RYDER SYSTEM INC, 10-Q filed on 4/22/2015
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2015
Document and Entity Information [Abstract]
 
Entity Registrant Name
RYDER SYSTEM INC 
Entity Central Index Key
0000085961 
Current Fiscal Year End Date
--12-31 
Entity Filer Category
Large Accelerated Filer 
Document Type
10-Q 
Document Period End Date
Mar. 31, 2015 
Document Fiscal Year Focus
2015 
Document Fiscal Period Focus
Q1 
Amendment Flag
false 
Entity Common Stock, Shares Outstanding
53,309,221 
Consolidated Condensed Statements of Earnings (Unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Income Statement [Abstract]
 
 
Lease and rental revenues
$ 729,024 
$ 689,682 
Services revenue
693,704 
709,699 
Fuel services revenue
144,425 
211,356 
Total revenues
1,567,153 
1,610,737 
Cost of lease and rental
519,174 
493,043 
Cost of services
582,330 
606,229 
Cost of fuel services
136,289 
207,205 
Other operating expenses
34,744 
36,645 
Selling, general and administrative expenses
206,605 
191,702 
Gains on vehicle sales, net
(29,579)
(28,818)
Interest expense
35,849 
35,109 
Miscellaneous income, net
(2,637)
(5,382)
Total expenses
1,482,775 
1,535,733 
Earnings from continuing operations before income taxes
84,378 
75,004 
Provision for income taxes
30,925 
25,906 
Earnings from continuing operations
53,453 
49,098 
Loss from discontinued operations, net of tax
(537)
(866)
Net earnings
$ 52,916 
$ 48,232 
Earnings (loss) per common share — Basic
 
 
Continuing operations (in dollars per share)
$ 1.01 
$ 0.93 
Discontinued operations (in dollars per share)
$ (0.01)
$ (0.02)
Net earnings (in dollars per share)
$ 1.00 
$ 0.91 
Earnings (loss) per common share — Diluted
 
 
Continuing operations (in dollars per share)
$ 1.00 
$ 0.92 
Discontinued operations (in dollars per share)
$ (0.01)
$ (0.02)
Net earnings (in dollars per share)
$ 0.99 
$ 0.90 
Cash dividends declared per common share (in dollars per share)
$ 0.37 
$ 0.34 
Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
 
 
Net earnings
$ 52,916 
$ 48,232 
Other comprehensive loss:
 
 
Changes in cumulative translation adjustment and other
(57,372)
(14,592)
Amortization of pension and postretirement items
7,058 
5,033 
Income tax expense related to amortization of pension and postretirement items
(2,448)
(1,906)
Amortization of pension and postretirement items, net of taxes
4,610 
3,127 
Other comprehensive loss, net of taxes
(52,762)
(11,465)
Comprehensive income
$ 154 
$ 36,767 
Consolidated Condensed Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Current assets:
 
 
Cash and cash equivalents
$ 72,199 
$ 50,092 
Receivables, net of allowance of $15,372 and $16,388, respectively
778,280 
794,864 
Inventories
63,021 
66,007 
Prepaid expenses and other current assets
164,519 
165,234 
Total current assets
1,078,019 
1,076,197 
Revenue earning equipment, net of accumulated depreciation of $3,679,498 and $3,648,704, respectively
7,208,345 
6,994,448 
Operating property and equipment, net of accumulated depreciation of $1,046,137 and $1,035,028, respectively
700,118 
699,594 
Goodwill
391,082 
393,029 
Intangible assets
63,977 
66,619 
Direct financing leases and other assets
465,250 
446,099 
Total assets
9,906,791 
9,675,986 
Current liabilities:
 
 
Short-term debt and current portion of long-term debt
11,417 
12,207 
Accounts payable
625,473 
560,852 
Accrued expenses and other current liabilities
489,647 
520,532 
Total current liabilities
1,126,537 
1,093,591 
Long-term debt
4,692,503 
4,500,275 
Other non-current liabilities
788,094 
786,676 
Deferred income taxes
1,488,111 
1,475,970 
Total liabilities
8,095,245 
7,856,512 
Shareholders’ equity:
 
 
Preferred stock of no par value per share — authorized, 3,800,917; none outstanding, March 31, 2015 or December 31, 2014
Common stock of $0.50 par value per share — authorized, 400,000,000; outstanding, March 31, 2015 — 53,309,221; December 31, 2014 — 53,039,688
26,655 
26,520 
Additional paid-in capital
978,748 
962,328 
Retained earnings
1,479,175 
1,450,896 
Accumulated other comprehensive loss
(673,032)
(620,270)
Total shareholders’ equity
1,811,546 
1,819,474 
Total liabilities and shareholders’ equity
$ 9,906,791 
$ 9,675,986 
Consolidated Condensed Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Assets:
 
 
Allowance for doubtful accounts, current
$ 15,372 
$ 16,388 
Revenue earning equipment, accumulated depreciation
3,679,498 
3,648,704 
Operating property and equipment, accumulated depreciation
$ 1,046,137 
$ 1,035,028 
Shareholders’ equity:
 
 
Common stock, par value
$ 0.50 
$ 0.50 
Common stock, shares authorized
400,000,000 
400,000,000 
Common stock, shares outstanding
53,309,221 
53,039,688 
Preferred stock, par value
$ 0 
$ 0 
Preferred stock, shares authorized
3,800,917 
3,800,917 
Preferred stock, shares outstanding
Consolidated Condensed Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Cash flows from operating activities from continuing operations:
 
 
Net earnings
$ 52,916 
$ 48,232 
Less: Loss from discontinued operations, net of tax
(537)
(866)
Earnings from continuing operations
53,453 
49,098 
Depreciation expense
262,395 
248,815 
Gains on vehicle sales, net
(29,579)
(28,818)
Share-based compensation expense
5,665 
4,858 
Amortization expense and other non-cash charges, net
13,317 
14,097 
Deferred income tax expense
26,719 
21,653 
Changes in operating assets and liabilities, net of acquisitions:
 
 
Receivables
10,775 
(41,526)
Inventories
2,563 
(629)
Prepaid expenses and other assets
(17,093)
(14,410)
Accounts payable
(28,847)
14,423 
Accrued expenses and other non-current liabilities
(21,490)
(29,901)
Net cash provided by operating activities from continuing operations
277,878 
237,660 
Cash flows from financing activities from continuing operations:
 
 
Net change in commercial paper borrowings
204,750 
142,834 
Debt proceeds
455,111 
366,612 
Debt repaid, including capital lease obligations
(457,569)
(252,845)
Dividends on common stock
(20,084)
(18,005)
Common stock issued
11,846 
18,526 
Common stock repurchased
(6,141)
(40,437)
Excess tax benefits from share-based compensation
620 
293 
Debt issuance costs
(3,696)
(1,809)
Net cash provided by financing activities from continuing operations
184,837 
215,169 
Cash flows from investing activities from continuing operations:
 
 
Purchases of property and revenue earning equipment
(553,242)
(578,722)
Sales of revenue earning equipment
96,821 
125,673 
Sales of operating property and equipment
273 
2,004 
Acquisitions
(1,649)
Collections on direct finance leases
16,243 
16,184 
Changes in restricted cash
(912)
(4,087)
Other
(1,250)
Net cash used in investing activities from continuing operations
(440,817)
(441,847)
Effect of exchange rate changes on cash
756 
1,369 
Increase in cash and cash equivalents from continuing operations
22,654 
12,351 
Decrease in cash and cash equivalents from discontinued operations
(547)
(1,127)
Increase in cash and cash equivalents
22,107 
11,224 
Cash and cash equivalents at January 1
50,092 
61,562 
Cash and cash equivalents at March 31
$ 72,199 
$ 72,786 
Consolidated Condensed Statement of Shareholders' Equity (Unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Preferred Stock [Member]
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Loss [Member]
Beginning balance at Dec. 31, 2013
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Common stock repurchases, shares
 
 
(562,683)
 
 
 
Ending balance at Dec. 31, 2014
$ 1,819,474 
$ 0 
$ 26,520 
$ 962,328 
$ 1,450,896 
$ (620,270)
Ending balance, shares at Dec. 31, 2014
53,039,688 
 
53,039,688 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Comprehensive income
154 
 
 
 
52,916 
(52,762)
Common stock dividends declared — $0.37 per share
(19,746)
 
 
 
(19,746)
 
Common stock issued under employee stock option and stock purchase plans1
11,793 
 
170 
11,623 
 
 
Common stock issued under employee stock option and stock purchase plans, shares1
 
 
338,009 
 
 
 
Benefit plan stock sales2
53 
 
53 
 
 
Benefit plan stock sales, shares2
 
 
631 
 
 
 
Common stock repurchases
(6,141)
 
(35)
(1,215)
(4,891)
 
Common stock repurchases, shares
 
 
(69,107)
 
 
 
Share-based compensation
5,665 
 
 
5,665 
 
Tax benefits from share-based compensation
294 
 
 
294 
 
 
Ending balance at Mar. 31, 2015
$ 1,811,546 
$ 0 
$ 26,655 
$ 978,748 
$ 1,479,175 
$ (673,032)
Ending balance, shares at Mar. 31, 2015
53,309,221 
 
53,309,221 
 
 
 
Consolidated Condensed Statement of Shareholders' Equity (Unaudited) (Parenthetical)
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Statement of Stockholders' Equity [Abstract]
 
 
Cash dividends declared per common share (in dollars per share)
$ 0.37 
$ 0.34 
Interim Financial Statements
INTERIM FINANCIAL STATEMENTS
INTERIM FINANCIAL STATEMENTS

The accompanying unaudited Consolidated Condensed 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 (VIEs) required to be consolidated in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The accompanying unaudited Consolidated Condensed Financial Statements have been prepared in accordance with the accounting policies described in our 2014 Annual Report on Form 10-K and should be read in conjunction with the Consolidated Financial Statements and notes thereto. 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.

During the first quarter of 2015, our management structure changed within the supply chain business. We created the role of President of Dedicated Transportation Solutions (DTS) for the dedicated product offering which was within Supply Chain Solutions (SCS). Beginning with the period ended March 31, 2015, we are reporting our financial performance based on our new segments: (1) Fleet Management Solutions (FMS), which provides full service leasing, commercial rental, contract maintenance, and contract-related maintenance of trucks, tractors and trailers to customers principally in the U.S., Canada and the U.K.; (2) DTS, which provides vehicles and drivers as part of a dedicated transportation solution in the U.S; and (3) SCS, which provides comprehensive supply chain solutions including distribution and transportation services in North America and Asia. Dedicated services provided as part of an integrated, multi-service, supply chain solution will continue to be reported in the SCS business segment where those services will continue to be managed. As a result, we recasted certain prior period amounts to conform to the way we internally manage and monitor segment performance during the year. This change impacted Note (F), "Goodwill," and Note (Q), "Segment Reporting," with no impact on consolidated revenues, net income or cash flows.
Recent Accounting Pronouncements
RECENT ACCOUNTING PRONOUNCEMENTS
RECENT ACCOUNTING PRONOUNCEMENTS

Presentation of Debt Issuance Costs
     
On April 7, 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires an entity to present debt issuance costs as a direct deduction from the carrying amount of the related debt liability on the balance sheet. The update requires retrospective application and represents a change in accounting principle. The update becomes effective January 1, 2016. Based on the balances as of March 31, 2015, the adoption of this ASU will require us to reclassify $18.7 million of unamortized debt issuance costs from "Direct financing leases and other assets" to "Long-term debt."

Revenue Recognition

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance when it becomes effective January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition methods. We are evaluating the effect that this ASU will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our consolidated financial position and results of operations.
Share-Based Compensation Plans
SHARE-BASED COMPENSATION PLANS
SHARE-BASED COMPENSATION PLANS

Share-based incentive awards are provided to employees under the terms of various share-based compensation plans (collectively, the “Plans”). The Plans are administered by the Compensation Committee of the Board of Directors. Awards under the Plans principally include at-the-money stock options, nonvested stock and cash awards. Nonvested stock awards include grants of market-based, performance-based, and time-vested restricted stock rights. Under the terms of our Plans, dividends may be paid on our nonvested stock awards but are not paid unless the award vests. Upon vesting, the amount of the dividends paid is equal to the aggregate dividends declared on common shares during the period from the date of grant of the award until the date the shares underlying the award are delivered.

The following table provides information on share-based compensation expense and income tax benefits recognized during the periods:
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands)
Stock option and stock purchase plans
$
2,301

 
2,237

Nonvested stock
3,364

 
2,621

Share-based compensation expense
5,665

 
4,858

Income tax benefit
(1,882
)
 
(1,676
)
Share-based compensation expense, net of tax
$
3,783

 
3,182



During the three months ended March 31, 2015 and 2014, approximately 358,000 and 405,000 stock options, respectively, were granted under the Plans. These awards generally vest evenly over a three year period beginning on the date of grant. The stock options have contractual terms of ten years. The fair value of each option award at the date of grant was estimated using a Black-Scholes-Merton option-pricing valuation model. Share-based compensation expense is recognized on a straight-line basis over the vesting period. The weighted-average fair value per option granted during the three months ended March 31, 2015 and 2014 was $18.46 and $14.99, respectively.

During the three months ended March 31, 2015 and 2014, approximately 19,000 and 22,000 market-based restricted stock rights were granted, respectively, under the Plans. The awards are segmented into three performance periods of one, two and three years. At the end of each performance period, up to 125% of the award may be earned based on Ryder's total shareholder return (TSR) compared to the target TSR of a peer group over the applicable performance period. If earned, employees will receive the grant of stock at the end of the relevant three year performance period provided they continue to be employed with Ryder, subject to Compensation Committee approval. The fair value of the market-based restricted stock rights was estimated using a lattice-based option-pricing valuation model that incorporates a Monte-Carlo simulation. The fair value of the market-based awards was determined on the grant date and considers the likelihood of Ryder achieving the market-based condition. Share-based compensation expense is recognized on a straight-line basis over the vesting period. The weighted-average fair value per market-based restricted stock right granted during the three months ended March 31, 2015 and 2014 was $89.40 and $61.07, respectively.

During the three months ended March 31, 2015 and 2014, approximately 35,000 and 42,000 performance-based restricted stock rights (PBRSRs), respectively, were awarded under the Plans. The awards are segmented into three one-year performance periods. For these awards, up to 125% of the awards may be earned based on Ryder's one-year adjusted return on capital (ROC) measured against an annual ROC target. If earned, employees will receive the grant of stock three years after the grant date, provided they continue to be employed with Ryder, subject to Compensation Committee approval. For accounting purposes, these awards are not considered granted until the Compensation Committee approves the annual ROC target. During the three months ended March 31, 2015 and 2014, approximately 42,000 and 30,000 PBRSRs, respectively, were considered granted for accounting purposes. The fair value of the PBRSRs is determined and fixed on the grant date based on Ryder's stock price on the date of grant. Share-based compensation expense is recognized on a straight-line basis over the vesting period, based upon the probability that the performance target will be met. The weighted-average fair value per PBRSR granted during the three months ended March 31, 2015 and 2014 was $93.04 and $71.43, respectively.

During the three months ended March 31, 2015 and 2014, approximately 68,000 and 87,000 time-vested restricted stock rights, respectively, were granted under the Plans. The time-vested restricted stock rights entitle the holder to shares of common stock when the awards generally vest at the end of the three-year period after the grant date. The fair value of the time-vested awards is determined and fixed on the date of grant based on Ryder’s stock price on the date of grant. Share-based compensation expense is recognized on a straight-line basis over the vesting period. The weighted-average fair value per time-vested restricted stock right granted during the three months ended March 31, 2015 and 2014 was $93.50 and $71.40, respectively.

During the three months ended March 31, 2015 and 2014, employees received market-based cash awards. The cash awards have the same vesting provisions as the market-based restricted stock rights. The cash awards are accounted for as liability awards under the share-based compensation accounting guidance as the awards are based upon the performance of our common stock and are settled in cash. As a result, the liability is adjusted to reflect fair value at the end of each reporting period. The fair value of the cash awards was estimated using a lattice-based option-pricing valuation model that incorporates a Monte-Carlo simulation. Share-based compensation expense is recognized on a straight-line basis over the vesting period.

The following table is a summary of compensation expense recognized for market-based cash awards in addition to the share-based compensation expense reported in the previous table:
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands)
Cash awards
$
172

 
523



Total unrecognized pre-tax compensation expense related to all share-based compensation arrangements at March 31, 2015 was $38.5 million and is expected to be recognized over a weighted-average period of 2.0 years.
Earnings Per Share
EARNINGS PER SHARE
EARNINGS PER SHARE

The following table presents the calculation of basic and diluted earnings per common share from continuing operations:
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands, except per share amounts)
Earnings per share — Basic:
 
 
 
Earnings from continuing operations
$
53,453

 
49,098

Less: Distributed and undistributed earnings allocated to nonvested stock
(147
)
 
(255
)
Earnings from continuing operations available to common shareholders — Basic
$
53,306

 
48,843

 
 
 
 
Weighted average common shares outstanding — Basic
52,596

 
52,660

 
 
 
 
Earnings from continuing operations per common share — Basic
$
1.01

 
0.93

 
 
 
 
Earnings per share — Diluted:
 
 
 
Earnings from continuing operations
$
53,453

 
49,098

Less: Distributed and undistributed earnings allocated to nonvested stock
(145
)
 
(255
)
Earnings from continuing operations available to common shareholders — Diluted
$
53,308

 
48,843

 
 
 
 
Weighted average common shares outstanding — Basic
52,596

 
52,660

Effect of dilutive equity awards
510

 
463

Weighted average common shares outstanding — Diluted
53,106

 
53,123

 
 
 
 
Earnings from continuing operations per common share — Diluted
$
1.00

 
0.92

 
 
 
 
Anti-dilutive equity awards not included above
184

 
215

Revenue Earning Equipment
REVENUE EARNING EQUIPMENT
REVENUE EARNING EQUIPMENT

 
March 31, 2015
 
December 31, 2014
 
Cost
 
Accumulated
Depreciation
 
Net  Book
Value(1)
 
Cost
 
Accumulated
Depreciation
 
Net  Book
Value(1)
 
(In thousands)
Held for use:
 
Full service lease
$
8,042,352

 
(2,614,711
)
 
5,427,641

 
$
7,918,497

 
(2,591,688
)
 
5,326,809

Commercial rental
2,513,888

 
(830,133
)
 
1,683,755

 
2,411,957

 
(830,683
)
 
1,581,274

Held for sale
331,603

 
(234,654
)
 
96,949

 
312,698

 
(226,333
)
 
86,365

Total
$
10,887,843

 
(3,679,498
)
 
7,208,345

 
$
10,643,152

 
(3,648,704
)
 
6,994,448

 ————————————
(1)
Revenue earning equipment, net includes vehicles acquired under capital leases of $48.4 million, less accumulated depreciation of $24.3 million, at March 31, 2015, and $47.8 million, less accumulated depreciation of $22.5 million, at December 31, 2014.

At the end of 2014, we completed our annual review of residual values and useful lives of revenue earning equipment. Based on the results of our analysis, we adjusted the estimated residual values of certain classes of revenue earning equipment effective January 1, 2015. The change in estimated residual values and useful lives increased pre-tax earnings for the first quarter of 2015 by approximately $10.0 million.

We lease revenue earning equipment to customers for periods typically ranging from three to seven years for trucks and tractors and up to ten years for trailers. The majority of our leases are classified as operating leases. However, some of our revenue earning equipment leases are classified as direct financing leases and, to a lesser extent, sales-type leases. As of March 31, 2015 and December 31, 2014, the net investment in direct financing and sales-type leases was $422.2 million and $417.0 million, respectively. Our direct financing lease customers operate in a wide variety of industries, and we have no significant customer concentrations in any one industry. We assess credit risk for all of our customers including those who lease equipment under direct financing leases upon signing of a full service lease contract. For those customers who are designated as high risk, we typically require deposits to be paid in advance in order to mitigate our credit risk. Additionally, our receivables are collateralized by the vehicles, based on their estimated fair values, which further mitigates our credit risk.

As of March 31, 2015 and December 31, 2014, the amount of direct financing lease receivables past due was not significant, and there were no impaired receivables. Accordingly, we do not believe there is a material risk of default with respect to the direct financing lease receivables. The allowance for credit losses was $0.3 million as of March 31, 2015 and December 31, 2014.
Accrued Expenses and Other Liabilities
ACCRUED EXPENSES AND OTHER LIABILITIES
ACCRUED EXPENSES AND OTHER LIABILITIES
 
March 31, 2015
 
December 31, 2014
 
Accrued
Expenses
 
Non-Current
Liabilities
 
Total
 
Accrued
Expenses
 
Non-Current
Liabilities
 
Total
 
(In thousands)
Salaries and wages
$
81,267

 

 
81,267

 
$
114,446

 

 
114,446

Deferred compensation
2,197

 
40,641

 
42,838

 
3,209

 
37,093

 
40,302

Pension benefits
3,681

 
445,789

 
449,470

 
3,739

 
444,657

 
448,396

Other postretirement benefits
2,094

 
26,442

 
28,536

 
2,112

 
26,889

 
29,001

Other employee benefits
1,344

 
15,967

 
17,311

 
7,172

 
19,276

 
26,448

Insurance obligations (1)
135,652

 
192,773

 
328,425

 
132,246

 
189,431

 
321,677

Environmental liabilities
3,879

 
7,360

 
11,239

 
3,877

 
8,002

 
11,879

Operating taxes
106,159

 

 
106,159

 
92,330

 

 
92,330

Income taxes
2,854

 
23,875

 
26,729

 
5,066

 
22,843

 
27,909

Interest
28,020

 

 
28,020

 
32,441

 

 
32,441

Deposits, mainly from customers
60,654

 
5,752

 
66,406

 
59,388

 
5,929

 
65,317

Deferred revenue
11,624

 

 
11,624

 
11,759

 

 
11,759

Acquisition holdbacks
5,714

 

 
5,714

 
3,817

 
2,187

 
6,004

Other
44,508

 
29,495

 
74,003

 
48,930

 
30,369

 
79,299

Total
$
489,647

 
788,094

 
1,277,741

 
$
520,532

 
786,676

 
1,307,208

 ————————————
(1) Insurance obligations are primarily comprised of self-insured claim liabilities.
Goodwill
GOODWILL
GOODWILL

The carrying amount of goodwill attributable to each reportable business segment with changes therein was as follows:

 
Fleet
Management
Solutions
 
Dedicated
Transportation
Solutions
 
Supply
Chain
Solutions
 
Total
 
 
Balance at January 1, 2015:
 
 
 
 
 
 
 
Goodwill
$
233,217

 
40,808

 
148,225

 
422,250

Accumulated impairment losses
(10,322
)
 

 
(18,899
)
 
(29,221
)
 
222,895

 
40,808

 
129,326

 
393,029

Foreign currency translation adjustments
(1,321
)
 

 
(626
)
 
(1,947
)
Balance at March 31, 2015:
 
 
 
 
 
 
 
Goodwill
231,896

 
40,808

 
147,599

 
420,303

Accumulated impairment losses
(10,322
)
 

 
(18,899
)
 
(29,221
)
 
$
221,574

 
40,808

 
128,700

 
391,082



As discussed in Note (Q), "Segment Reporting", we disaggregated our SCS business segment into DTS and SCS. This resulted in a change in our SCS U.S. operating segments and reporting units. We allocated goodwill to our DTS reporting unit using a relative fair value approach. In addition, we completed an assessment of any potential goodwill impairment for the SCS U.S. reporting unit immediately prior to and following the reallocation and determined that no impairment existed.
Debt
DEBT
DEBT
 
Weighted-Average
Interest Rate
 
 
 
 
 
 
 
March 31,
2015
 
December 31,
2014
 
Maturities
 
March 31,
2015
 
December 31,
2014
 
 
 
 
 
 
 
(In thousands)
Short-term debt and current portion of long-term debt:
 
 
 
 
 
 
 
 
 
Short-term debt
1.77%
 
1.30%
 
2015
 
$
2,550

 
3,773

Current portion of long-term debt, including capital leases
 
 
 
 
 
 
8,867

 
8,434

Total short-term debt and current portion of long-term debt
 
 
 
 
 
 
11,417

 
12,207

Long-term debt:
 
 
 
 
 
 
 
 
 
U.S. commercial paper (1)
0.46%
 
0.35%
 
2020
 
481,410

 
276,694

Global revolving credit facility
2.67%
 
1.60%
 
2020
 
22,710

 
11,190

Unsecured U.S. notes — Medium-term notes (1)
3.25%
 
3.29%
 
2015-2025
 
3,822,369

 
3,772,159

Unsecured U.S. obligations
1.49%
 
0.76%
 
2018
 
50,000

 
110,500

Unsecured foreign obligations
1.92%
 
2.01%
 
2015-2020
 
279,992

 
295,776

Capital lease obligations
3.57%
 
3.65%
 
2015-2019
 
35,004

 
37,560

Total before fair market value adjustment
 
 
 
 
 
 
4,691,485

 
4,503,879

Fair market value adjustment on notes subject to hedging (2)
 
 
 
 
 
9,885

 
4,830

 
 
 
 
 
 
 
4,701,370

 
4,508,709

Current portion of long-term debt, including capital leases
 
 
 
 
 
 
(8,867
)
 
(8,434
)
Long-term debt
 
 
 
 
 
 
4,692,503

 
4,500,275

Total debt
 
 
 
 
 
 
$
4,703,920

 
4,512,482

 ————————————
(1)
We had unamortized original issue discounts of $7.7 million and $7.9 million at March 31, 2015 and December 31, 2014, respectively.
(2)
The notional amount of executed interest rate swaps designated as fair value hedges was $600 million at March 31, 2015 and December 31, 2014.

We maintain a global revolving credit facility with a syndicate of twelve lending institutions led by Bank of America N.A., Bank of Tokyo-Mitsubishi UFJ, Ltd., BNP Paribas, Mizuho Corporate Bank, Ltd., Royal Bank of Canada, Royal Bank of Scotland Plc, U.S. Bank National Association and Wells Fargo Bank, N.A. The availability under our credit facility is $1.2 billion and matures in January 2020. The agreement provides for annual facility fees which range from 7.5 basis points to 25 basis points based on Ryder's long-term credit ratings. The annual facility fee is currently 10 basis points, which applies to the total facility size of $1.2 billion. The credit facility is used primarily to finance working capital but can also be used to issue up to $75 million in letters of credit (there were no letters of credit outstanding against the facility at March 31, 2015). 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 Ryder’s business operations; however, the credit facility does contain standard representations and warranties, events of default, cross-default provisions and certain affirmative and negative covenants. 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. The ratio at March 31, 2015 was 197%. At March 31, 2015, there was $695.3 million available under the credit facility, net of outstanding commercial paper borrowings.

Our global revolving credit facility enables us to refinance short-term obligations on a long-term basis. Settlement of short-term commercial paper obligations not expected to require the use of working capital are classified as long-term as we have both the intent and ability to refinance on a long-term basis. In addition, we have the intent and ability to refinance the current portion of long-term debt on a long-term basis. At March 31, 2015, we classified $504.1 million of short-term commercial paper and amounts drawn under the global revolving credit facility and $609.9 million of the current portion of long-term debt as long-term debt. At December 31, 2014, we classified $276.7 million of short-term commercial paper, $60.0 million of trade receivables borrowings and $698.5 million of the current portion of long-term debt as long-term debt.

In February 2015, we issued $400 million of unsecured medium-term notes maturing in March 2020. The proceeds from the notes were used to payoff maturing debt and for general corporate purposes. If the notes are downgraded below investment grade following, and as a result of, a change in control, the note holder can require us to repurchase all or a portion of the notes at a purchase price equal to 101% of principal plus accrued and unpaid interest.

We have a trade receivables purchase and sale program, pursuant to which we sell certain of our domestic trade accounts receivable to a bankruptcy remote, consolidated subsidiary of Ryder, that in turn sells, on a revolving basis, an ownership interest in certain of these accounts receivable to a receivables conduit or committed purchasers. The subsidiary is considered a VIE and is consolidated based on our control of the entity’s activities. We use this program to provide additional liquidity to fund our operations, particularly when it is cost effective to do so. The costs under the program may vary based on changes in interest rates. The available proceeds that may be received under the program are limited to $175 million. If no event occurs that causes early termination, the 364-day program will expire October 2015. The program contains provisions restricting its availability in the event of a material adverse change to our business operations or the collectibility of the collateralized receivables. No amounts were outstanding under the program at March 31, 2015. At December 31, 2014, $60.0 million was outstanding under the program. Sales of receivables under this program are accounted for as secured borrowings based on our continuing involvement in the transferred assets.

At March 31, 2015 and December 31, 2014, we had letters of credit and surety bonds outstanding totaling $343.0 million and $334.3 million, respectively, which primarily guarantee the payment of insurance claims.
Fair Value Measurements
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS

The assets and liabilities measured at fair value on a recurring basis consist primarily of interest rate swaps and investments held in Rabbi Trusts.  These amounts as of March 31, 2015 are not material to our consolidated financial position and operations and have not changed significantly from the amounts reported as of December 31, 2014.  

The following tables present our assets that are measured at fair value on a nonrecurring basis and considered a Level 3 fair value measurement:
 
 
 
 
 
Total Losses (2)
 
March 31,
 
Three months ended March 31,
 
2015
 
2014
 
2015
 
2014
 
(In thousands)
Assets held for sale:
 
 
 
 
 
 
 
Revenue earning equipment: (1)
 
 
 
 
 
 
 
Trucks
$
5,298

 
11,928

 
$
1,228

 
1,882

Tractors
4,611

 
7,495

 
827

 
1,632

Trailers
1,231

 
742

 
316

 
161

Total assets at fair value
$
11,140

 
20,165

 
$
2,371

 
3,675

 
 ————————————
(1)
Represents the portion of all revenue earning equipment held for sale that is recorded at fair value, less costs to sell.
(2)
Total losses represent fair value adjustments for all vehicles held for sale throughout the period for which fair value was less than carrying value.

Revenue earning equipment held for sale is stated at the lower of carrying amount or fair value less costs to sell. Only certain vehicles held for sale have carrying amounts greater than the fair value and losses are recorded at the time they arrive at our used truck centers. We typically record gains on the remaining vehicles with carrying amounts lower than fair value at the time they are sold. Losses to reflect changes in fair value are presented within “Other operating expenses” in the Consolidated Condensed 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. 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. Therefore, our revenue earning equipment held for sale was classified within Level 3 of the fair value hierarchy.

Fair value of total debt (excluding capital lease obligations) at March 31, 2015 and December 31, 2014 was approximately $4.79 billion and $4.59 billion, respectively. For publicly-traded debt, estimates of fair value were based on market prices. Since our publicly-traded debt is not actively traded, the fair value measurement was classified within Level 2 of the fair value hierarchy. 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. Therefore, the fair value measurement of our other debt was classified within Level 2 of the fair value hierarchy. The carrying amounts reported in the Consolidated Condensed 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.
Derivatives
DERIVATIVES
DERIVATIVES

We have interest rate swaps outstanding, which are designated as fair value hedges whereby we receive fixed interest rate payments in exchange for making variable interest rate payments. The differential to be paid or received is accrued and recognized as interest expense. Fair value was based on a model-driven income approach using the LIBOR rate at each interest payment date, which was observable at commonly quoted intervals for the full term of the swaps. Therefore, our interest rate swaps were classified within Level 2 of the fair value hierarchy. The fair value amounts of the interest rate swaps are reported in the Consolidated Condensed Balance Sheets within "Prepaid expenses and other current assets," "Direct financing leases and other assets," and "Other non-current liabilities." As of March 31, 2015, these amounts are not material to our consolidated financial position and operations and have not changed significantly from the amounts reported at December 31, 2014.

The following table provides a detail of the swaps outstanding and the related hedged items as of March 31, 2015:
 
 
 
Maturity date
 
Face value of medium-term notes
 
Aggregate 
notional
amount of interest rate swaps
 
Fixed interest 
rate
 
Weighted-average variable
interest rate on hedged debt
as of March 31,
Issuance date
 
 
 
 
 
2015
 
2014
 
 
 
 
(Dollars in thousands)
 
 
 
 
 
 
May 2011
 
June 2017
 
$350,000
 
$150,000
 
3.50%
 
1.42%
 
1.44%
November 2013
 
November 2018
 
$300,000
 
$100,000
 
2.45%
 
1.20%
 
1.19%
February 2014
 
June 2019
 
$350,000
 
$100,000
 
2.55%
 
1.13%
 
1.10%
May 2014
 
September 2019
 
$400,000
 
$100,000
 
2.45%
 
0.89%
 
—%
February 2015
 
March 2020
 
$400,000
 
$150,000
 
2.65%
 
1.14%
 
—%


The amount of gains (losses) on interest rate swap agreements designated as fair value hedges and related hedged items are reported in the Consolidated Condensed Statements of Earnings within "Interest expense." Changes in the fair value of our interest rate swaps are offset by changes in the fair value of the debt instrument. Accordingly, there is no ineffectiveness related to the interest rate swaps.
Share Repurchase Programs
SHARE REPURCHASE PROGRAMS
SHARE REPURCHASE PROGRAMS

In December 2013, our Board of Directors authorized a share repurchase program intended to mitigate the dilutive impact of shares issued under our various employee stock, stock option and employee stock purchase plans. Under the December 2013 program, management is authorized to repurchase shares of common stock in an amount not to exceed the number of shares issued to employees under the Company’s various employee stock, stock option and employee stock purchase plans from December 1, 2013 through December 31, 2015. The December 2013 program limits aggregate share repurchases to no more than 2 million shares of Ryder common stock. Share repurchases of common stock are made periodically in open-market transactions and are subject to market conditions, legal requirements and other factors. Management established prearranged written plans for the Company under Rule 10b5-1 of the Securities Exchange Act of 1934 as part of the December 2013 program, which allow for share repurchases during Ryder’s quarterly blackout periods as set forth in the trading plan. Early in the first quarter of 2015, we temporarily paused anti-dilutive share repurchase activity for the first half of 2015. For the three months ended March 31, 2015 and 2014, we repurchased and retired 69,107 shares and 562,683 shares, respectively under the program at an aggregate cost of $6.1 million and $40.4 million, respectively.
Accumulated Other Comprehensive Loss
ACCUMULATED OTHER COMPREHENSIVE LOSS
ACCUMULATED OTHER COMPREHENSIVE LOSS

The following summary sets forth the components of accumulated other comprehensive loss, net of tax:
 
 
 
Currency
Translation
Adjustments and Other
 
Net Actuarial
Loss (1)
 
Prior Service
Credit (1)
 
Accumulated
Other
Comprehensive
Loss
 
 
(In thousands)
December 31, 2014
 
$
(36,087
)
 
(585,941
)
 
1,758

 
(620,270
)
Amortization
 

 
4,961

 
(351
)
 
4,610

Other current period change
 
(57,372
)
 

 

 
(57,372
)
March 31, 2015
 
$
(93,459
)
 
(580,980
)
 
1,407

 
(673,032
)


 
 
Currency
Translation
Adjustments and Other
 
Net Actuarial
Loss (1)
 
Prior Service
Credit (1)
 
Accumulated
Other
Comprehensive
Loss
 
 
(In thousands)
December 31, 2013
 
$
35,875


(477,883
)
 
3,760

 
(438,248
)
Amortization
 


3,807


(680
)
 
3,127

Other current period change
 
(14,592
)




 
(14,592
)
March 31, 2014
 
$
21,283

 
(474,076
)
 
3,080

 
(449,713
)

_______________________ 

(1)
These amounts are included in the computation of net periodic benefit cost. See Note (M), "Employee Benefit Plans," for further information.

The loss from currency translation adjustments in the three months ended March 31, 2015 of $57.4 million was due primarily to the weakening of the Canadian Dollar and British Pound against the U.S. Dollar. The loss from currency translation adjustments in the three months ended March 31, 2014 of $14.6 million was due to the weakening of the Canadian Dollar compared to the U.S. Dollar.
Employee Benefit Plans
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS

Components of net periodic benefit cost were as follows:
 
Pension Benefits
 
Postretirement Benefits
 
Three months ended March 31,
 
2015
 
2014
 
2015
 
2014
 
(In thousands)
Company-administered plans:
 
 
 
 
 
 
 
Service cost
$
3,627

 
3,423

 
$
111

 
135

Interest cost
21,887

 
25,561

 
284

 
365

Expected return on plan assets
(24,900
)
 
(28,718
)
 

 

Amortization of:
 
 
 
 
 
 
 
Net actuarial loss/(gain)
7,808

 
6,235

 
(196
)
 
(129
)
Prior service credit
(76
)
 
(458
)
 
(478
)
 
(615
)
 
8,346

 
6,043

 
(279
)
 
(244
)
Union-administered plans
2,172

 
2,091

 

 

Net periodic benefit cost
$
10,518

 
8,134

 
$
(279
)
 
(244
)
 
 
 
 
 
 
 
 
Company-administered plans:
 
 
 
 
 
 
 
U.S.
$
8,892

 
6,287

 
$
(415
)
 
(397
)
Non-U.S.
(546
)
 
(244
)
 
136

 
153

 
8,346

 
6,043

 
(279
)
 
(244
)
Union-administered plans
2,172

 
2,091

 

 

 
$
10,518

 
8,134

 
$
(279
)
 
(244
)
 
 
 
 
 
 
 
 

During the three months ended March 31, 2015, we contributed $3.9 million to our pension plans. In 2015, we expect total contributions to our pension plans to be approximately $39 million.
Other Items Impacting Comparability
OTHER ITEMS IMPACTING COMPARABILITY
OTHER ITEMS IMPACTING COMPARABILITY

Our primary measure of segment performance excludes certain items we do not believe are representative of the ongoing operations of the segment. We believe that excluding these items from our segment measure of performance allows for better comparison of results. During the three months ended March 31, 2015, we incurred charges of $1.8 million related to professional fees associated with cost savings initiatives. This charge was recorded within "Selling, general and administrative expenses" in our Condensed Consolidated Statement of Earnings.
MISCELLANEOUS INCOME, NET
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands)
Rabbi trust investment income
$
1,067

 
500

Insurance proceeds
314

 

Gains on sales of operating property and equipment
183

 
1,304

Foreign currency translation benefit
129

 
(406
)
Contract settlement
15

 
2,908

Other, net
929

 
1,076

Total
$
2,637

 
5,382

Supplemental Cash Flow Information
SUPPLEMENTAL CASH FLOW INFORMATION
SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information was as follows:
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands)
Interest paid
$
38,381

 
41,180

Income taxes paid
3,590

 
1,534

Changes in accounts payable related to purchases of revenue earning equipment
99,972

 
16,918

Operating and revenue earning equipment acquired under capital leases

 
2,245



During the three months ended March 31, 2014, we paid $1.6 million related to acquisitions completed in prior years. No payments related to acquisitions completed in prior years were made during the three months ended March 31, 2015.
Miscellaneous Income, Net
MISCELLANEOUS INCOME, NET
OTHER ITEMS IMPACTING COMPARABILITY

Our primary measure of segment performance excludes certain items we do not believe are representative of the ongoing operations of the segment. We believe that excluding these items from our segment measure of performance allows for better comparison of results. During the three months ended March 31, 2015, we incurred charges of $1.8 million related to professional fees associated with cost savings initiatives. This charge was recorded within "Selling, general and administrative expenses" in our Condensed Consolidated Statement of Earnings.
MISCELLANEOUS INCOME, NET
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands)
Rabbi trust investment income
$
1,067

 
500

Insurance proceeds
314

 

Gains on sales of operating property and equipment
183

 
1,304

Foreign currency translation benefit
129

 
(406
)
Contract settlement
15

 
2,908

Other, net
929

 
1,076

Total
$
2,637

 
5,382

Segment Reporting
SEGMENT REPORTING
SEGMENT REPORTING

Our operating segments are aggregated into reportable business segments based upon similar economic characteristics, products, services, customers and delivery methods. During the first quarter of 2015, our management structure changed within the supply chain business. We created the role of President of DTS for the dedicated product offering which was within SCS. Beginning with the three-month period ended March 31, 2015, we are reporting our financial performance based on three business segments: (1) FMS, which provides full service leasing, commercial rental, contract maintenance, and contract-related maintenance of trucks, tractors and trailers to customers principally in the U.S., Canada and the U.K.; (2) DTS, which provides vehicles and drivers as part of a dedicated transportation solution in the U.S; and (3) SCS, which provides comprehensive supply chain solutions including distribution and transportation services in North America and Asia. Dedicated services provided as part of an integrated, multi-service, supply chain solution will continue to be reported in the SCS business segment where those services will continue to be managed.

Our primary measurement of segment financial performance, defined as “Earnings Before Tax” (EBT) from continuing operations, includes an allocation of Central Support Services (CSS) and excludes non-operating pension costs, restructuring and other charges, net and other items discussed in Note (N), "Other Items Impacting Comparability." CSS represents those costs incurred to support all business segments, including human resources, finance, corporate services, public affairs, information technology, health and safety, 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 business segment and each operating segment within each business segment accountable for their allocated share of CSS costs. Certain costs are considered to be overhead not attributable to any segment and remain unallocated in CSS. Included among the unallocated overhead remaining within CSS are the costs for investor relations, public affairs and certain executive compensation.

Our FMS segment leases revenue earning equipment and provides fuel, maintenance and other ancillary services to the DTS and SCS segments. Inter-segment revenue and EBT are accounted for at rates similar to those executed with third parties. EBT related to inter-segment equipment and services billed to customers (equipment contribution) are included in both FMS and the business segment which served the customer and then eliminated (presented as “Eliminations”). 
The following tables set forth financial information for each of our business segments and provides a reconciliation between segment EBT and earnings from continuing operations before income taxes for the three months ended March 31, 2015 and 2014. 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.
 
FMS
 
DTS
 
SCS
 
Eliminations
 
Total
 
 
 
 
For the three months ended March 31, 2015
 
 
 
 
 
 
 
 
Revenue from external customers
$
983,440

 
212,659

 
371,054

 

 
1,567,153

Inter-segment revenue
103,710

 

 

 
(103,710
)
 

Total revenue
$
1,087,150

 
212,659

 
371,054

 
(103,710
)
 
1,567,153

 
 
 
 
 
 
 
 
 
 
Segment EBT
$
89,919

 
8,970

 
15,689

 
(11,534
)
 
103,044

Unallocated CSS
 
 
 
 
 
 
 
 
(11,942
)
     Non-operating pension costs 
 
 
 
 
 
 
 
 
(4,883
)
Restructuring and other charges, net and other items (1)
 
 
 
 
 
 
 
 
(1,841
)
Earnings from continuing operations before income taxes
 
 
 
 
 
 
 
 
$
84,378

 
 
 
 
 
 
 
 
 
 
Segment capital expenditures paid (2)
$
538,743

 
709

 
5,987

 

 
545,439

Unallocated CSS
 
 
 
 
 
 
 
 
7,803

Capital expenditures paid
 
 
 
 
 
 
 
 
$
553,242

 
 
 
 
 
 
 
 
 
 
For the three months ended March 31, 2014
 
 
 
 
 
 
 
 
Revenue from external customers
$
1,013,396

 
215,962

 
381,379

 

 
1,610,737

Inter-segment revenue
121,691

 

 

 
(121,691
)
 

Total revenue
$
1,135,087

 
215,962

 
381,379

 
(121,691
)
 
1,610,737

 
 
 
 
 
 
 
 
 
 
Segment EBT
$
76,991

 
8,686

 
13,098

 
(9,628
)
 
89,147

Unallocated CSS
 
 
 
 
 
 
 
 
(10,829
)
Non-operating pension costs 
 
 
 
 
 
 
 
 
(3,314
)
Earnings from continuing operations before income taxes
 
 
 
 
 
 
 
 
$
75,004

 
 
 
 
 
 
 
 
 
 
Segment capital expenditures paid (2), (3)
$
568,239

 
250

 
3,622

 

 
572,111

Unallocated CSS
 
 
 
 
 
 
 
 
6,611

Capital expenditures paid
 
 
 
 
 
 
 
 
$
578,722

 ————————————
(1)
See Note (N), "Other Items Impacting Comparability," for additional information.
(2)
Excludes revenue earning equipment acquired under capital leases.
(3)
Excludes acquisition payments of $1.6 million during the three months ended March 31, 2014.
Other Matters
OTHER MATTERS
OTHER MATTERS

We are a party to various claims, complaints and proceedings arising in the ordinary course of our continuing business operations including but not limited to those relating to commercial and employment claims, environmental matters, risk management matters (e.g. vehicle liability, workers’ compensation, etc.) and administrative assessments primarily associated with operating taxes. We have established loss provisions for matters in which losses are probable and can be reasonably estimated. For matters from continuing operations where a reserve has not been established and for which we believe a loss is reasonably possible, as well as for matters where a reserve has been recorded but for which an exposure to loss in excess of the amount accrued is reasonably possible, we believe that such losses will not have a material effect on our consolidated financial statements.

Our estimates regarding potential losses and materiality are based on our judgment and assessment of the claims utilizing currently available information. Although we will continue to reassess our reserves and estimates based on future developments, our objective assessment of the legal merits of such claims may not always be predictive of the outcome and actual results may vary from our current estimates.

Although we discontinued our South American operations in 2009, we continue to be party to various federal, state and local legal proceedings involving labor matters, tort claims and tax assessments. We have established loss provisions for any matters where we believe a loss is probable and can be reasonably estimated. Other than with respect to the matters discussed below, for matters where a reserve has not been established and for which we believe a loss is reasonably possible, as well as for matters where a reserve has been recorded but for which an exposure to loss in excess of the amount accrued is reasonably possible, we believe that such losses will not have a material effect on our consolidated financial statements.

In Brazil, we were assessed $5 million (before and after tax) in prior years for various federal income taxes and social contribution taxes for the 1997 and 1998 tax years. We successfully overturned these federal tax assessments in the lower courts; however, there is a reasonable possibility that these rulings could be reversed and we would be required to pay the assessments. We believe it is more likely than not that our position will ultimately be sustained if appealed and no amounts have been reserved for these matters. We are entitled to indemnification for a portion of any resulting liability on these federal tax claims which, if honored, would reduce the estimated loss.
Share-Based Compensation Plans (Tables)
The following table provides information on share-based compensation expense and income tax benefits recognized during the periods:
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands)
Stock option and stock purchase plans
$
2,301

 
2,237

Nonvested stock
3,364

 
2,621

Share-based compensation expense
5,665

 
4,858

Income tax benefit
(1,882
)
 
(1,676
)
Share-based compensation expense, net of tax
$
3,783

 
3,182

The following table is a summary of compensation expense recognized for market-based cash awards in addition to the share-based compensation expense reported in the previous table:
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands)
Cash awards
$
172

 
523

Earnings Per Share (Tables)
Schedule of basic and diluted earnings per common share from continuing operations
The following table presents the calculation of basic and diluted earnings per common share from continuing operations:
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands, except per share amounts)
Earnings per share — Basic:
 
 
 
Earnings from continuing operations
$
53,453

 
49,098

Less: Distributed and undistributed earnings allocated to nonvested stock
(147
)
 
(255
)
Earnings from continuing operations available to common shareholders — Basic
$
53,306

 
48,843

 
 
 
 
Weighted average common shares outstanding — Basic
52,596

 
52,660

 
 
 
 
Earnings from continuing operations per common share — Basic
$
1.01

 
0.93

 
 
 
 
Earnings per share — Diluted:
 
 
 
Earnings from continuing operations
$
53,453

 
49,098

Less: Distributed and undistributed earnings allocated to nonvested stock
(145
)
 
(255
)
Earnings from continuing operations available to common shareholders — Diluted
$
53,308

 
48,843

 
 
 
 
Weighted average common shares outstanding — Basic
52,596

 
52,660

Effect of dilutive equity awards
510

 
463

Weighted average common shares outstanding — Diluted
53,106

 
53,123

 
 
 
 
Earnings from continuing operations per common share — Diluted
$
1.00

 
0.92

 
 
 
 
Anti-dilutive equity awards not included above
184

 
215

Revenue Earning Equipment (Tables)
Summary of revenue earning equipment
 
March 31, 2015
 
December 31, 2014
 
Cost
 
Accumulated
Depreciation
 
Net  Book
Value(1)
 
Cost
 
Accumulated
Depreciation
 
Net  Book
Value(1)
 
(In thousands)
Held for use:
 
Full service lease
$
8,042,352

 
(2,614,711
)
 
5,427,641

 
$
7,918,497

 
(2,591,688
)
 
5,326,809

Commercial rental
2,513,888

 
(830,133
)
 
1,683,755

 
2,411,957

 
(830,683
)
 
1,581,274

Held for sale
331,603

 
(234,654
)
 
96,949

 
312,698

 
(226,333
)
 
86,365

Total
$
10,887,843

 
(3,679,498
)
 
7,208,345

 
$
10,643,152

 
(3,648,704
)
 
6,994,448

 ————————————
(1)
Revenue earning equipment, net includes vehicles acquired under capital leases of $48.4 million, less accumulated depreciation of $24.3 million, at March 31, 2015, and $47.8 million, less accumulated depreciation of $22.5 million, at December 31, 2014.

Accrued Expenses and Other Liabilities (Tables)
Accrued Expenses and Other Liabilities
 
March 31, 2015
 
December 31, 2014
 
Accrued
Expenses
 
Non-Current
Liabilities
 
Total
 
Accrued
Expenses
 
Non-Current
Liabilities
 
Total
 
(In thousands)
Salaries and wages
$
81,267

 

 
81,267

 
$
114,446

 

 
114,446

Deferred compensation
2,197

 
40,641

 
42,838

 
3,209

 
37,093

 
40,302

Pension benefits
3,681

 
445,789

 
449,470

 
3,739

 
444,657

 
448,396

Other postretirement benefits
2,094

 
26,442

 
28,536

 
2,112

 
26,889

 
29,001

Other employee benefits
1,344

 
15,967

 
17,311

 
7,172

 
19,276

 
26,448

Insurance obligations (1)
135,652

 
192,773

 
328,425

 
132,246

 
189,431

 
321,677

Environmental liabilities
3,879

 
7,360

 
11,239

 
3,877

 
8,002

 
11,879

Operating taxes
106,159

 

 
106,159

 
92,330

 

 
92,330

Income taxes
2,854

 
23,875

 
26,729

 
5,066

 
22,843

 
27,909

Interest
28,020

 

 
28,020

 
32,441

 

 
32,441

Deposits, mainly from customers
60,654

 
5,752

 
66,406

 
59,388

 
5,929

 
65,317

Deferred revenue
11,624

 

 
11,624

 
11,759

 

 
11,759

Acquisition holdbacks
5,714

 

 
5,714

 
3,817

 
2,187

 
6,004

Other
44,508

 
29,495

 
74,003

 
48,930

 
30,369

 
79,299

Total
$
489,647

 
788,094

 
1,277,741

 
$
520,532

 
786,676

 
1,307,208

 ————————————
(1) Insurance obligations are primarily comprised of self-insured claim liabilities.
Goodwill (Tables)
Carrying amount of goodwill attributable to each reportable business segment
The carrying amount of goodwill attributable to each reportable business segment with changes therein was as follows:

 
Fleet
Management
Solutions
 
Dedicated
Transportation
Solutions
 
Supply
Chain
Solutions
 
Total
 
 
Balance at January 1, 2015:
 
 
 
 
 
 
 
Goodwill
$
233,217

 
40,808

 
148,225

 
422,250

Accumulated impairment losses
(10,322
)
 

 
(18,899
)
 
(29,221
)
 
222,895

 
40,808

 
129,326

 
393,029

Foreign currency translation adjustments
(1,321
)
 

 
(626
)
 
(1,947
)
Balance at March 31, 2015:
 
 
 
 
 
 
 
Goodwill
231,896

 
40,808

 
147,599

 
420,303

Accumulated impairment losses
(10,322
)
 

 
(18,899
)
 
(29,221
)
 
$
221,574

 
40,808

 
128,700

 
391,082

Debt (Tables)
Debt
 
Weighted-Average
Interest Rate
 
 
 
 
 
 
 
March 31,
2015
 
December 31,
2014
 
Maturities
 
March 31,
2015
 
December 31,
2014
 
 
 
 
 
 
 
(In thousands)
Short-term debt and current portion of long-term debt:
 
 
 
 
 
 
 
 
 
Short-term debt
1.77%
 
1.30%
 
2015
 
$
2,550

 
3,773

Current portion of long-term debt, including capital leases
 
 
 
 
 
 
8,867

 
8,434

Total short-term debt and current portion of long-term debt
 
 
 
 
 
 
11,417

 
12,207

Long-term debt:
 
 
 
 
 
 
 
 
 
U.S. commercial paper (1)
0.46%
 
0.35%
 
2020
 
481,410

 
276,694

Global revolving credit facility
2.67%
 
1.60%
 
2020
 
22,710

 
11,190

Unsecured U.S. notes — Medium-term notes (1)
3.25%
 
3.29%
 
2015-2025
 
3,822,369

 
3,772,159

Unsecured U.S. obligations
1.49%
 
0.76%
 
2018
 
50,000

 
110,500

Unsecured foreign obligations
1.92%
 
2.01%
 
2015-2020
 
279,992

 
295,776

Capital lease obligations
3.57%
 
3.65%
 
2015-2019
 
35,004

 
37,560

Total before fair market value adjustment
 
 
 
 
 
 
4,691,485

 
4,503,879

Fair market value adjustment on notes subject to hedging (2)
 
 
 
 
 
9,885

 
4,830

 
 
 
 
 
 
 
4,701,370

 
4,508,709

Current portion of long-term debt, including capital leases
 
 
 
 
 
 
(8,867
)
 
(8,434
)
Long-term debt
 
 
 
 
 
 
4,692,503

 
4,500,275

Total debt
 
 
 
 
 
 
$
4,703,920

 
4,512,482

 ————————————
(1)
We had unamortized original issue discounts of $7.7 million and $7.9 million at March 31, 2015 and December 31, 2014, respectively.
(2)
The notional amount of executed interest rate swaps designated as fair value hedges was $600 million at March 31, 2015 and December 31, 2014.
Fair Value Measurements (Tables)
Assets and liabilities measured at fair value on nonrecurring basis
The following tables present our assets that are measured at fair value on a nonrecurring basis and considered a Level 3 fair value measurement:
 
 
 
 
 
Total Losses (2)
 
March 31,
 
Three months ended March 31,
 
2015
 
2014
 
2015
 
2014
 
(In thousands)
Assets held for sale:
 
 
 
 
 
 
 
Revenue earning equipment: (1)
 
 
 
 
 
 
 
Trucks
$
5,298

 
11,928

 
$
1,228

 
1,882

Tractors
4,611

 
7,495

 
827

 
1,632

Trailers
1,231

 
742

 
316

 
161

Total assets at fair value
$
11,140

 
20,165

 
$
2,371

 
3,675

 
 ————————————
(1)
Represents the portion of all revenue earning equipment held for sale that is recorded at fair value, less costs to sell.
(2)
Total losses represent fair value adjustments for all vehicles held for sale throughout the period for which fair value was less than carrying value.

Derivatives (Tables)
Schedule of Derivative Instruments
The following table provides a detail of the swaps outstanding and the related hedged items as of March 31, 2015:
 
 
 
Maturity date
 
Face value of medium-term notes
 
Aggregate 
notional
amount of interest rate swaps
 
Fixed interest 
rate
 
Weighted-average variable
interest rate on hedged debt
as of March 31,
Issuance date
 
 
 
 
 
2015
 
2014
 
 
 
 
(Dollars in thousands)
 
 
 
 
 
 
May 2011
 
June 2017
 
$350,000
 
$150,000
 
3.50%
 
1.42%
 
1.44%
November 2013
 
November 2018
 
$300,000
 
$100,000
 
2.45%
 
1.20%
 
1.19%
February 2014
 
June 2019
 
$350,000
 
$100,000
 
2.55%
 
1.13%
 
1.10%
May 2014
 
September 2019
 
$400,000
 
$100,000
 
2.45%
 
0.89%
 
—%
February 2015
 
March 2020
 
$400,000
 
$150,000
 
2.65%
 
1.14%
 
—%
Accumulated Other Comprehensive Loss (Tables)
Schedule of accumulated other comprehensive loss
The following summary sets forth the components of accumulated other comprehensive loss, net of tax:
 
 
 
Currency
Translation
Adjustments and Other
 
Net Actuarial
Loss (1)
 
Prior Service
Credit (1)
 
Accumulated
Other
Comprehensive
Loss
 
 
(In thousands)
December 31, 2014
 
$
(36,087
)
 
(585,941
)
 
1,758

 
(620,270
)
Amortization
 

 
4,961

 
(351
)
 
4,610

Other current period change
 
(57,372
)
 

 

 
(57,372
)
March 31, 2015
 
$
(93,459
)
 
(580,980
)
 
1,407

 
(673,032
)


 
 
Currency
Translation
Adjustments and Other
 
Net Actuarial
Loss (1)
 
Prior Service
Credit (1)
 
Accumulated
Other
Comprehensive
Loss
 
 
(In thousands)
December 31, 2013
 
$
35,875


(477,883
)
 
3,760

 
(438,248
)
Amortization
 


3,807


(680
)
 
3,127

Other current period change
 
(14,592
)




 
(14,592
)
March 31, 2014
 
$
21,283

 
(474,076
)
 
3,080

 
(449,713
)

_______________________ 

(1)
These amounts are included in the computation of net periodic benefit cost. See Note (M), "Employee Benefit Plans," for further information.

Employee Benefit Plans (Tables)
Components of net periodic benefit cost
Components of net periodic benefit cost were as follows:
 
Pension Benefits
 
Postretirement Benefits
 
Three months ended March 31,
 
2015
 
2014
 
2015
 
2014
 
(In thousands)
Company-administered plans:
 
 
 
 
 
 
 
Service cost
$
3,627

 
3,423

 
$
111

 
135

Interest cost
21,887

 
25,561

 
284

 
365

Expected return on plan assets
(24,900
)
 
(28,718
)
 

 

Amortization of:
 
 
 
 
 
 
 
Net actuarial loss/(gain)
7,808

 
6,235

 
(196
)
 
(129
)
Prior service credit
(76
)
 
(458
)
 
(478
)
 
(615
)
 
8,346

 
6,043

 
(279
)
 
(244
)
Union-administered plans
2,172

 
2,091

 

 

Net periodic benefit cost
$
10,518

 
8,134

 
$
(279
)
 
(244
)
 
 
 
 
 
 
 
 
Company-administered plans:
 
 
 
 
 
 
 
U.S.
$
8,892

 
6,287

 
$
(415
)
 
(397
)
Non-U.S.
(546
)
 
(244
)
 
136

 
153

 
8,346

 
6,043

 
(279
)
 
(244
)
Union-administered plans
2,172

 
2,091

 

 

 
$
10,518

 
8,134

 
$
(279
)
 
(244
)
 
 
 
 
 
 
 
 
Supplemental Cash Flow Information (Tables)
Supplemental cash flow information
Supplemental cash flow information was as follows:
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands)
Interest paid
$
38,381

 
41,180

Income taxes paid
3,590

 
1,534

Changes in accounts payable related to purchases of revenue earning equipment
99,972

 
16,918

Operating and revenue earning equipment acquired under capital leases

 
2,245

Miscellaneous Income, Net (Tables)
Schedule of Other Nonoperating Income (Expense)
 
Three months ended March 31,
 
2015
 
2014
 
(In thousands)
Rabbi trust investment income
$
1,067

 
500

Insurance proceeds
314

 

Gains on sales of operating property and equipment
183

 
1,304

Foreign currency translation benefit
129

 
(406
)
Contract settlement
15

 
2,908

Other, net
929

 
1,076

Total
$
2,637

 
5,382

Segment Reporting (Tables)
Financial information of business segments
The following tables set forth financial information for each of our business segments and provides a reconciliation between segment EBT and earnings from continuing operations before income taxes for the three months ended March 31, 2015 and 2014. 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.
 
FMS
 
DTS
 
SCS
 
Eliminations
 
Total
 
 
 
 
For the three months ended March 31, 2015
 
 
 
 
 
 
 
 
Revenue from external customers
$
983,440

 
212,659

 
371,054

 

 
1,567,153

Inter-segment revenue
103,710

 

 

 
(103,710
)
 

Total revenue
$
1,087,150

 
212,659

 
371,054

 
(103,710
)
 
1,567,153

 
 
 
 
 
 
 
 
 
 
Segment EBT
$
89,919

 
8,970

 
15,689

 
(11,534
)
 
103,044

Unallocated CSS
 
 
 
 
 
 
 
 
(11,942
)
     Non-operating pension costs 
 
 
 
 
 
 
 
 
(4,883
)
Restructuring and other charges, net and other items (1)
 
 
 
 
 
 
 
 
(1,841
)
Earnings from continuing operations before income taxes
 
 
 
 
 
 
 
 
$
84,378

 
 
 
 
 
 
 
 
 
 
Segment capital expenditures paid (2)
$
538,743

 
709

 
5,987

 

 
545,439

Unallocated CSS
 
 
 
 
 
 
 
 
7,803

Capital expenditures paid
 
 
 
 
 
 
 
 
$
553,242

 
 
 
 
 
 
 
 
 
 
For the three months ended March 31, 2014
 
 
 
 
 
 
 
 
Revenue from external customers
$
1,013,396

 
215,962

 
381,379

 

 
1,610,737

Inter-segment revenue
121,691

 

 

 
(121,691
)
 

Total revenue
$
1,135,087

 
215,962

 
381,379

 
(121,691
)
 
1,610,737

 
 
 
 
 
 
 
 
 
 
Segment EBT
$
76,991

 
8,686

 
13,098

 
(9,628
)
 
89,147

Unallocated CSS
 
 
 
 
 
 
 
 
(10,829
)
Non-operating pension costs 
 
 
 
 
 
 
 
 
(3,314
)
Earnings from continuing operations before income taxes
 
 
 
 
 
 
 
 
$
75,004

 
 
 
 
 
 
 
 
 
 
Segment capital expenditures paid (2), (3)
$
568,239

 
250

 
3,622

 

 
572,111

Unallocated CSS
 
 
 
 
 
 
 
 
6,611

Capital expenditures paid
 
 
 
 
 
 
 
 
$
578,722

 ————————————
(1)
See Note (N), "Other Items Impacting Comparability," for additional information.
(2)
Excludes revenue earning equipment acquired under capital leases.
(3)
Excludes acquisition payments of $1.6 million during the three months ended March 31, 2014.


Recent Accounting Pronouncements (Details) (ASU No. 2015-03 [Member], USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
ASU No. 2015-03 [Member]
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
Unamortized debt issuance costs
$ 18.7 
Share-Based Compensation Plans (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share-based compensation expense
$ 5,665 
$ 4,858 
Income tax benefit
(1,882)
(1,676)
Share-based compensation expense, net of tax
3,783 
3,182 
Cash awards
172 
523 
Stock Option and Stock Purchase Plan [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share-based compensation expense
2,301 
2,237 
Nonvested Stock [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Share-based compensation expense
$ 3,364 
$ 2,621 
Share-Based Compensation Plans (Details Textual) (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Weighted-average fair value per option granted
$ 18.46 
$ 14.99 
Performance-based restricted stock awards granted
42 
30 
Total unrecognized pre-tax compensation expense
$ 38.5 
 
Weighted-average period to recognize pre-tax compensation expense (in years)
2 years 
 
Market Based Vested [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Weighted-average fair value per option granted
$ 89.40 
$ 61.07 
ROC performance based restricted stock rights, 2013 Grant [Member] |
Maximum [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Potential performance award percentage
125.00% 
 
Time Vested Restricted Stock [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Vesting period
3 years 
 
Time Vested [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Weighted-average fair value per option granted
$ 93.50 
$ 71.40 
Performance-Based Vested [Member] [Domain]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Weighted-average fair value per option granted
$ 93.04 
$ 71.43 
Stock Option [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Stock option plan granted
358 
405 
Vesting period
3 years 
 
Expiration period
10 years 
 
Market-based restricted stock rights [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Restricted stock rights and restricted stock units granted
19 
22 
Market-based restricted stock rights [Member] |
Maximum [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Potential performance award percentage
125.00% 
 
Performance based restricted stock [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Restricted stock rights and restricted stock units granted
35 
42 
Time Vested Restricted Stock [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Restricted stock rights and restricted stock units granted
68 
87 
Earnings Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Earnings per share — Basic:
 
 
Earnings from continuing operations
$ 53,453 
$ 49,098 
Less: Distributed and undistributed earnings allocated to nonvested stock
(147)
(255)
Earnings from continuing operations available to common shareholders — Basic
53,306 
48,843 
Weighted average common shares outstanding - Basic (shares)
52,596 
52,660 
Earnings from continuing operations per common share - Basic (in dollars per share)
$ 1.01 
$ 0.93 
Earnings per share — Diluted:
 
 
Earnings from continuing operations
53,453 
49,098 
Less: Distributed and undistributed earnings allocated to nonvested stock
(145)
(255)
Earnings from continuing operations available to common shareholders — Diluted
$ 53,308 
$ 48,843 
Weighted average common shares outstanding - Basic (shares)
52,596 
52,660 
Effect of dilutive equity awards (shares)
510 
463 
Weighted average common shares outstanding - Diluted (shares)
53,106 
53,123 
Earnings from continuing operations per common share - Diluted (in dollars per share)
$ 1.00 
$ 0.92 
Anti-dilutive equity awards not included above (shares)
184 
215 
Revenue Earning Equipment (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Revenue Earning Equipment [Line Items]
 
 
Cost
$ 10,887,843 
$ 10,643,152 
Accumulated Depreciation
(3,679,498)
(3,648,704)
Net Book Value
7,208,345 
6,994,448 
Held for use: Full service lease [Member]
 
 
Revenue Earning Equipment [Line Items]
 
 
Cost
8,042,352 
7,918,497 
Accumulated Depreciation
(2,614,711)
(2,591,688)
Net Book Value
5,427,641 
5,326,809 
Held for use: Commercial rental [Member]
 
 
Revenue Earning Equipment [Line Items]
 
 
Cost
2,513,888 
2,411,957 
Accumulated Depreciation
(830,133)
(830,683)
Net Book Value
1,683,755 
1,581,274 
Held-for-sale [Member]
 
 
Revenue Earning Equipment [Line Items]
 
 
Cost
331,603 
312,698 
Accumulated Depreciation
(234,654)
(226,333)
Net Book Value
96,949 
86,365 
Assets Held under Capital Leases [Member]
 
 
Revenue Earning Equipment [Line Items]
 
 
Cost
48,400 
47,800 
Accumulated Depreciation
$ (24,300)
$ (22,500)
Revenue Earning Equipment (Details Textuals) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Revenue Earning Equipment [Line Items]
 
 
Effect of change in estimated residual values of revenue earning equipment on pre tax earnings
$ 10.0 
 
Net investment in direct financing and sales-type leases
422.2 
417.0 
Allowance for credit losses
$ 0.3 
$ 0.3 
Trucks [Member] |
Minimum [Member]
 
 
Revenue Earning Equipment [Line Items]
 
 
Lease term
3 years 
 
Trucks [Member] |
Maximum [Member]
 
 
Revenue Earning Equipment [Line Items]
 
 
Lease term
7 years 
 
Trailers [Member] |
Maximum [Member]
 
 
Revenue Earning Equipment [Line Items]
 
 
Lease term
10 years 
 
Accrued Expenses and Other Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Accrued Expenses
 
 
Salaries and wages
$ 81,267 
$ 114,446 
Deferred compensation
2,197 
3,209 
Pension benefits
3,681 
3,739 
Other postretirement benefits
2,094 
2,112 
Other employee benefits
1,344 
7,172 
Insurance obligations
135,652 
132,246 
Environmental liabilities
3,879 
3,877 
Operating taxes
106,159 
92,330 
Income taxes
2,854 
5,066 
Interest
28,020 
32,441 
Deposits, mainly from customers
60,654 
59,388 
Deferred revenue
11,624 
11,759 
Acquisition holdbacks
5,714 
3,817 
Other
44,508 
48,930 
Total
489,647 
520,532 
Non-Current Liabilities
 
 
Salaries and wages
Deferred compensation
40,641 
37,093 
Pension benefits
445,789 
444,657 
Other postretirement benefits
26,442 
26,889 
Other employee benefits
15,967 
19,276 
Insurance obligations
192,773 
189,431 
Environmental liabilities
7,360 
8,002 
Operating taxes
Income taxes
23,875 
22,843 
Interest
Deposits, mainly from customers
5,752 
5,929 
Deferred revenue
Acquisition holdbacks
2,187 
Other
29,495 
30,369 
Total
788,094 
786,676 
Total
 
 
Salaries and wages
81,267 
114,446 
Deferred compensation
42,838 
40,302 
Pension benefits
449,470 
448,396 
Other postretirement benefits
28,536 
29,001 
Other employee benefits
17,311 
26,448 
Insurance obligations
328,425 
321,677 
Environmental liabilities
11,239 
11,879 
Operating taxes
106,159 
92,330 
Income taxes
26,729 
27,909 
Interest
28,020 
32,441 
Deposits, mainly from customers
66,406 
65,317 
Deferred revenue
11,624 
11,759 
Acquisition holdbacks
5,714 
6,004 
Other
74,003 
79,299 
Total
$ 1,277,741 
$ 1,307,208 
Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Carrying amount of goodwill attributable to each reportable business segment
 
 
Goodwill, gross
$ 420,303 
$ 422,250 
Accumulated impairment losses
(29,221)
(29,221)
Goodwill
391,082 
393,029 
Foreign currency translation adjustments
(1,947)
 
Fleet Management Solutions [Member]
 
 
Carrying amount of goodwill attributable to each reportable business segment
 
 
Goodwill, gross
231,896 
233,217 
Accumulated impairment losses
(10,322)
(10,322)
Goodwill
221,574 
222,895 
Foreign currency translation adjustments
(1,321)
 
Dedicated Transportation Solutions [Member] [Member]
 
 
Carrying amount of goodwill attributable to each reportable business segment
 
 
Goodwill, gross
40,808 
40,808 
Accumulated impairment losses
Goodwill
40,808 
40,808 
Foreign currency translation adjustments
 
Supply Chain Solutions [Member]
 
 
Carrying amount of goodwill attributable to each reportable business segment
 
 
Goodwill, gross
147,599 
148,225 
Accumulated impairment losses
(18,899)
(18,899)
Goodwill
128,700 
129,326 
Foreign currency translation adjustments
$ (626)
 
Debt (Details) (USD $)
Mar. 31, 2015
Dec. 31, 2014
Short-term debt and current portion of long-term debt:
 
 
Short-term debt, weighted-average interest rate
1.77% 
1.30% 
Short-term debt
$ 2,550,000 
$ 3,773,000 
Current portion of long-term debt, including capital leases
8,867,000 
8,434,000 
Short-term debt and current portion of long-term debt
11,417,000 
12,207,000 
Long-term debt:
 
 
U.S. commercial paper
504,100,000 
276,694,000 
Total before fair market value adjustment
4,691,485,000 
4,503,879,000 
Fair market value adjustment on notes subject to hedging
9,885,000 
4,830,000 
Total after fair market value adjustment
4,701,370,000 
4,508,709,000 
Current portion of long-term debt, including capital leases
(8,867,000)
(8,434,000)
Long-term debt
4,692,503,000 
4,500,275,000 
Total debt
4,703,920,000 
4,512,482,000 
Unamortized original issue discounts
7,700,000 
7,900,000 
Aggregate notional amount of interest rate swaps
600,000,000 
600,000,000 
U.S Commercial Paper, Long-Term [Member]
 
 
Long-term debt:
 
 
Long-term debt, weighted-average interest rate
0.46% 
0.35% 
U.S. commercial paper
481,410,000 
276,694,000 
Global Revolving Credit Facility [Member]
 
 
Long-term debt:
 
 
Long-term debt, weighted-average interest rate
2.67% 
1.60% 
Global revolving credit facility
22,710,000 
11,190,000 
Unsecured U.S. notes - Medium-term notes, Long-Term [Member]
 
 
Long-term debt:
 
 
Long-term debt, weighted-average interest rate
3.25% 
3.29% 
Unsecured U.S. notes - Medium-term notes
3,822,369,000 
3,772,159,000 
Unsecured U.S. obligations, principally bank term loans, Long-Term [Member]
 
 
Long-term debt:
 
 
Long-term debt, weighted-average interest rate
1.49% 
0.76% 
Unsecured U.S. obligations
50,000,000 
110,500,000 
Unsecured Foreign Obligations, Long-Term [Member]
 
 
Long-term debt:
 
 
Long-term debt, weighted-average interest rate
1.92% 
2.01% 
Unsecured foreign obligations
279,992,000 
295,776,000 
Capital Lease Obligations, Long-Term [Member]
 
 
Long-term debt:
 
 
Long-term debt, weighted-average interest rate
3.57% 
3.65% 
Capital lease obligations
$ 35,004,000 
$ 37,560,000 
Debt (Details Textuals) (USD $)
3 Months Ended 3 Months Ended 3 Months Ended
Mar. 31, 2015
Institutions
Jan. 31, 2015
Dec. 31, 2014
Mar. 31, 2015
Unsecured Medium Term Notes Due March 2020 [Member]
Feb. 28, 2015
Unsecured Medium Term Notes Due March 2020 [Member]
Mar. 31, 2015
Letter of Credit [Member]
Mar. 31, 2015
Minimum [Member]
Mar. 31, 2015
Maximum [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
Number of lending institutions
12 
 
 
 
 
 
 
 
Maximum borrowing capacity under global revolving credit facility
$ 1,200,000,000.0 
$ 1,200,000,000.0 
 
 
 
$ 75,000,000 
 
 
Annual facility fees, percentage
0.10% 
 
 
 
 
 
0.075% 
0.25% 
Letter of credit outstanding amount
 
 
 
 
 
 
 
Ratio of debt to consolidated net worth
 
 
 
 
 
 
 
Debt to consolidated tangible net worth ratio
197.00% 
 
 
 
 
 
 
 
Line of credit remaining capacity
695,300,000 
 
 
 
 
 
 
 
Commercial paper classified as long term debt
504,100,000 
 
276,694,000 
 
 
 
 
 
Current maturities classified as long-term debt
609,900,000 
 
698,500,000 
 
 
 
 
 
Trade receivables borrowings
 
 
60,000,000 
 
 
 
 
 
Face amount of unsecured medium-term notes issued
 
 
 
 
400,000,000 
 
 
 
Debt repurchase price, percentage
 
 
 
101.00% 
 
 
 
 
Total available proceeds under trade receivables purchase and sale program
175,000,000 
 
 
 
 
 
 
 
Number of days under trade receivables purchase and sale program
364 days 
 
 
 
 
 
 
 
Letters of credit and surety bonds outstanding
$ 343,000,000 
 
$ 334,300,000 
 
 
 
 
 
Fair Value Measurements (Details) (Fair Value, Measurements, Nonrecurring [Member], USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total Losses
$ 2,371 
$ 3,675 
Revenue earning equipment, Trucks [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total Losses
1,228 
1,882 
Revenue earning equipment, Tractors [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total Losses
827 
1,632 
Revenue earning equipment, Trailers [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total Losses
316 
161 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets held for sale at fair value
11,140 
20,165 
Fair Value, Inputs, Level 3 [Member] |
Revenue earning equipment, Trucks [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets held for sale at fair value
5,298 
11,928 
Fair Value, Inputs, Level 3 [Member] |
Revenue earning equipment, Tractors [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets held for sale at fair value
4,611 
7,495 
Fair Value, Inputs, Level 3 [Member] |
Revenue earning equipment, Trailers [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets held for sale at fair value
$ 1,231 
$ 742 
Fair Value Measurements Details Textual (Details) (Fair Value, Inputs, Level 2 [Member], USD $)
In Billions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of total debt
$ 4.79 
$ 4.59 
Derivatives (Details) (USD $)
3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Mar. 31, 2015
Interest rate swaps maturing June 2017 [Member]
Mar. 31, 2014
Interest rate swaps maturing June 2017 [Member]
Mar. 31, 2015
Interest rate swaps maturing November 2018 [Member]
Mar. 31, 2014
Interest rate swaps maturing November 2018 [Member]
Mar. 31, 2015
Interest rate swaps maturing June 2019 [Member]
Mar. 31, 2014
Interest rate swaps maturing June 2019 [Member]
Mar. 31, 2015
Interest rate swaps maturing September 2019 [Member]
Mar. 31, 2014
Interest rate swaps maturing September 2019 [Member]
Mar. 31, 2015
Interest Rate Swaps Maturing March 2020 [Member]
Mar. 31, 2014
Interest Rate Swaps Maturing March 2020 [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Issuance date
 
 
May 24, 2011 
 
Nov. 12, 2013 
 
Feb. 25, 2014 
 
May 06, 2014 
 
Feb. 24, 2015 
 
Maturity date
 
 
Jun. 01, 2017 
 
Nov. 15, 2018 
 
Jun. 01, 2019 
 
Sep. 03, 2019 
 
Mar. 02, 2020 
 
Face value of medium-term notes
 
 
$ 350,000,000 
 
$ 300,000,000 
 
$ 350,000,000 
 
$ 400,000,000 
 
$ 400,000,000 
 
Aggregate notional amount of interest rate swaps
$ 600,000,000 
$ 600,000,000 
$ 150,000,000 
 
$ 100,000,000 
 
$ 100,000,000 
 
$ 100,000,000 
 
$ 150,000,000 
 
Fixed interest rate
 
 
3.50% 
 
2.45% 
 
2.55% 
 
2.45% 
 
2.65% 
 
Weighted-average variable interest rate on hedged debt
 
 
1.42% 
1.44% 
1.20% 
1.19% 
1.13% 
1.10% 
0.89% 
0.00% 
1.14% 
0.00% 
Share Repurchase Programs (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Accelerated Share Repurchases [Line Items]
 
 
Common stock repurchases
$ 6,141 
 
December 2013 Anti-Dilutive Share Repurchase Program [Member]
 
 
Accelerated Share Repurchases [Line Items]
 
 
Common stock repurchases
6,100 
40,400 
Common Stock [Member]
 
 
Accelerated Share Repurchases [Line Items]
 
 
Repurchased and retired shares
69,107 
562,683 
Common stock repurchases
$ 35 
 
Common Stock [Member] |
December 2013 Anti-Dilutive Share Repurchase Program [Member]
 
 
Accelerated Share Repurchases [Line Items]
 
 
Maximum number of share repurchases authorization (no more than 2 million)
2,000,000 
 
Repurchased and retired shares
69,107 
 
Accumulated Other Comprehensive Loss (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax
$ 57,372 
$ 14,592 
Accumulated Other Comprehensive (Loss) [Roll Forward]
 
 
Accumulated other comprehensive loss, beginning of period
(620,270)
(438,248)
Amortization
4,610 
3,127 
Accumulated other comprehensive loss, end of period
(673,032)
(449,713)
Currency Translation Adjustments and Other [Member]
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax
57,372 
14,592 
Accumulated Other Comprehensive (Loss) [Roll Forward]
 
 
Accumulated other comprehensive loss, beginning of period
(36,087)
35,875 
Accumulated other comprehensive loss, end of period
(93,459)
21,283 
Net Actuarial Loss [Member]
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax
 
Accumulated Other Comprehensive (Loss) [Roll Forward]
 
 
Accumulated other comprehensive loss, beginning of period
(585,941)
(477,883)
Amortization
4,961 
3,807 
Accumulated other comprehensive loss, end of period
(580,980)
(474,076)
Prior Service Credit [Member]
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax
 
Accumulated Other Comprehensive (Loss) [Roll Forward]
 
 
Accumulated other comprehensive loss, beginning of period
1,758 
3,760 
Amortization
(351)
(680)
Accumulated other comprehensive loss, end of period
$ 1,407 
$ 3,080 
Employee Benefit Plans (Details) (USD $)
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Amortization of:
 
 
Contribution to pension plans
$ 3,900,000 
 
Estimated total contributions
39,000,000 
 
Pension Benefits [Member]
 
 
Amortization of:
 
 
Net periodic benefit cost
10,518,000 
8,134,000 
Postretirement Benefits [Member]
 
 
Amortization of:
 
 
Net periodic benefit cost
(279,000)
(244,000)
Company Administered Plan [Member] |
Pension Benefits [Member]
 
 
Components of net periodic benefit cost
 
 
Service cost
3,627,000 
3,423,000 
Interest cost
21,887,000 
25,561,000 
Expected return on plan assets
(24,900,000)
(28,718,000)
Amortization of:
 
 
Net actuarial loss/(gain)
7,808,000 
6,235,000 
Prior service credit
(76,000)
(458,000)
Net periodic benefit cost
8,346,000 
6,043,000 
Company Administered Plan [Member] |
Pension Benefits U.S. [Member]
 
 
Amortization of:
 
 
Net periodic benefit cost
8,892,000 
6,287,000 
Company Administered Plan [Member] |
Pension Benefits Non-U.S. [Member]
 
 
Amortization of:
 
 
Net periodic benefit cost
(546,000)
(244,000)
Company Administered Plan [Member] |
Postretirement Benefits [Member]
 
 
Components of net periodic benefit cost
 
 
Service cost
111,000 
135,000 
Interest cost
284,000 
365,000 
Expected return on plan assets
Amortization of:
 
 
Net actuarial loss/(gain)
(196,000)
(129,000)
Prior service credit
(478,000)
(615,000)
Net periodic benefit cost
(279,000)
(244,000)
Company Administered Plan [Member] |
Postretirement Benefits U.S [Member]
 
 
Amortization of:
 
 
Net periodic benefit cost
(415,000)
(397,000)
Company Administered Plan [Member] |
Postretirement Benefits Non-U.S [Member]
 
 
Amortization of:
 
 
Net periodic benefit cost
136,000 
153,000 
Union Administered Plan [Member] |
Pension Benefits [Member]
 
 
Amortization of:
 
 
Net periodic benefit cost
2,172,000 
2,091,000 
Union Administered Plan [Member] |
Postretirement Benefits [Member]
 
 
Amortization of:
 
 
Net periodic benefit cost
$ 0 
$ 0 
Other Items Impacting Comparability (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Other Income and Expenses [Abstract]
 
Professional fees associated with cost savings initiatives
$ 1.8 
Supplemental Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Supplemental cash flow information
 
 
Interest paid
$ 38,381 
$ 41,180 
Income taxes paid
3,590 
1,534 
Changes in accounts payable related to purchases of revenue earning equipment
99,972 
16,918 
Operating and revenue earning equipment acquired under capital leases
2,245 
Acquisitions
$ 0 
$ 1,649 
Miscellaneous Income, Net (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Other Income and Expenses [Abstract]
 
 
Rabbi trust investment income
$ 1,067 
$ 500 
Insurance proceeds
314 
Gains on sales of operating property and equipment
183 
1,304 
Foreign currency translation benefit
129 
(406)
Contract settlement
15 
2,908 
Other, net
929 
1,076 
Total
$ 2,637 
$ 5,382 
Segment Reporting (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
segment
Mar. 31, 2014
Segment Reporting Information [Line Items]
 
 
Number of business segments
 
Total revenue
$ 1,567,153 
$ 1,610,737 
Segment EBT
103,044 
89,147 
Unallocated CSS
(11,942)
(10,829)
Non-operating pension costs
(4,883)
(3,314)
Restructuring and other recoveries, net and other items
(1,841)
 
Earnings from continuing operations before income taxes
84,378 
75,004 
Segment capital expenditures paid
545,439 
572,111 
Unallocated CSS
7,803 
6,611 
Capital expenditures paid
553,242 
578,722 
Acquisition payments
1,649 
Fleet Management Solutions [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total revenue
1,087,150 
1,135,087 
Dedicated Transportation Solutions [Member] [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total revenue
212,659 
215,962 
Supply Chain Solutions [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total revenue
371,054 
381,379 
Intersegment Eliminations [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total revenue
(103,710)
(121,691)
Segment EBT
(11,534)
(9,628)
Segment capital expenditures paid
Intersegment Eliminations [Member] |
Fleet Management Solutions [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total revenue
103,710 
121,691 
Intersegment Eliminations [Member] |
Dedicated Transportation Solutions [Member] [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total revenue
Intersegment Eliminations [Member] |
Supply Chain Solutions [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total revenue
Operating Segments [Member] |
Fleet Management Solutions [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total revenue
983,440 
1,013,396 
Segment EBT
89,919 
76,991 
Segment capital expenditures paid
538,743 
568,239 
Operating Segments [Member] |
Dedicated Transportation Solutions [Member] [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total revenue
212,659 
215,962 
Segment EBT
8,970 
8,686 
Segment capital expenditures paid
709 
250 
Operating Segments [Member] |
Supply Chain Solutions [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total revenue
371,054 
381,379 
Segment EBT
15,689 
13,098 
Segment capital expenditures paid
$ 5,987 
$ 3,622 
Other Matters (Details) (Tax Year 1997 and 1998 [Member], Brazil state operating tax [Member], USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Tax Year 1997 and 1998 [Member] |
Brazil state operating tax [Member]
 
Loss Contingencies [Line Items]
 
Tax amounts assessed but not reserved
$ 5