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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Florida
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59-0739250
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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11690 N.W. 105
th
Street,
Miami, Florida 33178
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(305) 500-3726
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(Address of principal executive offices, including zip code)
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(Telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of exchange on which registered
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Ryder System, Inc. Common Stock ($0.50 par value)
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New York Stock Exchange
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Documents Incorporated by Reference into this Report
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Part of Form 10-K into which Document is Incorporated
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Ryder System, Inc. 2018 Proxy Statement
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Part III
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Page No.
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•
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delivering operational excellence through continuous productivity and process improvements;
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•
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attracting, developing and retaining the best talent; and
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•
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deploying technology that will enable growth while improving operational efficiencies.
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Fleet Management Solutions
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(1)
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U.S. Fleet as of June
2017
, Class 3-8, IHS Markit Ltd. (formerly RL Polk)
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(2)
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Canada Outsourced Fleet Market as of September
2017
, Class 3-8, IHS Markit Ltd. (formerly RL Polk)
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(3)
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U.K. Lease and Rental HGV Market, Projection for December
2017
, Source: The Society of Motor Manufacturers & Traders (SMMT) 2010 & Ryder Internal Estimates
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•
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We are able to leverage our vehicle buying power for the benefit of our customers because we purchase a large number of vehicles from a limited number of manufacturers. Once we have signed an agreement with the customer, we acquire vehicles and components that are custom engineered to the customer’s requirements and lease the vehicles to the customer for periods generally ranging from three to seven years for trucks and tractors and typically ten years for trailers.
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•
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We offer ChoiceLease customers a complete maintenance program designed to reduce vehicle downtime through a preventive maintenance plan that is based on vehicle type and time or mileage intervals. Alternatively, we offer flexible maintenance options to our customers designed to provide them with choices on their preferred level of maintenance. Given our continued focus on improving the efficiency and effectiveness of our maintenance services, particularly in light of changing technology and increased regulation, we provide our ChoiceLease customers with a cost effective alternative to maintaining their own fleet of vehicles and the flexibility to choose the maintenance program that works for them.
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•
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Our customers have access to our extensive network of maintenance facilities and trained technicians for maintenance, vehicle repairs, 24-hour emergency roadside service, and replacement vehicles for vehicles that are temporarily out of service.
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•
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We typically retain vehicle residual risk exposure.
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•
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Customers have an opportunity to enhance their standard lease with additional fleet support services including our fuel and related services as described below; liability insurance coverage under our existing insurance policies and related insurance services; safety services including safety training, driver certification and loss prevention consulting; vehicle use and other tax reporting, permitting and licensing, and regulatory compliance (including hours of service administration); environmental services; and access to
RydeSmart
®
, a full-featured GPS fleet location, tracking, and vehicle performance management system and to our web-based fleet tool that provides customers with 24/7 access to key operational and maintenance management information about their fleets.
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U.S.
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Foreign
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|
Total
|
||||||
|
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Vehicles
|
|
Customers
|
|
Vehicles
|
|
Customers
|
|
Vehicles
|
|
Customers
|
ChoiceLease
|
|
115,200
|
|
11,500
|
|
23,900
|
|
2,400
|
|
139,100
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|
13,900
|
Commercial rental
(1)
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|
31,000
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|
30,700
|
|
6,800
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|
5,700
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|
37,800
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|
36,400
|
SelectCare
(2)
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48,400
|
|
1,700
|
|
6,000
|
|
400
|
|
54,400
|
|
2,100
|
(1)
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Commercial rental customers include customers who rented a vehicle for more than 3 days during the year and includes approximately
7,400
ChoiceLease customers
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(2)
|
SelectCare customers include approximately
1,020
ChoiceLease customers
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•
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Drive profitable fleet growth by (1) successfully implementing sales and marketing initiatives designed to compel private fleet operators and for-hire carriers to outsource all or some portion of their fleet management needs to us; (2) offering innovative products, solutions and support services that will create and strengthen new and existing customer relationships; and (3) completing targeted acquisitions;
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•
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Deliver a consistent, industry-leading and cost-effective maintenance program to our customers through continued process improvement and re-design, productivity initiatives and technology improvements; and
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•
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Optimize asset utilization and management, particularly with respect to our rental fleet, used vehicle operations and maintenance facility infrastructure.
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Dedicated Transportation Solutions
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Supply Chain Solutions
|
•
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Provide customers with best in class execution and quality through reliable and flexible supply chain solutions;
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•
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Develop innovative solutions and capabilities that drive value for our customer within our targeted industry verticals;
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•
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Create a culture of innovation and collaboration to share capabilities and solutions to meet our client’s needs;
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•
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Consistent focus on network optimization and continuous improvement; and
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•
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Successfully execute targeted sales and marketing growth strategies.
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Name
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Age
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Position
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Robert E. Sanchez
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52
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Chair and Chief Executive Officer
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Art A. Garcia
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56
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Executive Vice President and Chief Financial Officer
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Dennis C. Cooke
|
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53
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President, Global Fleet Management Solutions
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John J. Diez
|
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46
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President, Dedicated Transportation Solutions
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J. Steven Sensing
|
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50
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President, Global Supply Chain Solutions
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Robert D. Fatovic
|
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52
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Executive Vice President, Chief Legal Officer and Corporate Secretary
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Frank Lopez
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43
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Senior Vice President and Chief Human Resources Officer
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Karen M. Jones
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55
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Executive Vice President and Chief Marketing Officer
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John Gleason
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61
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Executive Vice President and Chief Sales Officer
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Rajeev Ravindran
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52
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Senior Vice President and Chief Information Officer
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Frank Mullen
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48
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Vice President and Controller
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•
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our inability to obtain expected customer retention levels or sales growth targets;
|
•
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we compete with many other transportation and logistics service providers, some of which have greater capital resources than we do;
|
•
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customers may choose to provide the services we provide for themselves;
|
•
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some of our competitors periodically reduce their prices to gain business, and some of our smaller competitors may have lower cost structures than we do, which may limit our ability to maintain or increase prices; and
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•
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because cost of capital is a significant competitive factor, any increase in either the cost of our debt or equity as a result of reductions in our debt rating or stock price volatility could have a significant impact on our competitive position.
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•
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unanticipated interest rate and currency exchange rate fluctuations;
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•
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increased risk of default by counterparties under derivative instruments and hedging agreements;
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•
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diminished liquidity and credit availability resulting in higher short-term borrowing costs and more stringent borrowing terms; and
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•
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restricted access to capital and increased cost of capital and financing sources.
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Stock Price
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Dividends per
Common Share
|
|||||
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High
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Low
|
|
||||
2017
|
|
|
|
|
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|||
First quarter
|
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$
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79.26
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|
|
70.89
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|
|
0.44
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Second quarter
|
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79.63
|
|
|
62.52
|
|
|
0.44
|
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Third quarter
|
|
84.99
|
|
|
70.24
|
|
|
0.46
|
|
Fourth quarter
|
|
85.77
|
|
|
76.11
|
|
|
0.46
|
|
|
|
|
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|
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|||
2016
|
|
|
|
|
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|||
First quarter
|
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$
|
66.36
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|
|
45.12
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|
|
0.41
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Second quarter
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|
71.90
|
|
|
56.98
|
|
|
0.41
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Third quarter
|
|
69.78
|
|
|
59.57
|
|
|
0.44
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Fourth quarter
|
|
85.42
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|
|
62.03
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|
|
0.44
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Total Number
of Shares
Purchased
(1)
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Average Price
Paid per
Share
|
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Total Number of
Shares Purchased as
Part of Publicly Announced Program
(2)
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Maximum Number
of Shares That May
Yet Be Purchased
Under the Anti-Dilutive
Program
(2)
|
|||||
October 1 through October 31, 2017
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250
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|
|
$
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81.92
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|
—
|
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530,734
|
|
November 1 through November 30, 2017
|
|
99,924
|
|
|
80.57
|
|
|
99,818
|
|
|
430,916
|
|
|
December 1 through December 31, 2017
|
|
54,530
|
|
|
81.60
|
|
|
54,115
|
|
|
376,801
|
|
|
Total
|
|
154,704
|
|
|
$
|
80.94
|
|
|
153,933
|
|
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(1)
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During the three months ended
December 31, 2017
, we purchased an aggregate of
771
shares of our common stock in employee-related transactions. Employee-related transactions may include: (i) shares of common stock delivered as payment for the exercise price of options exercised or to satisfy the option holders’ tax withholding liability associated with our share-based compensation programs and (ii) open-market purchases by the trustee of Ryder’s deferred compensation plans relating to investments by employees in our stock, one of the investment options available under the plans.
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(2)
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In December 2017, our Board of Directors authorized a new share repurchase program intended to mitigate the dilutive impact of shares issued under our employee stock plans. Under the December 2017 program, management is authorized to repurchase up to 1.5 million shares of common stock issued to employees under the Company’s employee stock plans from December 1, 2017 through December 13, 2019. Share repurchases will be made periodically in open-market transactions using the Company's working capital, and are subject to market conditions, legal requirements, and other factors. In addition, management has been granted the authority to establish prearranged written trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934 as part of the repurchase program.
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Years ended December 31
|
|||||||||||||||
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2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(Dollars and shares in thousands, except per share amounts)
|
||||||||||||||
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Revenue
|
|
$
|
7,329,599
|
|
|
6,786,984
|
|
|
6,571,893
|
|
|
6,638,285
|
|
|
6,419,285
|
|
Operating Revenue
(1)
|
|
$
|
6,040,380
|
|
|
5,790,897
|
|
|
5,561,077
|
|
|
5,252,217
|
|
|
4,965,818
|
|
Earnings from continuing operations
(2)
|
|
$
|
791,015
|
|
|
264,640
|
|
|
305,989
|
|
|
220,225
|
|
|
243,275
|
|
Comparable earnings from continuing operations
(3)
|
|
$
|
240,809
|
|
|
290,488
|
|
|
326,485
|
|
|
294,279
|
|
|
255,394
|
|
Net earnings
(2), (4)
|
|
$
|
790,558
|
|
|
262,477
|
|
|
304,768
|
|
|
218,341
|
|
|
237,871
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings from continuing operations -Diluted
(2)
|
|
$
|
14.87
|
|
|
4.94
|
|
|
5.73
|
|
|
4.14
|
|
|
4.63
|
|
Comparable earnings from continuing operations -Diluted
(3)
|
|
$
|
4.53
|
|
|
5.42
|
|
|
6.10
|
|
|
5.53
|
|
|
4.85
|
|
Net earnings -Diluted
(2), (4)
|
|
$
|
14.87
|
|
|
4.90
|
|
|
5.71
|
|
|
4.11
|
|
|
4.53
|
|
Cash dividends
|
|
$
|
1.80
|
|
|
1.70
|
|
|
1.56
|
|
|
1.42
|
|
|
1.30
|
|
Book value
(5)
|
|
$
|
53.54
|
|
|
38.39
|
|
|
37.15
|
|
|
34.30
|
|
|
35.56
|
|
Financial Data:
|
|
|
|
|
|
|
|
|
|
|
||||||
Total assets
|
|
$
|
11,452,231
|
|
|
10,902,454
|
|
|
10,952,580
|
|
|
9,837,776
|
|
|
9,156,175
|
|
Average assets
(6)
|
|
$
|
11,133,727
|
|
|
11,056,740
|
|
|
10,464,001
|
|
|
9,594,878
|
|
|
8,692,120
|
|
Return on average assets (%)
(6)
|
|
7.1
|
|
|
2.4
|
|
|
2.9
|
|
|
2.3
|
|
|
2.7
|
|
|
Long-term debt
|
|
$
|
4,583,582
|
|
|
4,599,864
|
|
|
4,868,097
|
|
|
4,681,240
|
|
|
4,010,810
|
|
Total debt
|
|
$
|
5,409,651
|
|
|
5,391,274
|
|
|
5,502,627
|
|
|
4,717,524
|
|
|
4,283,013
|
|
Shareholders’ equity
(5)
|
|
$
|
2,835,016
|
|
|
2,052,275
|
|
|
1,987,111
|
|
|
1,819,087
|
|
|
1,896,561
|
|
Debt to equity (%)
(5)
|
|
191
|
|
|
263
|
|
|
277
|
|
|
259
|
|
|
226
|
|
|
Average shareholders’ equity
(5), (6)
|
|
$
|
2,201,219
|
|
|
2,052,371
|
|
|
1,894,917
|
|
|
1,925,824
|
|
|
1,593,942
|
|
Return on average shareholders’ equity (%)
(5), (6)
|
|
35.9
|
|
|
12.8
|
|
|
16.1
|
|
|
11.3
|
|
|
14.9
|
|
|
Adjusted return on average capital (%)
(6), (7)
|
|
4.2
|
|
|
4.8
|
|
|
5.8
|
|
|
5.8
|
|
|
5.8
|
|
|
Net cash provided by operating activities from continuing operations
|
|
$
|
1,547,986
|
|
|
1,601,022
|
|
|
1,441,788
|
|
|
1,382,818
|
|
|
1,251,811
|
|
Net cash (used in) provided by financing activities from continuing operations
|
|
$
|
(155,115
|
)
|
|
(185,922
|
)
|
|
731,485
|
|
|
311,650
|
|
|
347,070
|
|
Net cash used in investing activities from continuing operations
|
|
$
|
(1,366,340
|
)
|
|
(1,405,833
|
)
|
|
(2,161,355
|
)
|
|
(1,704,510
|
)
|
|
(1,603,818
|
)
|
Free cash flow
(8)
|
|
$
|
189,722
|
|
|
193,675
|
|
|
(727,714
|
)
|
|
(315,116
|
)
|
|
(339,596
|
)
|
Capital expenditures paid
|
|
$
|
1,860,436
|
|
|
1,905,157
|
|
|
2,667,978
|
|
|
2,259,164
|
|
|
2,122,628
|
|
Other Data:
|
|
|
|
|
|
|
|
|
|
|
||||||
Average common shares — Diluted
|
|
52,988
|
|
|
53,361
|
|
|
53,260
|
|
|
53,036
|
|
|
52,071
|
|
|
Number of vehicles — Owned and leased
|
|
186,200
|
|
|
185,100
|
|
|
185,200
|
|
|
174,100
|
|
|
172,100
|
|
|
Average number of vehicles — Owned and leased
|
|
185,200
|
|
|
185,400
|
|
|
180,500
|
|
|
172,800
|
|
|
171,200
|
|
|
Number of employees
|
|
36,100
|
|
|
34,500
|
|
|
33,100
|
|
|
30,600
|
|
|
28,900
|
|
(1)
|
Non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section in Item 7 for a reconciliation of total revenue to operating revenue, as well as the reasons management believes these measures are important to investors.
|
(2)
|
2017 amounts reflect tax benefit as a result of the 2017 Tax Cuts and Jobs Act. Refer to
Note 13
, "
Income Taxes
," for additional information.
|
(3)
|
Non-GAAP financial measures. Refer to the “Non-GAAP Financial Measures” section in Item 7 of this report for a reconciliation of net earnings from continuing operations to comparable earnings from continuing operations and net earnings from continuing operations per diluted common share to comparable earnings per diluted common share, as well as the reasons management believes these measures are important to investors.
|
(4)
|
Net earnings in
2017
,
2016
,
2015
,
2014
and
2013
, included losses from discontinued operations of $
(0.5) million
, or
$(0.01)
per diluted common share,
$(2) million
, or
$(0.04)
per diluted common share,
$(1) million
, or
$(0.02)
per diluted common share,
$(2) million
, or
$(0.03)
per diluted common share, and
$(5) million
, or
$(0.10)
per diluted common share, respectively.
|
(5)
|
Shareholders’ equity at
December 31, 2017
,
2016
,
2015
,
2014
and
2013
, reflected cumulative after-tax equity charges of
$567 million
,
$627 million
,
$577 million
,
$584 million
, and
$474 million
, respectively, related to our pension and postretirement plans.
|
(6)
|
Amounts were computed using an 8-point average based on quarterly information.
|
(7)
|
Non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section in Item 7 of this report for a reconciliation of the non-GAAP elements of this calculation and a numerical reconciliation of net earnings to adjusted net earnings and average total debt and average shareholders' equity to adjusted average total capital used to calculate adjusted return on average capital, as well as the reasons management believes these measures are important to investors.
|
(8)
|
Non-GAAP financial measure. Refer to the “Non-GAAP financial measures” section in Item 7 of this report for a reconciliation of net cash provided by operating activities to free cash flow, as well as the reasons why management believes this measure is important to investors.
|
|
|
|
|
Change
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(Dollars in thousands, except per share amounts)
|
|
|
|
|
||||||||
Total revenue
|
|
$
|
7,329,599
|
|
|
6,786,984
|
|
|
6,571,893
|
|
|
8%
|
|
3%
|
Operating revenue
(1)
|
|
6,040,380
|
|
|
5,790,897
|
|
|
5,561,077
|
|
|
4%
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings before income taxes (EBT)
|
|
$
|
313,786
|
|
|
406,381
|
|
|
469,215
|
|
|
(23)%
|
|
(13)%
|
Comparable EBT
(2)
|
|
369,747
|
|
|
449,048
|
|
|
504,571
|
|
|
(18)%
|
|
(11)%
|
|
Earnings from continuing operations
(3)
|
|
791,015
|
|
|
264,640
|
|
|
305,989
|
|
|
199%
|
|
(14)%
|
|
Comparable earnings from continuing operations
(2)
|
|
240,809
|
|
|
290,488
|
|
|
326,485
|
|
|
(17)%
|
|
(11)%
|
|
Net earnings
(3)
|
|
790,558
|
|
|
262,477
|
|
|
304,768
|
|
|
201%
|
|
(14)%
|
|
Earnings per common share — Diluted
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations
(3)
|
|
$
|
14.87
|
|
|
4.94
|
|
|
5.73
|
|
|
201%
|
|
(14)%
|
Comparable
(2)
|
|
4.53
|
|
|
5.42
|
|
|
6.10
|
|
|
(16)%
|
|
(11)%
|
|
Net earnings
(3)
|
|
14.87
|
|
|
4.90
|
|
|
5.71
|
|
|
203%
|
|
(14)%
|
(1)
|
Non-GAAP financial measure. Refer to the“Non-GAAP Financial Measures” section of this MD&A for a reconciliation of total revenue to operating revenue and the reasons why management believes this measure is important to investors
.
|
(2)
|
Non-GAAP financial measures. Refer to the “Non-GAAP Financial Measures” section for a reconciliation of EBT, net earnings from continuing operations and earnings per diluted common share to the comparable measures and the reasons why management believes these measures are important to investors.
|
(3)
|
2017 amounts reflect tax benefit as a result of the 2017 Tax Cuts and Jobs Act.
Refer to
Note 13
, "
Income Taxes
," in the Notes to Consolidated Financial Statements for additional information.
|
|
|
2017
|
|
2016
|
||||
|
|
Total
|
|
Operating
|
|
Total
|
|
Operating
|
Organic, including price and volume
|
|
7%
|
|
4%
|
|
6%
|
|
5%
|
Fuel
|
|
1
|
|
—
|
|
(2)
|
|
—
|
Foreign exchange
|
|
—
|
|
—
|
|
(1)
|
|
(1)
|
Total increase
|
|
8%
|
|
4%
|
|
3%
|
|
4%
|
|
|
|
|
Change
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(Dollars in thousands)
|
|
|
|
|
||||||||
Lease and rental revenues
|
|
$
|
3,237,685
|
|
|
3,170,952
|
|
|
3,121,553
|
|
|
2%
|
|
2%
|
Cost of lease and rental
|
|
2,355,043
|
|
|
2,234,284
|
|
|
2,153,450
|
|
|
5%
|
|
4%
|
|
Gross margin
|
|
882,642
|
|
|
936,668
|
|
|
968,103
|
|
|
(6)%
|
|
(3)%
|
|
Gross margin %
|
|
27
|
%
|
|
30
|
%
|
|
31
|
%
|
|
|
|
|
|
|
|
|
Change
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(Dollars in thousands)
|
|
|
|
|
||||||||
Services revenue
|
|
$
|
3,571,414
|
|
|
3,152,294
|
|
|
2,912,063
|
|
|
13%
|
|
8%
|
Cost of services
|
|
3,003,348
|
|
|
2,602,978
|
|
|
2,413,156
|
|
|
15%
|
|
8%
|
|
Gross margin
|
|
568,066
|
|
|
549,316
|
|
|
498,907
|
|
|
3%
|
|
10%
|
|
Gross margin %
|
|
16
|
%
|
|
17
|
%
|
|
17
|
%
|
|
|
|
|
|
|
|
|
Change
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(Dollars in thousands)
|
|
|
|
|
||||||||
Fuel services revenue
|
|
$
|
520,500
|
|
|
463,738
|
|
|
538,277
|
|
|
12%
|
|
(14)%
|
Cost of fuel services
|
|
507,440
|
|
|
448,306
|
|
|
519,843
|
|
|
13%
|
|
(14)%
|
|
Gross margin
|
|
13,060
|
|
|
15,432
|
|
|
18,434
|
|
|
(15)%
|
|
(16)%
|
|
Gross margin %
|
|
3
|
%
|
|
3
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
Change
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(In thousands)
|
|
|
|
|
||||||||
Other operating expenses
|
|
$
|
115,507
|
|
|
113,461
|
|
|
117,082
|
|
|
2%
|
|
(3)%
|
|
|
|
|
|
|
|
|
Change
|
||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(Dollars in thousands)
|
|
|
|
|
||||||||
Selling, general and administrative expenses (SG&A)
|
|
$
|
871,983
|
|
|
805,104
|
|
|
822,857
|
|
|
8%
|
|
(2)%
|
Percentage of total revenue
|
|
12
|
%
|
|
12
|
%
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(In thousands)
|
|
|
|
|
||||||||
Non-operating pension costs
|
|
$
|
27,741
|
|
|
37,593
|
|
|
17,797
|
|
|
(26)%
|
|
111%
|
|
|
|
|
Change
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(In thousands)
|
|
|
|
|
||||||||
Used vehicle sales, net
|
|
$
|
(17,241
|
)
|
|
972
|
|
|
99,853
|
|
|
NM
|
|
(99)%
|
|
|
|
|
|
|
|
|
Change
|
||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(Dollars in thousands)
|
|
|
|
|
||||||||
Interest expense
|
|
$
|
140,350
|
|
|
147,843
|
|
|
150,434
|
|
|
(5)%
|
|
(2)%
|
Effective interest rate
|
|
2.6
|
%
|
|
2.7
|
%
|
|
2.9
|
%
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Miscellaneous income, net
|
|
$
|
44,245
|
|
|
13,068
|
|
|
10,156
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Restructuring charges and fees, net
|
|
$
|
21,405
|
|
|
5,074
|
|
|
18,068
|
|
|
|
|
|
Change
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(Dollars in thousands)
|
|
|
|
|
||||||||
(Benefit from) provision for income taxes
|
|
$
|
(477,229
|
)
|
|
141,741
|
|
|
163,226
|
|
|
NM
|
|
(13)%
|
Effective tax rate from continuing operations
|
|
(152.1
|
)%
|
|
34.9
|
%
|
|
34.8
|
%
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||||
|
|
(In thousands)
|
|
|
|
|
||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||
Fleet Management Solutions
|
|
$
|
4,733,571
|
|
|
4,556,194
|
|
|
4,545,692
|
|
|
4
|
%
|
|
—
|
%
|
Dedicated Transportation Solutions
|
|
1,096,042
|
|
|
1,020,895
|
|
|
895,538
|
|
|
7
|
|
|
14
|
|
|
Supply Chain Solutions
|
|
1,969,500
|
|
|
1,637,850
|
|
|
1,547,763
|
|
|
20
|
|
|
6
|
|
|
Eliminations
|
|
(469,514
|
)
|
|
(427,955
|
)
|
|
(417,100
|
)
|
|
(10
|
)
|
|
(3
|
)
|
|
Total
|
|
$
|
7,329,599
|
|
|
6,786,984
|
|
|
6,571,893
|
|
|
8
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating Revenue:
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||
Fleet Management Solutions
|
|
$
|
4,043,762
|
|
|
3,947,740
|
|
|
3,846,046
|
|
|
2
|
%
|
|
3
|
%
|
Dedicated Transportation Solutions
|
|
789,294
|
|
|
774,319
|
|
|
714,453
|
|
|
2
|
|
|
8
|
|
|
Supply Chain Solutions
|
|
1,507,548
|
|
|
1,352,077
|
|
|
1,256,309
|
|
|
11
|
|
|
8
|
|
|
Eliminations
|
|
(300,224
|
)
|
|
(283,239
|
)
|
|
(255,731
|
)
|
|
(6
|
)
|
|
(11
|
)
|
|
Total
|
|
$
|
6,040,380
|
|
|
5,790,897
|
|
|
5,561,077
|
|
|
4
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||
EBT:
|
|
|
|
|
|
|
|
|
|
|
||||||
Fleet Management Solutions
|
|
$
|
312,720
|
|
|
370,829
|
|
|
461,314
|
|
|
(16
|
)%
|
|
(20
|
)%
|
Dedicated Transportation Solutions
|
|
55,328
|
|
|
63,571
|
|
|
45,575
|
|
|
(13
|
)
|
|
39
|
|
|
Supply Chain Solutions
|
|
103,102
|
|
|
105,532
|
|
|
93,575
|
|
|
(2
|
)
|
|
13
|
|
|
Eliminations
|
|
(53,275
|
)
|
|
(50,148
|
)
|
|
(47,193
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
|
|
417,875
|
|
|
489,784
|
|
|
553,271
|
|
|
(15
|
)
|
|
(11
|
)
|
|
Unallocated Central Support Services
|
|
(48,128
|
)
|
|
(40,736
|
)
|
|
(48,700
|
)
|
|
(18
|
)
|
|
16
|
|
|
Non-operating pension costs
|
|
(27,741
|
)
|
|
(29,943
|
)
|
|
(17,797
|
)
|
|
7
|
|
|
(68
|
)
|
|
Restructuring charges and fees, net and other items
|
|
(28,220
|
)
|
|
(12,724
|
)
|
|
(17,559
|
)
|
|
NM
|
|
|
NM
|
|
|
Earnings from continuing operations before income taxes
|
|
$
|
313,786
|
|
|
406,381
|
|
|
469,215
|
|
|
(23
|
)%
|
|
(13
|
)%
|
(1)
|
Non-GAAP financial measures. Refer to the “Non-GAAP Financial Measures” section of this MD&A for a reconciliation of total revenue to operating revenue, and segment total revenue to segment operating revenue for FMS, DTS and SCS, as well as the reasons why management believes these measures are important to investors.
|
|
|
|
|
|
|
|
Change
|
||||||
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
(In thousands)
|
|
|
|
|
||||||||
Equipment Contribution:
|
|
|
|
|
|
|
|
|
|
||||
Dedicated Transportation Solutions
|
$
|
31,029
|
|
|
32,731
|
|
|
32,471
|
|
|
(5)%
|
|
1%
|
Supply Chain Solutions
|
22,246
|
|
|
17,417
|
|
|
14,722
|
|
|
28
|
|
18
|
|
Total
|
$
|
53,275
|
|
|
50,148
|
|
|
47,193
|
|
|
6%
|
|
6%
|
(1)
|
Total amount is included in FMS EBT
|
|
|
|
|
|
||||||||
Description
|
|
Consolidated
Statements of Earnings Line Item
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
|
|
(In thousands)
|
||||||||
Restructuring
(1)
|
|
Restructuring charges and fees, net
|
|
$
|
(10,500
|
)
|
|
(5,074
|
)
|
|
(14,225
|
)
|
Fees related to cost-savings program
(2)
|
|
Restructuring charges and fees, net
|
|
(10,905
|
)
|
|
—
|
|
|
(3,843
|
)
|
|
Restructuring charges and fees, net
|
|
|
|
(21,405
|
)
|
|
(5,074
|
)
|
|
(18,068
|
)
|
|
Non-operating pension costs
(3)
|
|
Non-operating pension costs
|
|
(27,741
|
)
|
|
(29,943
|
)
|
|
(17,797
|
)
|
|
Tax reform related bonus
(2)
|
|
SG&A
|
|
(23,278
|
)
|
|
—
|
|
|
—
|
|
|
Operating tax adjustment
(2)
|
|
SG&A
|
|
(2,205
|
)
|
|
—
|
|
|
—
|
|
|
Gain on sale of property
(2)
|
|
Miscellaneous income
|
|
24,122
|
|
|
—
|
|
|
—
|
|
|
Pension related adjustment
(4)
|
|
SG&A
|
|
(5,454
|
)
|
|
|
|
509
|
|
||
Pension related adjustment
(4)
|
|
Non-operating pension costs
|
|
—
|
|
|
(7,650
|
)
|
|
—
|
|
|
|
|
|
|
$
|
(55,961
|
)
|
|
(42,667
|
)
|
|
(35,356
|
)
|
(1)
|
See
Note 4
, "
Restructuring Charges and Fees, Net
," in the Notes to Consolidated Financial Statements for additional information.
|
(2)
|
See
Note 24
, “
Other Items Impacting Comparability
,” in the Notes to Consolidated Financial Statements for additional information.
|
(3)
|
See
Note 28
“
Segment Reporting
,” in the Notes to Consolidated Financial Statements for additional information.
|
(4)
|
See
Note 22
, “
Employee Benefit Plans
,” in the Notes to Consolidated Financial Statements for additional information.
|
|
|
|
|
|
|
|
|
Change
|
||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(Dollars in thousands)
|
|
|
|
|
||||||||
ChoiceLease
|
|
$
|
2,688,717
|
|
|
2,573,638
|
|
|
2,406,711
|
|
|
4%
|
|
7%
|
SelectCare
|
|
464,056
|
|
|
449,729
|
|
|
421,665
|
|
|
3
|
|
7
|
|
Commercial rental
|
|
813,539
|
|
|
846,331
|
|
|
940,045
|
|
|
(4)
|
|
(10)
|
|
Other
|
|
77,450
|
|
|
78,042
|
|
|
77,625
|
|
|
(1)
|
|
1
|
|
Fuel services revenue
|
|
689,809
|
|
|
608,454
|
|
|
699,646
|
|
|
13
|
|
(13)
|
|
FMS total revenue
(1)
|
|
$
|
4,733,571
|
|
|
4,556,194
|
|
|
4,545,692
|
|
|
4%
|
|
—%
|
|
|
|
|
|
|
|
|
|
|
|
||||
FMS operating revenue
(2)
|
|
$
|
4,043,762
|
|
|
3,947,740
|
|
|
3,846,046
|
|
|
2
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
||||
FMS EBT
|
|
$
|
312,720
|
|
|
370,829
|
|
|
461,314
|
|
|
(16)%
|
|
(20)%
|
|
|
|
|
|
|
|
|
|
|
|
||||
FMS EBT as a % of FMS total revenue
|
|
6.6
|
%
|
|
8.1
|
%
|
|
10.1
|
%
|
|
(150) bps
|
|
(200) bps
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
FMS EBT as a % of FMS operating revenue
(1)
|
|
7.7
|
%
|
|
9.4
|
%
|
|
12.0
|
%
|
|
(170) bps
|
|
(260) bps
|
(1)
|
Includes intercompany fuel sales from FMS to DTS and SCS.
|
(2)
|
Non-GAAP financial measures. Reconciliations of FMS total revenue to FMS operating revenue and FMS EBT as a % of FMS total revenue to FMS EBT as a % of FMS operating revenue, as well as the reasons why management believes these measures are important to investors are included in the “Non-GAAP Financial Measures” section of this MD&A.
|
|
|
2017
|
|
2016
|
||||
|
|
Total
|
|
Operating
(1)
|
|
Total
|
|
Operating
(1)
|
Organic, including price and volume
|
|
2%
|
|
2%
|
|
3%
|
|
4%
|
Fuel
|
|
2
|
|
—
|
|
(2)
|
|
—
|
Foreign exchange
|
|
—
|
|
—
|
|
(1)
|
|
(1)
|
Total increase
|
|
4%
|
|
2%
|
|
—%
|
|
3%
|
(1)
|
Non-GAAP financial measure. A reconciliation of FMS total revenue to FMS operating revenue as well as the reasons why management believes this measure is important to investors is included in the "Non-GAAP Financial Measures" section of this MD&A.
|
|
|
|
|
|
|
|
|
Change
|
||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
(Dollars in thousands)
|
|
|
|
||||||||||
Rental revenue from non-lease customers
|
|
$
|
517,874
|
|
|
528,892
|
|
|
571,985
|
|
|
(2)%
|
|
(8)%
|
Rental revenue from lease customers
(1)
|
|
$
|
295,665
|
|
|
317,439
|
|
|
368,060
|
|
|
(7)%
|
|
(14)%
|
Average commercial rental power fleet size – in service
(2), (3)
|
|
29,700
|
|
|
31,500
|
|
|
33,800
|
|
|
(6)%
|
|
(7)%
|
|
Commercial rental utilization – power fleet
(2)
|
|
75.6
|
%
|
|
74.7
|
%
|
|
76.5
|
%
|
|
90 bps
|
|
(180) bps
|
(1)
|
Represents revenue from rental vehicles provided to our existing ChoiceLease customers, generally in place of a lease vehicle.
|
(2)
|
Number of units rounded to nearest hundred and calculated using quarterly average unit counts.
|
(3)
|
Excluding trailers.
|
|
|
|
|
|
|
|
|
|
|
|
|||
Our global fleet of owned and leased revenue earning equipment and SelectCare vehicles, including vehicles under on-demand maintenance, is summarized as follows (number of units rounded to the nearest hundred):
|
|||||||||||||
|
|
|
|
|
|
|
|
Change
|
|||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
|||
End of period vehicle count
|
|
|
|
|
|
|
|
|
|
|
|||
By type:
|
|
|
|
|
|
|
|
|
|
|
|||
Trucks
(1)
|
|
76,400
|
|
|
73,300
|
|
|
72,800
|
|
|
4%
|
|
1%
|
Tractors
(2)
|
|
66,000
|
|
|
67,900
|
|
|
68,700
|
|
|
(3)
|
|
(1)
|
Trailers
(3), (4)
|
|
42,600
|
|
|
42,800
|
|
|
42,400
|
|
|
—
|
|
1
|
Other
|
|
1,200
|
|
|
1,100
|
|
|
1,300
|
|
|
9
|
|
(15)
|
Total
|
|
186,200
|
|
|
185,100
|
|
|
185,200
|
|
|
1%
|
|
—%
|
|
|
|
|
|
|
|
|
|
|
|
|||
By ownership:
|
|
|
|
|
|
|
|
|
|
|
|||
Owned
|
|
184,900
|
|
|
183,700
|
|
|
184,700
|
|
|
1%
|
|
(1)%
|
Leased
|
|
1,300
|
|
|
1,400
|
|
|
500
|
|
|
(7)
|
|
180
|
Total
|
|
186,200
|
|
|
185,100
|
|
|
185,200
|
|
|
1%
|
|
—%
|
|
|
|
|
|
|
|
|
|
|
|
|||
By product line:
(4)
|
|
|
|
|
|
|
|
|
|
|
|||
ChoiceLease
|
|
139,100
|
|
|
136,500
|
|
|
131,800
|
|
|
2%
|
|
4%
|
Commercial rental
|
|
37,800
|
|
|
37,800
|
|
|
42,100
|
|
|
—
|
|
(10)
|
Service vehicles and other
|
|
3,300
|
|
|
3,300
|
|
|
3,300
|
|
|
—
|
|
—
|
Active units
|
|
180,200
|
|
|
177,600
|
|
|
177,200
|
|
|
1
|
|
—
|
Held for sale
|
|
6,000
|
|
|
7,500
|
|
|
8,000
|
|
|
(20)
|
|
(6)
|
Total
|
|
186,200
|
|
|
185,100
|
|
|
185,200
|
|
|
1
|
|
—
|
Customer vehicles under SelectCare contracts
|
|
54,400
|
|
|
49,000
|
|
|
46,700
|
|
|
11
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|||
Average vehicle count
|
|
|
|
|
|
|
|
|
|
|
|||
By product line:
|
|
|
|
|
|
|
|
|
|
|
|||
ChoiceLease
|
|
137,600
|
|
|
134,400
|
|
|
128,800
|
|
|
2%
|
|
4%
|
Commercial rental
|
|
37,500
|
|
|
39,200
|
|
|
42,400
|
|
|
(4)
|
|
(8)
|
Service vehicles and other
|
|
3,400
|
|
|
3,400
|
|
|
3,200
|
|
|
—
|
|
6
|
Active units
|
|
178,500
|
|
|
177,000
|
|
|
174,400
|
|
|
1
|
|
1
|
Held for sale
|
|
6,700
|
|
|
8,400
|
|
|
6,100
|
|
|
(20)
|
|
38
|
Total
|
|
185,200
|
|
|
185,400
|
|
|
180,500
|
|
|
—
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|||
Customer vehicles under SelectCare contracts
|
|
52,100
|
|
|
49,200
|
|
|
43,300
|
|
|
6%
|
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
|||
Customer vehicles under SelectCare on-demand
(5)
|
|
24,500
|
|
|
21,000
|
|
|
20,000
|
|
|
17%
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total vehicles serviced
|
|
261,800
|
|
|
255,600
|
|
|
243,800
|
|
|
2%
|
|
5%
|
(1)
|
Generally comprised of Class 1 through Class 7 type vehicles with a Gross Vehicle Weight (GVW) up to 33,000 pounds.
|
(2)
|
Generally comprised of over the road on highway tractors and are primarily comprised of Class 8 type vehicles with a GVW of over 33,000 pounds.
|
(3)
|
Generally comprised of dry, flatbed and refrigerated type trailers.
|
(4)
|
Includes
4,900
UK trailers (
3,100
ChoiceLease and
1,800
commercial rental),
5,300
UK trailers (
3,300
ChoiceLease and
2,000
commercial rental) and
6,100
UK trailers (
3,900
ChoiceLease and
2,200
commercial rental) as of December 31,
2017
,
2016
and
2015
, respectively.
|
(5)
|
Comprised of the number of unique vehicles serviced under on-demand maintenance agreements. This does not represent averages for the periods. Vehicles included in the end of period count may have been serviced more than one time during the respective annual period.
|
Note:
|
Average vehicle counts were computed using a 24-point average based on monthly information.
|
|
|
|
|
Change
|
|||||||||
Number of Units
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
|||
Not yet earning revenue (NYE)
|
|
2,900
|
|
|
1,700
|
|
|
2,800
|
|
|
71%
|
|
(39)%
|
No longer earning revenue (NLE):
|
|
|
|
|
|
|
|
|
|
|
|||
Units held for sale
|
|
6,000
|
|
|
7,500
|
|
|
8,000
|
|
|
(20)
|
|
(6)
|
Other NLE units
|
|
3,400
|
|
|
4,400
|
|
|
3,300
|
|
|
(23)
|
|
33
|
Total
|
|
12,300
|
|
|
13,600
|
|
|
14,100
|
|
|
(10)%
|
|
(4)%
|
|
|
|
|
|
Change
|
|||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(Dollars in thousands)
|
|
|
|
|
||||||||
DTS total revenue
|
|
$
|
1,096,042
|
|
|
1,020,895
|
|
|
895,538
|
|
|
7%
|
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
DTS operating revenue
(1)
|
|
$
|
789,294
|
|
|
774,319
|
|
|
714,453
|
|
|
2%
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
||||
DTS EBT
|
|
$
|
55,328
|
|
|
63,571
|
|
|
45,575
|
|
|
(13)%
|
|
39%
|
DTS EBT as a % of DTS total revenue
|
|
5.0
|
%
|
|
6.2
|
%
|
|
5.1
|
%
|
|
(120) bps
|
|
110 bps
|
|
DTS EBT as a % of DTS operating revenue
(1)
|
|
7.0
|
%
|
|
8.2
|
%
|
|
6.4
|
%
|
|
(120) bps
|
|
180 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Memo:
|
|
|
|
|
|
|
|
|
|
|
||||
Average fleet
|
|
8,200
|
|
|
8,200
|
|
|
7,700
|
|
|
—%
|
|
6%
|
(1)
|
Non-GAAP financial measures. Reconciliations of DTS total revenue to DTS operating revenue and DTS EBT as a % of DTS total revenue to DTS EBT as a % of DTS operating revenue, as well as the reasons why management believes these measures are important to investors are included in the “Non-GAAP Financial Measures” section of this MD&A.
|
|
|
2017
|
|
2016
|
||||
|
|
Total
|
|
Operating
(1)
|
|
Total
|
|
Operating
(1)
|
Organic, including price and volume
|
|
6%
|
|
2%
|
|
16%
|
|
8%
|
Fuel
|
|
1
|
|
—
|
|
(2)
|
|
—
|
Total increase
|
|
7%
|
|
2%
|
|
14%
|
|
8%
|
(1)
|
Non-GAAP financial measure. A reconciliation of DTS total revenue to DTS operating revenue, as well as the reasons why management believes this measure is important to investors is included in the "Non-GAAP Financial Measures" section of this MD&A.
|
|
|
|
|
Change
|
||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||||
|
|
(Dollars in thousands)
|
|
|
|
|
||||||||||
Automotive
|
|
$
|
566,302
|
|
|
548,659
|
|
|
469,178
|
|
|
3%
|
|
17%
|
||
Technology and healthcare
|
|
271,551
|
|
|
242,474
|
|
|
251,188
|
|
|
12
|
|
(3)
|
|||
CPG and retail
|
|
511,793
|
|
|
436,368
|
|
|
431,571
|
|
|
17
|
|
1
|
|||
Industrial and other
|
|
157,902
|
|
|
124,576
|
|
|
104,372
|
|
|
27
|
|
19
|
|||
Subcontracted transportation
|
|
386,792
|
|
|
224,060
|
|
|
226,880
|
|
|
73
|
|
(1)
|
|||
Fuel
|
|
75,160
|
|
|
61,713
|
|
|
64,574
|
|
|
22
|
|
(4)
|
|||
SCS total revenue
|
|
$
|
1,969,500
|
|
|
$
|
1,637,850
|
|
|
$
|
1,547,763
|
|
|
20%
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
||||||
SCS operating revenue
(1)
|
|
$
|
1,507,548
|
|
|
1,352,077
|
|
|
1,256,309
|
|
|
11%
|
|
8%
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
SCS EBT
|
|
$
|
103,102
|
|
|
105,532
|
|
|
93,575
|
|
|
(2)%
|
|
13%
|
||
SCS EBT as a % of SCS total revenue
|
|
5.2
|
%
|
|
6.4
|
%
|
|
6.0
|
%
|
|
(120) bps
|
|
40 bps
|
|||
SCS EBT as a % of SCS operating revenue
(1)
|
|
6.8
|
%
|
|
7.8
|
%
|
|
7.4
|
%
|
|
(100) bps
|
|
40 bps
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||
Memo:
|
|
|
|
|
|
|
|
|
|
|
||||||
Average fleet
|
|
7,900
|
|
|
7,200
|
|
|
6,300
|
|
|
10%
|
|
14%
|
(1)
|
Non-GAAP financial measures. Reconciliations of SCS total revenue to SCS operating revenue and SCS EBT as a % of SCS total revenue to SCS EBT as a % of SCS operating revenue, as well as the reasons why management believes these measures are important to investors are included in the “Non-GAAP Financial Measures” section of this MD&A.
|
|
|
2017
|
|
2016
|
||||
|
|
Total
|
|
Operating
(1)
|
|
Total
|
|
Operating
(1)
|
Organic, including price and volume
|
|
19%
|
|
11%
|
|
8%
|
|
9%
|
Foreign exchange
|
|
—
|
|
—
|
|
(2)
|
|
(1)
|
Fuel
|
|
1
|
|
—
|
|
—
|
|
—
|
Total increase
|
|
20%
|
|
11%
|
|
6%
|
|
8%
|
(1)
|
Non-GAAP financial measure. A reconciliation of SCS total revenue to SCS operating revenue, as well as the reasons why management believes this measure is important to investors is included in the "Non-GAAP Financial Measures" section of this MD&A.
|
|
|
|
|
Change
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017/2016
|
|
2016/2015
|
||||
|
|
(In thousands)
|
|
|
|
|
||||||||
Human resources
|
|
$
|
16,820
|
|
|
17,501
|
|
|
20,150
|
|
|
(4)%
|
|
(13)%
|
Finance
|
|
58,597
|
|
|
59,445
|
|
|
60,998
|
|
|
(1)
|
|
(3)
|
|
Corporate services and public affairs
|
|
12,561
|
|
|
11,682
|
|
|
12,303
|
|
|
8
|
|
(5)
|
|
Information technology
|
|
89,453
|
|
|
82,087
|
|
|
84,729
|
|
|
9
|
|
(3)
|
|
Legal and safety
|
|
25,382
|
|
|
23,977
|
|
|
24,522
|
|
|
6
|
|
(2)
|
|
Marketing
|
|
18,306
|
|
|
18,029
|
|
|
22,206
|
|
|
2
|
|
(19)
|
|
Other
|
|
34,284
|
|
|
24,144
|
|
|
33,888
|
|
|
42
|
|
(29)
|
|
Total CSS
|
|
255,403
|
|
|
236,865
|
|
|
258,796
|
|
|
8
|
|
(8)
|
|
Allocation of CSS to business segments
|
|
(207,275
|
)
|
|
(196,129
|
)
|
|
(210,096
|
)
|
|
6
|
|
(7)
|
|
Unallocated CSS
|
|
$
|
48,128
|
|
|
40,736
|
|
|
48,700
|
|
|
18%
|
|
(16)%
|
|
|
Three months ended December 31,
|
|
Change
|
|||||
|
|
2017
|
|
2016
|
|
2017/2016
|
|||
|
|
(Dollars in thousands, except
per share amounts)
|
|
|
|||||
Total revenue
|
|
$
|
1,939,693
|
|
|
1,729,150
|
|
|
12%
|
Operating revenue
(1)
|
|
1,586,612
|
|
|
1,466,878
|
|
|
8
|
|
|
|
|
|
|
|
|
|||
EBT
|
|
$
|
78,795
|
|
|
69,196
|
|
|
14%
|
Comparable EBT
(2)
|
|
104,540
|
|
|
82,165
|
|
|
27
|
|
Earnings from continuing operations
(3)
|
|
642,480
|
|
|
49,275
|
|
|
1,204
|
|
Comparable earnings from continuing operations
(2)
|
|
72,730
|
|
|
57,435
|
|
|
27
|
|
Net earnings
(3)
|
|
642,970
|
|
|
48,181
|
|
|
1,234
|
|
|
|
|
|
|
|
|
|||
Earnings per common share (EPS) — Diluted
|
|
|
|
|
|
|
|||
Continuing operations
(3)
|
|
$
|
12.10
|
|
|
0.92
|
|
|
1,215%
|
Comparable
(2)
|
|
1.37
|
|
|
1.07
|
|
|
28
|
|
Net earnings
(3)
|
|
$
|
12.11
|
|
|
0.91
|
|
|
1,231
|
(1)
|
Non-GAAP financial measure. Refer to the“Non-GAAP Financial Measures” section of this MD&A for a reconciliation of total revenue to operating revenue and the reasons why management believes this measure is important to investors.
|
(2)
|
Non-GAAP financial measures. Refer to the “Non-GAAP Financial Measures” section for a reconciliation of EBT, net earnings from continuing operations and earnings per diluted common share to their respective comparable measures and the reasons why management believes these measures are important to investors.
|
(3)
|
2017 amounts reflect tax benefit as a result of the 2017 Tax Cuts and Jobs Act. Refer to Note 13 , "Income Taxes ," in the Notes to Consolidated Financial Statements for additional information.
|
|
|
Three months ended December 31, 2017
|
||
|
|
Total
|
|
Operating
(1)
|
Organic, including price and volume
|
|
9%
|
|
7%
|
Foreign exchange
|
|
1
|
|
1
|
Fuel
|
|
2
|
|
—
|
Total increase
|
|
12%
|
|
8%
|
(1)
|
Non-GAAP financial measure. Refer to the“Non-GAAP Financial Measures” section of this MD&A for a reconciliation of total revenue to operating revenue and the reasons why management believes this measure is important to investors.
|
|
|
Three months ended December 31,
|
|
Change
|
|||||
|
|
2017
|
|
2016
|
|
2017/2016
|
|||
|
|
(In thousands)
|
|
|
|||||
Revenue:
|
|
|
|
|
|
|
|||
Fleet Management Solutions
|
|
$
|
1,241,724
|
|
|
1,151,742
|
|
|
8%
|
Dedicated Transportation Solutions
|
|
284,422
|
|
|
256,870
|
|
|
11
|
|
Supply Chain Solutions
|
|
540,023
|
|
|
430,185
|
|
|
26
|
|
Eliminations
|
|
(126,476
|
)
|
|
(109,647
|
)
|
|
(15)
|
|
Total
|
|
$
|
1,939,693
|
|
|
1,729,150
|
|
|
12%
|
Operating Revenue:
(1)
|
|
|
|
|
|
|
|||
Fleet Management Solutions
|
|
$
|
1,056,970
|
|
|
992,274
|
|
|
7%
|
Dedicated Transportation Solutions
|
|
198,249
|
|
|
193,106
|
|
|
3
|
|
Supply Chain Solutions
|
|
410,649
|
|
|
352,650
|
|
|
16
|
|
Eliminations
|
|
(79,256
|
)
|
|
(71,152
|
)
|
|
(11)
|
|
Total
|
|
$
|
1,586,612
|
|
|
1,466,878
|
|
|
8%
|
EBT:
|
|
|
|
|
|
|
|||
Fleet Management Solutions
|
|
$
|
91,747
|
|
|
64,275
|
|
|
43%
|
Dedicated Transportation Solutions
|
|
15,436
|
|
|
15,271
|
|
|
1
|
|
Supply Chain Solutions
|
|
27,743
|
|
|
26,427
|
|
|
5
|
|
Eliminations
|
|
(15,222
|
)
|
|
(13,032
|
)
|
|
(17)
|
|
|
|
119,704
|
|
|
92,941
|
|
|
29
|
|
Unallocated Central Support Services
|
|
(15,163
|
)
|
|
(10,775
|
)
|
|
(41)
|
|
Non-operating pension costs
|
|
(6,866
|
)
|
|
(7,895
|
)
|
|
13
|
|
Restructuring and other charges, net and other items
|
|
(18,880
|
)
|
|
(5,074
|
)
|
|
NM
|
|
Earnings from continuing operations before income taxes
|
|
$
|
78,795
|
|
|
69,196
|
|
|
14%
|
(1)
|
Non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section of this MD&A for a reconciliation of total revenue to operating revenue, and segment total revenue to segment operating revenue, as well as the reasons why management believes these measures are important to investors.
|
|
|
Three months ended December 31, 2017
|
||
|
|
Total
|
|
Operating
(1)
|
Organic, including price and volume
|
|
5%
|
|
6%
|
Fuel
|
|
2
|
|
—
|
Foreign exchange
|
|
1
|
|
1
|
Total increase
|
|
8%
|
|
7%
|
(1)
|
Non-GAAP financial measure. A reconciliation of FMS total revenue to FMS operating revenue as well as the reasons why management believes this measure is important to investors is included in the "Non-GAAP Financial Measures" section of this MD&A.
|
|
|
Three months ended December 31, 2017
|
||
|
|
Total
|
|
Operating
(1)
|
Organic, including price and volume
|
|
9%
|
|
3%
|
Fuel
|
|
2
|
|
—
|
Total increase
|
|
11%
|
|
3%
|
|
|
Three months ended December 31, 2017
|
||
|
|
Total
|
|
Operating
(1)
|
Organic, including price and volume
|
|
24%
|
|
15%
|
Fuel
|
|
1
|
|
—
|
Foreign exchange
|
|
1
|
|
1
|
Total increase
|
|
26%
|
|
16%
|
(1)
|
Non-GAAP financial measure. A reconciliation of SCS total revenue to SCS operating revenue, as well as the reasons why management believes this measure is important to investors is included in the "Non-GAAP Financial Measures" section of this MD&A.
|
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
||||
Operating activities
|
|
$
|
1,547,986
|
|
|
1,601,022
|
|
|
1,441,788
|
|
Financing activities
|
|
(155,115
|
)
|
|
(185,922
|
)
|
|
731,485
|
|
|
Investing activities
|
|
(1,366,340
|
)
|
|
(1,405,833
|
)
|
|
(2,161,355
|
)
|
|
Effect of exchange rates on cash
|
|
(5,539
|
)
|
|
(9,482
|
)
|
|
37
|
|
|
Net change in cash and cash equivalents
|
|
$
|
20,992
|
|
|
(215
|
)
|
|
11,955
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Net cash provided by operating activities
|
|
$
|
1,547,986
|
|
|
1,601,022
|
|
|
1,441,788
|
|
Sales of revenue earning equipment
(1)
|
|
376,743
|
|
|
414,249
|
|
|
423,605
|
|
|
Sales of operating property and equipment
(1)
|
|
52,257
|
|
|
7,051
|
|
|
3,891
|
|
|
Collections on direct finance leases and other
(1)
|
|
73,172
|
|
|
76,510
|
|
|
70,980
|
|
|
Total cash generated
(2)
|
|
2,050,158
|
|
|
2,098,832
|
|
|
1,940,264
|
|
|
Purchases of property and revenue earning equipment
(1)
|
|
(1,860,436
|
)
|
|
(1,905,157
|
)
|
|
(2,667,978
|
)
|
|
Free cash flow
(2)
|
|
$
|
189,722
|
|
|
193,675
|
|
|
(727,714
|
)
|
|
|
|
|
|
|
|
||||
Memo:
|
|
|
|
|
|
|
||||
Net cash (used in) provided by financing activities
|
|
$
|
(155,115
|
)
|
|
(185,922
|
)
|
|
731,485
|
|
Net cash used in investing activities
|
|
$
|
(1,366,340
|
)
|
|
(1,405,833
|
)
|
|
(2,161,355
|
)
|
(1)
|
Included in cash flows from investing activities.
|
(2)
|
Non-GAAP financial measures. Reconciliations of net cash provided by operating activities to total cash generated and to free cash flow are set forth in this table. Refer to the “Non-GAAP Financial Measures” section of this MD&A for the reasons why management believes these measures are important to investors.
|
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Revenue earning equipment:
|
|
|
|
|
|
|
||||
ChoiceLease
|
|
$
|
1,456,758
|
|
|
1,547,717
|
|
|
2,060,254
|
|
Commercial rental
|
|
351,707
|
|
|
82,580
|
|
|
522,940
|
|
|
|
|
1,808,465
|
|
|
1,630,297
|
|
|
2,583,194
|
|
|
Operating property and equipment
|
|
132,752
|
|
|
132,603
|
|
|
112,918
|
|
|
Total capital expenditures
(1)
|
|
1,941,217
|
|
|
1,762,900
|
|
|
2,696,112
|
|
|
Changes in accounts payable related to purchases of revenue earning equipment
|
|
(80,781
|
)
|
|
142,257
|
|
|
(28,134
|
)
|
|
Cash paid for purchases of property and revenue earning equipment
|
|
$
|
1,860,436
|
|
|
1,905,157
|
|
|
2,667,978
|
|
(1)
|
Non-cash additions exclude approximately
$7 million
,
$1 million
and
$6 million
in
2017
,
2016
and
2015
, respectively, in assets held under capital leases resulting from the extension of existing operating leases and other additions.
|
|
|
2017
|
|
2016
|
||||
|
|
(In thousands)
|
||||||
Current assets
|
|
$
|
1,322,282
|
|
|
$
|
1,101,557
|
|
Current liabilities
|
|
2,012,778
|
|
|
1,744,069
|
|
||
Working capital
|
|
$
|
(690,496
|
)
|
|
$
|
(642,512
|
)
|
|
|
Short-term
|
|
Long-term
|
||||
|
|
Rating
|
|
Outlook
|
|
Rating
|
|
Outlook
|
Moody’s Investors Service
|
|
P2
|
|
Stable
|
|
Baa1
|
|
Stable (affirmed May 2017)
|
Standard & Poor’s Ratings Services
|
|
A2
|
|
Stable
|
|
BBB+
|
|
Stable (affirmed October 2017)
|
Fitch Ratings
|
|
F2
|
|
Stable
|
|
A-
|
|
Stable (affirmed October 2017)
|
|
(In millions)
|
Global revolving credit facility
|
$577
|
Trade receivables program
|
$175
|
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Debt balance at January 1
|
|
$
|
5,391,274
|
|
|
5,502,627
|
|
Cash-related changes in debt:
|
|
|
|
|
|||
Net change in commercial paper borrowings and revolving credit facilities
|
|
89,519
|
|
|
(77,798
|
)
|
|
Proceeds from issuance of medium-term notes
|
|
595,785
|
|
|
596,283
|
|
|
Proceeds from issuance of other debt instruments
|
|
277,517
|
|
|
78,645
|
|
|
Retirement of medium-term notes
|
|
(700,000
|
)
|
|
(600,000
|
)
|
|
Other debt repaid
|
|
(262,577
|
)
|
|
(69,047
|
)
|
|
Debt issuance costs paid
|
|
(1,738
|
)
|
|
(1,776
|
)
|
|
|
|
(1,494
|
)
|
|
(73,693
|
)
|
|
Non-cash changes in debt:
|
|
|
|
|
|||
Fair market value adjustment on notes subject to hedging
|
|
(8,302
|
)
|
|
(4,143
|
)
|
|
Addition of capital lease obligations
|
|
7,057
|
|
|
1,231
|
|
|
Changes in foreign currency exchange rates and other non-cash items
|
|
21,116
|
|
|
(34,748
|
)
|
|
Total changes in debt
|
|
18,377
|
|
|
(111,353
|
)
|
|
Debt balance at December 31
|
|
$
|
5,409,651
|
|
|
5,391,274
|
|
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
|
Total
|
||||||
|
|
(In thousands)
|
||||||||||||||
Debt
|
|
$
|
818,510
|
|
|
2,970,078
|
|
|
1,416,874
|
|
|
190,510
|
|
|
5,395,972
|
|
Capital lease obligations
|
|
7,559
|
|
|
9,502
|
|
|
3,810
|
|
|
—
|
|
|
20,871
|
|
|
Total debt, including capital leases
(1)
|
|
826,069
|
|
|
2,979,580
|
|
|
1,420,684
|
|
|
190,510
|
|
|
5,416,843
|
|
|
Interest on debt
(2)
|
|
148,150
|
|
|
201,785
|
|
|
71,900
|
|
|
32,570
|
|
|
454,405
|
|
|
Operating leases
(3)
|
|
84,824
|
|
|
104,469
|
|
|
43,443
|
|
|
38,288
|
|
|
271,024
|
|
|
Purchase obligations
(4)
|
|
26,417
|
|
|
29,668
|
|
|
6,641
|
|
|
259
|
|
|
62,985
|
|
|
Total contractual cash obligations
|
|
259,391
|
|
|
335,922
|
|
|
121,984
|
|
|
71,117
|
|
|
788,414
|
|
|
Insurance obligations (primarily self-insurance)
|
|
110,632
|
|
|
114,543
|
|
|
49,590
|
|
|
78,341
|
|
|
353,106
|
|
|
Other long-term liabilities
(5), (6), (7)
|
|
6,771
|
|
|
6,957
|
|
|
4,547
|
|
|
71,308
|
|
|
89,583
|
|
|
Total
|
|
$
|
1,202,863
|
|
|
3,437,002
|
|
|
1,596,805
|
|
|
411,276
|
|
|
6,647,946
|
|
(1)
|
Net of unamortized discount and excludes the fair market value adjustment on notes subject to hedging.
|
(2)
|
Total debt matures at various dates through fiscal year
2025
and bears interest principally at fixed rates. Interest on variable-rate debt is calculated based on the applicable rate at
December 31, 2017
. Amounts are based on existing debt obligations, including capital leases, and do not consider potential refinancing of expiring debt obligations.
|
(3)
|
Represents future lease payments associated with vehicles, equipment and properties under operating leases. Amounts are based upon the general assumption that the leased asset will remain on lease for the length of time specified by the respective lease agreements. No effect has been given to renewals, cancellations, contingent rentals or future rate changes.
|
(4)
|
The majority of our purchase obligations are pay-as-you-go transactions made in the ordinary course of business. Purchase obligations include agreements to purchase goods or services that are legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed minimum or variable price provisions; and the approximate timing of the transaction. The most significant item included in the above table are purchase obligations related to vehicles. Purchase orders made in the ordinary course of business that are cancelable are excluded from the above table. Any amounts for which we are liable under purchase orders for goods received are reflected in our Consolidated Balance Sheets as “Accounts payable” and “Accrued expenses and other current liabilities” and are excluded from the above table.
|
(5)
|
Represents other long-term liability amounts reflected in our Consolidated Balance Sheets that have known payment streams. The most significant items included were asset retirement obligations and deferred compensation obligations.
|
(6)
|
The amounts exclude our estimated pension contributions. For
2018
, our pension contributions, including our minimum funding requirements as set forth by U.S. and international regulations and legislation (including ERISA), are expected to be
$34 million
. Our minimum funding requirements after
2018
are dependent on several factors. However, we estimate that the undiscounted required global contributions over the next five years are approximately
$296 million
(pre-tax) (assuming expected long-term rate of return realized and other assumptions remain unchanged). We also have payments due under our other postretirement benefit (OPEB) plans. These plans are not required to be funded in advance, but are pay-as-you-go. See
Note 22
,“
Employee Benefit Plans
,” in the Notes to Consolidated Financial Statements for further discussion.
|
(7)
|
The amounts exclude
$68 million
of liabilities associated with uncertain tax positions as we are unable to reasonably estimate the ultimate amount or timing of settlement. See
Note 13
, “
Income Taxes
,” in the Notes to Consolidated Financial Statements for further discussion.
|
2018
|
|
2017
|
|
2016
|
($40 million)
|
|
($4 million)
|
|
$35 million
|
|
|
Assumed Rate
|
|
Change
|
|
Impact on 2018 Net
Pension Expense |
|
Effect on
December 31, 2017 Projected Benefit Obligation |
|
Expected long-term rate of return on assets
|
|
5.40
|
%
|
|
+/- 0.25
|
|
+/- $3.0 million
|
|
N/A
|
Discount rate increase
|
|
3.70
|
%
|
|
+ 0.25
|
|
+ $4.0 million
|
|
- $52 million
|
Discount rate decrease
|
|
3.70
|
%
|
|
- 0.25
|
|
- $4.0 million
|
|
+ $52 million
|
|
|
December 31, 2017
|
|
|
April 1, 2017
|
|
October 1, 2017
|
|||||
Reporting unit:
|
|
Goodwill
|
|
Quantitative
|
|
Qualitative
|
|
Quantitative
|
|
Qualitative
|
||
|
|
(In millions)
|
|
|
|
|
|
|
|
|
||
FMS North America
|
|
$
|
211.7
|
|
|
X
|
|
|
|
|
|
X
|
FMS Europe
|
|
15.1
|
|
|
X
|
|
|
|
X
|
|
|
|
DTS
|
|
40.8
|
|
|
|
|
X
|
|
|
|
X
|
|
SCS U.S.
|
|
121.8
|
|
|
|
|
X
|
|
|
|
X
|
|
SCS Canada
|
|
6.1
|
|
|
|
|
X
|
|
|
|
X
|
|
Total
|
|
$
|
395.5
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measure
|
Comparable GAAP Measure
|
Operating Revenue Measures:
|
|
Operating Revenue
|
Total Revenue
|
FMS Operating Revenue
|
FMS Total Revenue
|
DTS Operating Revenue
|
DTS Total Revenue
|
SCS Operating Revenue
|
SCS Total Revenue
|
FMS EBT as a % of FMS Operating Revenue
|
FMS EBT as a % of FMS Total Revenue
|
DTS EBT as a % of DTS Operating Revenue
|
DTS EBT as a % of DTS Total Revenue
|
SCS EBT as a % of SCS Operating Revenue
|
SCS EBT as a % of SCS Total Revenue
|
Comparable Earnings Measures:
|
|
Comparable Earnings Before Income Tax
|
Earnings Before Income Tax
|
Comparable Earnings
|
Earnings from Continuing Operations
|
Comparable EPS
|
EPS from Continuing Operations
|
Adjusted Return on Average Capital (ROC)
|
Not Applicable. However, the non-GAAP elements of the calculation have been reconciled to the corresponding GAAP measures. A numerical reconciliation of net earnings to adjusted net earnings and average total debt and average shareholder's equity to adjusted average total capital is provided on page 63.
|
Cash Flow Measures:
|
|
Total Cash Generated and Free Cash Flow
|
Cash Provided by Operating Activities
|
Operating Revenue Measures:
|
|
|
|
|
Operating Revenue
FMS Operating Revenue
DTS Operating Revenue SCS Operating Revenue FMS EBT as a % of FMS Operating Revenue DTS EBT as a % of DTS Operating Revenue SCS EBT as a % of SCS Operating Revenue |
Operating revenue is defined as total revenue for Ryder System, Inc. or each business segment (FMS, DTS and SCS), respectively, excluding any (1) fuel and (2) subcontracted transportation. We believe operating revenue provides useful information to investors as we use it to evaluate the operating performance of our core businesses and as a measure of sales activity at the consolidated level for Ryder System, Inc., as well as for each of our business segments. We also use segment EBT as a percentage of segment operating revenue for each business segment for the same reason. Note: FMS EBT, DTS EBT and SCS EBT, our primary measures of segment performance, are not non-GAAP measures.
Fuel : We exclude FMS, DTS and SCS fuel from the calculation of our operating revenue measures, as fuel is an ancillary service that we provide our customers, which is impacted by fluctuations in market fuel prices, and the costs are largely a pass-through to our customers, resulting in minimal changes in our profitability during periods of steady market fuel prices. However, profitability may be positively or negatively impacted by rapid changes in market fuel prices during a short period of time, as customer pricing for fuel services is established based on trailing market fuel costs. Subcontracted transportation : We also exclude subcontracted transportation from the calculation of our operating revenue measures, as these services are also typically a pass-through to our customers and, therefore, fluctuations result in minimal changes to our profitability. While our DTS and SCS business segments subcontract certain transportation services to third party providers, our FMS business segment does not engage in subcontracted transportation and, therefore, this item is not applicable to FMS. |
|||
Comparable Earnings Measures:
|
|
|
|
|
Comparable earnings before income tax (EBT)
Comparable Earnings Comparable earnings per diluted common share (EPS)Comparable Earnings Adjusted Return on Average Capital (ROC) |
Comparable EBT, comparable earnings and comparable EPS are defined, respectively, as GAAP EBT, earnings and EPS, all from continuing operations, excluding (1) non-operating pension costs and (2) any other significant items that are not representative of our business operations. We believe these comparable earnings measures provide useful information to investors and allow for better year-over-year comparison of operating performance.
Non-Operating Pension Costs : Our comparable earnings measures exclude non-operating pension costs, which include the amortization of net actuarial loss and prior service cost, interest cost and expected return on plan assets components of pension and postretirement benefit costs. We exclude non-operating pension costs because we consider these to be impacted by financial market performance and outside the operational performance of our business. Other Significant Items : Our comparable earnings measures also exclude other significant items that are not representative of our business operations as detailed in the reconciliation table below page 59. These other significant items vary from period to period and, in some periods, there may be no such significant items. Calculation of comparable tax rate : The comparable provision for income taxes is computed using the same methodology as the GAAP provision for income taxes. Income tax effects of non-GAAP adjustments are calculated based on the statutory tax rates of the jurisdictions to which the non-GAAP adjustments relate. Adjusted ROC: Adjusted ROC is defined as adjusted net earnings divided by average total capital and represents the rate of return generated by the capital deployed in our business. The adjustments represent the comparable items described above, which are excluded, as applicable, from the calculation of net earnings and average shareholders' equity (a component of average total capital).
We use adjusted ROC as an internal measure of how effectively we use the capital invested (borrowed or owned) in our operations.
|
|||
Cash Flow Measures:
|
|
|
|
Total Cash Generated
Free Cash Flow
|
We consider total cash generated and free cash flow to be important measures of comparative operating performance, as our principal sources of operating liquidity are cash from operations and proceeds from the sale of revenue earning equipment.
Total Cash Generated : Total cash generated is defined as the sum of (1) net cash provided by operating activities, (2) net cash provided by the sale of revenue earning equipment and (3) net cash provided by the sale of operating property and equipment, (4) collections on direct finance leases and (5) other cash inflows from investing activities. We believe total cash generated is an important measure of total cash flows generated from our ongoing business activities. Free Cash Flow : We refer to the net amount of cash generated from operating activities and investing activities (excluding changes in restricted cash and acquisitions) from continuing operations as “free cash flow”. We calculate free cash flow as the sum of (1) net cash provided by operating activities, (2) net cash provided by the sale of revenue earning equipment and (3) net cash provided by the sale of operating property and equipment, (4) collections on direct finance leases and (5) other cash inflows from investing activities, less (6) purchases of property and revenue earning equipment. We believe free cash flow provides investors with an important perspective on the cash available for debt service and for shareholders, after making capital investments required to support ongoing business operations. Our calculation of free cash flow may be different from the calculation used by other companies and, therefore, comparability may be limited. |
|
|
Continuing Operations
|
||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(Dollars in thousands, except per share amounts)
|
||||||||||||||
EBT
|
|
$
|
313,786
|
|
|
406,381
|
|
|
469,215
|
|
|
338,267
|
|
|
369,015
|
|
Non-operating pension costs
|
|
27,741
|
|
|
29,943
|
|
|
17,797
|
|
|
5,521
|
|
|
22,236
|
|
|
Tax reform related adjustments, net
(1)
|
|
23,278
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Restructuring charges and fees, net
(2)
|
|
21,405
|
|
|
5,074
|
|
|
18,068
|
|
|
2,787
|
|
|
(469
|
)
|
|
Pension lump sum settlement expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
97,231
|
|
|
—
|
|
|
Pension-related adjustments
(3)
|
|
5,454
|
|
|
7,650
|
|
|
(509
|
)
|
|
12,564
|
|
|
2,820
|
|
|
Operating tax adjustment
(1)
|
|
2,205
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Gain on sale of property
(1)
|
|
(24,122
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Acquisition-related tax adjustment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,808
|
|
|
—
|
|
|
Acquisition transaction costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
566
|
|
|
—
|
|
|
Superstorm Sandy vehicle-related recoveries
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(600
|
)
|
|
Foreign currency translation benefit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,904
|
)
|
|
Comparable EBT
|
|
$
|
369,747
|
|
|
449,048
|
|
|
504,571
|
|
|
458,744
|
|
|
391,098
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings
|
|
$
|
791,015
|
|
|
264,640
|
|
|
305,989
|
|
|
220,225
|
|
|
243,275
|
|
Non-operating pension costs
|
|
16,034
|
|
|
17,518
|
|
|
10,136
|
|
|
2,822
|
|
|
13,046
|
|
|
Tax reform related adjustments, net
(1), (4)
|
|
(571,666
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Restructuring charges and fees, net
(2)
|
|
13,371
|
|
|
3,513
|
|
|
12,782
|
|
|
1,800
|
|
|
(360
|
)
|
|
Pension lump sum settlement expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,333
|
|
|
—
|
|
|
Pension-related adjustments
(3)
|
|
3,303
|
|
|
4,817
|
|
|
(309
|
)
|
|
7,623
|
|
|
1,711
|
|
|
Operating tax adjustment
(1)
|
|
1,677
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Gain on sale of property
(1)
|
|
(14,769
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Acquisition-related tax adjustment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,808
|
|
|
—
|
|
|
Acquisition transaction costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
444
|
|
|
—
|
|
|
Tax law changes
(4)
|
|
1,844
|
|
|
—
|
|
|
(2,113
|
)
|
|
(1,776
|
)
|
|
—
|
|
|
Superstorm Sandy vehicle-related recoveries
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(374
|
)
|
|
Foreign currency translation benefit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,904
|
)
|
|
Comparable Earnings
(5)
|
|
$
|
240,809
|
|
|
290,488
|
|
|
326,485
|
|
|
294,279
|
|
|
255,394
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted EPS
|
|
$
|
14.87
|
|
|
4.94
|
|
|
5.73
|
|
|
4.14
|
|
|
4.63
|
|
Non-operating pension costs
|
|
0.31
|
|
|
0.33
|
|
|
0.19
|
|
|
0.05
|
|
|
0.25
|
|
|
Tax reform related adjustments, net
(1), (4)
|
|
(10.75
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Restructuring charges and fees, net
(2)
|
|
0.25
|
|
|
0.06
|
|
|
0.23
|
|
|
0.03
|
|
|
(0.01
|
)
|
|
Pension lump sum settlement expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.16
|
|
|
—
|
|
|
Pension-related adjustments
(3)
|
|
0.06
|
|
|
0.09
|
|
|
(0.01
|
)
|
|
0.14
|
|
|
0.03
|
|
|
Operating tax adjustment
(1)
|
|
0.03
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Gain on sale of property
(1)
|
|
(0.27
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Acquisition-related tax adjustment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.03
|
|
|
—
|
|
|
Acquisition transaction costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|
Tax law changes
(4)
|
|
0.03
|
|
|
—
|
|
|
(0.04
|
)
|
|
(0.03
|
)
|
|
—
|
|
|
Superstorm Sandy vehicle-related recoveries
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
Foreign currency translation benefit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.04
|
)
|
|
Comparable EPS
(5)
|
|
$
|
4.53
|
|
|
5.42
|
|
|
6.10
|
|
|
5.53
|
|
|
4.85
|
|
(1)
|
Refer to
Note 24
, “
Other Items Impacting Comparability
,” in the Notes to Consolidated Financial Statements for further discussion.
|
(2)
|
Refer to
Note 4
, “
Restructuring Charges and Fees, Net
,” in the Notes to Consolidated Financial Statements for additional information.
|
(3)
|
Refer to
Note 22
, “
Employee Benefit Plans
,” in the Notes to Consolidated Financial Statements for further discussion
|
(4)
|
Refer to
Note 13
, “
Income Taxes
,” in the Notes to Consolidated Financial Statements for further discussion.
|
(5)
|
Refer to page 60 for information on the tax impact on our comparable earnings measures.
|
|
|
Continuing Operations
|
|||||||||||||||||||
|
|
EBT
|
|
Earnings
|
|
Diluted EPS
|
|||||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
|
|
(Dollars in thousands except per share amounts)
|
|||||||||||||||||||
Three months ended December 31
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
EBT/Earnings/EPS
(1)
|
|
$
|
78,795
|
|
|
69,196
|
|
|
$
|
642,480
|
|
|
49,275
|
|
|
$
|
12.10
|
|
|
0.92
|
|
Non-operating pension costs
(2)
|
|
6,865
|
|
|
7,895
|
|
|
3,969
|
|
|
4,647
|
|
|
0.07
|
|
|
0.09
|
|
|||
Restructuring charges and fees, net
(3)
|
|
19,724
|
|
|
5,074
|
|
|
12,716
|
|
|
3,513
|
|
|
0.24
|
|
|
0.06
|
|
|||
Tax reform related adjustments, net
(4)
|
|
23,278
|
|
|
—
|
|
|
(571,666
|
)
|
|
—
|
|
|
(10.77
|
)
|
|
—
|
|
|||
Gain on sale of property
|
|
(24,122
|
)
|
|
—
|
|
|
(14,769
|
)
|
|
—
|
|
|
(0.27
|
)
|
|
—
|
|
|||
Comparable
|
|
$
|
104,540
|
|
|
82,165
|
|
|
$
|
72,730
|
|
|
57,435
|
|
|
$
|
1.37
|
|
|
1.07
|
|
(1)
|
2017 amounts reflect tax benefit as a result of the 2017 Tax Cuts and Jobs Act. Refer to
Note 13
, "
Income Taxes
," in the Notes to Consolidated Financial Statements for additional information.
|
(2)
|
Includes the amortization of actuarial loss, interest cost and expected return on plan assets components of pension and post-retirement costs, which are tied to financial market performance.
|
(3)
|
Refer to
Note 4
, "
Restructuring Charges and Fees, Net
,” in the Notes to Consolidated Financial Statements for additional information.
|
(4)
|
Refer to the table below for the information on the tax impact on our comparable earnings measures.
|
|
Three months ended December 31,
|
|
Twelve months ended December 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||||||
|
(In thousands)
|
|||||||||||||||||||||
Provision for income taxes
(1), (2)
|
$
|
563,685
|
|
|
(19,921
|
)
|
|
$
|
477,229
|
|
|
(141,741
|
)
|
|
(163,226
|
)
|
|
(118,042
|
)
|
|
(125,740
|
)
|
Income tax effects of non-GAAP adjustments
(1)
|
(551
|
)
|
|
(4,809
|
)
|
|
(11,223
|
)
|
|
(16,819
|
)
|
|
(14,860
|
)
|
|
(46,423
|
)
|
|
(9,964
|
)
|
||
Tax reform related adjustments, net
(1), (2)
|
(594,944
|
)
|
|
—
|
|
|
(594,944
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Comparable provision for income taxes
(1)
|
$
|
(31,810
|
)
|
|
(24,730
|
)
|
|
$
|
(128,938
|
)
|
|
(158,560
|
)
|
|
(178,086
|
)
|
|
(164,465
|
)
|
|
(135,704
|
)
|
(1)
|
The comparable provision for income taxes is computed using the same methodology as the GAAP provision of income taxes. Income tax effects of non-GAAP adjustments are calculated based on statutory tax rates of the jurisdictions to which the non-GAAP adjustments related.
|
(2)
|
2017 amounts reflect tax benefit as a result of the 2017 Tax Cuts and Jobs Act. Refer to
Note 13
, "
Income Taxes
," in the Notes to Consolidated Financial Statements for additional information.
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In thousands)
|
||||||||||||||
Net cash provided by operating activities
|
$
|
1,547,986
|
|
|
1,601,022
|
|
|
1,441,788
|
|
|
1,382,818
|
|
|
1,251,811
|
|
Sales of revenue earning equipment
(1)
|
376,743
|
|
|
414,249
|
|
|
423,605
|
|
|
493,477
|
|
|
445,589
|
|
|
Sales of operating property and equipment
(1)
|
52,257
|
|
|
7,051
|
|
|
3,891
|
|
|
3,486
|
|
|
6,782
|
|
|
Collections on direct finance leases
(1)
|
73,172
|
|
|
76,510
|
|
|
70,980
|
|
|
65,517
|
|
|
70,677
|
|
|
Other, net
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,250
|
)
|
|
8,173
|
|
|
Total cash generated
|
2,050,158
|
|
|
2,098,832
|
|
|
1,940,264
|
|
|
1,944,048
|
|
|
1,783,032
|
|
|
Purchases of property and revenue earning equipment
|
(1,860,436
|
)
|
|
(1,905,157
|
)
|
|
(2,667,978
|
)
|
|
(2,259,164
|
)
|
|
(2,122,628
|
)
|
|
Free cash flow
|
$
|
189,722
|
|
|
193,675
|
|
|
(727,714
|
)
|
|
(315,116
|
)
|
|
(339,596
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||
Memo:
|
|
|
|
|
|
|
|
|
|
||||||
Net cash (used in) provided by financing activities
|
$
|
(155,115
|
)
|
|
(185,922
|
)
|
|
731,485
|
|
|
311,650
|
|
|
347,070
|
|
Net cash used in investing activities
|
$
|
(1,366,340
|
)
|
|
(1,405,833
|
)
|
|
(2,161,355
|
)
|
|
(1,704,510
|
)
|
|
(1,603,818
|
)
|
(1)
|
Included in cash flows from investing activities.
|
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(In thousands)
|
||||||||||||||
Total revenue
|
|
$
|
7,329,599
|
|
|
6,786,984
|
|
|
6,571,893
|
|
|
6,638,285
|
|
|
6,419,285
|
|
Fuel
|
|
(710,305
|
)
|
|
(628,525
|
)
|
|
(722,734
|
)
|
|
(1,049,646
|
)
|
|
(1,098,843
|
)
|
|
Subcontracted transportation
|
|
(578,914
|
)
|
|
(367,562
|
)
|
|
(288,082
|
)
|
|
(336,422
|
)
|
|
(354,624
|
)
|
|
Operating revenue
|
|
$
|
6,040,380
|
|
|
5,790,897
|
|
|
5,561,077
|
|
|
5,252,217
|
|
|
4,965,818
|
|
|
|
Three months ended December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Total revenue
|
|
$
|
1,939,693
|
|
|
1,729,150
|
|
Fuel
|
|
(190,326
|
)
|
|
(164,349
|
)
|
|
Subcontracted transportation
|
|
(162,755
|
)
|
|
(97,923
|
)
|
|
Operating revenue
|
|
$
|
1,586,612
|
|
|
1,466,878
|
|
|
Three months ended December 31,
|
|
Twelve months ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2015
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||||
FMS total revenue
|
$
|
1,241,724
|
|
|
1,151,742
|
|
|
$
|
4,733,571
|
|
|
4,556,194
|
|
|
4,545,692
|
|
Fuel
(1)
|
(184,754
|
)
|
|
(159,468
|
)
|
|
(689,809
|
)
|
|
(608,454
|
)
|
|
(699,646
|
)
|
||
FMS operating revenue
|
$
|
1,056,970
|
|
|
992,274
|
|
|
$
|
4,043,762
|
|
|
3,947,740
|
|
|
3,846,046
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
FMS EBT
|
$
|
91,747
|
|
|
64,275
|
|
|
$
|
312,720
|
|
|
370,829
|
|
|
461,314
|
|
FMS EBT as a % of FMS total revenue
|
7.4
|
%
|
|
5.6
|
%
|
|
6.6
|
%
|
|
8.1
|
%
|
|
10.1
|
%
|
||
FMS EBT as a % of FMS operating revenue
|
8.7
|
%
|
|
6.5
|
%
|
|
7.7
|
%
|
|
9.4
|
%
|
|
12.0
|
%
|
(1)
|
Includes intercompany fuel sales from FMS to DTS and SCS.
|
|
Three months ended December 31,
|
|
Twelve months ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2015
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||||
DTS total revenue
|
$
|
284,422
|
|
|
256,870
|
|
|
$
|
1,096,042
|
|
|
1,020,895
|
|
|
895,538
|
|
Subcontracted transportation
|
(55,289
|
)
|
|
(36,606
|
)
|
|
(192,122
|
)
|
|
(143,502
|
)
|
|
(61,202
|
)
|
||
Fuel
|
(30,884
|
)
|
|
(27,158
|
)
|
|
(114,626
|
)
|
|
(103,074
|
)
|
|
(119,883
|
)
|
||
DTS operating revenue
|
$
|
198,249
|
|
|
193,106
|
|
|
$
|
789,294
|
|
|
774,319
|
|
|
714,453
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
DTS EBT
|
$
|
15,436
|
|
|
15,271
|
|
|
$
|
55,328
|
|
|
63,571
|
|
|
45,575
|
|
DTS EBT as a % of DTS total revenue
|
5.4
|
%
|
|
5.9
|
%
|
|
5.0
|
%
|
|
6.2
|
%
|
|
5.1
|
%
|
||
DTS EBT as a % of DTS operating revenue
|
7.8
|
%
|
|
7.9
|
%
|
|
7.0
|
%
|
|
8.2
|
%
|
|
6.4
|
%
|
|
Three months ended December 31,
|
|
Twelve months ended December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2015
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||||
SCS total revenue
|
$
|
540,023
|
|
|
430,185
|
|
|
$
|
1,969,500
|
|
|
1,637,850
|
|
|
1,547,763
|
|
Subcontracted transportation
|
(107,466
|
)
|
|
(61,317
|
)
|
|
(386,792
|
)
|
|
(224,060
|
)
|
|
(226,880
|
)
|
||
Fuel
|
(21,908
|
)
|
|
(16,218
|
)
|
|
(75,160
|
)
|
|
(61,713
|
)
|
|
(64,574
|
)
|
||
SCS operating revenue
|
$
|
410,649
|
|
|
352,650
|
|
|
$
|
1,507,548
|
|
|
1,352,077
|
|
|
1,256,309
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
SCS EBT
|
$
|
27,743
|
|
|
26,427
|
|
|
$
|
103,102
|
|
|
105,532
|
|
|
93,575
|
|
SCS EBT as a % of SCS total revenue
|
5.1
|
%
|
|
6.1
|
%
|
|
5.2
|
%
|
|
6.4
|
%
|
|
6.0
|
%
|
||
SCS EBT as a % of SCS operating revenue
|
6.8
|
%
|
|
7.5
|
%
|
|
6.8
|
%
|
|
7.8
|
%
|
|
7.4
|
%
|
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(Dollars in thousands)
|
||||||||||||||
Net earnings
(1)
|
|
$
|
790,558
|
|
|
262,477
|
|
|
304,768
|
|
|
218,341
|
|
|
237,871
|
|
Restructuring and other charges (recoveries), net and other items
(2)
|
|
28,221
|
|
|
12,585
|
|
|
17,559
|
|
|
114,956
|
|
|
(154
|
)
|
|
Income taxes
|
|
(476,707
|
)
|
|
141,623
|
|
|
163,649
|
|
|
118,120
|
|
|
125,693
|
|
|
Adjusted earnings before income taxes
|
|
342,072
|
|
|
416,685
|
|
|
485,976
|
|
|
451,417
|
|
|
363,410
|
|
|
Adjusted interest expense
(3)
|
|
140,584
|
|
|
148,043
|
|
|
150,640
|
|
|
144,991
|
|
|
140,738
|
|
|
Adjusted income taxes
(4)
|
|
(166,773
|
)
|
|
(198,248
|
)
|
|
(224,033
|
)
|
|
(213,738
|
)
|
|
(177,308
|
)
|
|
Adjusted net earnings for adjusted return on average capital
[A]
|
|
$
|
315,883
|
|
|
366,480
|
|
|
412,583
|
|
|
382,670
|
|
|
326,840
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Average total debt
|
|
$
|
5,360,257
|
|
|
5,549,458
|
|
|
5,177,012
|
|
|
4,653,476
|
|
|
4,015,178
|
|
Average off-balance sheet debt
|
|
1,758
|
|
|
1,472
|
|
|
1,467
|
|
|
1,919
|
|
|
961
|
|
|
Average shareholders’ equity
|
|
2,201,219
|
|
|
2,052,371
|
|
|
1,894,917
|
|
|
1,925,824
|
|
|
1,593,942
|
|
|
Average adjustments to shareholders’ equity
(5)
|
|
(69,443
|
)
|
|
1,728
|
|
|
10,843
|
|
|
7,758
|
|
|
(2,088
|
)
|
|
Adjusted average total capital
[B]
|
|
$
|
7,493,791
|
|
|
7,605,029
|
|
|
7,084,239
|
|
|
6,588,977
|
|
|
5,607,993
|
|
Adjusted return on average capital
[A]/[B]
|
|
4.2
|
%
|
|
4.8
|
%
|
|
5.8
|
%
|
|
5.8
|
%
|
|
5.8
|
%
|
(1)
|
2017 amounts reflect tax benefit as a result of the 2017 Tax Cuts and Jobs Act. Refer to
Note 13
, "
Income Taxes
," in the Notes to Consolidated Financial Statements for additional information.
|
(2)
|
For
2017
,
2016
and
2015
, see
Note 4
, “
Restructuring Charges and Fees, Net
” and
Note 24
, “
Other Items Impacting Comparability
,” in the Notes to Consolidated Financial Statements;
2014
includes
$97 million
related to a pension lump sum settlement expense for unrecognized actuarial losses as a result of the partial settlement of our pension plan liability.
|
(3)
|
Represents reported interest expense plus imputed interest on off-balance sheet obligations.
|
(4)
|
Represents provision for income taxes plus income taxes on restructuring and other items and adjusted interest expense.
|
(5)
|
Represents the impact to equity of items to arrive at comparable earnings.
|
|
|
2018
|
|
EPS from continuing operations forecast
|
|
$5.34 - 5.64
|
|
Non-operating pension costs
|
|
0.06
|
|
Comparable EPS from continuing operations forecast
|
|
$5.40 - 5.70
|
|
|
|
2018
|
||
|
|
(In thousands)
|
||
Total revenue
|
|
$
|
7,800,000
|
|
Fuel
|
|
(700,000
|
)
|
|
Subcontracted transportation
|
|
(600,000
|
)
|
|
Operating revenue
|
|
$
|
6,500,000
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
ChoiceLease revenue
|
|
$
|
2,688,717
|
|
|
2,573,638
|
|
|
2,406,711
|
|
Commercial rental revenue
|
|
813,539
|
|
|
846,331
|
|
|
940,045
|
|
|
ChoiceLease and commercial rental revenue
|
|
3,502,256
|
|
|
3,419,969
|
|
|
3,346,756
|
|
|
Intercompany revenue
|
|
(264,571
|
)
|
|
(249,017
|
)
|
|
(225,203
|
)
|
|
ChoiceLease and commercial rental revenue from external customers
|
|
$
|
3,237,685
|
|
|
3,170,952
|
|
|
3,121,553
|
|
|
|
|
|
|
|
|
||||
FMS services revenue
|
|
$
|
541,506
|
|
|
527,771
|
|
|
499,290
|
|
Intercompany revenue
|
|
(35,634
|
)
|
|
(34,222
|
)
|
|
(30,528
|
)
|
|
FMS services revenue from external customers
|
|
$
|
505,872
|
|
|
493,549
|
|
|
468,762
|
|
|
|
|
|
|
|
|
||||
FMS fuel services revenue
|
|
$
|
689,809
|
|
|
608,454
|
|
|
699,646
|
|
Intercompany revenue
|
|
(169,309
|
)
|
|
(144,716
|
)
|
|
(161,369
|
)
|
|
FMS fuel services revenue from external customers
|
|
$
|
520,500
|
|
|
463,738
|
|
|
538,277
|
|
•
|
our expectations as to anticipated revenue and earnings growth specifically, total revenue, operating revenue and product line revenues, used vehicle sales, demand, pricing, inventory and volumes, contract revenues, ChoiceLease growth, SelectCare growth, commercial rental pricing and demand, and actual and planned new sales activity in lease, DTS and SCS;
|
•
|
our expectations relating to further deterioration in the used vehicle sales market and residual values of used vehicles;
|
•
|
the size and impact of strategic investments;
|
•
|
our expected cost savings from workforce reductions and restructuring actions;
|
•
|
the continuing benefits of our maintenance initiatives and a newer fleet;
|
•
|
our ability to successfully achieve the operational goals that are the basis of our business strategies, including driving fleet growth, delivering a consistent, industry-leading and cost-effective maintenance program, optimizing asset utilization and management, providing differentiated quality of service and best execution, developing broad-based capabilities, creating a culture of innovation, focusing on continuous improvement and standardization and successfully implementing sales and marketing strategies;
|
•
|
impact of losses from conditional obligations arising from guarantees;
|
•
|
number of NLE and used vehicles in inventory and the appropriate size of our commercial rental fleet given commercial rental market expectations;
|
•
|
estimates of cash flows from operations, free cash flow and capital expenditures for
2018
;
|
•
|
the adequacy of our accounting estimates and reserves for pension expense, compensation-related expense, postretirement benefit expense, depreciation and residual value guarantees, rent expense under operating leases, self-insurance reserves, goodwill impairment, accounting changes and income taxes;
|
•
|
our ability to meet our operating, investing and financing needs in the foreseeable future through internally generated funds and outside funding sources;
|
•
|
our expected level of use of outside funding sources, anticipated future payments under debt, lease and purchase agreements, and risk of losses resulting from counterparty default under hedging and derivative agreements;
|
•
|
anticipated impact of exchange rate fluctuations;
|
•
|
the anticipated impact of fuel price fluctuations on our operations, cash flows and financial position;
|
•
|
our expectations as to future pension expense and contributions, as well as the continued effect of the freeze of our pension plans on our benefit funding requirements;
|
•
|
the anticipated deferral of tax gains on disposal of eligible revenue earning equipment under our vehicle like-kind exchange program;
|
•
|
our expectations relating to withdrawal liabilities and funding levels of multi-employer plans;
|
•
|
the status of our unrecognized tax benefits related to the U.S. federal, state and foreign tax positions;
|
•
|
our expectations regarding the completion and ultimate outcome of certain tax audits;
|
•
|
the ultimate disposition of legal proceedings and estimated environmental liabilities;
|
•
|
our expectations relating to compliance with new regulatory requirements;
|
•
|
our expectations regarding the effects of the adoption of recent accounting pronouncements; and
|
•
|
the impact of tax reform legislation.
|
|
|
Page No.
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Notes to Consolidated Financial Statements:
|
|
|
|
||
|
||
|
||
Note 4. Restructuring
Charges and Fees, Net
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
||
Consolidated Financial Statement Schedule for the Years Ended December 31, 2017, 2016 and 2015:
|
|
|
|
|
|
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands, except per share amounts)
|
||||||||
Lease and rental revenues
|
|
$
|
3,237,685
|
|
|
3,170,952
|
|
|
3,121,553
|
|
Services revenue
|
|
3,571,414
|
|
|
3,152,294
|
|
|
2,912,063
|
|
|
Fuel services revenue
|
|
520,500
|
|
|
463,738
|
|
|
538,277
|
|
|
Total revenues
|
|
7,329,599
|
|
|
6,786,984
|
|
|
6,571,893
|
|
|
|
|
|
|
|
|
|
||||
Cost of lease and rental
|
|
2,355,043
|
|
|
2,234,284
|
|
|
2,153,450
|
|
|
Cost of services
|
|
3,003,348
|
|
|
2,602,978
|
|
|
2,413,156
|
|
|
Cost of fuel services
|
|
507,440
|
|
|
448,306
|
|
|
519,843
|
|
|
Other operating expenses
|
|
115,507
|
|
|
113,461
|
|
|
117,082
|
|
|
Selling, general and administrative expenses
|
|
871,983
|
|
|
805,104
|
|
|
822,857
|
|
|
Non-operating pension costs
|
|
27,741
|
|
|
37,593
|
|
|
17,797
|
|
|
Used vehicle sales, net
|
|
17,241
|
|
|
(972
|
)
|
|
(99,853
|
)
|
|
Interest expense
|
|
140,350
|
|
|
147,843
|
|
|
150,434
|
|
|
Miscellaneous income, net
|
|
(44,245
|
)
|
|
(13,068
|
)
|
|
(10,156
|
)
|
|
Restructuring charges and fees, net
|
|
21,405
|
|
|
5,074
|
|
|
18,068
|
|
|
|
|
7,015,813
|
|
|
6,380,603
|
|
|
6,102,678
|
|
|
|
|
|
|
|
|
|
||||
Earnings from continuing operations before income taxes
|
|
313,786
|
|
|
406,381
|
|
|
469,215
|
|
|
(Benefit from) provision for income taxes
|
|
(477,229
|
)
|
|
141,741
|
|
|
163,226
|
|
|
Earnings from continuing operations
|
|
791,015
|
|
|
264,640
|
|
|
305,989
|
|
|
Loss from discontinued operations, net of tax
|
|
(457
|
)
|
|
(2,163
|
)
|
|
(1,221
|
)
|
|
Net earnings
|
|
$
|
790,558
|
|
|
262,477
|
|
|
304,768
|
|
|
|
|
|
|
|
|
||||
Earnings (loss) per common share — Basic
|
|
|
|
|
|
|
||||
Continuing operations
|
|
$
|
14.98
|
|
|
4.98
|
|
|
5.78
|
|
Discontinued operations
|
|
(0.01
|
)
|
|
(0.04
|
)
|
|
(0.02
|
)
|
|
Net earnings
|
|
$
|
14.97
|
|
|
4.94
|
|
|
5.75
|
|
Earnings (loss) per common share — Diluted
|
|
|
|
|
|
|
||||
Continuing operations
|
|
$
|
14.87
|
|
|
4.94
|
|
|
5.73
|
|
Discontinued operations
|
|
(0.01
|
)
|
|
(0.04
|
)
|
|
(0.02
|
)
|
|
Net earnings
|
|
$
|
14.87
|
|
|
4.90
|
|
|
5.71
|
|
|
|
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Net earnings
|
|
$
|
790,558
|
|
|
262,477
|
|
|
304,768
|
|
|
|
|
|
|
|
|
||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
||||
Changes in cumulative translation adjustment and other
|
|
66,172
|
|
|
(70,590
|
)
|
|
(99,933
|
)
|
|
|
|
|
|
|
|
|
||||
Amortization of pension and postretirement items
|
|
31,520
|
|
|
29,493
|
|
|
27,731
|
|
|
Income tax expense related to amortization of pension and postretirement items
|
|
(11,034
|
)
|
|
(10,452
|
)
|
|
(9,637
|
)
|
|
Amortization of pension and postretirement items, net of tax
|
|
20,486
|
|
|
19,041
|
|
|
18,094
|
|
|
|
|
|
|
|
|
|
||||
Change in net actuarial loss and prior service credit
|
|
49,680
|
|
|
(98,092
|
)
|
|
(23,979
|
)
|
|
Income tax (expense) benefit related to change in net actuarial loss and prior service credit
|
|
(9,807
|
)
|
|
28,344
|
|
|
13,353
|
|
|
Change in net actuarial loss and prior service credit, net of taxes
|
|
39,873
|
|
|
(69,748
|
)
|
|
(10,626
|
)
|
|
|
|
|
|
|
|
|
||||
Other comprehensive income (loss), net of taxes
|
|
126,531
|
|
|
(121,297
|
)
|
|
(92,465
|
)
|
|
|
|
|
|
|
|
|
||||
Comprehensive income
|
|
$
|
917,089
|
|
|
141,180
|
|
|
212,303
|
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(Dollars in thousands, except
share amounts)
|
|||||
Assets:
|
|
|
|
|
|||
Current assets:
|
|
|
|
|
|||
Cash and cash equivalents
|
|
$
|
78,348
|
|
|
58,801
|
|
Receivables, net
|
|
1,010,908
|
|
|
831,947
|
|
|
Inventories
|
|
73,543
|
|
|
69,529
|
|
|
Prepaid expenses and other current assets
|
|
159,483
|
|
|
141,280
|
|
|
Total current assets
|
|
1,322,282
|
|
|
1,101,557
|
|
|
Revenue earning equipment, net
|
|
8,355,262
|
|
|
8,147,722
|
|
|
Operating property and equipment, net
|
|
776,704
|
|
|
745,870
|
|
|
Goodwill
|
|
395,504
|
|
|
386,772
|
|
|
Intangible assets
|
|
42,930
|
|
|
48,249
|
|
|
Direct financing leases and other assets
|
|
559,549
|
|
|
472,284
|
|
|
Total assets
|
|
$
|
11,452,231
|
|
|
10,902,454
|
|
|
|
|
|
|
|||
Liabilities and shareholders’ equity:
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Short-term debt and current portion of long-term debt
|
|
$
|
826,069
|
|
|
791,410
|
|
Accounts payable
|
|
599,303
|
|
|
445,470
|
|
|
Accrued expenses and other current liabilities
|
|
587,406
|
|
|
507,189
|
|
|
Total current liabilities
|
|
2,012,778
|
|
|
1,744,069
|
|
|
Long-term debt
|
|
4,583,582
|
|
|
4,599,864
|
|
|
Other non-current liabilities
|
|
812,089
|
|
|
817,565
|
|
|
Deferred income taxes
|
|
1,208,766
|
|
|
1,688,681
|
|
|
Total liabilities
|
|
8,617,215
|
|
|
8,850,179
|
|
|
|
|
|
|
|
|||
Shareholders’ equity:
|
|
|
|
|
|||
Preferred stock, no par value per share — authorized, 3,800,917; none outstanding, December 31, 2017 or 2016
|
|
—
|
|
|
—
|
|
|
Common stock, $0.50 par value per share — authorized, 400,000,000; outstanding, December 31, 2017 — 52,955,314; December 31, 2016 — 53,463,118
|
|
26,478
|
|
|
26,732
|
|
|
Additional paid-in capital
|
|
1,051,017
|
|
|
1,032,549
|
|
|
Retained earnings
|
|
2,465,022
|
|
|
1,827,026
|
|
|
Accumulated other comprehensive loss
|
|
(707,501
|
)
|
|
(834,032
|
)
|
|
Total shareholders’ equity
|
|
2,835,016
|
|
|
2,052,275
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
11,452,231
|
|
|
10,902,454
|
|
|
|
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
|
|
|
|
|
|
|
||||
Net earnings
|
|
$
|
790,558
|
|
|
262,477
|
|
|
304,768
|
|
Less: Loss from discontinued operations, net of tax
|
|
(457
|
)
|
|
(2,163
|
)
|
|
(1,221
|
)
|
|
Earnings from continuing operations
|
|
791,015
|
|
|
264,640
|
|
|
305,989
|
|
|
Depreciation expense
|
|
1,255,175
|
|
|
1,187,050
|
|
|
1,121,966
|
|
|
Used vehicle sales, net
|
|
17,241
|
|
|
(972
|
)
|
|
(99,853
|
)
|
|
Amortization expense and other non-cash charges, net
|
|
12,114
|
|
|
30,667
|
|
|
52,965
|
|
|
Non-operating pension costs and share-based compensation expense
|
|
46,708
|
|
|
56,257
|
|
|
38,978
|
|
|
Deferred income tax (benefit) expense
|
|
(499,783
|
)
|
|
124,886
|
|
|
154,042
|
|
|
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
||||
Receivables
|
|
(173,840
|
)
|
|
(51,754
|
)
|
|
(40,323
|
)
|
|
Inventories
|
|
(3,296
|
)
|
|
(5,906
|
)
|
|
1,448
|
|
|
Prepaid expenses and other assets
|
|
(38,878
|
)
|
|
(14,211
|
)
|
|
(292
|
)
|
|
Accounts payable
|
|
66,149
|
|
|
94,320
|
|
|
(74,381
|
)
|
|
Accrued expenses and other non-current liabilities
|
|
75,381
|
|
|
(83,955
|
)
|
|
(18,751
|
)
|
|
Net cash provided by operating activities from continuing operations
|
|
1,547,986
|
|
|
1,601,022
|
|
|
1,441,788
|
|
|
|
|
|
|
|
|
|
||||
Cash flows from financing activities from continuing operations:
|
|
|
|
|
|
|
||||
Net change in commercial paper borrowings and revolving credit facilities
|
|
89,519
|
|
|
(77,798
|
)
|
|
323,359
|
|
|
Debt proceeds
|
|
873,302
|
|
|
674,928
|
|
|
1,283,223
|
|
|
Debt repaid
|
|
(962,577
|
)
|
|
(669,047
|
)
|
|
(798,311
|
)
|
|
Dividends on common stock
|
|
(95,813
|
)
|
|
(91,043
|
)
|
|
(83,201
|
)
|
|
Common stock issued
|
|
20,508
|
|
|
18,087
|
|
|
23,635
|
|
|
Common stock repurchased
|
|
(78,316
|
)
|
|
(37,274
|
)
|
|
(6,141
|
)
|
|
Debt issuance costs and other items
|
|
(1,738
|
)
|
|
(3,775
|
)
|
|
(11,079
|
)
|
|
Net cash (used in) provided by financing activities from continuing operations
|
|
(155,115
|
)
|
|
(185,922
|
)
|
|
731,485
|
|
|
|
|
|
|
|
|
|
||||
Cash flows from investing activities from continuing operations:
|
|
|
|
|
|
|
||||
Purchases of property and revenue earning equipment
|
|
(1,860,436
|
)
|
|
(1,905,157
|
)
|
|
(2,667,978
|
)
|
|
Sales of revenue earning equipment
|
|
376,743
|
|
|
414,249
|
|
|
423,605
|
|
|
Sales of operating property and equipment
|
|
52,257
|
|
|
7,051
|
|
|
3,891
|
|
|
Acquisitions
|
|
(7,240
|
)
|
|
—
|
|
|
—
|
|
|
Collections on direct finance leases and other items
|
|
73,172
|
|
|
76,510
|
|
|
70,980
|
|
|
Changes in restricted cash
|
|
(836
|
)
|
|
1,514
|
|
|
8,147
|
|
|
Net cash used in investing activities from continuing operations
|
|
(1,366,340
|
)
|
|
(1,405,833
|
)
|
|
(2,161,355
|
)
|
|
|
|
|
|
|
|
|
||||
Effect of exchange rates on cash
|
|
(5,539
|
)
|
|
(9,482
|
)
|
|
37
|
|
|
Increase (decrease) in cash and cash equivalents from continuing operations
|
|
20,992
|
|
|
(215
|
)
|
|
11,955
|
|
|
Decrease in cash and cash equivalents from discontinued operations
|
|
(1,445
|
)
|
|
(1,929
|
)
|
|
(1,102
|
)
|
|
Increase (decrease) increase in cash and cash equivalents
|
|
19,547
|
|
|
(2,144
|
)
|
|
10,853
|
|
|
Cash and cash equivalents at January 1
|
|
58,801
|
|
|
60,945
|
|
|
50,092
|
|
|
Cash and cash equivalents at December 31
|
|
$
|
78,348
|
|
|
58,801
|
|
|
60,945
|
|
|
|
Preferred
Stock
|
|
Common Stock
|
|
Additional
Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive Loss
|
|
|
|||||||||||
|
|
Amount
|
|
Shares
|
|
Par
|
|
|
|
|
Total
|
||||||||||||
|
|
(Dollars in thousands, except share amounts)
|
|||||||||||||||||||||
Balance at January 1, 2015
|
|
$
|
—
|
|
|
53,039,688
|
|
|
$
|
26,520
|
|
|
962,328
|
|
|
1,450,509
|
|
|
(620,270
|
)
|
|
1,819,087
|
|
Comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
304,768
|
|
|
(92,465
|
)
|
|
212,303
|
|
||
Common stock dividends declared and paid—$1.56 per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83,306
|
)
|
|
—
|
|
|
(83,306
|
)
|
||
Common stock issued under employee stock option and stock purchase plans
(1)
|
|
—
|
|
|
519,271
|
|
|
260
|
|
|
23,292
|
|
|
—
|
|
|
—
|
|
|
23,552
|
|
||
Benefit plan stock purchases
(2)
|
|
—
|
|
|
751
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
83
|
|
||
Common stock repurchases
|
|
—
|
|
|
(69,107
|
)
|
|
(35
|
)
|
|
(1,215
|
)
|
|
(4,891
|
)
|
|
—
|
|
|
(6,141
|
)
|
||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,181
|
|
|
—
|
|
|
—
|
|
|
21,181
|
|
||
Tax benefits from share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
352
|
|
|
—
|
|
|
—
|
|
|
352
|
|
||
Balance at December 31, 2015
|
|
—
|
|
|
53,490,603
|
|
|
26,745
|
|
|
1,006,021
|
|
|
1,667,080
|
|
|
(712,735
|
)
|
|
1,987,111
|
|
||
Comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
262,477
|
|
|
(121,297
|
)
|
|
141,180
|
|
||
Common stock dividends declared and paid—$1.70 per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(91,100
|
)
|
|
—
|
|
|
(91,100
|
)
|
||
Common stock issued under employee stock option and stock purchase plans
(1)
|
|
—
|
|
|
507,104
|
|
|
254
|
|
|
17,752
|
|
|
—
|
|
|
—
|
|
|
18,006
|
|
||
Benefit plan stock sales
(2)
|
|
—
|
|
|
1,709
|
|
|
1
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
81
|
|
||
Common stock repurchases
|
|
—
|
|
|
(536,298
|
)
|
|
(268
|
)
|
|
(9,968
|
)
|
|
(27,038
|
)
|
|
—
|
|
|
(37,274
|
)
|
||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,664
|
|
|
—
|
|
|
—
|
|
|
18,664
|
|
||
Adoption of new accounting standard
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,607
|
|
|
|
|
15,607
|
|
|||
Balance at December 31, 2016
|
|
—
|
|
|
53,463,118
|
|
|
26,732
|
|
|
1,032,549
|
|
|
1,827,026
|
|
|
(834,032
|
)
|
|
2,052,275
|
|
||
Comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
790,558
|
|
|
126,531
|
|
|
917,089
|
|
||
Common stock dividends declared and paid—$1.80 per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(95,507
|
)
|
|
—
|
|
|
(95,507
|
)
|
||
Common stock issued under employee stock option and stock purchase plans
(1)
|
|
—
|
|
|
578,847
|
|
|
289
|
|
|
20,200
|
|
|
—
|
|
|
—
|
|
|
20,489
|
|
||
Benefit plan stock sales
(2)
|
|
—
|
|
|
250
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||
Common stock repurchases
|
|
—
|
|
|
(1,086,901
|
)
|
|
(543
|
)
|
|
(20,718
|
)
|
|
(57,055
|
)
|
|
—
|
|
|
(78,316
|
)
|
||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,967
|
|
|
—
|
|
|
—
|
|
|
18,967
|
|
||
Balance at December 31, 2017
|
|
$
|
—
|
|
|
52,955,314
|
|
|
$
|
26,478
|
|
|
1,051,017
|
|
|
2,465,022
|
|
|
(707,501
|
)
|
|
2,835,016
|
|
(1)
|
Net of common shares delivered as payment for the exercise price or to satisfy the holders’ withholding tax liability upon exercise of options.
|
(2)
|
Represents open-market transactions of common shares by the trustee of Ryder’s deferred compensation plans.
|
•
|
The majority of our leases and all of our rental arrangements are classified as operating leases and, therefore, we recognize lease and commercial rental revenue on a straight-line basis as it becomes receivable over the term of the lease or rental arrangement. Lease and rental agreements do not usually provide for scheduled rent increases or escalations. However, most lease agreements allow for rate changes based upon changes in the Consumer Price Index (CPI). ChoiceLease and rental agreements also provide for vehicle usage charges based on a time charge and/or a fixed per-mile charge. The fixed time charge, the fixed per-mile charge and the changes in rates attributed to changes in the CPI are considered contingent rentals and are not considered fixed or determinable until the effect of CPI changes is implemented or the equipment usage occurs.
|
•
|
The non-lease deliverables of our ChoiceLease arrangements are comprised of access to substitute vehicles, emergency road service, and safety services. These services are available to our customers throughout the lease term. Accordingly, revenue is recognized on a straight-line basis over the lease term.
|
•
|
Leases not classified as operating leases are generally considered direct financing leases. We recognize revenue for direct financing leases using the effective interest method, which provides a constant periodic rate of return on the outstanding investment on the lease. Cash receipts on impaired direct financing lease receivables are first applied to the direct financing lease receivable and then to any unrecognized income. A direct financing lease receivable is considered impaired, based on current information and events, if it is probable that we will be unable to collect all amounts due according to the contractual terms of the lease.
|
Level 1
|
Quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
Level 2
|
Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or model-derived valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
Level 3
|
Unobservable inputs for the asset or liability. These inputs reflect our own assumptions about the assumptions a market participant would use in pricing the asset or liability.
|
|
|
Employee Termination Costs
|
||
Balance as of December 31, 2014
|
|
$
|
2,486
|
|
Workforce reduction charges
|
|
8,830
|
|
|
CRSAL divestiture and RCT shut-down
|
|
3,225
|
|
|
Utilization
(1)
|
|
(2,208
|
)
|
|
Balance as of December 31, 2015
|
|
12,333
|
|
|
Workforce reduction charges
|
|
5,074
|
|
|
Utilization
(1)
|
|
(10,129
|
)
|
|
Balance as of December 31, 2016
|
|
7,278
|
|
|
Workforce reduction charges
|
|
13,320
|
|
|
Utilization
(1)
|
|
(7,524
|
)
|
|
Balance as of December 31, 2017
(2)
|
|
$
|
13,074
|
|
|
|
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Fleet Management Solutions
|
|
$
|
2,995
|
|
|
3,550
|
|
|
4,817
|
|
Dedicated Transportation Solutions
|
|
771
|
|
|
22
|
|
|
250
|
|
|
Supply Chain Solutions
|
|
2,278
|
|
|
278
|
|
|
7,033
|
|
|
Central Support Services
|
|
15,361
|
|
|
1,224
|
|
|
5,968
|
|
|
Total
|
|
$
|
21,405
|
|
|
5,074
|
|
|
18,068
|
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Trade
|
|
$
|
898,876
|
|
|
739,743
|
|
Direct financing leases
|
|
81,996
|
|
|
76,322
|
|
|
Other, primarily warranty and insurance
|
|
43,883
|
|
|
30,797
|
|
|
|
|
1,024,755
|
|
|
846,862
|
|
|
Allowance
|
|
(13,847
|
)
|
|
(14,915
|
)
|
|
Total
|
|
$
|
1,010,908
|
|
|
831,947
|
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Restricted cash
|
|
$
|
4,674
|
|
|
3,838
|
|
Prepaid vehicle licenses
|
|
62,772
|
|
|
50,343
|
|
|
Prepaid operating taxes
|
|
14,320
|
|
|
20,242
|
|
|
Prepaid sales commission
|
|
12,988
|
|
|
9,731
|
|
|
Prepaid insurance
|
|
15,688
|
|
|
12,074
|
|
|
Start-up costs
|
|
8,001
|
|
|
5,284
|
|
|
Other
|
|
41,040
|
|
|
39,768
|
|
|
Total
|
|
$
|
159,483
|
|
|
141,280
|
|
|
|
Estimated
Useful
Lives
|
|
December 31, 2017
|
|
December 31, 2016
|
|||||||||||||||
Cost
|
|
Accumulated
Depreciation
|
|
Net
(1)
|
|
Cost
|
|
Accumulated
Depreciation
|
|
Net
(1)
|
|||||||||||
(In years)
|
|
(In thousands)
|
|||||||||||||||||||
Held for use:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
ChoiceLease
|
|
3 — 12
|
|
$
|
10,002,981
|
|
|
(3,367,431
|
)
|
|
6,635,550
|
|
|
9,486,977
|
|
|
(3,031,937
|
)
|
|
6,455,040
|
|
Commercial rental
|
|
4.5 — 12
|
|
2,616,706
|
|
|
(1,001,965
|
)
|
|
1,614,741
|
|
|
2,499,010
|
|
|
(935,346
|
)
|
|
1,563,664
|
|
|
Held for sale
|
|
|
|
403,229
|
|
|
(298,258
|
)
|
|
104,971
|
|
|
494,355
|
|
|
(365,337
|
)
|
|
129,018
|
|
|
Total
|
|
|
|
$
|
13,022,916
|
|
|
(4,667,654
|
)
|
|
8,355,262
|
|
|
12,480,342
|
|
|
(4,332,620
|
)
|
|
8,147,722
|
|
(1)
|
Revenue earning equipment, net includes vehicles under capital leases of
$29 million
, less accumulated depreciation of
$14 million
, at
December 31, 2017
and
$43 million
, less accumulated depreciation of
$22 million
, at
December 31, 2016
.
|
|
|
|
|
|
|
Total Losses
(2)
|
||||||||
|
|
December 31,
|
|
Year ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Assets held for sale:
|
|
(In thousands)
|
|
(In thousands)
|
||||||||||
Revenue earning equipment:
(1)
|
|
|
|
|
|
|
|
|
||||||
Trucks
|
|
$
|
33,208
|
|
|
24,178
|
|
|
$
|
30,812
|
|
|
14,645
|
|
Tractors
|
|
27,976
|
|
|
57,348
|
|
|
21,261
|
|
|
47,597
|
|
||
Trailers
|
|
2,100
|
|
|
2,532
|
|
|
5,992
|
|
|
5,173
|
|
||
Total assets at fair value
|
|
$
|
63,284
|
|
|
84,058
|
|
|
$
|
58,065
|
|
|
67,415
|
|
(1)
|
Assets held for sale in the above table only include the portion of revenue earning equipment held for sale where net book values exceeded fair values and fair value adjustments were recorded. The net book value of assets held for sale not exceeding fair value was
$42 million
and
$45 million
as of
December 31, 2017
and
2016
, respectively. We have revised prior year amounts to reflect only the portion of revenue earning equipment held for sale where fair value adjustments were recorded.
|
(2)
|
Total losses represent fair value adjustments for all vehicles reclassified to held for sale throughout the period for which fair value was less than net book value.
|
|
Twelve months ended December 31,
|
||||||||
|
2017
|
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||||
Gains on vehicle sales, net
|
$
|
(40,824
|
)
|
|
(68,387
|
)
|
|
(117,809
|
)
|
Losses from fair value adjustments
|
58,065
|
|
|
67,415
|
|
|
17,956
|
|
|
Used vehicle sales, net
|
$
|
17,241
|
|
|
(972
|
)
|
|
(99,853
|
)
|
|
|
Estimated
Useful Lives
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||||
|
|
(In years)
|
|
(In thousands)
|
|||||
Land
|
|
—
|
|
$
|
217,885
|
|
|
212,660
|
|
Buildings and improvements
|
|
10 — 40
|
|
822,931
|
|
|
808,909
|
|
|
Machinery and equipment
|
|
3 — 10
|
|
797,084
|
|
|
737,899
|
|
|
Other
|
|
3 — 10
|
|
131,181
|
|
|
114,442
|
|
|
|
|
|
|
1,969,081
|
|
|
1,873,910
|
|
|
Accumulated depreciation
|
|
|
|
(1,192,377
|
)
|
|
(1,128,040
|
)
|
|
Total
|
|
|
|
$
|
776,704
|
|
|
745,870
|
|
|
|
Fleet
Management
Solutions
|
|
Dedicated Transportation Solutions
|
|
Supply
Chain
Solutions
|
|
Total
|
|||||
|
|
(In thousands)
|
|||||||||||
Balance at January 1, 2016
|
|
|
|
|
|
|
|
|
|||||
Goodwill
|
|
$
|
231,358
|
|
|
40,808
|
|
|
146,190
|
|
|
418,356
|
|
Accumulated impairment losses
|
|
(10,322
|
)
|
|
—
|
|
|
(18,899
|
)
|
|
(29,221
|
)
|
|
|
|
221,036
|
|
|
40,808
|
|
|
127,291
|
|
|
389,135
|
|
|
Foreign currency translation adjustment
|
|
(2,526
|
)
|
|
—
|
|
|
163
|
|
|
(2,363
|
)
|
|
Balance at December 31, 2016
|
|
|
|
|
|
|
|
|
|||||
Goodwill
|
|
228,832
|
|
|
40,808
|
|
|
146,353
|
|
|
415,993
|
|
|
Accumulated impairment losses
|
|
(10,322
|
)
|
|
—
|
|
|
(18,899
|
)
|
|
(29,221
|
)
|
|
|
|
218,510
|
|
|
40,808
|
|
|
127,454
|
|
|
386,772
|
|
|
Acquisitions
|
|
6,506
|
|
|
—
|
|
|
—
|
|
|
6,506
|
|
|
Foreign currency translation adjustment and other
|
|
1,838
|
|
|
|
|
|
388
|
|
|
2,226
|
|
|
Balance at December 31, 2017
|
|
|
|
|
|
|
|
|
|||||
Goodwill
|
|
237,176
|
|
|
40,808
|
|
|
146,741
|
|
|
424,725
|
|
|
Accumulated impairment losses
|
|
(10,322
|
)
|
|
—
|
|
|
(18,899
|
)
|
|
(29,221
|
)
|
|
|
|
$
|
226,854
|
|
|
40,808
|
|
|
127,842
|
|
|
395,504
|
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Indefinite lived intangible assets — Trade name
|
|
$
|
8,731
|
|
|
8,731
|
|
Finite lived intangible assets:
|
|
|
|
|
|||
Customer relationship intangibles
|
|
91,523
|
|
|
91,523
|
|
|
Other intangibles, primarily trade name
|
|
2,367
|
|
|
2,367
|
|
|
Accumulated amortization
|
|
(57,420
|
)
|
|
(51,578
|
)
|
|
|
|
36,470
|
|
|
42,312
|
|
|
Foreign currency translation adjustment
|
|
(2,271
|
)
|
|
(2,794
|
)
|
|
Total
|
|
$
|
42,930
|
|
|
48,249
|
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Direct financing leases, net
|
|
$
|
364,847
|
|
|
333,152
|
|
Investments held in Rabbi Trusts
|
|
61,425
|
|
|
48,451
|
|
|
Lease incentives
|
|
14,857
|
|
|
15,741
|
|
|
Insurance receivables
|
|
15,545
|
|
|
18,402
|
|
|
Start-up costs
|
|
13,750
|
|
|
7,422
|
|
|
Prepaid pension asset
|
|
58,708
|
|
|
14,049
|
|
|
Lease origination costs
|
|
9,387
|
|
|
9,227
|
|
|
Deferred tax asset
|
|
6,736
|
|
|
9,009
|
|
|
Other
|
|
14,294
|
|
|
16,831
|
|
|
Total
|
|
$
|
559,549
|
|
|
472,284
|
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Cash and cash equivalents
|
|
$
|
4,956
|
|
|
5,391
|
|
U.S. equity mutual funds
|
|
39,958
|
|
|
30,229
|
|
|
Foreign equity mutual funds
|
|
8,001
|
|
|
5,232
|
|
|
Fixed income mutual funds
|
|
8,510
|
|
|
7,599
|
|
|
Total Investments held in Rabbi Trusts
|
|
$
|
61,425
|
|
|
48,451
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|||||||||||||||
|
|
Accrued
Expenses
|
|
Non-Current
Liabilities
|
|
Total
|
|
Accrued
Expenses
|
|
Non-Current
Liabilities
|
|
Total
|
|||||||
|
|
(In thousands)
|
|||||||||||||||||
Salaries and wages
|
|
$
|
133,733
|
|
|
—
|
|
|
133,733
|
|
|
90,913
|
|
|
—
|
|
|
90,913
|
|
Deferred compensation
|
|
4,269
|
|
|
58,411
|
|
|
62,680
|
|
|
2,992
|
|
|
46,541
|
|
|
49,533
|
|
|
Pension benefits
|
|
3,863
|
|
|
412,417
|
|
|
416,280
|
|
|
3,796
|
|
|
451,940
|
|
|
455,736
|
|
|
Other postretirement benefits
|
|
1,481
|
|
|
19,760
|
|
|
21,241
|
|
|
1,506
|
|
|
19,459
|
|
|
20,965
|
|
|
Other employee benefits
|
|
28,636
|
|
|
3,279
|
|
|
31,915
|
|
|
29,358
|
|
|
5,854
|
|
|
35,212
|
|
|
Insurance obligations
(1)
|
|
130,848
|
|
|
242,473
|
|
|
373,321
|
|
|
127,470
|
|
|
234,336
|
|
|
361,806
|
|
|
Operating taxes
|
|
95,848
|
|
|
—
|
|
|
95,848
|
|
|
92,150
|
|
|
—
|
|
|
92,150
|
|
|
Income taxes
|
|
8,550
|
|
|
24,160
|
|
|
32,710
|
|
|
4,197
|
|
|
23,174
|
|
|
27,371
|
|
|
Interest
|
|
30,003
|
|
|
—
|
|
|
30,003
|
|
|
27,277
|
|
|
—
|
|
|
27,277
|
|
|
Deposits, mainly from customers
|
|
69,903
|
|
|
3,638
|
|
|
73,541
|
|
|
61,225
|
|
|
4,569
|
|
|
65,794
|
|
|
Deferred revenue
|
|
14,004
|
|
|
—
|
|
|
14,004
|
|
|
14,064
|
|
|
—
|
|
|
14,064
|
|
|
Restructuring liabilities
(2)
|
|
13,074
|
|
|
—
|
|
|
13,074
|
|
|
7,278
|
|
|
—
|
|
|
7,278
|
|
|
Other
|
|
53,194
|
|
|
47,951
|
|
|
101,145
|
|
|
44,963
|
|
|
31,692
|
|
|
76,655
|
|
|
Total
|
|
$
|
587,406
|
|
|
812,089
|
|
|
1,399,495
|
|
|
507,189
|
|
|
817,565
|
|
|
1,324,754
|
|
|
|
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Earnings from continuing operations before income taxes:
|
|
|
|
|
|
|
||||
United States
|
|
$
|
254,327
|
|
|
344,614
|
|
|
408,757
|
|
Foreign
|
|
59,459
|
|
|
61,767
|
|
|
60,458
|
|
|
Total
|
|
$
|
313,786
|
|
|
406,381
|
|
|
469,215
|
|
Current tax expense (benefit) from continuing operations:
|
|
|
|
|
|
|
||||
Federal
(1)
|
|
$
|
6,752
|
|
|
2,731
|
|
|
(1,836
|
)
|
State
(1)
|
|
9,360
|
|
|
7,713
|
|
|
5,748
|
|
|
Foreign
|
|
6,442
|
|
|
6,411
|
|
|
5,272
|
|
|
|
|
22,554
|
|
|
16,855
|
|
|
9,184
|
|
|
Deferred tax (benefit) expense from continuing operations:
|
|
|
|
|
|
|
||||
Federal
|
|
(509,573
|
)
|
|
106,513
|
|
|
135,585
|
|
|
State
|
|
7,985
|
|
|
16,259
|
|
|
20,111
|
|
|
Foreign
|
|
1,805
|
|
|
2,114
|
|
|
(1,654
|
)
|
|
|
|
(499,783
|
)
|
|
124,886
|
|
|
154,042
|
|
|
(Benefit from) provision for income taxes from continuing operations
|
|
$
|
(477,229
|
)
|
|
141,741
|
|
|
163,226
|
|
(1)
|
Excludes federal and state tax benefits resulting from the exercise of stock options and vesting of restricted stock awards, which were credited directly to “Additional paid-in capital” for the year ended December 31, 2015.
|
|
|
Years ended December 31,
|
|||||||
|
|
2017
|
|
2016
|
|
2015
|
|||
|
|
(Percentage of pre-tax earnings)
|
|||||||
Federal statutory tax rate
|
|
35.0
|
|
|
35.0
|
|
|
35.0
|
|
Impact of one-time deemed repatriation
|
|
10.7
|
|
|
—
|
|
|
—
|
|
Impact on deferred taxes for changes in tax rates
|
|
(197.5
|
)
|
|
(0.7
|
)
|
|
(0.9
|
)
|
State income taxes, net of federal income tax benefit
|
|
4.5
|
|
|
5.0
|
|
|
5.0
|
|
Foreign rates varying from federal statutory tax rate
|
|
(4.0
|
)
|
|
(3.3
|
)
|
|
(3.3
|
)
|
Tax reviews and audits
|
|
(1.0
|
)
|
|
(0.7
|
)
|
|
(1.3
|
)
|
Other, net
|
|
0.2
|
|
|
(0.4
|
)
|
|
0.3
|
|
Effective tax rate
|
|
(152.1
|
)
|
|
34.9
|
|
|
34.8
|
|
Tax Jurisdiction
|
|
Enactment Date
|
|
Net Earnings
|
|
|
|
|
(in thousands)
|
2017
|
|
|
|
|
United States
|
|
December 22, 2017
|
|
$585,912
|
Illinois
|
|
July 1, 2017
|
|
$(1,844)
|
|
|
|
|
|
2016
|
|
|
|
|
North Carolina
|
|
August 4, 2016
|
|
$585
|
|
|
|
|
|
2015
|
|
|
|
|
Connecticut
|
|
June 30, 2015
|
|
$1,616
|
Other Jurisdictions
|
|
April 13, 2015 - November 18, 2015
|
|
$497
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Deferred income tax assets:
|
|
|
|
|
|||
Self-insurance accruals
|
|
$
|
75,198
|
|
|
107,252
|
|
Net operating loss carryforwards
|
|
171,053
|
|
|
396,313
|
|
|
Alternative minimum taxes
|
|
22,552
|
|
|
13,901
|
|
|
Accrued compensation and benefits
|
|
65,532
|
|
|
81,454
|
|
|
Federal benefit on state tax positions
|
|
11,950
|
|
|
19,247
|
|
|
Pension benefits
|
|
82,547
|
|
|
162,141
|
|
|
Miscellaneous other accruals
|
|
19,608
|
|
|
28,313
|
|
|
|
|
448,440
|
|
|
808,621
|
|
|
Valuation allowance
|
|
(18,667
|
)
|
|
(16,387
|
)
|
|
|
|
429,773
|
|
|
792,234
|
|
|
Deferred income tax liabilities:
|
|
|
|
|
|||
Property and equipment basis difference
|
|
(1,614,963
|
)
|
|
(2,451,151
|
)
|
|
Other
|
|
(16,857
|
)
|
|
(20,735
|
)
|
|
|
|
(1,631,820
|
)
|
|
(2,471,886
|
)
|
|
Net deferred income tax liability
(1)
|
|
$
|
(1,202,047
|
)
|
|
(1,679,652
|
)
|
(1)
|
Deferred tax assets of
$7 million
and
$9 million
have been included in "Direct financing leases and other assets" at
December 31, 2017
and
2016
.
|
|
|
December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Balance at January 1
|
|
$
|
61,649
|
|
|
60,740
|
|
|
60,482
|
|
Additions based on tax positions related to the current year
|
|
3,971
|
|
|
3,855
|
|
|
4,220
|
|
|
Reductions due to lapse of applicable statutes of limitation
|
|
(3,332
|
)
|
|
(2,946
|
)
|
|
(3,962
|
)
|
|
Gross balance at December 31
|
|
62,288
|
|
|
61,649
|
|
|
60,740
|
|
|
Interest and penalties
|
|
5,860
|
|
|
5,219
|
|
|
4,912
|
|
|
Balance at December 31
|
|
$
|
68,148
|
|
|
66,868
|
|
|
65,652
|
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Total minimum lease payments receivable
|
|
$
|
713,857
|
|
|
647,111
|
|
Less: Executory costs
|
|
(216,754
|
)
|
|
(196,469
|
)
|
|
Minimum lease payments receivable
|
|
497,103
|
|
|
450,642
|
|
|
Less: Allowance for uncollectibles
|
|
(327
|
)
|
|
(248
|
)
|
|
Net minimum lease payments receivable
|
|
496,776
|
|
|
450,394
|
|
|
Unguaranteed residuals
|
|
41,937
|
|
|
45,748
|
|
|
Less: Unearned income
|
|
(91,870
|
)
|
|
(86,668
|
)
|
|
Net investment in direct financing and sales-type leases
|
|
446,843
|
|
|
409,474
|
|
|
Current portion
|
|
(81,996
|
)
|
|
(76,322
|
)
|
|
Non-current portion
|
|
$
|
364,847
|
|
|
333,152
|
|
|
December 31,
|
|||||
|
2017
|
|
2016
|
|||
|
(In thousands)
|
|||||
Very low risk to low risk
|
$
|
201,434
|
|
|
192,853
|
|
Moderate
|
198,464
|
|
|
194,234
|
|
|
Moderately high to high risk
|
97,205
|
|
|
63,555
|
|
|
|
$
|
497,103
|
|
|
450,642
|
|
|
|
As Lessor
(1)
|
|
As Lessee
|
||||||
|
|
Operating
Leases
|
|
Direct Financing and Sales-Type
Leases
|
|
Operating
Leases
|
||||
|
|
(In thousands)
|
||||||||
2018
|
|
$
|
1,139,552
|
|
|
110,692
|
|
|
84,824
|
|
2019
|
|
892,754
|
|
|
95,759
|
|
|
63,435
|
|
|
2020
|
|
649,096
|
|
|
99,470
|
|
|
41,034
|
|
|
2021
|
|
433,319
|
|
|
68,349
|
|
|
24,948
|
|
|
2022
|
|
258,381
|
|
|
54,603
|
|
|
18,495
|
|
|
Thereafter
|
|
210,213
|
|
|
68,230
|
|
|
38,288
|
|
|
Total
|
|
$
|
3,583,315
|
|
|
497,103
|
|
|
271,024
|
|
(1)
|
Amounts do not include contingent rentals, which may be received under certain leases on the basis of miles or changes in the Consumer Price Index. Contingent rentals from operating leases included in revenue were $
357 million
in
2017
and $
342 million
in both
2016
and
2015
. Contingent rentals from direct financing leases included in revenue were
$15 million
in
2017
,
$12 million
in
2016
and
$12 million
in
2015
.
|
|
|
Weighted-Average
Interest Rate
|
|
|
|
|
|
|
|||||||
|
|
December 31,
|
|
|
|
December 31,
|
|||||||||
|
|
2017
|
|
2016
|
|
Maturities
|
|
2017
|
|
2016
|
|||||
|
|
|
|
|
|
|
|
(In thousands)
|
|||||||
Short-term debt and current portion of long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|||||
Short-term debt
|
|
1.79
|
%
|
|
1.07
|
%
|
|
|
|
$
|
35,509
|
|
|
177,629
|
|
Current portion of long-term debt, including capital leases
|
|
|
|
|
|
|
|
790,560
|
|
|
613,781
|
|
|||
Total short-term debt and current portion of long-term debt
|
|
|
|
|
|
|
|
826,069
|
|
|
791,410
|
|
|||
Total long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. commercial paper
(1)
|
|
1.56
|
%
|
|
0.87
|
%
|
|
2020
|
|
570,218
|
|
|
342,480
|
|
|
Global revolving credit facility
|
|
2.80
|
%
|
|
2.06
|
%
|
|
2020
|
|
17,328
|
|
|
4,703
|
|
|
Unsecured U.S. notes – Medium-term notes
(1)
|
|
2.73
|
%
|
|
2.67
|
%
|
|
2018-2025
|
|
4,014,091
|
|
|
4,113,421
|
|
|
Unsecured U.S. obligations, principally bank term loans
|
|
2.79
|
%
|
|
2.19
|
%
|
|
2018
|
|
50,000
|
|
|
50,000
|
|
|
Unsecured foreign obligations
|
|
1.50
|
%
|
|
1.55
|
%
|
|
2018-2020
|
|
230,380
|
|
|
232,092
|
|
|
Asset backed U.S. obligations
(2)
|
|
1.85
|
%
|
|
1.80
|
%
|
|
2018-2022
|
|
491,899
|
|
|
459,876
|
|
|
Capital lease obligations
|
|
3.53
|
%
|
|
3.17
|
%
|
|
2018-2023
|
|
20,871
|
|
|
24,184
|
|
|
Total before fair market value adjustment
|
|
|
|
|
|
|
|
5,394,787
|
|
|
5,226,756
|
|
|||
Fair market value adjustment on notes subject to hedging
(3)
|
|
|
|
|
|
|
|
(7,192
|
)
|
|
1,110
|
|
|||
Debt issuance costs
|
|
|
|
|
|
|
|
(13,453
|
)
|
|
(14,221
|
)
|
|||
|
|
|
|
|
|
|
|
5,374,142
|
|
|
5,213,645
|
|
|||
Current portion of long-term debt, including capital leases
|
|
|
|
|
|
|
|
(790,560
|
)
|
|
(613,781
|
)
|
|||
Long-term debt
|
|
|
|
|
|
|
|
4,583,582
|
|
|
4,599,864
|
|
|||
Total debt
|
|
|
|
|
|
|
|
$
|
5,409,651
|
|
|
5,391,274
|
|
(1)
|
Amounts are net of unamortized original issue discounts of
$6 million
and
$7 million
at
December 31, 2017
and
2016
, respectively.
|
(2)
|
Asset-backed U.S. obligations are related to financing transactions backed by a portion of our revenue earning equipment.
|
(3)
|
The notional amount of the executed interest rate swaps designated as fair value hedges was
$825 million
at
December 31, 2017
and
2016
. Refer to
Note 16
, "
Derivatives
," for additional information.
|
|
|
Capital Leases
|
|
Debt
|
|||
|
|
(In thousands)
|
|||||
2018
|
|
$
|
7,559
|
|
|
818,510
|
|
2019
|
|
7,918
|
|
|
1,077,734
|
|
|
2020
|
|
2,428
|
|
|
1,892,344
|
|
|
2021
|
|
2,620
|
|
|
717,868
|
|
|
2022
|
|
1,379
|
|
|
699,006
|
|
|
Thereafter
|
|
—
|
|
|
190,510
|
|
|
Total
|
|
21,904
|
|
|
5,395,972
|
|
|
Imputed interest
|
|
(1,033
|
)
|
|
|
||
Present value of minimum capitalized lease payments
|
|
20,871
|
|
|
|
||
Current portion
|
|
(7,559
|
)
|
|
|
||
Long-term capitalized lease obligation
|
|
$
|
13,312
|
|
|
|
|
|
Currency
Translation
Adjustments and Other
|
|
Net Actuarial
Loss
(1)
|
|
Prior Service
Credit
(1)
|
|
Accumulated
Other
Comprehensive
Loss
|
|||||
|
|
(In thousands)
|
|||||||||||
January 1, 2015
|
|
$
|
(36,087
|
)
|
|
(585,941
|
)
|
|
1,758
|
|
|
(620,270
|
)
|
Amortization
|
|
—
|
|
|
19,505
|
|
|
(1,411
|
)
|
|
18,094
|
|
|
Other current period change
|
|
(99,933
|
)
|
|
(10,557
|
)
|
|
(69
|
)
|
|
(110,559
|
)
|
|
December 31, 2015
|
|
(136,020
|
)
|
|
(576,993
|
)
|
|
278
|
|
|
(712,735
|
)
|
|
Amortization
|
|
—
|
|
|
18,876
|
|
|
165
|
|
|
19,041
|
|
|
Other current period change
|
|
(70,590
|
)
|
|
(62,175
|
)
|
|
(7,573
|
)
|
|
(140,338
|
)
|
|
December 31, 2016
|
|
(206,610
|
)
|
|
(620,292
|
)
|
|
(7,130
|
)
|
|
(834,032
|
)
|
|
Amortization
|
|
—
|
|
|
20,267
|
|
|
219
|
|
|
20,486
|
|
|
Other current period change
|
|
66,172
|
|
|
39,872
|
|
|
1
|
|
|
106,045
|
|
|
December 31, 2017
|
|
$
|
(140,438
|
)
|
|
(560,153
|
)
|
|
(6,910
|
)
|
|
(707,501
|
)
|
(1)
|
These amounts are included in the computation of net periodic pension cost and pension settlement charge. See
Note 22
, "
Employee Benefit Plans
," for further information.
|
|
|
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands, except per share amounts)
|
||||||||
Earnings per share — Basic:
|
|
|
|
|
|
|
||||
Earnings from continuing operations
|
|
$
|
791,015
|
|
|
264,640
|
|
|
305,989
|
|
Less: Distributed and undistributed earnings allocated to unvested stock
|
|
(2,848
|
)
|
|
(840
|
)
|
|
(877
|
)
|
|
Earnings from continuing operations available to common shareholders — Basic
|
|
$
|
788,167
|
|
|
263,800
|
|
|
305,112
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding— Basic
|
|
52,613
|
|
|
53,015
|
|
|
52,814
|
|
|
|
|
|
|
|
|
|
||||
Earnings from continuing operations per common share — Basic
|
|
$
|
14.98
|
|
|
4.98
|
|
|
5.78
|
|
|
|
|
|
|
|
|
||||
Earnings per share — Diluted:
|
|
|
|
|
|
|
||||
Earnings from continuing operations
|
|
$
|
791,015
|
|
|
264,640
|
|
|
305,989
|
|
Less: Distributed and undistributed earnings allocated to unvested stock
|
|
(2,830
|
)
|
|
(836
|
)
|
|
(872
|
)
|
|
Earnings from continuing operations available to common shareholders — Diluted
|
|
$
|
788,185
|
|
|
263,804
|
|
|
305,117
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding— Basic
|
|
52,613
|
|
|
53,015
|
|
|
52,814
|
|
|
Effect of dilutive equity awards
|
|
375
|
|
|
346
|
|
|
446
|
|
|
Weighted average common shares outstanding— Diluted
|
|
52,988
|
|
|
53,361
|
|
|
53,260
|
|
|
|
|
|
|
|
|
|
||||
Earnings from continuing operations per common share — Diluted
|
|
$
|
14.87
|
|
|
4.94
|
|
|
5.73
|
|
Anti-dilutive equity awards and market-based restrictive stock rights not included above
|
|
881
|
|
|
716
|
|
|
392
|
|
|
|
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Stock option and stock purchase plans
|
|
$
|
7,869
|
|
|
7,244
|
|
|
8,048
|
|
Unvested stock awards
|
|
11,098
|
|
|
11,420
|
|
|
13,133
|
|
|
Share-based compensation expense
|
|
18,967
|
|
|
18,664
|
|
|
21,181
|
|
|
Income tax benefit
|
|
(6,628
|
)
|
|
(6,644
|
)
|
|
(7,271
|
)
|
|
Share-based compensation expense, net of tax
|
|
$
|
12,339
|
|
|
12,020
|
|
|
13,910
|
|
|
|
Years ended December 31
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Cash awards
|
|
$
|
174
|
|
|
689
|
|
|
532
|
|
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic Value
|
|||||
|
|
(In thousands)
|
|
|
|
(In years)
|
|
(In thousands)
|
|||||
Options outstanding at January 1
|
|
1,529
|
|
|
$
|
66.35
|
|
|
|
|
|
||
Granted
|
|
465
|
|
|
76.43
|
|
|
|
|
|
|||
Exercised
|
|
(235
|
)
|
|
55.41
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(42
|
)
|
|
70.56
|
|
|
|
|
|
|||
Options outstanding at December 31
|
|
1,717
|
|
|
$
|
70.47
|
|
|
7.3
|
|
$
|
26,209
|
|
Vested and expected to vest at December 31
|
|
1,649
|
|
|
$
|
70.61
|
|
|
7.4
|
|
$
|
25,320
|
|
Exercisable at December 31
|
|
848
|
|
|
$
|
70.20
|
|
|
6.0
|
|
$
|
13,689
|
|
|
|
Time-Vested
|
|
Market-Based
|
|
Performance-Based
|
||||||||||||
|
|
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
||||||
|
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
Unvested stock outstanding at January 1
|
|
476
|
|
$
|
67.31
|
|
|
66
|
|
$
|
64.33
|
|
|
72
|
|
$
|
70.92
|
|
Granted
|
|
117
|
|
75.61
|
|
|
45
|
|
73.43
|
|
|
79
|
|
76.47
|
|
|||
Vested
(1)
|
|
(141)
|
|
78.18
|
|
|
(15)
|
|
61.07
|
|
|
(30)
|
|
75.62
|
|
|||
Forfeited
(2)
|
|
(19)
|
|
69.95
|
|
|
(4)
|
|
81.47
|
|
|
(27)
|
|
48.71
|
|
|||
Unvested stock outstanding at December 31
|
|
433
|
|
$
|
65.91
|
|
|
92
|
|
$
|
68.26
|
|
|
94
|
|
$
|
78.91
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Stock purchase plan:
|
|
|
||||||||||
Shares granted and exercised
|
|
160,000
|
|
|
192,000
|
|
|
178,000
|
|
|||
Weighted average exercise plan
|
|
$
|
66.72
|
|
|
$
|
56.17
|
|
|
$
|
63.93
|
|
|
|
Years ended December 31,
|
||||
|
|
2017
|
|
2016
|
|
2015
|
Option plans:
|
|
|
|
|
|
|
Expected dividends
|
|
2.3%
|
|
3.0%
|
|
1.6%
|
Expected volatility
|
|
28.5%
|
|
35.2%
|
|
26.4%
|
Risk-free rate
|
|
1.9%
|
|
1.1%
|
|
1.4%
|
Expected term in years
|
|
4.4 years
|
|
4.3 years
|
|
4.3 years
|
Grant-date fair value
|
|
$15.71
|
|
$12.53
|
|
$18.47
|
|
|
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Company-administered plans:
|
|
|
|
|
|
|
||||
Service cost
|
|
$
|
12,345
|
|
|
12,977
|
|
|
13,820
|
|
Interest cost
|
|
86,431
|
|
|
94,476
|
|
|
88,013
|
|
|
Expected return on plan assets
|
|
(91,062
|
)
|
|
(90,588
|
)
|
|
(98,892
|
)
|
|
Amortization of:
|
|
|
|
|
|
|
||||
Net actuarial loss
|
|
32,987
|
|
|
31,777
|
|
|
30,741
|
|
|
Prior service cost (credit)
|
|
579
|
|
|
2,976
|
|
|
(306
|
)
|
|
|
|
41,280
|
|
|
51,618
|
|
|
33,376
|
|
|
Union-administered plans
|
|
15,553
|
|
|
9,597
|
|
|
8,328
|
|
|
Net pension expense
|
|
$
|
56,833
|
|
|
61,215
|
|
|
41,704
|
|
|
|
|
|
|
|
|
||||
Company-administered plans:
|
|
|
|
|
|
|
||||
U.S.
|
|
$
|
43,717
|
|
|
53,319
|
|
|
34,986
|
|
Foreign
|
|
(2,437
|
)
|
|
(1,701
|
)
|
|
(1,610
|
)
|
|
|
|
41,280
|
|
|
51,618
|
|
|
33,376
|
|
|
Union-administered plans
|
|
15,553
|
|
|
9,597
|
|
|
8,328
|
|
|
|
|
$
|
56,833
|
|
|
61,215
|
|
|
41,704
|
|
|
|
U.S. Plans
Years ended December 31,
|
|
Foreign Plans
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
Discount rate
|
|
4.20%
|
|
4.50%
|
|
4.15%
|
|
3.90%
|
|
3.70%
|
|
3.70%
|
Rate of increase in compensation levels
|
|
3.00%
|
|
3.00%
|
|
3.00%
|
|
3.10%
|
|
3.10%
|
|
3.10%
|
Expected long-term rate of return on plan assets
|
|
5.40%
|
|
5.85%
|
|
5.95%
|
|
5.48%
|
|
5.44%
|
|
5.50%
|
Gain and loss amortization period (years)
|
|
21
|
|
23
|
|
23
|
|
26
|
|
27
|
|
27
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Change in benefit obligations:
|
|
|
|
|
|||
Benefit obligations at January 1
|
|
$
|
2,228,762
|
|
|
2,091,844
|
|
Service cost
|
|
12,345
|
|
|
12,977
|
|
|
Interest cost
|
|
86,431
|
|
|
94,476
|
|
|
Actuarial loss
|
|
100,905
|
|
|
189,523
|
|
|
Pension annuity settlement
|
|
(66,423
|
)
|
|
—
|
|
|
Benefits paid
|
|
(104,054
|
)
|
|
(96,723
|
)
|
|
Foreign currency exchange rate changes
|
|
40,936
|
|
|
(63,335
|
)
|
|
Benefit obligations at December 31
|
|
2,298,902
|
|
|
2,228,762
|
|
|
|
|
|
|
|
|||
Change in plan assets:
|
|
|
|
|
|||
Fair value of plan assets at January 1
|
|
1,787,075
|
|
|
1,647,286
|
|
|
Actual return on plan assets
|
|
244,916
|
|
|
176,066
|
|
|
Employer contribution
|
|
41,219
|
|
|
127,991
|
|
|
Benefits paid
|
|
(104,054
|
)
|
|
(96,723
|
)
|
|
Pension annuity settlement
|
|
(71,299
|
)
|
|
—
|
|
|
Foreign currency exchange rate changes
|
|
43,473
|
|
|
(67,545
|
)
|
|
Fair value of plan assets at December 31
|
|
1,941,330
|
|
|
1,787,075
|
|
|
Funded status
|
|
$
|
(357,572
|
)
|
|
(441,687
|
)
|
Funded percent
|
|
84
|
%
|
|
80
|
%
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Noncurrent asset
|
|
$
|
58,708
|
|
|
14,049
|
|
Current liability
|
|
(3,863
|
)
|
|
(3,796
|
)
|
|
Noncurrent liability
|
|
(412,417
|
)
|
|
(451,940
|
)
|
|
Net amount recognized
|
|
$
|
(357,572
|
)
|
|
(441,687
|
)
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Prior service cost
|
|
$
|
11,135
|
|
|
11,714
|
|
Net actuarial loss
|
|
878,386
|
|
|
961,010
|
|
|
Net amount recognized
|
|
$
|
889,521
|
|
|
972,724
|
|
|
|
U.S. Plans
December 31,
|
|
Foreign Plans
December 31,
|
||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Discount rate
|
|
3.70%
|
|
4.20%
|
|
2.70%
|
|
3.90%
|
Rate of increase in compensation levels
|
|
3.00%
|
|
3.00%
|
|
3.10%
|
|
3.10%
|
|
|
U.S. Plans
December 31,
|
|
Foreign Plans
December 31,
|
|
Total
December 31,
|
|||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||
|
|
(In thousands)
|
|||||||||||||||||
Total accumulated benefit obligations
|
|
$
|
1,781,882
|
|
|
1,748,171
|
|
|
492,864
|
|
|
454,301
|
|
|
2,274,746
|
|
|
2,202,472
|
|
Plans with pension obligations in excess of plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PBO
|
|
1,804,260
|
|
|
1,771,968
|
|
|
7,802
|
|
|
7,383
|
|
|
1,812,062
|
|
|
1,779,351
|
|
|
ABO
|
|
1,781,882
|
|
|
1,748,171
|
|
|
6,502
|
|
|
5,997
|
|
|
1,788,384
|
|
|
1,754,168
|
|
|
Fair value of plan assets
|
|
1,395,790
|
|
|
1,323,751
|
|
|
—
|
|
|
—
|
|
|
1,395,790
|
|
|
1,323,751
|
|
|
|
Fair Value Measurements at
December 31, 2017 |
|||||||||||
Asset Category
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||
|
|
(In thousands)
|
|||||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|||||
U.S. common collective trusts
|
|
$
|
443,405
|
|
|
—
|
|
|
443,405
|
|
|
—
|
|
Foreign common collective trusts
|
|
458,111
|
|
|
—
|
|
|
458,111
|
|
|
—
|
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|||||
Corporate bonds
|
|
85,117
|
|
|
—
|
|
|
85,117
|
|
|
—
|
|
|
Common collective trusts
|
|
840,104
|
|
|
—
|
|
|
840,104
|
|
|
—
|
|
|
Private equity and hedge funds
|
|
114,593
|
|
|
—
|
|
|
—
|
|
|
114,593
|
|
|
Total
|
|
$
|
1,941,330
|
|
|
—
|
|
|
1,826,737
|
|
|
114,593
|
|
|
|
Fair Value Measurements at
December 31, 2016 |
|||||||||||
Asset Category
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||
|
|
(In thousands)
|
|||||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|||||
U.S. common collective trusts
|
|
$
|
429,456
|
|
|
—
|
|
|
429,456
|
|
|
—
|
|
Foreign common collective trusts
|
|
398,282
|
|
|
—
|
|
|
398,282
|
|
|
—
|
|
|
Fixed income securities:
|
|
|
|
|
|
|
|
|
|||||
Corporate bonds
|
|
76,086
|
|
|
—
|
|
|
76,086
|
|
|
—
|
|
|
Common collective trusts
|
|
780,367
|
|
|
—
|
|
|
780,367
|
|
|
—
|
|
|
Private equity and hedge funds
|
|
102,884
|
|
|
—
|
|
|
—
|
|
|
102,884
|
|
|
Total
|
|
$
|
1,787,075
|
|
|
—
|
|
|
1,684,191
|
|
|
102,884
|
|
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Beginning balance at January 1
|
|
$
|
102,884
|
|
|
100,631
|
|
Return on plan assets:
|
|
|
|
|
|||
Relating to assets still held at the reporting date
|
|
10,795
|
|
|
1,548
|
|
|
Relating to assets sold during the period
|
|
(405
|
)
|
|
703
|
|
|
Purchases, sales, settlements and expenses
|
|
1,319
|
|
|
2
|
|
|
Ending balance at December 31
|
|
$
|
114,593
|
|
|
102,884
|
|
|
|
|
|
Pension Protection Act Zone Status
|
|
|
|
Ryder Contributions
|
|
|
|
Expiration Date(s) of Collective-Bargaining Agreement(s)
|
||||||||||
Pension Fund
|
|
Employer Identification Number
|
|
2017
|
|
2016
|
|
FIP/RP Status Pending/ Implemented
(1)
|
|
2017
|
|
2016
|
|
2015
|
|
Surcharge Imposed
|
|
|||||
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
||||||||
Western Conference Teamsters
|
|
91-6145047
|
|
Green
|
|
Green
|
|
No
|
|
$
|
3,245
|
|
|
2,613
|
|
|
2,430
|
|
|
No
|
|
1/12/18 to 4/1/21
|
IAM National
|
|
51-6031295
|
|
Green
|
|
Green
|
|
No
|
|
3,891
|
|
|
4,162
|
|
|
3,801
|
|
|
No
|
|
3/31/17 to 11/30/19
|
|
Automobile Mechanics
Local No. 701 |
|
36-6042061
|
|
Yellow
|
|
Yellow
|
|
RP Adopted
|
|
2,048
|
|
|
2,201
|
|
|
1,902
|
|
|
Yes
|
|
10/31/17 to 5/31/19
|
|
Central States Southeast and Southwest Areas
|
|
36-6044243
|
|
Red
|
|
Red
|
|
RP Adopted
|
|
244
|
|
|
259
|
|
|
254
|
|
|
Yes
|
|
5/6/17 to 10/31/17
|
|
Other funds
|
|
|
|
|
|
|
|
|
|
671
|
|
|
501
|
|
|
450
|
|
|
|
|
|
|
Total contributions
|
|
|
|
|
|
|
|
|
|
10,099
|
|
|
9,736
|
|
|
8,837
|
|
|
|
|
|
|
Pension settlement charges (benefit)
|
|
|
|
|
|
|
|
|
|
5,454
|
|
|
(139
|
)
|
|
(509
|
)
|
|
|
|
|
|
Union-administered plans
|
|
|
|
|
|
|
|
|
|
$
|
15,553
|
|
|
9,597
|
|
|
8,328
|
|
|
|
|
|
(1)
|
The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented.
|
|
|
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Service cost
|
|
$
|
191
|
|
|
215
|
|
|
363
|
|
Interest cost
|
|
833
|
|
|
906
|
|
|
1,097
|
|
|
Amortization of:
|
|
|
|
|
|
|
||||
Net actuarial gain
|
|
(1,796
|
)
|
|
(1,989
|
)
|
|
(1,773
|
)
|
|
Prior service credit
|
|
(231
|
)
|
|
(231
|
)
|
|
(1,083
|
)
|
|
Postretirement benefit income
|
|
$
|
(1,003
|
)
|
|
(1,099
|
)
|
|
(1,396
|
)
|
|
|
|
|
|
|
|
||||
U.S.
|
|
$
|
(1,308
|
)
|
|
(1,429
|
)
|
|
(1,887
|
)
|
Foreign
|
|
305
|
|
|
330
|
|
|
491
|
|
|
|
|
$
|
(1,003
|
)
|
|
(1,099
|
)
|
|
(1,396
|
)
|
|
|
U.S. Plan
Years ended December 31,
|
|
Foreign Plan
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
Discount rate
|
|
4.20%
|
|
4.50%
|
|
4.15%
|
|
4.00%
|
|
4.00%
|
|
4.00%
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Benefit obligations at January 1
|
|
$
|
20,965
|
|
|
21,626
|
|
Service cost
|
|
191
|
|
|
215
|
|
|
Interest cost
|
|
833
|
|
|
906
|
|
|
Actuarial loss (gain)
|
|
16
|
|
|
(338
|
)
|
|
Benefits paid
|
|
(1,182
|
)
|
|
(1,609
|
)
|
|
Foreign currency exchange rate changes
|
|
418
|
|
|
165
|
|
|
Benefit obligations at December 31
|
|
$
|
21,241
|
|
|
20,965
|
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Current liability
|
|
$
|
1,481
|
|
|
1,506
|
|
Noncurrent liability
|
|
19,760
|
|
|
19,459
|
|
|
Amount recognized
|
|
$
|
21,241
|
|
|
20,965
|
|
|
|
December 31,
|
|||||
|
|
2017
|
|
2016
|
|||
|
|
(In thousands)
|
|||||
Prior service credit
|
|
$
|
(154
|
)
|
|
(385
|
)
|
Net actuarial gain
|
|
(8,371
|
)
|
|
(10,186
|
)
|
|
Net amount recognized
|
|
$
|
(8,525
|
)
|
|
(10,571
|
)
|
|
|
U.S. Plan
December 31,
|
|
Foreign Plan
December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Discount rate
|
|
3.70
|
%
|
|
4.20
|
%
|
|
3.40
|
%
|
|
3.90
|
%
|
Rate of increase in compensation levels
|
|
3.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
Healthcare cost trend rate assumed for next year
|
|
7.25
|
%
|
|
7.50
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
Rate to which the cost trend rate is assumed to decline (ultimate trend rate)
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
Year that the rate reaches the ultimate trend rate
|
|
2027
|
|
|
2027
|
|
|
2017
|
|
|
2018
|
|
|
Years ended December 31,
|
||||||||
|
2017
|
|
2016
|
|
2015
|
||||
|
|
|
(In thousands)
|
|
|
||||
Restructuring charges and fees, net
(1)
|
$
|
(21,405
|
)
|
|
(5,074
|
)
|
|
(18,068
|
)
|
Tax reform related bonus
|
(23,278
|
)
|
|
—
|
|
|
—
|
|
|
Operating tax adjustment
|
(2,205
|
)
|
|
—
|
|
|
—
|
|
|
Pension related adjustment
(2)
|
(5,454
|
)
|
|
(7,650
|
)
|
|
509
|
|
|
Gain on sale of property
(3)
|
24,122
|
|
|
—
|
|
|
—
|
|
|
Restructuring charges and fees, net and other items
|
$
|
(28,220
|
)
|
|
(12,724
|
)
|
|
(17,559
|
)
|
|
|
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Interest paid
|
|
$
|
129,559
|
|
|
143,990
|
|
|
144,973
|
|
Income taxes paid
|
|
13,692
|
|
|
14,062
|
|
|
13,379
|
|
|
Changes in accounts payable related to purchases of revenue earning equipment
|
|
80,781
|
|
|
(142,256
|
)
|
|
28,134
|
|
|
Operating and revenue earning equipment acquired under capital leases
|
|
7,057
|
|
|
1,230
|
|
|
5,959
|
|
|
Years ended December 31,
|
||||||||
|
2017
|
|
2016
|
|
2015
|
||||
|
|
||||||||
Gains on sales of operating property and equipment
|
$
|
26,093
|
|
|
2,475
|
|
|
3,045
|
|
Insurance proceeds/recoveries
|
1,734
|
|
|
966
|
|
|
—
|
|
|
Contract settlement
|
1,600
|
|
|
—
|
|
|
55
|
|
|
Foreign currency transaction gains
|
657
|
|
|
1,236
|
|
|
1,945
|
|
|
Rabbi trust investment income
|
10,522
|
|
|
2,763
|
|
|
632
|
|
|
Other, net
|
3,639
|
|
|
5,628
|
|
|
4,479
|
|
|
Total
|
$
|
44,245
|
|
|
13,068
|
|
|
10,156
|
|
|
|
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Revenue:
|
|
|
|
|
|
|
||||
Fleet Management Solutions:
|
|
|
|
|
|
|
||||
ChoiceLease
|
|
$
|
2,460,424
|
|
|
2,362,040
|
|
|
2,220,929
|
|
Commercial rental
|
|
777,261
|
|
|
808,912
|
|
|
900,624
|
|
|
ChoiceLease and commercial rental
|
|
3,237,685
|
|
|
3,170,952
|
|
|
3,121,553
|
|
|
SelectCare
|
|
428,422
|
|
|
415,507
|
|
|
391,137
|
|
|
Other
|
|
77,450
|
|
|
78,042
|
|
|
77,625
|
|
|
Fuel services revenue
|
|
520,500
|
|
|
463,738
|
|
|
538,277
|
|
|
Total Fleet Management Solutions from external customers
|
|
4,264,057
|
|
|
4,128,239
|
|
|
4,128,592
|
|
|
Inter-segment revenue
|
|
469,514
|
|
|
427,955
|
|
|
417,100
|
|
|
Fleet Management Solutions
|
|
4,733,571
|
|
|
4,556,194
|
|
|
4,545,692
|
|
|
Dedicated Transportation Solutions
|
|
1,096,042
|
|
|
1,020,895
|
|
|
895,538
|
|
|
Supply Chain Solutions
|
|
1,969,500
|
|
|
1,637,850
|
|
|
1,547,763
|
|
|
Eliminations
|
|
(469,514
|
)
|
|
(427,955
|
)
|
|
(417,100
|
)
|
|
Total revenue
|
|
$
|
7,329,599
|
|
|
6,786,984
|
|
|
6,571,893
|
|
|
|
|
|
|
|
|
||||
EBT:
|
|
|
|
|
|
|
||||
Fleet Management Solutions
|
|
$
|
312,720
|
|
|
370,829
|
|
|
461,314
|
|
Dedicated Transportation Solutions
|
|
55,328
|
|
|
63,571
|
|
|
45,575
|
|
|
Supply Chain Solutions
|
|
103,102
|
|
|
105,532
|
|
|
93,575
|
|
|
Eliminations
|
|
(53,275
|
)
|
|
(50,148
|
)
|
|
(47,193
|
)
|
|
|
|
$
|
417,875
|
|
|
489,784
|
|
|
553,271
|
|
Unallocated Central Support Services
|
|
(48,128
|
)
|
|
(40,736
|
)
|
|
(48,700
|
)
|
|
Non-operating pension costs
(1)
|
|
(27,741
|
)
|
|
(29,943
|
)
|
|
(17,797
|
)
|
|
Restructuring charges and fees, net and other items
(2)
|
|
(28,220
|
)
|
|
(12,724
|
)
|
|
(17,559
|
)
|
|
Earnings before income taxes from continuing operations
|
|
$
|
313,786
|
|
|
406,381
|
|
|
469,215
|
|
(1)
|
Non-operating pension costs include the amortization of net actuarial loss and prior service costs, interest cost and expected return on plan assets
|
(2)
|
See
Note 24
, “
Other Items Impacting Comparability
,” for a discussion of items excluded from our primary measure of segment performance.
|
|
|
FMS
|
|
DTS
|
|
SCS
|
|
CSS
|
|
Eliminations
|
|
Total
|
|||||||
|
|
(In thousands)
|
|||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Non-operating pension costs and share-based compensation expense
|
|
$
|
5,339
|
|
|
1,270
|
|
|
2,982
|
|
|
37,117
|
|
|
—
|
|
|
46,708
|
|
Depreciation expense
(1)
|
|
$
|
1,218,492
|
|
|
3,520
|
|
|
32,255
|
|
|
908
|
|
|
—
|
|
|
1,255,175
|
|
Used vehicle sales, net
|
|
$
|
17,553
|
|
|
(113
|
)
|
|
(199
|
)
|
|
—
|
|
|
—
|
|
|
17,241
|
|
Amortization expense and other non-cash charges, net
|
|
$
|
29,550
|
|
|
(21,967
|
)
|
|
1,015
|
|
|
3,516
|
|
|
—
|
|
|
12,114
|
|
Interest expense (income)
(2)
|
|
$
|
144,137
|
|
|
(1,659
|
)
|
|
(2,446
|
)
|
|
318
|
|
|
—
|
|
|
140,350
|
|
Capital expenditures paid
|
|
$
|
1,783,917
|
|
|
3,375
|
|
|
50,117
|
|
|
23,027
|
|
|
—
|
|
|
1,860,436
|
|
Total assets
|
|
$
|
10,386,613
|
|
|
276,832
|
|
|
864,022
|
|
|
196,686
|
|
|
(271,922
|
)
|
|
11,452,231
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Non-operating pension costs and share-based compensation expense
|
|
$
|
5,464
|
|
|
1,254
|
|
|
2,764
|
|
|
46,775
|
|
|
—
|
|
|
56,257
|
|
Depreciation expense
(1)
|
|
$
|
1,156,888
|
|
|
3,222
|
|
|
25,956
|
|
|
984
|
|
|
—
|
|
|
1,187,050
|
|
Used vehicle sales, net
|
|
$
|
(724
|
)
|
|
(90
|
)
|
|
(158
|
)
|
|
—
|
|
|
—
|
|
|
(972
|
)
|
Amortization expense and other non-cash charges, net
|
|
$
|
34,652
|
|
|
1,027
|
|
|
3,215
|
|
|
(8,227
|
)
|
|
—
|
|
|
30,667
|
|
Interest expense (income)
(2)
|
|
$
|
151,297
|
|
|
(1,901
|
)
|
|
(1,663
|
)
|
|
110
|
|
|
—
|
|
|
147,843
|
|
Capital expenditures paid
|
|
$
|
1,814,146
|
|
|
2,551
|
|
|
64,186
|
|
|
24,274
|
|
|
—
|
|
|
1,905,157
|
|
Total assets
|
|
$
|
9,954,452
|
|
|
255,845
|
|
|
713,190
|
|
|
198,394
|
|
|
(219,427
|
)
|
|
10,902,454
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Non-operating pension costs and share-based compensation expense
|
|
$
|
5,672
|
|
|
1,155
|
|
|
3,400
|
|
|
28,751
|
|
|
—
|
|
|
38,978
|
|
Depreciation expense
(1)
|
|
$
|
1,092,750
|
|
|
3,184
|
|
|
25,721
|
|
|
311
|
|
|
—
|
|
|
1,121,966
|
|
Used vehicle sales, net
|
|
$
|
(99,758
|
)
|
|
(54
|
)
|
|
(41
|
)
|
|
—
|
|
|
—
|
|
|
(99,853
|
)
|
Amortization expense and other non-cash charges, net
|
|
$
|
36,348
|
|
|
1,878
|
|
|
2,971
|
|
|
11,768
|
|
|
—
|
|
|
52,965
|
|
Interest expense (income)
(2)
|
|
$
|
154,276
|
|
|
(1,597
|
)
|
|
(2,174
|
)
|
|
(71
|
)
|
|
—
|
|
|
150,434
|
|
Capital expenditures paid
(3)
|
|
$
|
2,595,961
|
|
|
3,570
|
|
|
27,841
|
|
|
40,606
|
|
|
—
|
|
|
2,667,978
|
|
Total assets
|
|
$
|
10,061,092
|
|
|
275,634
|
|
|
636,647
|
|
|
202,129
|
|
|
(222,922
|
)
|
|
10,952,580
|
|
(1)
|
Depreciation expense associated with CSS assets was allocated to business segments based upon estimated and planned asset utilization. Depreciation expense totaling
$24 million
,
$24 million
and
$22 million
during
2017
,
2016
and
2015
, respectively, associated with CSS assets was allocated to other business segments.
|
(2)
|
Interest expense was primarily allocated to the FMS segment since such borrowings were used principally to fund the purchase of revenue earning equipment used in FMS; however, interest income was also reflected in DTS and SCS based on targeted segment leverage ratios.
|
(3)
|
Excludes acquisition payments of
$1 million
in
2017
. See
Note 3
, “
Acquisitions
,” for additional information.
|
|
|
Years ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||
|
|
(In thousands)
|
||||||||
Revenue:
|
|
|
|
|
|
|
||||
United States
|
|
$
|
6,378,784
|
|
|
5,892,384
|
|
|
5,603,697
|
|
Foreign:
|
|
|
|
|
|
|
||||
Canada
|
|
428,252
|
|
|
387,713
|
|
|
408,325
|
|
|
Europe
|
|
321,375
|
|
|
339,420
|
|
|
391,339
|
|
|
Mexico
|
|
170,398
|
|
|
139,176
|
|
|
139,583
|
|
|
Singapore
|
|
30,790
|
|
|
28,291
|
|
|
28,949
|
|
|
|
|
950,815
|
|
|
894,600
|
|
|
968,196
|
|
|
Total
|
|
$
|
7,329,599
|
|
|
6,786,984
|
|
|
6,571,893
|
|
Long-lived assets:
|
|
|
|
|
|
|
||||
United States
|
|
$
|
7,935,167
|
|
|
7,854,845
|
|
|
7,817,628
|
|
Foreign:
|
|
|
|
|
|
|
||||
Canada
|
|
623,576
|
|
|
532,403
|
|
|
504,027
|
|
|
Europe
|
|
527,869
|
|
|
472,027
|
|
|
545,630
|
|
|
Mexico
|
|
44,997
|
|
|
33,979
|
|
|
31,993
|
|
|
Singapore
|
|
357
|
|
|
338
|
|
|
427
|
|
|
|
|
1,196,799
|
|
|
1,038,747
|
|
|
1,082,077
|
|
|
Total
|
|
$
|
9,131,966
|
|
|
8,893,592
|
|
|
8,899,705
|
|
|
|
|
|
Earnings from Continuing Operations Before Income Taxes
|
|
Earnings from
Continuing Operations
|
|
|
|
Earnings from
Continuing
Operations per
Common Share
|
|
Net Earnings per
Common Share
|
||||||||||||||
|
|
Revenue
|
|
|
|
Net Earnings
|
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||||||
|
|
(In thousands, except per share amounts)
|
||||||||||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
First quarter
|
|
$
|
1,748,163
|
|
|
59,956
|
|
|
38,279
|
|
|
38,149
|
|
|
0.72
|
|
|
0.71
|
|
|
0.72
|
|
|
0.71
|
|
|
Second quarter
|
|
1,793,214
|
|
|
80,692
|
|
|
51,343
|
|
|
50,816
|
|
|
0.97
|
|
|
0.97
|
|
|
0.96
|
|
|
0.96
|
|
||
Third quarter
|
|
1,848,529
|
|
|
94,343
|
|
|
58,913
|
|
|
58,623
|
|
|
1.12
|
|
|
1.11
|
|
|
1.11
|
|
|
1.11
|
|
||
Fourth quarter
|
|
1,939,693
|
|
|
78,795
|
|
|
642,480
|
|
|
642,970
|
|
|
12.21
|
|
|
12.10
|
|
|
12.22
|
|
|
12.11
|
|
||
Full year
|
|
$
|
7,329,599
|
|
|
313,786
|
|
|
791,015
|
|
|
790,558
|
|
|
14.98
|
|
|
14.87
|
|
|
14.97
|
|
|
14.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
First quarter
|
|
$
|
1,629,672
|
|
|
88,708
|
|
|
56,185
|
|
|
55,794
|
|
|
1.06
|
|
|
1.05
|
|
|
1.05
|
|
|
1.04
|
|
|
Second quarter
|
|
1,703,744
|
|
|
116,779
|
|
|
74,042
|
|
|
73,750
|
|
|
1.39
|
|
|
1.38
|
|
|
1.39
|
|
|
1.38
|
|
||
Third quarter
|
|
1,724,418
|
|
|
131,698
|
|
|
85,138
|
|
|
84,752
|
|
|
1.60
|
|
|
1.59
|
|
|
1.60
|
|
|
1.59
|
|
||
Fourth quarter
|
|
1,729,150
|
|
|
69,196
|
|
|
49,275
|
|
|
48,181
|
|
|
0.93
|
|
|
0.92
|
|
|
0.91
|
|
|
0.91
|
|
||
Full year
|
|
$
|
6,786,984
|
|
|
406,381
|
|
|
264,640
|
|
|
262,477
|
|
|
4.98
|
|
|
4.94
|
|
|
4.94
|
|
|
$
|
4.90
|
|
|
|
|
|
Additions
|
|
|
|
|
||||||||
Description
|
|
Balance at
Beginning
of Period
|
|
Charged to
Earnings
|
|
Transferred
from Other
Accounts
(1)
|
|
Deductions
(2)
|
|
Balance
at End
of Period
|
||||||
|
|
(In thousands)
|
||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
||||||
Accounts receivable allowance
|
|
$
|
14,915
|
|
|
12,335
|
|
|
—
|
|
|
13,403
|
|
|
13,847
|
|
Self-insurance accruals
(3)
|
|
$
|
336,901
|
|
|
327,306
|
|
|
74,153
|
|
|
389,748
|
|
|
348,612
|
|
Valuation allowance on deferred tax assets
|
|
$
|
16,387
|
|
|
2,213
|
|
|
—
|
|
|
67
|
|
|
18,667
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
||||||
Accounts receivable allowance
|
|
$
|
15,560
|
|
|
13,118
|
|
|
—
|
|
|
13,763
|
|
|
14,915
|
|
Self-insurance accruals
(3)
|
|
$
|
311,821
|
|
|
324,673
|
|
|
71,703
|
|
|
371,296
|
|
|
336,901
|
|
Valuation allowance on deferred tax assets
|
|
$
|
14,991
|
|
|
98
|
|
|
—
|
|
|
(1,298
|
)
|
|
16,387
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
||||||
Accounts receivable allowance
|
|
$
|
16,388
|
|
|
11,172
|
|
|
—
|
|
|
12,000
|
|
|
15,560
|
|
Self-insurance accruals
(3)
|
|
$
|
298,853
|
|
|
295,399
|
|
|
68,999
|
|
|
351,430
|
|
|
311,821
|
|
Valuation allowance on deferred tax assets
|
|
$
|
24,742
|
|
|
(1,150
|
)
|
|
—
|
|
|
8,601
|
|
|
14,991
|
|
(1)
|
Transferred from other accounts includes employee contributions made to the medical and dental self-insurance plans.
|
(2)
|
Deductions represent write-offs, lease termination payments, insurance claim payments during the period and net foreign currency translation adjustments.
|
(3)
|
Self-insurance accruals include vehicle liability, workers’ compensation, property damage, cargo and medical and dental, which comprise our self-insurance programs. Amounts charged to earnings include developments in prior years' selected loss development factors which benefited earnings by
$9 million
in
2017
and charged earnings by
$9 million
and
$4 million
in
2016
and
2015
, respectively. Prior year presentation of self-insurance accruals has been revised to reflect amounts charged to earnings and deductions consistent with current year presentation.
|
Plans
|
|
Number of Securities to be issued upon Exercise of Outstanding Options, Warrants and Rights
|
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans Excluding Securities Reflected in Column (a)
|
|||||
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|||
Equity compensation plans approved by security holders:
|
|
|
|
|
|
|
|
|
|||
Broad based employee stock plans
|
|
2,250,700
|
|
(1)
|
|
$70.47
|
(3)
|
|
2,528,128
|
|
|
Employee stock purchase plan
|
|
—
|
|
|
|
—
|
|
|
|
783,390
|
|
Non-employee directors' stock plans
|
|
207,066
|
|
(2)
|
|
—
|
|
|
|
38,236
|
|
Total
|
|
2,457,766
|
|
|
|
$70.47
|
|
|
3,349,754
|
|
(1)
|
Includes
1,717,188
stock options,
231,900
time-vested restricted stock awards,
93,164
market-based restricted stock awards and
208,448
performance-based restricted stock awards, which includes
109,350
performance-based restricted stock rights not considered granted under accounting guidance for stock compensation. Refer to
Note 21
, "
Share-Based Compensation Plans
", for additional information.
|
(2)
|
Includes
200,559
time-vested restricted stock awards, as well as,
6,507
time-vested restricted stock awards vested but not exercisable until six months after the director's retirement.
|
(3)
|
Weighted-average exercise price of outstanding options excludes restricted stock awards and restricted stock units.
|
(a)
|
Items A through H and Schedule II are presented on the following pages of this Form 10-K Annual Report:
|
|
|
|
|
|
Page No.
|
1. Financial Statements for Ryder System, Inc. and Consolidated Subsidiaries:
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
2. Consolidated Financial Statement Schedule for the Years Ended December 31, 2017, 2016 and 2015
|
|
|
|
Exhibit
Number
|
|
Description
|
||
3.1
|
|
|
||
3.2
|
|
|
||
4.1
|
|
Ryder hereby agrees, pursuant to paragraph (b)(4)(iii) of Item 601 of Regulation S-K, to furnish the Commission with a copy of any instrument defining the rights of holders of long-term debt of Ryder, where such instrument has not been filed as an exhibit hereto and the total amount of securities authorized there under does not exceed 10% of the total assets of Ryder and its subsidiaries on a consolidated basis.
|
|
|
4.2
|
|
The First Supplemental Indenture between Ryder System, Inc. and The Chase Manhattan Bank (National Association) dated October 1, 1987, previously filed with the Commission as an exhibit to Ryder's Annual Report on Form 10-K for the year ended December 31, 1994, is incorporated by reference into this report.
|
|
|
4.3
|
|
The Form of Indenture between Ryder System, Inc. and The Chase Manhattan Bank (National Association) dated as of May 1, 1987, and supplemented as of November 15, 1990 and June 24, 1992, filed with the Commission on July 30, 1992 as an exhibit to Ryder's Registration Statement on Form S-3 (No. 33-50232), is incorporated by reference into this report.
|
|
|
4.4
|
|
|
||
10.1(a)
|
|
|
||
10.1(b)
|
|
|
||
10.1(c)
|
|
|
||
10.1(d)
|
|
|
||
10.1(e)
|
|
|
||
10.1(f)
|
|
|
||
10.1(g)
|
|
|
||
10.1(h)
|
|
|
||
10.1(i)
|
|
|
||
10.1(j)
|
|
|
||
10.1(k)
|
|
|
Exhibit
Number
|
|
Description
|
10.1(l)
|
|
|
10.1(m)
|
|
|
10.1(n)
|
|
|
10.1(o)
|
|
|
10.1(p)
|
|
|
10.1(q)
|
|
|
10.1(r)
|
|
|
10.1(s)
|
|
|
10.1(t)
|
|
|
10.1(u)
|
|
|
10.1(v)
|
|
|
10.1(w)
|
|
|
10.1(x)
|
|
|
10.1(y)
|
|
|
10.1(z)
|
|
|
10.1(aa)
|
|
|
10.1(bb)
|
|
Exhibit
Number
|
|
Description
|
10.1(cc)
|
|
|
10.2(a)
|
|
|
10.2(b)
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6(a)
|
|
|
10.6(b)
|
|
|
10.6(c)
|
|
|
10.6(d)
|
|
|
10.7
|
|
|
12
|
|
|
21.1
|
|
|
23.1
|
|
(b)
|
Executive Compensation Plans and Arrangements:
|
|
|
|
|
|
|
|
|
Date:
|
February 16, 2018
|
|
RYDER SYSTEM, INC.
|
|
|
|
|
|
|
|
By: /s/ Robert E. Sanchez
|
|
|
|
Robert E. Sanchez
|
|
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
|
Date:
|
February 16, 2018
|
|
By: /s/ ROBERT E. SANCHEZ
|
|
|
|
Robert E. Sanchez
|
|
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date:
|
February 16, 2018
|
|
By: /s/ ART A. GARCIA
|
|
|
|
Art A. Garcia
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Date:
|
February 16, 2018
|
|
By: /s/ FRANK MULLEN
|
|
|
|
Frank Mullen
|
|
|
|
Vice President and Controller
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
Date:
|
February 16, 2018
|
|
By: JOHN M. BERRA *
|
|
|
|
John M. Berra
|
|
|
|
Director
|
|
|
|
|
Date:
|
February 16, 2018
|
|
By: ROBERT J. ECK *
|
|
|
|
Robert J. Eck
|
|
|
|
Director
|
|
|
|
|
Date:
|
February 16, 2018
|
|
By: ROBERT A. HAGEMANN *
|
|
|
|
Robert A. Hagemann
|
|
|
|
Director
|
|
|
|
|
Date:
|
February 16, 2018
|
|
By: MICHAEL F. HILTON*
|
|
|
|
Michael F. Hilton
|
|
|
|
Director
|
Date:
|
February 16, 2018
|
|
By: TAMARA L. LUNDGREN*
|
|
|
|
Tamara L. Lundgren
|
|
|
|
Director
|
|
|
|
|
Date:
|
February 16, 2018
|
|
By: LUIS P. NIETO, JR. *
|
|
|
|
Luis P. Nieto, Jr.
|
|
|
|
Director
|
|
|
|
|
Date:
|
February 16, 2018
|
|
By: ABBIE J. SMITH *
|
|
|
|
Abbie J. Smith
|
|
|
|
Director
|
|
|
|
|
Date:
|
February 16, 2018
|
|
By: E. FOLLIN SMITH *
|
|
|
|
E. Follin Smith
|
|
|
|
Director
|
|
|
|
|
Date:
|
February 16, 2018
|
|
By: HANSEL E. TOOKES, II *
|
|
|
|
Hansel E. Tookes, II
|
|
|
|
Director
|
|
|
|
|
Date:
|
February 16, 2018
|
|
*By: /s/ ALENA BRENNER
|
|
|
|
Alena Brenner
|
|
|
|
Attorney-in-Fact, pursuant to a power of attorney
|
|
|
|
|
|
|
|
|
1.
|
General
. The Award represents the right to receive a cash payment based on the attainment of certain financial performance goals, on the terms and conditions set forth herein, in
Schedule A
attached hereto, in the Guide and in the Plan, the applicable terms, conditions and other provisions of which are incorporated by reference herein (collectively, the “Award Documents”).
|
(a)
|
The Award Documents supersede any and all prior oral representations, promises or guarantees relating to short-term incentives or annual bonuses. All provisions of the Award Documents shall apply unless otherwise prohibited by law. In the event there is an express conflict between the provisions of the Plan and those set forth in the Guide or in these terms and conditions, the terms and conditions of the Plan shall govern. Unless otherwise approved by the Committee, individuals who have written agreements which specifically provide for annual incentive compensation other than that which is provided under the Award or who are participants in any other short-term incentive compensation plan of the Company or its subsidiaries and affiliates are not eligible to receive an Award hereunder. The Company may, in its sole discretion, provide discretionary or other bonuses to Company employees, whether or not they receive an Award.
|
(b)
|
The terms and conditions contained herein may be amended by the Committee as permitted by the Plan; none of the terms and conditions of the Award may be amended or waived without the prior approval of the Committee. Any amendment or waiver not approved by the Committee will be void and have no force or effect. Any employee or officer of the Company who authorizes any such amendment or waiver without the prior approval of the Committee will be subject to disciplinary action up to and including forfeiture of an Award and/or termination of employment (unless otherwise prohibited by law). All decisions and determinations made by the Committee relating to the Awards shall be final and binding on the Participant, his or her beneficiaries and any other person having or claiming an interest under the Plan.
|
2.
|
Financial Performance Goals; Performance Period
. The Awards are intended to reward Participants for the attainment by the Company of certain performance goals during the period beginning on January 1, [20XX] and ending on December 31, [20XX] (the “Performance Period”). The amount payable pursuant to this Award shall be calculated in accordance with the attached Schedule A, subject to the additional terms and conditions of this Award and the Plan.
|
3.
|
Payment
.
Subject to Sections 4 and 5 below and the provisions of the Guide and the Plan, amounts payable
|
4.
|
New Hire, Promotion or Transfer.
Participants who are newly hired, promoted, or transferred into or out of eligible positions, and those who move from one eligibility level to another, will receive a pro-rata incentive based on the terms in effect for his or her Management Level position, the portion of time spent in each position during the Performance Period, the annual rate of pay and the target incentive award for the eligible position(s).
|
5.
|
Termination of Employment; Temporary Leave.
Except as specifically set forth below, the Award will terminate and no amounts will be paid under the Award following the termination of the Participant’s employment.
|
(a)
|
Resignation by the Participant or Termination by the Company or a Subsidiary
: Notwithstanding anything herein to the contrary, (i) with respect to Participants who are entitled to severance benefits under the terms and conditions of any individual agreement or under the Company’s Executive Severance Plan, any amounts due will be calculated in accordance with such agreement or plan and (ii) with respect to Participants who are not otherwise entitled to severance benefits under the terms of any individual agreement or the Company’s Executive Severance Plan, if any, the Award will terminate and no amounts will be paid under the Award, provided that if a Participant’s employment is terminated by the Company after October 1, [20XX]but before the Payment Date as a result of a reduction in force by the Company, or a location closing or loss of business, as determined by the Committee, in its sole and absolute discretion, the Participant shall be eligible to receive a payment hereunder on the Payment Date, if the Participant would have received a payment under the Award but for his or her termination. Payment made to a terminated employee pursuant to the preceding sentence shall only be made if the Participant has executed and delivered to the Company a release in favor of the Company in form and substance satisfactory to the Company, which has not been revoked, and shall not be made prior to the effective date of such release.
|
i.
|
Notwithstanding the foregoing, if the Participant is terminated by the Company or a Subsidiary prior to the Payment Date and is subsequently re-employed by the Company or a Subsidiary prior to the Payment Date, such Participant shall be eligible to receive a pro-rata payment on the Payment Date based on the number of days during the Performance Period that the Participant was considered to be an active employee, as determined by the Company.
|
ii.
|
In the event that the Participant voluntarily terminates his or her employment with the Company prior to the Payment Date, (x) if the Participant is re-employed by the Company or a Subsidiary within 90 days of the effective date of such termination, but in any event prior to the Payment Date, the Participant shall be eligible to receive a pro-rata payment on the Payment Date based on the number of days during the Performance Period that the Participant was considered to be an active employee, as determined by the Company; or (y) unless otherwise provided for herein, if the Participant is re-employed by the Company or a Subsidiary more than 90 days after the effective date of such resignation, but in any event before the end of the Performance Period, the Participant shall be eligible to receive a pro-rata payment on the Payment Date based on the number of days during the Performance Period that the Participant was considered to be an active employee, as determined by the Company, after the Participant was re-employed.
|
(a)
|
Death or Disability (including Disability Retirement)
: If the Participant’s death or Disability occurs after the end of the Performance Period, the Participant (or his or her Beneficiary, in the event of death) shall receive all amounts otherwise payable to him or her under the Award on the Payment Date. If the death or Disability occurs during the Performance Period and the Participant would have received a payment under the Award but for his or her death or Disability, the Participant (or his or her Beneficiary, in the event of death) will be eligible to receive a pro-rata payment on the Payment Date based on the amount otherwise payable to the Participant and the number of days during the Performance Period that the Participant was considered to be an active employee, as determined by the Company.
|
(b)
|
Workers’ Compensation or Approved Leave of Absence
: Except as otherwise set forth herein, a Participant who takes an approved workers’ compensation leave or an approved leave of absence during any portion of the Performance Period and is actively employed for at least 180 days during [20XX], as determined by the Company, will be eligible to receive a payment on the Payment Date (to the extent the Participant would have received a payment under the Award but for his or her leave of absence), which will be pro-rated based on the number of days during the Performance Period that the Participant is considered to be an active employee, as determined by the Company.
|
(c)
|
Military Leave of Absence
: A Participant who takes an approved military leave of absence will be eligible to receive a payment on the Payment Date (to the extent the Participant would have received a payment under the Award but for his or her military leave of absence) based on the Participant’s full Eligible Base Salary (as defined on
Schedule A
) regardless of the number of days worked during the Performance Period.
|
(d)
|
Retirement
: If the Participant’s Retirement occurs after December 31, [20XX] (the last day worked) and before the Payment Date, the Participant shall receive all amounts due to him or her under the Award on the Payment Date. If the Participant’s Retirement occurs on or prior to December 31, [20XX] (the last day worked is December 30 or earlier), the Award will terminate and no amounts will be paid under the Award, unless Section 5(a) or 5(b) applies. As used herein, the term “Retirement” means termination of employment for any reason (other than for Cause or by reason of death or Disability) upon or following attainment of age 55 and completion of 10 years of service, or upon or following attainment of age 65 without regard to years of service.
|
(e)
|
Proscribed Activity
: If, during the Proscribed Period but prior to a Change of Control, the Participant engages in a Proscribed Activity, then the Company shall have the right to reclaim and receive from the Participant all cash paid to the Participant pursuant to Section 3 during the one year period immediately prior to, or at any time following, the date of the Participant’s termination of employment.
|
6.
|
U.S. Federal, State and Local Income Taxes.
The Participant is solely responsible for the satisfaction of all taxes that may arise in connection with the Award. At the time of taxation, the Company shall have
|
7.
|
Section 409A.
All payments made under the Award are intended to constitute short-term deferral amounts excludible from the requirements of Section 409A of the Code and shall be administered in accordance with Section 9.17 of the Plan. In the event that the Participant is required to execute a release of claims to receive payment pursuant to the Award and the 60 day period following the Participant’s termination of employment spans two calendar years, notwithstanding any provision herein, payment shall not be made until the later calendar year.
|
8.
|
Change of Control
.
Notwithstanding anything herein to the contrary, in the event of a Change of Control of the Company during the Performance Period, (i) with respect to Participants who are entitled to Change of Control benefits under the terms of any individual agreement or any severance plan or arrangement, the amount payable pursuant to this Award will be calculated in accordance with such agreement or plan and (ii) with respect to Participants who are not otherwise entitled to Change of Control benefits under the terms of any individual agreement or any severance plan or arrangement, and whose employment is terminated in connection with or as a result of the Change of Control, upon approval by the Committee, the Participant will be entitled to receive a pro-rata payment based on the number of days during the Performance Period that the Participant is considered to be an active employee, as determined by the Company, assuming target performance. This payment shall be made on or before March 15, [20XX].
|
9.
|
Sale of Business
.
If a business unit is sold during the Performance Period, the Participants that are employees of such business unit will receive a pro-rata payment based on performance on the Payment Date. Such payment will be made over time or in one lump sum, as determined by the Committee, provided that in any event all payments will be made on or before March 15, [20XX].
|
10.
|
Statute of Limitations and Conflicts of Laws.
All rights of action by, or on behalf of the Company or by any shareholder against any past, present, or future member of the Board of Directors, officer, or employee of the Company arising out of or in connection with the Award or the Award Documents, must be brought within three years from the date of the act or omission in respect of which such right of action arises. The Awards and the Award Documents shall be governed by the laws of the State of Florida, without giving effect to principles of conflict of laws, and construed accordingly.
|
11.
|
No Employment Right
.
Neither the grant of the Award, nor any action taken hereunder, shall be construed as giving any employee or any Participant any right to be retained in the employ of the Company. The Company is under no obligation to grant Awards hereunder. Nothing contained in the Award Documents shall limit or affect in any manner or degree the normal and usual powers of management, exercised by the officers and the Board of Directors or committees thereof, to change the duties or the character of employment of any employee of the Company or to remove the individual from the employment of the Company at any time, all of which rights and powers are expressly reserved.
|
12.
|
No Assignment
.
A Participant’s rights and interest under the Award may not be assigned or transferred, except as otherwise provided herein, and any attempted assignment or transfer shall be null and void and shall extinguish, in the Company’s sole discretion, the Company's obligation under the Award to make any payment thereunder.
|
13.
|
Unfunded Plan
.
Any amounts owed under the Award shall be unfunded. The Company shall not be required to establish any special or separate fund, or to make any other segregation of assets, to assure payment of any amounts payable under the Award.
|
14.
|
Recoupment Policy
.
This Award is considered “incentive compensation” under the Company’s
|
15.
|
Defend Trade Secrets Act Notice
. Participants are hereby notified that the immunity provisions in Section 1833 of title 18 of the United States Code provide that an individual cannot be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that is made (i) in confidence to federal, state or local government officials, either directly or indirectly, or to an attorney, and is solely for the purpose of reporting or investigating a suspected violation of the law, (ii) under seal in a complaint or other document filed in a lawsuit or other proceeding,
or (iii) to the Participant’s attorney in
connection with a lawsuit for retaliation for reporting a suspected violation of law (and the trade secret may be used in the court proceedings for such lawsuit) as long as any document containing the trade secret is filed under seal and the trade secret is not disclosed except pursuant to court order.
|
16.
|
Definitions
.
Capitalized terms used above that are not defined below have the meanings set forth in the Plan. For purposes of these Terms and Conditions:
|
(a)
|
“Proscribed Activity” means any of the following:
|
(i)
|
the Participant’s breach of any written agreement between the Participant and the Company or any of its Subsidiaries, including any agreement relating to nondisclosure, noncompetition, nonsolicitation and/or nondisparagement, to the extent such agreements are enforceable under applicable law;
|
(ii)
|
the Participant’s direct or indirect unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary, including, but not limited to, such matters as costs, profits, markets, sales, products, product lines, key personnel, pricing policies, operational methods, customers, customer requirements, suppliers, plans for future developments, and other business affairs and methods and other information not readily available to the public;
|
(iii)
|
the Participant’s direct or indirect engaging or becoming a partner, director, officer, principal, employee, consultant, investor, creditor or stockholder in/for any business, proprietorship, association, firm or corporation not owned or controlled by the Company or its Subsidiaries which is engaged or proposes to engage in a business competitive directly or indirectly with the business conducted by the Company or its Subsidiaries in any geographic area where such business of the Company or its Subsidiaries is conducted, provided that the Participant’s investment in 1% or less of the outstanding capital stock of any corporation whose stock is listed on a national securities exchange shall not be treated as a Proscribed Activity;
|
(iv)
|
the Participant’s direct or indirect, either on the Participant’s own account or for any person, firm or company, soliciting, interfering with or inducing, or attempting to induce, any employee of the Company or any of its Subsidiaries to leave his or her employment or to breach his or her employment agreement;
|
(v)
|
the Participant’s direct or indirect taking away, interfering with relations with, diverting or attempting to divert from the Company or any Subsidiary any business with any customer of the Company or any Subsidiary, including (A) any customer that has been solicited or serviced by the Company within one year prior to the date of termination of Participant’s employment with the Company and (B) any customer with which the Participant has had contact or association, or which was under the supervision of Participant, or the identity of which was learned by the Participant as a result of Participant’s employment with the Company;
|
(vi)
|
following the Participant’s termination of employment, the Participant’s making of any remarks disparaging the conduct or character of the Company or any of its Subsidiaries, or their current or former agents, employees, officers, directors, successors or assigns; or
|
(vii)
|
the Participant’s failure to cooperate with the Company or any Subsidiary, for no additional compensation (other than reimbursement of expenses), in any litigation or administrative proceedings involving any matters with which the Participant was involved during the Participant’s employment with the Company or any Subsidiary.
|
(b)
|
“Proscribed Period” means the period beginning on the date of termination of Participant’s employment and ending on the later of (A) the one year anniversary of such termination date or (B) if the Participant is entitled to severance benefits in the form of salary continuation, the date on which salary continuation is no longer payable to the Participant.
|
1.
|
General
. Each PBRSR represents the right to receive one Share on a future date based upon the attainment of certain financial performance goals and continued employment, on the terms and conditions set forth in Schedule A, in the Notification and in the Plan, the applicable terms, conditions and other provisions of which are incorporated by reference herein (collectively, the “Award Documents”). A copy of the Plan and the documents that constitute the “Prospectus” for the Plan under the Securities Act of 1933 have been made available to the Participant prior to or along with delivery of the Notification. In the event there is an express conflict between the provisions of the Plan and those set forth in any other Award Document, the terms and conditions of the Plan shall govern.
|
2.
|
Financial Performance Goals
.
|
3.
|
Delivery of Shares
. Provided that the Participant remained continuously employed through the end of the Performance Period (but subject to Sections 4 and 5 below), the number of Shares equal to the number of Accrued PBRSRs, net of the number of Shares necessary to satisfy applicable withholding taxes, will be transferred to an account held in the name of the Participant by the Company’s independent stock plan administrator and the Participant will receive notice of such transfer together with all relevant account details. Such transfer will occur in [20XX] as soon as practicable after the Committee has determined the Company’s relative attainment with respect to the Performance Goals after the conclusion of the Performance Period, provided that in no event shall the transfer be made after March 15, [20XX]. As used herein, the term “Performance Period” shall mean the period from January 1, [20XX] through December 31, [20XX].
|
4.
|
Termination of the PBRSRs; Forfeiture.
The PBRSRs will be cancelled upon the termination of the Participant’s employment with the Company and its Subsidiaries as described below.
|
(a)
|
Resignation by the Participant or Termination by the Company or a Subsidiary
: Except as provided in subsection (b) or Section 5 below, upon any termination of a Participant’s employment with the Company and its Subsidiaries prior to the end of the Performance Period, all outstanding PBRSRs will be forfeited and the Participant will not have any right to delivery of Shares. In addition, even if a Participant remains employed through the end of the Performance Period, if the Participant’s employment is subsequently terminated by the Company or a Subsidiary for Cause, the right to any undelivered Shares shall be forfeited, and the Company shall have the right to reclaim and receive from the Participant any Shares delivered to the Participant pursuant to Section 3 within the one year period before the date of the Participant’s termination of employment, or to the extent the Participant has transferred such Shares, the equivalent after-tax value thereof (as of the date the Shares were transferred by the Participant) in cash.
|
(a)
|
Termination by reason of Death, Disability or Retirement
: Except as otherwise provided in Section 5 below, if a Participant’s employment terminates due to death, Disability or Retirement prior to the end of the Performance Period, the Participant (or his or her Beneficiary, in the event of death) will be entitled to receive a pro-rata number of Shares that would have been delivered pursuant to Section 3, had the Participant remained employed through the end of the Performance Period, based on the number of days during the Performance Period that the Participant is considered to be an active employee as determined by the Company, payable at the time and manner specified in Section 3 above.
|
(b)
|
Proscribed Activity
: If, during the Proscribed Period but prior to a Change of Control, the Participant engages in a Proscribed Activity, then the Company shall have the right to reclaim and receive from the Participant all Shares delivered to the Participant pursuant to Section 3 during the one year period immediately prior to, or at any time following, the date of the Participant’s termination of employment, or to the extent the Participant has transferred such Shares, the after-tax equivalent value thereof (as of the date the Shares were transferred by the Participant) in cash.
|
5.
|
Change of Control
.
Notwithstanding anything contained herein to the contrary, in the event of a Change of Control during the Performance Period, unless otherwise determined by the Committee prior to the Change of Control, each Participant shall be entitled to delivery of a number of Shares equal to the COC Share Amount (as defined below) (such Shares, the COC Shares); provided that, except as set forth in subsections (c) and (d) below, the Participant remains actively employed through the last day of the Performance Period. Except as set forth in subsections (c) and (d) below, the COC Shares shall be delivered at the time and manner specified in Section 3 above.
|
(a)
|
Calculation of the COC Share Amount
. In the event of a Change of Control during the Performance Period, the Performance Period shall end, and the COC Share Amount shall be determined as of the date of the Change of Control. The COC Share Amount shall be equal to the greater of the Accrued PBRSRs for the Performance Period (measured as though the last day of the Performance Period was the date immediately preceding the date of the Change of Control) or one-hundred percent (100%) of the PBRSR Award.
|
(b)
|
Form of Payment
. The Committee may determine that the COC Shares shall be (i) converted to and payable in units with respect to shares or other equity interests of the acquiring company or its parent or (ii) payable in cash based on the Fair Market Value of the COC Shares as of the Change of Control.
|
(c)
|
Termination without Cause or for Good Reason
. If the Participant’s employment is terminated by the Company without Cause or the Participant terminates employment for Good Reason,
|
(d)
|
Termination due to Death, Disability or Retirement
. If a Participant’s employment terminates due to death, Disability or Retirement prior to the end of the Performance Period and upon or within 24 months following a Change of Control, the Participant (or his or her Beneficiary, in the event of death) will be entitled to receive the COC Shares, which shall be delivered in a lump sum within 60 days following the Participant’s employment termination date, subject to Section 9.17 of the Plan; provided that, the COC Shares will be delivered to the Participant at the time and manner specified in Section 3 above if the Change of Control is a Non-409A Compliant COC. If such termination occurs more than 24 months following a Change of Control, the COC Payment Amount will be pro-rated, based on the number of days during the Performance Period that the Participant is considered to be an active employee, as determined by the Company, and will be paid at the time and manner specified in Section 3 above.
|
(e)
|
Termination Prior to a Change of Control
. To the extent (i) a Participant’s employment was terminated by the Company other than for Cause or Disability within the 12 months prior to the date on which the Change of Control occurred, (ii) during such 12 month period the Participant did not engage in a Proscribed Activity, and (iii) the Committee determines, in its sole and absolute discretion, that the decision related to such termination was made in contemplation of the Change of Control, then upon the Change of Control, the Participant will become entitled to a cash payment equal to the product of: the Fair Market Value of a Share on the date of the Change of Control and the COC Share Amount. In the event of a 409A Compliant COC, such cash payment will be made in a lump sum within 60 days following the date on which the Change of Control occurs. In the event of a Non-409A Compliant COC, the cash payment will be paid to the Participant at the time and manner specified in Section 3 above. In the event that a Participant’s termination of employment by the Company under this Section 5(e) also meets the requirements of Retirement, this Section 5(e) shall supersede Section 4(b) above.
|
6.
|
Rights as a Shareholder; Dividend Equivalent Rights.
The Participant will not have the rights of a shareholder of the Company with respect to Shares subject to the PBRSRs until such Shares are actually delivered to the Participant. At the time Shares are delivered to the Participant pursuant to Section 3 or Section 5, as applicable, the Company will make a cash payment equal to the product of (i) the number of Accrued PBRSRs or the COC Share Amount, if applicable, and (ii) the aggregate dividends paid on a Share during the Performance Period.
|
7.
|
U.S. Federal, State and Local Income Taxes.
The Participant is solely responsible for the satisfaction of all taxes that may arise in connection with the PBRSRs. At the time of taxation, the Company shall have the right to deduct from other compensation or from amounts payable with respect to the PBRSRs, including by withholding Shares otherwise issuable upon settlement of the PBRSRs (as determined by the Company in its sole discretion), an amount equal to the federal (including FICA), state and local income and payroll taxes and other amounts as may be required by law to be withheld with respect to the PBRSRs.
The Company intends to satisfy this withholding obligation by reducing the number of Shares and/or cash to be delivered to the Participant under this Agreement in an amount sufficient to satisfy the withholding obligations due (based on the Fair Market Value of the Shares for the related PBRSRs). Notwithstanding
|
8.
|
Section 409A.
The PBRSRs are intended to comply with Section 409A of the Code or an exemption, and delivery of Shares and other payments pursuant to the PBRSRs may only be made upon an event and in a manner permitted by Section 409A, to the extent applicable. The PBRSRs shall be administered consistent with Section 9.17 of the Plan.
|
9.
|
Statute of Limitations and Conflicts of Laws.
All rights of action by, or on behalf of the Company or by any shareholder against any past, present, or future member of the Board of Directors, officer, or employee of the Company arising out of or in connection with the PBRSRs or the Award Documents, must be brought within three years from the date of the act or omission in respect of which such right of action arises. The PBRSRs and the Award Documents shall be governed by the laws of the State of Florida, without giving effect to principles of conflict of laws, and construed accordingly.
|
10.
|
No Employment Right
.
Neither the grant of the PBRSRs nor any action taken hereunder shall be construed as giving any employee or any Participant any right to be retained in the employ of the Company. The Company is under no obligation to grant PBRSRs hereunder. Nothing contained in the Award Documents shall limit or affect in any manner or degree the normal and usual powers of management, exercised by the officers and the Board of Directors or committees thereof, to change the duties or the character of employment of any employee of the Company or to remove the individual from the employment of the Company at any time, all of which rights and powers are expressly reserved.
|
11.
|
No Assignment
.
A Participant’s rights and interest under the PBRSRs may not be assigned or transferred, except as otherwise provided herein, and any attempted assignment or transfer shall be null and void and shall extinguish, in the Company’s sole discretion, the Company’s obligation under the PBRSRs or the Award Documents.
|
12.
|
Unfunded Plan
.
Any Shares or other amounts owed under the PBRSRs shall be unfunded. The Company shall not be required to establish any special or separate fund, or to make any other segregation of assets, to assure delivery or payment of any earned amounts.
|
13.
|
Recoupment Policy
.
Any amounts paid under the PBRSRs are considered “incentive compensation” under the Company’s Recoupment Policy, in effect from time to time. The PBRSRs and any Shares or cash paid pursuant to the PBRSRs shall be subject to all applicable clawback or recoupment policies, share trading policies and other policies that may be implemented by the Company’s Board of Directors from time to time.
|
14.
|
Definitions
.
|
(a)
|
“Accrual Percentage” means the percentage of the PBRSRs that accrues at the end of the Performance Period pursuant to Section 2 based on the Company’s attainment of the Performance Goals or as described in Section 5.
|
(b)
|
“Accrued PBRSRs” means the Accrual Percentage for the Performance Period times one hundred percent (100%) of the PBRSR Award.
|
(c)
|
“Performance Period” means the period from January 1, [20XX] through December 1, [20XX].
|
(d)
|
“Proscribed Activity” means any of the following:
|
(i)
|
the Participant’s breach of any written agreement between the Participant and the Company or any of its Subsidiaries, including any agreement relating to nondisclosure, noncompetition, nonsolicitation and/or nondisparagement, to the
|
(ii)
|
the Participant’s direct or indirect unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary, including, but not limited to, such matters as costs, profits, markets, sales, products, product lines, key personnel, pricing policies, operational methods, customers, customer requirements, suppliers, plans for future developments, and other business affairs and methods and other information not readily available to the public;
|
(iii)
|
the Participant’s direct or indirect engaging or becoming a partner, director, officer, principal, employee, consultant, investor, creditor or stockholder in/for any business, proprietorship, association, firm or corporation not owned or controlled by the Company or its Subsidiaries which is engaged or proposes to engage in a business competitive directly or indirectly with the business conducted by the Company or its Subsidiaries in any geographic area where such business of the Company or its Subsidiaries is conducted, provided that the Participant’s investment in 1% or less of the outstanding capital stock of any corporation whose stock is listed on a national securities exchange shall not be treated as a Proscribed Activity;
|
(iv)
|
the Participant’s direct or indirect, either on the Participant’s own account or for any person, firm or company, soliciting, interfering with or inducing, or attempting to induce, any employee of the Company or any of its Subsidiaries to leave his or her employment or to breach his or her employment agreement;
|
(v)
|
the Participant’s direct or indirect taking away, interfering with relations with, diverting or attempting to divert from the Company or any Subsidiary any business with any customer of the Company or any Subsidiary, including (A) any customer that has been solicited or serviced by the Company within one year prior to the date of termination of Participant’s employment with the Company and (B) any customer with which the Participant has had contact or association, or which was under the supervision of Participant, or the identity of which was learned by the Participant as a result of Participant’s employment with the Company;
|
(vi)
|
following the Participant’s termination of employment, the Participant’s making of any remarks disparaging the conduct or character of the Company or any of its Subsidiaries, or their current or former agents, employees, officers, directors, successors or assigns; or
|
(vii)
|
the Participant’s failure to cooperate with the Company or any Subsidiary, for no additional compensation (other than reimbursement of expenses), in any litigation or administrative proceedings involving any matters with which the Participant was involved during the Participant’s employment with the Company or any Subsidiary.
|
(e)
|
“Proscribed Period” means the period beginning on the date of termination of Participant’s employment and ending on the later of (i) the one year anniversary of such termination date or (ii) if the Participant is entitled to severance benefits in the form of salary continuation, the date on which salary continuation is no longer payable to the Participant.
|
(f)
|
“Retirement” means termination of employment for any reason (other than for Cause or by reason of death or Disability) upon or following attainment of age 55 and completion of 10 years of service, or upon or following attainment of age 65 without regard to years of service; provided that, Retirement shall not be deemed to occur unless such termination of service constitutes a separation from service, as defined by Section 409A of the Code.
|
(g)
|
“Performance Period” means the period from January 1, [20XX] through December 31, [20XX].
|
13
.
|
Other Benefits
.
No amount accrued or paid under the PBRSRs shall be deemed compensation for purposes of computing a Participant’s benefits under any retirement plan of the Company or its Subsidiaries, nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the Participant’s level of compensation.
|
1.
|
Defend Trade Secrets Act Notice
. Participants are hereby notified that the immunity provisions in Section 1833 of title 18 of the United States Code provide that an individual cannot be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that is made (i) in confidence to federal, state or local government officials, either directly or indirectly, or to an attorney, and is solely for the purpose of reporting or investigating a suspected violation of the law, (ii) under seal in a complaint or other document filed in a lawsuit or other proceeding, or (iii) to the Participant’s attorney in connection with a lawsuit for retaliation for reporting a suspected violation of law (and the trade secret may be used in the court proceedings for such lawsuit) as long as any document containing the trade secret is filed under seal and the trade secret is not disclosed except pursuant to court order.
|
1.
|
DEFINITIONS.
|
4.
|
TERMINATION.
|
(A)
|
Any Accrued Benefits payable as soon as practical after the Termination Date, or such other date as their terms require;
|
(B)
|
Continued payment of the Executive’s Base Salary for the applicable Severance Period payable in installments in accordance with the Company’s standard payroll practices, but no less frequently than monthly, beginning within sixty (60) days following the Termination Date (with the first payment to include amounts accrued between the Termination Date and the first payment date); provided that, if the sixtieth (60th) day following the Termination Date falls in the calendar year following the calendar year in which the Termination Date occurs, payments will not commence prior to the first day of the calendar year following the calendar year in which the Termination Date occurs; provided further that, in the event the Executive is a Specified Employee on the Termination Date, payment shall be made in accordance with the following provisions:
|
a.
|
If the aggregate value of the payments due to the Executive pursuant to this Section 5(c)(i)(B) during the six (6) month period following his Termination Date does not exceed two (2) times the lesser of: (x) the Specified Employee’s base salary for the year prior to the year in which the Termination Date occurs; or (y) the maximum amount that may be taken into account under a qualified retirement plan pursuant to Section 401(a)(17) of the Code for the year in which the Termination Date occurs (such amount, the “Separation Pay Limit”), the Executive shall receive continuation of his Base Salary for the Severance Period payable in installments in accordance with the Company’s standard payroll practices, but no less frequently than monthly, as set forth above.
|
b.
|
If the aggregate value of the payments due to the Executive pursuant to this Section 5(c)(i)(B) during the six (6) month period following his Termination Date exceeds the Separation Pay Limit, the Executive shall not receive any payments of continued Base Salary in excess of the Separation Pay Limit during such six (6) month period. Any amounts in excess of the Separation Pay Limit which would have otherwise been paid during the six (6) month period following the Executive’s Termination Date shall be paid in a lump sum on the first day following the six (6) month anniversary of the Executive’s Termination Date. Beginning with the first payroll cycle occurring on or after the first day following the six (6) month anniversary of the Executive’s Termination Date and continuing until the end of the Severance Period, the Executive shall receive continuation payments of the Executive’s Base Salary in installments in accordance with the Company’s standard payroll practices, but no less frequently than monthly.
|
c.
|
For purposes of Section 409A of the Code, each installment payment of Base Salary made pursuant to this Section 5(c)(i)(B) shall be treated as a separate payment of compensation.
|
(C)
|
A lump sum payment equal to (x) the Executive’s Three-Year Average Bonus multiplied by (y) the Severance Multiple, payable on the Release Effective Date or as soon thereafter as is reasonably practicable, but in no event shall such payment occur later than March 15 of the calendar year following the year in which the Termination Date occurs;
|
(D)
|
A lump sum payment equal to the pro-rata cash bonus for the year in which the Termination Date occurs which shall be paid (x) when such annual bonuses are paid to non-terminated employees (or, if later, upon the satisfaction of all conditions for the payment of benefits hereunder, but in no event shall such payment occur later than March 15 of the calendar year following the year in which the Termination Date occurs) and (y) based on the actual attainment of the performance goals under the annual bonus plan for the year in which the Termination Date occurs;
|
(E)
|
If the Executive continues to receive health benefits (including, medical, prescription, dental, vision and health care reimbursement account benefits) pursuant to the Company’s health plans under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, supplemented or substituted from time to time (“COBRA”) and pays the full COBRA premiums, the Company will reimburse the Executive for the COBRA premiums paid for such benefits for the Executive and his family through COBRA (with the exception of any COBRA premiums paid for health care reimbursement account benefits), through the Benefits Continuation Period, in accordance with the applicable plans, programs or policies of the Company, and on such terms applicable to comparably situated active employees during such period (which shall offset the Company’s COBRA obligation, if any); provided that the Executive may continue to receive health benefits pursuant to the Company’s health plans during a period of time in the Benefits Continuation Period during which the Executive would not otherwise be entitled to COBRA continuation coverage under Section 4980B of the Code if the Executive continues to pay premiums for such health benefits, and the Executive shall receive reimbursement for all premiums paid by the Executive for such continued health benefits on the date no later than December 31 of the calendar year immediately following the calendar year in which the applicable expenses have been incurred. If the Executive fails to accept available coverage from another employer or fails to notify the Company (or following a Change of Control, the Company or the Trustee) within thirty (30) days of the Executive’s eligibility to receive coverage under another employer’s plan, the Executive’s reimbursements under this Section 5(c)(i)(E) shall immediately terminate and the Executive shall cease to be entitled to any such reimbursements under this Agreement and shall be required within three (3) months after such failure to reimburse the Company for the reimbursements paid to the Executive after such failure. In addition, the Executive agrees that the Company may offset against such reimbursement or deduct such reimbursement from any payments due to the Executive in full or partial payment of such reimbursement; provided that no such offset shall be made in violation of Section 409A of the Code;
|
(F)
|
The Company shall provide the Executive with professional outplacement services as determined in the Company’s sole discretion until the earliest of: (w) twenty-four (24) months after the Termination Date, (x) the date on which the Executive obtains another full-time job, (y) the date on which the Executive becomes self-employed, and (z) the date
|
(G)
|
If the Executive is covered by any Company-sponsored executive life insurance program as of the Termination Date, the Company shall continue to pay for the Executive’s coverage until the end of the Severance Period. At the end of the Severance Period, the Executive will have thirty-one (31) days from the last day of the Severance Period to convert his life insurance coverage to an individual policy;
|
(H)
|
If the Executive is covered by any Company-sponsored supplemental long-term disability insurance program as of the Termination Date, the Company shall continue to pay for the Executive’s coverage until the end of the Severance Period. At the end of the Severance Period, the Executive shall be entitled to keep this policy if he continues to pay the annual premiums; and
|
(I)
|
Any benefits or rights to which the Executive is entitled under any of the Company’s stock or equity plans in accordance with the terms and conditions of those plans.
|
(A)
|
A lump sum payment equal to the Executive’s Base Salary multiplied by the Severance Multiple payable within sixty (60) days following the Change of Control; provided that, if
|
(B)
|
A lump sum payment equal to the Target Bonus multiplied by the Severance Multiple, payable on the Release Effective Date or as soon thereafter as is practicable, but no later than March 15 of the calendar year following the calendar year in which the Change of Control occurs;
|
(C)
|
A lump sum payment equal to the pro-rata cash bonus for the year in which the Termination Date occurs which shall be paid (i) when such annual bonuses are paid to non-terminated employees (or, if later, upon the satisfaction of all conditions for the payment of benefits hereunder, but in no event shall such payment occur later than March 15 of the calendar year following the year in which the Change of Control occurs) and (ii) based on the actual attainment of the performance goals under the annual bonus plan for the year in which the Termination Date occurs;
|
(D)
|
If the Executive continues to receive health benefits (including, medical, prescription, dental, vision and health care reimbursement account benefits) pursuant to the Company’s health plans under COBRA and pays the full COBRA premiums, the Company will reimburse the Executive for the COBRA premiums paid for such benefits for the Executive and his family through COBRA (with the exception of any COBRA premiums paid for health care reimbursement account benefits), for the remainder of the Benefits Continuation Period, in accordance with the applicable plans, programs or policies, if any, of the Company or its successor, and on such terms applicable to comparably situated active employees during such period (which shall offset the Company’s COBRA obligation, if any); provided that the Executive may continue to receive health benefits pursuant to the Company’s health plans during a period of time in the Benefits Continuation Period during which the Executive would not otherwise be entitled to COBRA continuation coverage under Section 4980B of the Code if the Executive continues to pay premiums for such health benefits, and the Executive shall receive reimbursement for all premiums paid by the Executive for such continued health benefits on the date no later than December 31 of the calendar year immediately following the calendar year in which the applicable expenses have been incurred. If the Executive fails to accept available coverage from another employer or fails to notify the Company (or the Trustee) within thirty (30) days of the Executive’s eligibility to receive coverage under another employer’s plan, the Executive’s reimbursements under this Section 5(c)(iv)(D) shall immediately terminate and the Executive shall cease to be entitled to any such reimbursements under this Agreement and shall be required within three (3) months after such failure to reimburse the Company for the reimbursements paid to the Executive after such failure. In addition, the Executive agrees that the Company may offset against such reimbursement or deduct such reimbursement from any payments due to the Executive in full or partial payment of such reimbursement; provided that, no such offset shall be made in violation of Section 409A of the Code;
|
(E)
|
A lump sum payment equal to the value of the Company-sponsored outplacement program maintained by the Company immediately prior to the Change of Control, based on the Executive’s management level as of the Termination Date, which shall be paid within sixty (60) days following the Change of Control; provided that, if the sixtieth (60th) day following the Change of Control falls in the calendar year following the calendar year in which the Change of Control occurs, payment will not be made prior to the first day of the calendar year following the calendar year in which the Change of Control occurs; provided further that, if the Executive is a Specified Employee on the Termination Date, such amount
|
(F)
|
If the Executive is covered by any Company-sponsored executive life insurance program as of the Termination Date, the Company (or the Trustee) shall continue to pay for the Executive’s coverage until the end of the Severance Period. At the end of the Severance Period, the Executive will have thirty-one days (31) from the last day of the Severance Period to convert his life insurance coverage to an individual policy;
|
(G)
|
If the Executive is covered by any Company-sponsored supplemental long term disability insurance program as of the Termination Date, the Company (or the Trustee) shall continue to pay for the Executive’s coverage until the end of the Severance Period. At the end of the Severance Period, the Executive shall be entitled to keep this policy if he continues to pay the annual premiums; and
|
(H)
|
Any benefits or rights to which the Executive is entitled under any of the Company’s stock or equity plans in accordance with the terms and conditions of any such plans.
|
(I)
|
For the avoidance of doubt, no payments or benefits payable to the Executive pursuant to this Section 5(c)(iv) shall continue beyond the end of the second calendar year following the calendar year in which the Termination Date occurs.
|
(J)
|
The Executive shall not be entitled to any payments or benefits pursuant to this Section 5(c)(iv), unless prior to the Executive’s Termination Date, the Executive had given the Company notice of the circumstances forming the basis of termination for Good Reason and an opportunity to cure such circumstances in accordance with Sections 1(k) and (m).
|
(A)
|
Any Accrued Benefits payable as soon as practical after the Termination Date;
|
(B)
|
A lump sum payment equal to the Executive’s Base Salary multiplied by the Severance Multiple payable within sixty (60) days following the Termination Date; provided that, if the sixtieth (60th) day following the Termination Date falls in the calendar year following the calendar year in which the Termination Date occurs, payment will not be made prior to the first day of the calendar year following the calendar year in which the Termination Date occurs; provided further that, if the Executive is a Specified Employee on the Termination Date, any amounts payable under this Section 5(e)(i)(B) in excess of the Separation Pay Limit shall be paid to the Executive in a lump sum on the first day following the six (6) month anniversary of the Termination Date;
|
(C)
|
A lump sum payment equal to the Target Bonus multiplied by the Severance Multiple, payable on the Release Effective Date or as soon thereafter as is practicable, but no later than March 15 of the calendar year following the calendar year in which the Termination Date occurs;
|
(D)
|
A lump sum payment equal to the pro-rata cash bonus for the year in which the Termination Date occurs which shall be paid (i) when such annual bonuses are paid to non-terminated
|
(E)
|
If the Executive continues to receive health benefits (including, medical, prescription, dental, vision and health care reimbursement account benefits) pursuant to the Company’s health plans under COBRA and pays the full COBRA premiums, the Company will reimburse the Executive for the COBRA premiums paid for such benefits for the Executive and his family through COBRA (with the exception of any COBRA premiums paid for health care reimbursement account benefits), for the Benefits Continuation Period, in accordance with the applicable plans, programs or policies, if any, of the Company or its successor, and on such terms applicable to comparably situated active employees during such period (which shall offset the Company’s COBRA obligation, if any); provided that the Executive may continue to receive health benefits pursuant to the Company’s health plans during a period of time in the Benefits Continuation Period during which the Executive would not otherwise be entitled to COBRA continuation coverage under Section 4980B of the Code if the Executive continues to pay premiums for such health benefits, and the Executive shall receive reimbursement for all premiums paid by the Executive for such continued health benefits on the date no later than December 31 of the calendar year immediately following the calendar year in which the applicable expenses have been incurred. If the Executive fails to accept available coverage from another employer or fails to notify the Company (or the Trustee) within thirty (30) days of Executive’s eligibility to receive coverage under another employer’s plan, the Executive’s reimbursements under this Section 5(e)(i)(E) shall immediately terminate and the Executive shall cease to be entitled to any such reimbursements under this Agreement and shall be required within three (3) months after such failure to reimburse the Company for the reimbursements paid to the Executive after such failure. In addition, the Executive agrees that the Company may offset against such reimbursement or deduct such reimbursement from any payments due to the Executive in full or partial payment of such reimbursement; provided that, no such offset shall be made in violation of Section 409A of the Code;
|
(F)
|
The Company (or the Trustee) shall pay to the Executive in a lump sum an amount equal to the value of the Company-sponsored outplacement program maintained by the Company immediately prior to the Change of Control, based on the Executive’s management level as of the Termination Date, which shall be paid within sixty (60) days following the Termination Date; provided that, if the sixtieth (60th) day following the Termination Date falls in the calendar year following the calendar year in which the Termination Date occurs, payment will not be made prior to the first day of the calendar year following the calendar year in which the Termination Date occurs; provided further that, if the Executive is a Specified Employee on the Termination Date, such amount shall be paid on the first day following the six (6) month anniversary of the Termination Date;
|
(G)
|
If the Executive is covered by any Company-sponsored executive life insurance program as of the Termination Date, the Company (or the Trustee) shall continue to pay for the Executive’s coverage until the end of the Severance Period. At the end of the Severance Period, the Executive will have thirty-one (31) days from the last day of the Severance Period to convert his life insurance coverage to an individual policy;
|
(H)
|
If the Executive is covered by any Company-sponsored supplemental long term disability insurance program as of the Termination Date, the Company (or the Trustee) shall continue to pay for the Executive’s coverage until the end of the Severance Period. At the end of the Severance Period, the Executive shall be entitled to keep this policy if he continues to pay the annual premiums; and
|
(I)
|
Any benefits or rights to which the Executive is entitled under any of the Company’s stock or equity plans in accordance with the terms and conditions of any such plans.
|
(A)
|
Reduction in Payments. In the event any Payment (as defined below) would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, the Company shall reduce (but not below zero) the aggregate present value of the Payments under this Agreement to the Reduced Amount (as defined below), if reducing the Payments under this Agreement will provide the Executive with a greater net after-tax amount than would be the case if no reduction was made.
|
(B)
|
Determining Net After-Tax Amounts. In determining whether a reduction in Payments under this Agreement will provide the Executive with a greater net after-tax amount, the following computations shall be made:
|
a.
|
The net after-tax benefit to the Executive without any reduction in Payments shall be determined by reducing the Payments by the amount of federal, state, local and other applicable taxes (including the Excise Tax (as defined below)) applicable to the Payments. For these purposes, the tax rates shall be determined using the maximum marginal rate applicable to such Executive for each year in which the Payments shall be paid.
|
b.
|
The net after-tax benefit to the Executive with a reduction in the Payments to the Reduced Amount shall be determined by applying the tax rates under Section 5(e)(iii)(B)(a), with the exception of the Excise Tax.
|
(C)
|
Reduction Methodology. In the event a reduction in the Payments to the Reduced Amount will provide the Executive with a greater net after-tax amount, the following shall apply:
|
a.
|
Reduction of payments. The reduction in the Payments shall be made first by reducing as applicable, but not below zero, the cash payments under Sections 5(c)(i)(B), 5(c)(iv)(A), and 5(e)(i)(B). In the event that such payments are installment payments, each such installment payment shall be reduced pro-rata. The cash payments under Sections 5(c)(i)(C), 5(c)(i)(D), 5(c)(iv)(B), 5(c)(iv)(C), 5(e)(i)(C) and 5(e)(i)(D) shall be reduced next, as applicable, but not below zero. In the event that following reduction of the amounts set forth in the preceding sentence, additional amounts payable to the Executive must be reduced, any payments due to the Executive pursuant to the Company’s equity plans shall be reduced on a pro-rata basis, but not below zero.
|
b.
|
Restrictions. Only amounts payable under this Agreement shall be reduced pursuant to this Section 5(e)(iii). Any reduction shall be made in a manner consistent with the requirements of Section 409A of the Code.
|
(D)
|
Definitions. For purposes of Section 5(e)(iii), the following definitions shall apply.
|
a.
|
“Payment” shall mean an amount that is received by the Executive or paid by the Company on his behalf, or represents any property, or any other benefit provided to the Executive under this Agreement or under any other plan, arrangement or agreement with the Company or any other person, and such amount is treated as contingent on a change in control, as provided under Section 280G of the Code.
|
b.
|
“Reduced Amount” shall mean an amount, as determined under Section 280G of the Code, which does not cause any Payment to be subject to the Excise Tax.
|
c.
|
“Excise Tax” shall mean the excise tax imposed under Section 4999 of the Code.
|
(E)
|
Determination of Reduction. All determinations required to be made under this Section 5(e)(iii) shall be made by a nationally recognized accounting (or compensation and benefits consulting ) firm selected by the Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within ten (10)
|
8.
|
NO ASSIGNMENTS.
|
9.
|
NOTICE.
|
10.
|
RESTRICTIVE COVENANTS.
|
12.
|
ATTORNEY’S FEES.
|
13.
|
LIABILITY INSURANCE.
|
14.
|
WITHHOLDING.
|
15.
|
SECTION 409A of the Code
|
17.
|
EFFECTIVE DATE; ENTIRE AGREEMENT; TERM
|
19.
|
SEVERABILITY.
|
20.
|
COUNTERPARTS.
|
21.
|
MISCELLANEOUS.
|
22.
|
GENDER.
|
Ryder System, Inc. and Subsidiaries
|
||||||||||||||
Ratio of Earnings to Fixed Charges
|
||||||||||||||
Continuing Operations
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||
|
Years Ended
|
|||||||||||||
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|||||
EARNINGS:
|
|
|
|
|
|
|
|
|
|
|||||
Earnings before income taxes
|
369,014
|
|
|
338,267
|
|
|
469,215
|
|
|
406,381
|
|
|
313,786
|
|
Fixed charges
|
181,460
|
|
|
187,291
|
|
|
194,635
|
|
|
190,083
|
|
|
183,722
|
|
Add: Amortization of capitalized interest
|
589
|
|
|
535
|
|
|
571
|
|
|
599
|
|
|
1,489
|
|
Less: Interest capitalized
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Earnings available for fixed charges (A)
|
551,063
|
|
|
526,093
|
|
|
664,421
|
|
|
597,063
|
|
|
498,997
|
|
|
|
|
|
|
|
|
|
|
|
|||||
FIXED CHARGES:
|
|
|
|
|
|
|
|
|
|
|||||
Interest and other financial charges
|
140,729
|
|
|
144,960
|
|
|
150,784
|
|
|
147,843
|
|
|
140,349
|
|
Portion of rents representing interest expense
|
40,731
|
|
|
42,331
|
|
|
43,852
|
|
|
42,240
|
|
|
43,373
|
|
Total fixed charges (B)
|
181,460
|
|
|
187,291
|
|
|
194,636
|
|
|
190,083
|
|
|
183,722
|
|
|
|
|
|
|
|
|
|
|
|
|||||
RATIO OF EARNINGS TO FIXED CHARGES (A) / (B)
|
3.04x
|
|
2.81x
|
|
3.41x
|
|
3.14x
|
|
2.72x
|
|||||
|
|
|
|
|
|
|
|
|
|
Name of Subsidiary
|
State or Country of Incorporation or Organization
|
3241290 Nova Scotia Company
|
Nova Scotia
|
Associated Ryder Capital Services, Inc.
|
Florida
|
Bullwell Trailer Solutions Limited
|
England
|
CRSA Global Logistics (HK) Limited
|
Hong Kong
|
CRTS Logistica Automotiva S.A.
|
Brazil
|
Euroway Vehicle Contracts Limited
|
England
|
Euroway Vehicle Engineering Limited
|
England
|
Euroway Vehicle Management Limited
|
England
|
Euroway Vehicle Rental Limited
|
England
|
Far East Freight, Inc.
|
Florida
|
Hill Hire Limited
|
England
|
Network Vehicle Central, Inc.
|
Florida
|
Network Vehicle Central, LLC
|
Florida
|
Road Master, Limited
|
Bermuda
|
RSI Holding B.V.
|
Netherlands
|
RSI Purchase Corp.
|
Delaware
|
RTI Argentina S.A.
|
Argentina
|
RTRC Finance LP
|
Canada
|
RTR Holdings (B.V.I.) Limited
|
British Virgin Islands
|
RTR Leasing I, Inc.
|
Delaware
|
RTR Leasing II, Inc.
|
Delaware
|
RTR Next Gen Sales, LLC
|
Florida
|
Ryder Argentina S.A.
|
Argentina
|
Ryder Ascent Logistics Pte Ltd.
|
Singapore
|
Ryder Asia Pacific Holdings B.V.
|
Netherlands
|
Ryder Capital (Barbados) SRL
|
Barbados
|
Ryder Canadian Financing US LLC
|
Delaware
|
Ryder Capital Ireland Holdings II LLC
|
Delaware
|
Ryder Capital Luxembourg Limited, S.A.R.L.
|
England
|
Ryder Capital Luxembourg Limited, Corp.
|
Florida
|
Ryder Capital S. de R.L. de C.V.
|
Mexico
|
Ryder Capital Services Corporation
|
Delaware
|
Ryder Capital UK Holdings LLP
|
England
|
Ryder Chile Sistemas Intergrados de Logistica Limitada
(1)
|
Chile
|
Ryder CRSA Logistics (HK) Limited
|
Hong Kong
|
Ryder de Mexico S. de R.L. de C.V.
|
Mexico
|
Ryder Dedicated Logistics, Inc.
|
Delaware
|
Ryder Deutschland GmbH
|
Germany
|
Ryder Distribution Services Limited
|
England
|
Ryder do Brasil Ltda.
|
Brazil
|
Ryder Energy Distribution Corporation
|
Florida
|
Ryder European B.V.
|
Netherlands
|
Ryder Europe Operations B.V.
|
Netherlands
|
Ryder Fleet Products, Inc.
|
Tennessee
|
Ryder Fuel Services, LLC
|
Florida
|
Ryder Funding LP
|
Delaware
|
Ryder Funding II LP
|
Delaware
|
Ryder Global Services, LLC
|
Florida
|
Ryder Hungary Logistics LLC
|
Hungary
|
Ryder Integrated Logistics, Inc.
(2)
|
Delaware
|
Ryder Integrated Logistics of California Contractors, LLC
|
Delaware
|
Ryder Integrated Logistics of Texas, LLC
|
Texas
|
Ryder International Acquisition Corp.
|
Florida
|
Ryder International, Inc.
|
Florida
|
Ryder Limited
|
England
|
Ryder Logistica Ltda.
|
Brazil
|
Ryder Logistics (Shanghai) Co., Ltd.
|
China
|
Ryder Mauritius Holdings, Ltd.
|
Mauritius
|
Ryder Mexican Holding B.V.
|
Netherlands
|
Ryder Mexican Investments I LP
|
Delaware
|
Ryder Mexican Investments II LP
|
Delaware
|
Ryder Mexicana, S. de R.L. de C.V.
|
Mexico
|
Ryder Offshore Holdings III LLC
|
Delaware
|
Ryder Pension Fund Limited
|
England
|
Ryder Puerto Rico, Inc.
|
Delaware
|
Ryder Purchasing LLC
|
Delaware
|
Ryder Receivable Funding III, L.L.C.
|
Delaware
|
Ryder Risk Solutions, LLC
|
Florida
|
Ryder Services Corporation
(3)
|
Florida
|
Ryder Servicios do Brasil Ltda.
|
Brazil
|
Ryder Soluciones S. de R.L. de C.V.
|
Mexico
|
Ryder Singapore Pte Ltd.
|
Singapore
|
Ryder System B.V.
|
Netherlands
|
Ryder System Holdings (UK) Limited
|
England
|
Ryder Thailand I, LLC
|
Florida
|
Ryder Thailand II, LLC
|
Florida
|
Ryder Truck Rental Holdings Canada Ltd.
|
Canada
|
Ryder Truck Rental, Inc.
(4)
|
Florida
|
Ryder Truck Rental I LLC
|
Delaware
|
Ryder Truck Rental II LLC
|
Delaware
|
Ryder Truck Rental III LLC
|
Delaware
|
Ryder Truck Rental IV LLC
|
Delaware
|
Ryder Truck Rental I LP
|
Delaware
|
Ryder Truck Rental II LP
|
Delaware
|
(4)
|
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming: d/b/a Ryder Transportation Services
|
|
/s/ John M. Berra
|
|
/s/ Robert J. Eck
|
|
|
John M. Berra
|
|
Robert J. Eck
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Robert A. Hagemann
|
|
/s/ Tamara L. Lundgren
|
|
|
Robert A Hagemann
|
|
Tamara L. Lundgren
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Michael F. Hilton
|
|
/s/ E. Follin Smith
|
|
|
Michael F. Hilton
|
|
E. Follin Smith
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Luis P. Nieto, Jr.
|
|
|
|
|
Luis P. Nieto, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Abbie J. Smith
|
|
|
|
|
Abbie J. Smith
|
|
|
|
|
|
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/s/ Hansel E. Tookes II
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Hansel E. Tookes, II
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1.
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I have reviewed this annual report on Form 10-K of Ryder System, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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February 16, 2018
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/s/ Robert E. Sanchez
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Robert E. Sanchez
President and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of Ryder System, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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February 16, 2018
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/s/ Art A. Garcia
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Art A. Garcia
Executive Vice President and Chief Financial Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Robert E. Sanchez
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Robert E. Sanchez
President and Chief Executive Officer
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February 16, 2018
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/s/ Art A. Garcia
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Art A. Garcia
Executive Vice President and Chief Financial Officer
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February 16, 2018
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