120,973 — 120,973 116,003 — 116,003 Income taxes 8,168 18,257 26,425 2,873 17,484 20,357 Interest 46,160 — 46,160 46,032 — 46,032 Deposits, mainly from customers 75,769 3,185 78,954 82,573 3,065 85,638 Operating lease liabilities 72,513 162,124 234,637 72,285 151,361 223,646 Deferred revenue (2) 167,281 446,691 613,972 165,205 438,482 603,687 Restructuring liabilities (3) 17,356 — 17,356 6,765 — 6,765 Other 57,032 77,850 134,882 61,105 46,751 107,856 Total $ 869,315 $ 1,496,471 $ 2,365,786 $ 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 increase in restructuring liabilities from December 31, 2019 principally represents certain severance actions in the second quarter of 2020. Refer to Note 16, "Other Items Impacting Comparability," for further information on restructuring activities during the second quarter. The majority of the balance remaining in restructuring liabilities is expected to be paid by mid-2021. |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Lease Income - Operating | The components of lease income were as follows: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Operating leases Lease income related to ChoiceLease $ 385,639 $ 374,550 $ 785,227 $ 734,859 Lease income related to commercial rental (1) 161,220 239,068 356,915 458,240 Sales type leases Interest income related to net investment in leases $ 12,080 $ 10,432 $ 23,724 $ 21,888 Variable lease income excluding commercial rental (1) $ 58,882 $ 58,409 $ 124,389 $ 113,848 ———————————— (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: June 30, 2020 December 31, 2019 (In thousands) Net investment in the lease — lease payment receivable $ 561,795 $ 553,076 Net investment in the lease — unguaranteed residual value in assets 41,013 44,952 602,808 598,028 Estimated loss allowance (1) (3,226) (673) Total (2) $ 599,582 $ 597,355 ———————————— (1) Amount as of June 30, 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) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Weighted Average Interest Rate June 30, 2020 Maturities June 30, December 31, (In thousands) Debt: U.S. commercial paper (1) 0.69% 2023 $ 76,410 $ 511,486 Canadian commercial paper (1) 1.24% 2023 118,146 136,199 Trade receivables program 1.11% 2021 200,000 — Global revolving credit facility 1.20% 2023 1,800 8,104 Unsecured U.S. notes — Medium-term notes (1)(2) 3.33% 2020-2026 6,071,198 5,965,064 Unsecured U.S. obligations 2.33% 2021-2024 600,000 200,000 Unsecured foreign obligations 2.04% 2020-2024 309,627 270,719 Asset-backed U.S. obligations (3) 2.51% 2020-2026 751,567 807,374 Finance lease obligations and other 2020-2073 47,869 51,717 8,176,617 7,950,663 Debt issuance costs (28,917) (25,875) Total debt 8,147,700 7,924,788 Short-term debt and current portion of long-term debt (1,460,604) (1,154,564) Long-term debt $ 6,687,096 $ 6,770,224 ———————————— (1) Amounts are net of unamortized original issue discounts of $5 million and $6 million as of June 30, 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 June 30, 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 June 30, 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 six months ended June 30, 2020. Debt Proceeds Debt Repayments (In thousands) (In thousands) Floating-rate unsecured 364-day U.S. term loan $ 400,000 2.65% Medium-term notes (due March 2020) $ 400,000 4.625% Medium-term notes (due June 2025) 399,924 2.50% Medium-term notes (due May 2020) 300,000 3.35% Medium-term notes (due September 2025) 399,724 Unsecured foreign term loans (1.71% due March 2020 and 1.89% due March 2020) 177,926 Trade receivables program 300,000 Trade receivables program 100,000 Unsecured foreign term loans (1.71% due February 2021 and 1.89% due February 2023) 177,926 Asset-backed U.S. obligations 60,318 Unsecured foreign term loans (2.94% due February 2021 and 2.99% due February 2022) 60,132 Canadian term loan, finance lease obligations, and other repayments 25,852 Unsecured foreign term loan (3.44% due February 2023) 18,791 Total debt proceeds $ 1,756,497 Total debt repaid $ 1,064,096 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 6 Months Ended |
Jun. 30, 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 and Prior Service Costs (1) Unrealized Gain/Loss from Cash Flow Hedges Accumulated (In thousands) December 31, 2019 $ (162,243) $ (667,459) $ (6,789) $ (836,491) Amortization — 12,045 — 12,045 Other current period change (65,878) (3,452) (10,864) (80,194) June 30, 2020 $ (228,121) $ (658,866) $ (17,653) $ (904,640) Currency Net Actuarial Loss and Prior Service Costs (1) Unrealized Gain/Loss from Cash Flow Hedges Accumulated (In thousands) December 31, 2018 $ (199,704) $ (711,921) $ (9) $ (911,634) Amortization — 11,450 — 11,450 Other current period change 15,388 (7,203) (7,389) 796 June 30, 2019 $ (184,316) $ (707,674) $ (7,398) $ (899,388) _______________________ (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) | 6 Months Ended |
Jun. 30, 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 June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands, except per share amounts) Earnings (loss) per share — Basic: Earnings (loss) from continuing operations $ (73,705) $ 75,452 $ (182,834) $ 121,342 Less: Distributed and undistributed earnings allocated to unvested stock (130) (286) (248) (464) Earnings (loss) from continuing operations available to common shareholders — Basic $ (73,835) $ 75,166 $ (183,082) $ 120,878 Weighted average common shares outstanding — Basic 52,355 52,337 52,320 52,377 Earnings (loss) from continuing operations per common share — Basic $ (1.41) $ 1.44 $ (3.50) $ 2.31 Earnings (loss) per share — Diluted: Earnings (loss) from continuing operations $ (73,705) $ 75,452 $ (182,834) $ 121,342 Less: Distributed and undistributed earnings allocated to unvested stock (130) (286) (248) (464) Earnings (loss) from continuing operations available to common shareholders — Diluted $ (73,835) $ 75,166 $ (183,082) $ 120,878 Weighted average common shares outstanding — Basic 52,355 52,337 52,320 52,377 Effect of dilutive equity awards — 212 — 218 Weighted average common shares outstanding — Diluted 52,355 52,549 52,320 52,595 Earnings (loss) from continuing operations per common share — Diluted $ (1.41) $ 1.43 $ (3.50) $ 2.30 Anti-dilutive equity awards not included above 3,612 1,724 3,498 1,703 |
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of 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 June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Stock option and stock purchase plans $ 1,052 $ 1,656 $ 2,409 $ 3,475 Unvested stock awards 6,487 5,867 8,221 11,447 Share-based compensation expense 7,539 7,523 10,630 14,922 Income tax benefit (1,307) (1,374) (1,485) (2,534) Share-based compensation expense, net of tax $ 6,232 $ 6,149 $ 9,145 $ 12,388 |
Schedule of Share-based Compensation, Activity | The following table is a summary of the awards granted in the annual management grant in the first quarter of 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) | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Benefit Cost | Components of net pension expense were as follows: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Pension Benefits Company-administered plans: Service cost $ 2,741 $ 2,783 $ 5,954 $ 5,815 Interest cost 17,353 21,395 34,885 42,864 Expected return on plan assets (23,948) (22,589) (48,211) (45,265) Amortization of: Net actuarial loss 7,437 7,432 15,152 15,042 Prior service cost 185 187 372 366 3,768 9,208 8,152 18,822 Union-administered plans 2,798 2,701 5,577 5,158 Net pension expense $ 6,566 $ 11,909 $ 13,729 $ 23,980 Company-administered plans: U.S. $ 6,055 $ 10,659 $ 12,833 $ 22,132 Non-U.S. (2,287) (1,451) (4,681) (3,310) 3,768 9,208 8,152 18,822 Union-administered plans 2,798 2,701 5,577 5,158 Net pension expense $ 6,566 $ 11,909 $ 13,729 $ 23,980 |
OTHER ITEMS IMPACTING COMPARA_2
OTHER ITEMS IMPACTING COMPARABILITY (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Items Impacting Comparability | Excluding these items from our segment measure of performance allows for better year over year comparison: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Restructuring and other, net $ 18,760 $ 5,935 $ 30,023 $ 8,523 ERP implementation costs 11,032 3,901 21,358 7,491 Gain on sale of property — (18,614) — (18,614) Total other items impacting comparability $ 29,792 $ (8,778) $ 51,381 $ (2,600) |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | Six months ended June 30, 2020 2019 (In thousands) Interest paid $ 123,258 $ 104,829 Income taxes paid 4,997 10,782 Right-of-use assets obtained in exchange for lease obligations: Finance leases 5,511 6,633 Operating leases 52,640 40,911 June 30, 2020 December 31, 2019 (In thousands) Capital expenditures acquired but not yet paid $ 75,576 $ 185,264 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information of Business Segments | The following table sets forth financial information for each of our segments and provides a reconciliation between segment EBT and earnings from continuing operations before income taxes. Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 (In thousands) Revenue: Fleet Management Solutions: ChoiceLease $ 766,161 $ 757,271 $ 1,558,367 $ 1,497,329 SelectCare 125,851 136,360 261,997 272,138 Commercial rental 169,171 253,871 374,937 490,019 Other 12,332 22,996 35,758 46,225 Fuel services revenue 117,253 212,371 290,588 420,237 ChoiceLease liability insurance revenue (1) 7,409 8,041 16,767 16,561 Fleet Management Solutions 1,198,177 1,390,910 2,538,414 2,742,509 Supply Chain Solutions 519,318 649,311 1,147,765 1,284,982 Dedicated Transportation Solutions 293,944 362,244 628,832 711,865 Eliminations (2) (116,157) (157,472) (258,423) (314,036) Total revenue $ 1,895,282 $ 2,244,993 $ 4,056,588 $ 4,425,320 Earnings (Loss) Before Taxes: Fleet Management Solutions $ (103,735) $ 57,746 $ (218,309) $ 118,657 Supply Chain Solutions 36,916 45,774 67,941 78,091 Dedicated Transportation Solutions 21,233 27,132 33,413 44,544 Eliminations (7,745) (19,166) (17,814) (36,468) (53,331) 111,486 (134,769) 204,824 Unallocated Central Support Services (10,718) (10,482) (20,104) (23,029) Non-operating pension costs (3) (936) (6,713) (2,157) (13,175) Other items impacting comparability, net (4) (29,792) 8,778 (51,381) 2,600 Earnings (loss) from continuing operations before income taxes $ (94,777) $ 103,069 $ (208,411) $ 171,220 _______________ (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) Represents the elimination of intercompany revenues in our FMS business segment. (3) 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. (4) 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 June 30, 2020 Capital expenditures paid $ 256,216 13,868 339 3,547 $ 273,970 Three months ended June 30, 2019 Capital expenditures paid $ 1,161,089 12,738 517 9,706 $ 1,184,050 Six months ended June 30, 2020 Capital expenditures paid $ 679,332 19,874 763 4,961 $ 704,930 Six months ended June 30, 2019 Capital expenditures paid $ 2,167,218 25,494 860 17,189 $ 2,210,761 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||||
Lease & related maintenance and rental revenues | $ 868,660 | $ 933,833 | $ 1,796,416 | $ 1,833,392 | |
Deferred revenue | 613,972 | 613,972 | $ 603,687 | ||
Amount of revenue recognized, previously included in deferred revenue | 103,000 | ||||
Increase in deferred revenue during the period | 117,000 | ||||
Contracted not recognized revenue | 2,800,000 | 2,800,000 | |||
Capitalized sales commissions | 94,000 | 94,000 | 105,000 | ||
Initial direct costs of leases | 49,000 | 55,000 | |||
Amortization of capitalized sales commissions | 11,000 | 11,000 | 22,000 | 22,000 | |
Maintenance Services | |||||
Disaggregation of Revenue [Line Items] | |||||
Lease & related maintenance and rental revenues | 238,000 | $ 236,000 | 478,000 | $ 475,000 | |
ChoiceLease | |||||
Disaggregation of Revenue [Line Items] | |||||
Deferred revenue | $ 594,000 | $ 594,000 | $ 587,000 |
REVENUE Disaggregation of Reven
REVENUE Disaggregation of Revenue - Geographical (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,895,282 | $ 2,244,993 | $ 4,425,320 | |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,703,799 | 1,988,488 | $ 3,621,438 | 3,915,282 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 97,536 | 124,473 | 216,882 | 242,794 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 56,249 | 75,889 | 128,200 | 154,531 |
Mexico | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 37,698 | 56,143 | 90,068 | 109,420 |
Singapore | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 4,056,588 | 3,293 | |
SCS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 519,318 | 649,311 | 1,147,765 | 1,284,982 |
Operating Segments | FMS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,198,177 | 1,390,910 | 2,742,509 | |
Operating Segments | FMS | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,081,448 | 1,238,631 | 2,278,969 | 2,437,574 |
Operating Segments | FMS | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 60,480 | 76,390 | 131,245 | 150,404 |
Operating Segments | FMS | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 56,249 | 75,889 | 128,200 | 154,531 |
Operating Segments | FMS | Mexico | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segments | FMS | Singapore | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 2,538,414 | 0 | |
Operating Segments | SCS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 519,318 | 649,311 | 1,284,982 | |
Operating Segments | SCS | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 441,332 | 539,623 | 963,857 | 1,069,016 |
Operating Segments | SCS | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 40,288 | 53,545 | 93,840 | 103,253 |
Operating Segments | SCS | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segments | SCS | Mexico | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 37,698 | 56,143 | 90,068 | 109,420 |
Operating Segments | SCS | Singapore | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 1,147,765 | 3,293 | |
Operating Segments | DTS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 293,944 | 362,244 | 711,865 | |
Operating Segments | DTS | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 293,944 | 362,244 | 628,832 | 711,865 |
Operating Segments | DTS | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segments | DTS | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segments | DTS | Mexico | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating Segments | DTS | Singapore | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 628,832 | 0 | |
Eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (116,157) | (157,472) | (314,036) | |
Eliminations | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (112,925) | (152,010) | (250,220) | (303,173) |
Eliminations | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (3,232) | (5,462) | (8,203) | (10,863) |
Eliminations | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Eliminations | Mexico | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0 | 0 | 0 | 0 |
Eliminations | Singapore | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0 | $ (258,423) | $ 0 |
REVENUE Disaggregation of Rev_2
REVENUE Disaggregation of Revenue - Industry (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1,895,282 | $ 2,244,993 | $ 4,425,320 | |
SCS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 519,318 | 649,311 | $ 1,147,765 | 1,284,982 |
Automotive | SCS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 147,749 | 261,288 | 397,674 | 514,967 |
Technology and healthcare | SCS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 84,766 | 110,054 | 175,899 | 223,723 |
Consumer package goods and retail | SCS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 236,499 | 225,582 | 466,431 | 442,679 |
Industrial and other | SCS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 50,304 | $ 52,387 | $ 107,761 | $ 103,613 |
RECEIVABLES, NET - Summary (Det
RECEIVABLES, NET - Summary (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Trade | $ 950,466 | $ 1,060,298 |
Sales-type leases | 121,184 | 135,353 |
Other, primarily warranty and insurance | 60,897 | 55,600 |
Receivables, gross | 1,132,547 | 1,251,251 |
Allowance for credit losses and other | (44,908) | (22,761) |
Total | $ 1,087,639 | $ 1,228,490 |
RECEIVABLES, NET - Allowance fo
RECEIVABLES, NET - Allowance for Credit Loss (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at December 31, 2019 | $ 10,500 | |
Charges to provisions for credit losses | 32,600 | |
Impact of adoption of new accounting standard, write-offs, and other | (8,300) | |
Balance at June 30, 2020 | 34,800 | |
Allowance for credit memos | 10,108 | |
Allowance for credit losses and other | $ 44,908 | $ 22,761 |
REVENUE EARNING EQUIPMENT, NE_2
REVENUE EARNING EQUIPMENT, NET - Schedule of Revenue Earning Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Revenue Earning Equipment [Line Items] | ||
Cost | $ 15,613,763 | $ 16,172,017 |
Accumulated Depreciation | (6,043,924) | (5,744,353) |
Net Book Value | 9,569,839 | 10,427,664 |
ChoiceLease | ||
Revenue Earning Equipment [Line Items] | ||
Cost | 11,681,853 | 12,223,179 |
Accumulated Depreciation | (4,188,226) | (4,125,342) |
Net Book Value | 7,493,627 | 8,097,837 |
Commercial rental | ||
Revenue Earning Equipment [Line Items] | ||
Cost | 2,795,894 | 3,200,403 |
Accumulated Depreciation | (954,648) | (1,049,850) |
Net Book Value | 1,841,246 | 2,150,553 |
Held for sale | ||
Revenue Earning Equipment [Line Items] | ||
Cost | 1,136,016 | 748,435 |
Accumulated Depreciation | (901,050) | (569,161) |
Net Book Value | 234,966 | 179,274 |
Assets held under finance leases | ||
Revenue Earning Equipment [Line Items] | ||
Cost | 10,000 | 12,000 |
Accumulated Depreciation | $ (8,000) | $ (8,000) |
REVENUE EARNING EQUIPMENT, NE_3
REVENUE EARNING EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | |
Revenue Earning Equipment [Abstract] | ||
Accelerated depreciation | $ 31 | $ 27 |
Losses from used vehicle sales | 9 | $ 21 |
Policy depreciation | $ 18 |
REVENUE EARNING EQUIPMENT, NE_4
REVENUE EARNING EQUIPMENT, NET - Summary of Impact from Review of Policy Depreciation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue Earning Equipment [Line Items] | ||||
Pre-tax earnings (loss) from continuing operations | $ (94,777) | $ 103,069 | $ (208,411) | $ 171,220 |
Net earnings (loss) | $ (74,099) | $ 75,215 | $ (183,712) | $ 120,531 |
Net earnings (in dollars per share) | $ (1.42) | $ 1.43 | $ (3.52) | $ 2.28 |
Impact from review of policy depreciation | ||||
Revenue Earning Equipment [Line Items] | ||||
Pre-tax earnings (loss) from continuing operations | $ 80,000 | $ 128,000 | ||
Net earnings (loss) | $ 59,000 | $ 95,000 | ||
Net earnings (in dollars per share) | $ 1.13 | $ 1.81 |
REVENUE EARNING EQUIPMENT, NE_5
REVENUE EARNING EQUIPMENT, NET - Level 3 Fair Value Measurement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Revenue Earning Equipment [Line Items] | |||||
Total losses | $ (11,016) | $ (24,278) | $ (32,524) | $ (40,972) | |
Net book value of assets held for sale | 98,000 | 98,000 | $ 65,000 | ||
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring | |||||
Revenue Earning Equipment [Line Items] | |||||
Assets held for sale | 136,707 | 136,707 | 114,574 | ||
Total losses | 11,016 | 24,278 | 32,524 | 40,972 | |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring | Trucks | |||||
Revenue Earning Equipment [Line Items] | |||||
Assets held for sale | 48,744 | 48,744 | 39,009 | ||
Total losses | 5,389 | 8,740 | 16,451 | 20,287 | |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring | Tractors | |||||
Revenue Earning Equipment [Line Items] | |||||
Assets held for sale | 84,707 | 84,707 | 73,359 | ||
Total losses | 3,035 | 14,053 | 11,488 | 19,021 | |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring | Trailers | |||||
Revenue Earning Equipment [Line Items] | |||||
Assets held for sale | 3,256 | 3,256 | $ 2,206 | ||
Total losses | $ 2,592 | $ 1,485 | $ 4,585 | $ 1,664 |
REVENUE EARNING EQUIPMENT, NE_6
REVENUE EARNING EQUIPMENT, NET - Recognized Gains on Used Vehicles (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue Earning Equipment [Abstract] | ||||
Losses (gains) on vehicle sales, net | $ (1,528) | $ (6,138) | $ (2,352) | $ (14,615) |
Losses from valuation adjustments | 11,016 | 24,278 | 32,524 | 40,972 |
Used vehicle sales, net | $ 9,488 | $ 18,140 | $ 30,172 | $ 26,357 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill Summary (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance at December 31, 2019 | $ 475,025 |
Foreign currency translation adjustments | (545) |
Balance at June 30, 2020 | 474,480 |
FMS | |
Goodwill [Roll Forward] | |
Balance at December 31, 2019 | 243,702 |
Foreign currency translation adjustments | (256) |
Balance at June 30, 2020 | 243,446 |
SCS | |
Goodwill [Roll Forward] | |
Balance at December 31, 2019 | 190,515 |
Foreign currency translation adjustments | (289) |
Balance at June 30, 2020 | 190,226 |
DTS | |
Goodwill [Roll Forward] | |
Balance at December 31, 2019 | 40,808 |
Foreign currency translation adjustments | 0 |
Balance at June 30, 2020 | $ 40,808 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill [Line Items] | |||
Goodwill | $ 474,480 | $ 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 | Jun. 30, 2020 | Dec. 31, 2019 |
Finite lived intangible assets: | ||
Intangible assets, gross | $ 124,248 | $ 124,248 |
Accumulated amortization | (77,554) | (73,343) |
Intangible assets, net | 46,694 | 50,905 |
Customer relationship intangibles | ||
Finite lived intangible assets: | ||
Finite lived intangible assets | 113,150 | 113,150 |
Other intangibles, primarily trade name | ||
Finite lived intangible assets: | ||
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: | ||
Intangible assets, gross | 57,686 | 57,686 |
Accumulated amortization | (50,655) | (49,031) |
Intangible assets, net | 7,031 | 8,655 |
FMS | Customer relationship intangibles | ||
Finite lived intangible assets: | ||
Finite lived intangible assets | 56,050 | 56,050 |
FMS | Other intangibles, primarily trade name | ||
Finite lived intangible assets: | ||
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: | ||
Intangible assets, gross | 50,249 | 50,249 |
Accumulated amortization | (22,397) | (20,047) |
Intangible assets, net | 27,852 | 30,202 |
SCS | Customer relationship intangibles | ||
Finite lived intangible assets: | ||
Finite lived intangible assets | 49,518 | 49,518 |
SCS | Other intangibles, primarily trade name | ||
Finite lived intangible assets: | ||
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: | ||
Intangible assets, gross | 7,582 | 7,582 |
Accumulated amortization | (4,502) | (4,265) |
Intangible assets, net | 3,080 | 3,317 |
DTS | Customer relationship intangibles | ||
Finite lived intangible assets: | ||
Finite lived intangible assets | 7,582 | 7,582 |
DTS | Other intangibles, primarily trade name | ||
Finite lived intangible assets: | ||
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: | ||
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: | ||
Finite lived intangible assets | 0 | 0 |
CSS | Other intangibles, primarily trade name | ||
Finite lived intangible assets: | ||
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 | Jun. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccountsPayableAndOtherAccruedLiabilitiesCurrent | us-gaap:AccountsPayableAndOtherAccruedLiabilitiesCurrent |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent |
Accrued Expenses | ||
Salaries and wages | $ 116,237 | $ 126,119 |
Deferred compensation | 4,375 | 6,436 |
Pension benefits | 3,841 | 3,863 |
Other postretirement benefits | 1,469 | 1,478 |
Other employee benefits | 11,236 | 21,577 |
Insurance obligations | 166,905 | 163,763 |
Operating taxes | 120,973 | 116,003 |
Income taxes | 8,168 | 2,873 |
Interest | 46,160 | 46,032 |
Deposits, mainly from customers | 75,769 | 82,573 |
Operating lease liabilities | 72,513 | 72,285 |
Deferred revenue | 167,281 | 165,205 |
Restructuring liabilities | 17,356 | 6,765 |
Other | 57,032 | 61,105 |
Total | 869,315 | 876,077 |
Non-Current Liabilities | ||
Salaries and wages | 0 | 0 |
Deferred compensation | 66,533 | 65,006 |
Pension benefits | 402,483 | 413,829 |
Other postretirement benefits | 18,976 | 20,187 |
Other employee benefits | 0 | 0 |
Insurance obligations | 300,372 | 285,838 |
Operating taxes | 0 | 0 |
Income taxes | 18,257 | 17,484 |
Interest | 0 | 0 |
Deposits, mainly from customers | 3,185 | 3,065 |
Operating lease liabilities | 162,124 | 151,361 |
Deferred revenue | 446,691 | 438,482 |
Restructuring liabilities | 0 | 0 |
Other | 77,850 | 46,751 |
Total | 1,496,471 | 1,442,003 |
Total | ||
Salaries and wages | 116,237 | 126,119 |
Deferred compensation | 70,908 | 71,442 |
Pension benefits | 406,324 | 417,692 |
Other postretirement benefits | 20,445 | 21,665 |
Other employee benefits | 11,236 | 21,577 |
Insurance obligations | 467,277 | 449,601 |
Operating taxes | 120,973 | 116,003 |
Income taxes | 26,425 | 20,357 |
Interest | 46,160 | 46,032 |
Deposits, mainly from customers | 78,954 | 85,638 |
Operating lease liabilities | 234,637 | 223,646 |
Deferred revenue | 613,972 | 603,687 |
Restructuring liabilities | 17,356 | 6,765 |
Other | 134,882 | 107,856 |
Total | $ 2,365,786 | $ 2,318,080 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate from continuing operations, expense (benefit) | (22.20%) | 26.80% | (12.30%) | 29.10% | |
Valuation allowance recorded | $ 13 |
LEASES - Lease Income (Details)
LEASES - Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating leases | ||||
Lease income related to ChoiceLease | $ 385,639 | $ 374,550 | $ 785,227 | $ 734,859 |
Lease income related to commercial rental | 161,220 | 239,068 | 356,915 | 458,240 |
Sales type leases | ||||
Interest income related to net investment in leases | 12,080 | 10,432 | 23,724 | 21,888 |
Variable lease income excluding commercial rental | $ 58,882 | $ 58,409 | $ 124,389 | $ 113,848 |
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 | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Net investment in the lease — lease payment receivable | $ 561,795 | $ 553,076 |
Net investment in the lease — unguaranteed residual value in assets | 41,013 | 44,952 |
Net investment in the lease, gross | 602,808 | 598,028 |
Estimated loss allowance | (3,226) | (673) |
Net investment in the lease | $ 599,582 | $ 597,355 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt: | ||
Long-term debt, gross | $ 8,176,617 | $ 7,950,663 |
Debt issuance costs | (28,917) | (25,875) |
Total debt | 8,147,700 | 7,924,788 |
Short-term debt and current portion of long-term debt | (1,460,604) | (1,154,564) |
Long-term debt | 6,687,096 | 6,770,224 |
Unamortized original issue discounts | 5,000 | 6,000 |
Fair market value adjustment on notes subject to hedging | 6,000 | |
Debt Proceeds | 1,756,497 | |
Debt Repayments | 1,064,096 | |
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 | 0.69% | |
Long-term debt, gross | $ 76,410 | 511,486 |
Canadian commercial paper | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 1.24% | |
Long-term debt, gross | $ 118,146 | 136,199 |
Trade receivables program | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 1.11% | |
Long-term debt, gross | $ 200,000 | 0 |
Debt Proceeds | 300,000 | |
Debt Repayments | $ 100,000 | |
Global revolving credit facility | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 1.20% | |
Long-term debt, gross | $ 1,800 | 8,104 |
Unsecured U.S. notes — Medium-term notes | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 3.33% | |
Long-term debt, gross | $ 6,071,198 | 5,965,064 |
Unsecured U.S. obligations | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 2.33% | |
Long-term debt, gross | $ 600,000 | 200,000 |
Unsecured foreign obligations | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 2.04% | |
Long-term debt, gross | $ 309,627 | 270,719 |
Asset-backed U.S. obligations | ||
Debt: | ||
Long-term debt, weighted-average interest rate | 2.51% | |
Long-term debt, gross | $ 751,567 | 807,374 |
Debt Repayments | 60,318 | |
Finance lease obligations and other | ||
Debt: | ||
Long-term debt, gross | 47,869 | $ 51,717 |
Floating-rate unsecured 364-day U.S. term loan | ||
Debt: | ||
Debt Proceeds | $ 400,000 | |
4.625% Medium-term notes (due June 2025) | ||
Debt: | ||
Stated interest rate | 4.625% | |
Debt Proceeds | $ 399,924 | |
3.35% Medium-term notes (due September 2025) | ||
Debt: | ||
Stated interest rate | 3.35% | |
Debt Proceeds | $ 399,724 | |
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% | |
Unsecured foreign 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% | |
Unsecured foreign term loan (3.44% 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 | |
2.50% Medium-term notes (due May 2020) | ||
Debt: | ||
Stated interest rate | 2.50% | |
Debt Repayments | $ 300,000 | |
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 | ||
Debt: | ||
Stated interest rate | 1.71% | |
Unsecured Foreign Term Loans, Due March 2020 | ||
Debt: | ||
Stated interest rate | 1.89% | |
Canadian term loan, finance lease obligations, and other repayments | ||
Debt: | ||
Debt Repayments | $ 25,852 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($)instution | Feb. 29, 2020USD ($) | Jan. 31, 2020USD ($) | 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 | $ 225,000,000 | |||
Available proceeds under program | $ 93,000,000 | $ 93,000,000 | |||
Letters of credit and surety bonds outstanding | 483,000,000 | 483,000,000 | 453,000,000 | ||
Fair value of total debt | 7,700,000,000 | 7,700,000,000 | 7,000,000,000 | ||
Global revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 1,400,000,000 | $ 1,400,000,000 | |||
Number of lending institutions | instution | 12 | ||||
Annual facility fees, percentage | 0.15% | ||||
Ratio of debt to consolidated net worth | 3 | 3 | |||
Amortization percent of charge | 50.00% | 50.00% | |||
Amortization period | 7 years | ||||
Debt to consolidated tangible net worth ratio | 235.00% | 235.00% | |||
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 | $ 75,000,000 | |||
Letter of credit outstanding amount | 0 | 0 | |||
Line of credit remaining capacity | $ 1,200,000,000 | $ 1,200,000,000 | |||
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% |
SHARE REPURCHASE PROGRAMS (Deta
SHARE REPURCHASE PROGRAMS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Accelerated Share Repurchases [Line Items] | |||||
Common stock repurchases | $ 0 | $ 7,064 | $ 11,924 | $ 21,220 | |
Common Stock | |||||
Accelerated Share Repurchases [Line Items] | |||||
Repurchased and retired shares (in shares) | 119,270 | 303,098 | 345,114 | ||
Common stock repurchases | $ 60 | $ 152 | $ 173 | ||
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 | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 2,476,310 | $ 2,536,568 |
Ending balance | 2,159,092 | 2,607,706 |
Currency Translation Adjustments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (162,243) | (199,704) |
Amortization | 0 | 0 |
Other current period change | (65,878) | 15,388 |
Ending balance | (228,121) | (184,316) |
Net Actuarial Loss and Prior Service Costs | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (667,459) | (711,921) |
Amortization | 12,045 | 11,450 |
Other current period change | (3,452) | (7,203) |
Ending balance | (658,866) | (707,674) |
Unrealized Gain/Loss from Cash Flow Hedges | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (6,789) | (9) |
Amortization | 0 | 0 |
Other current period change | (10,864) | (7,389) |
Ending balance | (17,653) | (7,398) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (836,491) | (911,634) |
Amortization | 12,045 | 11,450 |
Other current period change | (80,194) | 796 |
Ending balance | $ (904,640) | $ (899,388) |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings (loss) per share — Basic: | ||||
Earnings (loss) from continuing operations | $ (73,705) | $ 75,452 | $ (182,834) | $ 121,342 |
Less: Distributed and undistributed earnings allocated to unvested stock | (130) | (286) | (248) | (464) |
Earnings (loss) from continuing operations available to common shareholders — Basic | $ (73,835) | $ 75,166 | $ (183,082) | $ 120,878 |
Weighted average common shares outstanding - Basic (in shares) | 52,355 | 52,337 | 52,320 | 52,377 |
Earnings from continuing operations per common share - Basic (in dollars per share) | $ (1.41) | $ 1.44 | $ (3.50) | $ 2.31 |
Earnings (loss) per share — Diluted: | ||||
Earnings (loss) from continuing operations | $ (73,705) | $ 75,452 | $ (182,834) | $ 121,342 |
Less: Distributed and undistributed earnings allocated to unvested stock | (130) | (286) | (248) | (464) |
Earnings (loss) from continuing operations available to common shareholders — Diluted | $ (73,835) | $ 75,166 | $ (183,082) | $ 120,878 |
Weighted average common shares outstanding - Basic (in shares) | 52,355 | 52,337 | 52,320 | 52,377 |
Effect of dilutive equity awards (in shares) | 0 | 212 | 0 | 218 |
Weighted average common shares outstanding — Diluted (in shares) | 52,355 | 52,549 | 52,320 | 52,595 |
Earnings (loss) from continuing operations per common share - Diluted (in dollars per share) | $ (1.41) | $ 1.43 | $ (3.50) | $ 2.30 |
Anti-dilutive equity awards not included above (in shares) | 3,612 | 1,724 | 3,498 | 1,703 |
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 | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 7,539 | $ 7,523 | $ 10,630 | $ 14,922 |
Income tax benefit | (1,307) | (1,374) | (1,485) | (2,534) |
Share-based compensation expense, net of tax | 6,232 | 6,149 | 9,145 | 12,388 |
Stock option and stock purchase plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 1,052 | 1,656 | 2,409 | 3,475 |
Unvested stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 6,487 | $ 5,867 | $ 8,221 | $ 11,447 |
SHARE-BASED COMPENSATION PLAN_3
SHARE-BASED COMPENSATION PLANS - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Share-based Payment Arrangement [Abstract] | |
Compensation cost not yet recognized | $ 50 |
Compensation cost not yet recognized, period for recognition | 2 years 2 months 12 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 dollar 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 dollar 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 dollar per share) | $ / shares | $ 38.45 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Company-administered plans: | ||||
Contribution to pension plans | $ 17,000 | |||
Expected plan contributions | $ 37,000 | 37,000 | ||
Pension Benefits | ||||
Company-administered plans: | ||||
Net pension expense | 6,566 | $ 11,909 | 13,729 | $ 23,980 |
Pension Benefits | Company-administered plans: | ||||
Company-administered plans: | ||||
Service cost | 2,741 | 2,783 | 5,954 | 5,815 |
Interest cost | 17,353 | 21,395 | 34,885 | 42,864 |
Expected return on plan assets | (23,948) | (22,589) | (48,211) | (45,265) |
Net actuarial loss | 7,437 | 7,432 | 15,152 | 15,042 |
Prior service cost | 185 | 187 | 372 | 366 |
Net pension expense | 3,768 | 9,208 | 8,152 | 18,822 |
Pension Benefits | Company-administered plans: | U.S. | ||||
Company-administered plans: | ||||
Net pension expense | 6,055 | 10,659 | 12,833 | 22,132 |
Pension Benefits | Company-administered plans: | Non-U.S. | ||||
Company-administered plans: | ||||
Net pension expense | (2,287) | (1,451) | (4,681) | (3,310) |
Pension Benefits | Union-administered plans | ||||
Company-administered plans: | ||||
Net pension expense | $ 2,798 | $ 2,701 | $ 5,577 | $ 5,158 |
OTHER ITEMS IMPACTING COMPARA_3
OTHER ITEMS IMPACTING COMPARABILITY - Schedule of Other Items Impacting Comparability (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Other Income and Expenses [Abstract] | ||||
Restructuring and other, net | $ 18,760 | $ 5,935 | $ 30,023 | $ 8,523 |
ERP implementation costs | 11,032 | 3,901 | 21,358 | 7,491 |
Gain on sale of property | 0 | (18,614) | 0 | (18,614) |
Total other items impacting comparability | $ 29,792 | $ (8,778) | $ 51,381 | $ (2,600) |
OTHER ITEMS IMPACTING COMPARA_4
OTHER ITEMS IMPACTING COMPARABILITY - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other, net | $ 18,760 | $ 5,935 | $ 30,023 | $ 8,523 |
Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and other, net | $ 13,000 | $ 13,000 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid | $ 123,258 | $ 104,829 |
Income taxes paid | 4,997 | 10,782 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Finance leases | 5,511 | 6,633 |
Operating leases | 52,640 | 40,911 |
Capital expenditures acquired but not yet paid | $ 75,576 | $ 185,264 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segment | Jun. 30, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of segments | segment | 3 | |||
Lease & related maintenance and rental revenues | $ 868,660 | $ 933,833 | $ 1,796,416 | $ 1,833,392 |
Revenues | 1,895,282 | 2,244,993 | 4,056,588 | 4,425,320 |
Earnings (Loss) Before Taxes | (53,331) | 111,486 | (134,769) | 204,824 |
Non-operating pension costs | (936) | (6,713) | (2,157) | (13,175) |
Other items impacting comparability, net | (37,200) | (9,836) | (68,147) | (16,014) |
Earnings (loss) from continuing operations before income taxes | (94,777) | 103,069 | (208,411) | 171,220 |
Capital expenditures paid | 273,970 | 1,184,050 | 704,930 | 2,210,761 |
Operating Segments | FMS | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,198,177 | 1,390,910 | 2,538,414 | 2,742,509 |
Earnings (Loss) Before Taxes | (103,735) | 57,746 | (218,309) | 118,657 |
Capital expenditures paid | 256,216 | 1,161,089 | 679,332 | 2,167,218 |
Operating Segments | FMS | ChoiceLease | ||||
Segment Reporting Information [Line Items] | ||||
Lease & related maintenance and rental revenues | 766,161 | 757,271 | 1,558,367 | 1,497,329 |
Operating Segments | FMS | SelectCare | ||||
Segment Reporting Information [Line Items] | ||||
Lease & related maintenance and rental revenues | 125,851 | 136,360 | 261,997 | 272,138 |
Operating Segments | FMS | Commercial rental | ||||
Segment Reporting Information [Line Items] | ||||
Lease & related maintenance and rental revenues | 169,171 | 253,871 | 374,937 | 490,019 |
Operating Segments | FMS | Other | ||||
Segment Reporting Information [Line Items] | ||||
Lease & related maintenance and rental revenues | 12,332 | 22,996 | 35,758 | 46,225 |
Operating Segments | FMS | Fuel services revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 117,253 | 212,371 | 290,588 | 420,237 |
Operating Segments | FMS | Choice lease liability insurance revenue | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 7,409 | 8,041 | 16,767 | 16,561 |
Operating Segments | SCS | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 519,318 | 649,311 | 1,147,765 | 1,284,982 |
Earnings (Loss) Before Taxes | 36,916 | 45,774 | 67,941 | 78,091 |
Capital expenditures paid | 13,868 | 12,738 | 19,874 | 25,494 |
Operating Segments | DTS | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 293,944 | 362,244 | 628,832 | 711,865 |
Earnings (Loss) Before Taxes | 21,233 | 27,132 | 33,413 | 44,544 |
Capital expenditures paid | 339 | 517 | 763 | 860 |
Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (116,157) | (157,472) | (258,423) | (314,036) |
Earnings (Loss) Before Taxes | (7,745) | (19,166) | (17,814) | (36,468) |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Unallocated Central Support Services | (10,718) | (10,482) | (20,104) | (23,029) |
Non-operating pension costs | (936) | (6,713) | (2,157) | (13,175) |
Other items impacting comparability, net | (29,792) | 8,778 | (51,381) | 2,600 |
Capital expenditures paid | $ 3,547 | $ 9,706 | $ 4,961 | $ 17,189 |