Segment Reporting

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

Our operating segments are aggregated into reportable business segments based upon similar economic characteristics, products, services, customers and delivery methods. We operate in two reportable business segments: (1) FMS, which provides full service leasing, contract maintenance, contract-related maintenance and commercial rental of trucks, tractors and trailers to customers, principally in the U.S., Canada and the U.K.; and (2) SCS, which provides comprehensive supply chain consulting including distribution and transportation services in North America and Asia. The SCS segment also provides dedicated services, which includes vehicles and drivers as part of a dedicated transportation solution in the U.S.

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

Our FMS segment leases revenue earning equipment and provides fuel, maintenance and other ancillary services to the SCS segment. Inter-segment revenue and EBT are accounted for at rates similar to those executed with third parties. EBT related to inter-segment equipment and services billed to customers (equipment contribution) are included in both FMS and SCS and then eliminated (presented as “Eliminations”).

The following tables set forth financial information for each of our business segments and provides a reconciliation between segment EBT and earnings from continuing operations before income taxes for the three and six months endedJune 30, 2013 and 2012. Segment results are not necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented.

	FMS		SCS	Eliminations		Total
	(In thousands)
For the three months ended June 30, 2013
Revenue from external customers	$	1,006,822	597,177	—		1,603,999
Inter-segment revenue	114,436		—	(114,436	)	—
Total revenue	$	1,121,258	597,177	(114,436	)	1,603,999
Segment EBT	$	88,667	32,683	(8,405	)	112,945
Unallocated CSS						(10,584		)
Non-operating pension costs						(4,999		)
Earnings from continuing operations before income taxes						$	97,362
Segment capital expenditures paid (1), (2)	$	517,131	5,017	—		522,148
Unallocated CSS						5,912
Capital expenditures paid						$	528,060
For the three months ended June 30, 2012
Revenue from external customers	$	993,606	570,254	—		1,563,860
Inter-segment revenue	107,299		—	(107,299	)	—
Total revenue	$	1,100,905	570,254	(107,299	)	1,563,860
Segment EBT	$	76,651	30,401	(7,246	)	99,806
Unallocated CSS						(11,193		)
Non-operating pension costs						(7,702		)
Restructuring and other charges, net and other items						(7,142		)
Earnings from continuing operations before income taxes						$	73,769
Segment capital expenditures paid (1), (2)	$	721,954	5,599	—		727,553
Unallocated CSS						5,463
Capital expenditures paid						$	733,016

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(1) Excludes revenue earning equipment acquired under capital leases.

(2) Excludes acquisition payments of $0.4 million during the three months ended June 30, 2012.

	FMS		SCS	Eliminations		Total
	(In thousands)
For the six months ended June 30, 2013
Revenue from external customers	$	1,993,360	1,173,656	—		3,167,016
Inter-segment revenue	227,630		—	(227,630	)	—
Total revenue	$	2,220,990	1,173,656	(227,630	)	3,167,016
Segment EBT	$	149,412	56,494	(15,738	)	190,168
Unallocated CSS						(21,959		)
Non-operating pension costs						(10,243		)
Restructuring and other charges, net and other items						1,904
Earnings from continuing operations before income taxes						$	159,870
Segment capital expenditures paid (1), (2)	$	923,642	10,817	—		934,459
Unallocated CSS						13,655
Capital expenditures paid						$	948,114
For the six months ended June 30, 2012
Revenue from external customers	$	1,957,969	1,142,167	—		3,100,136
Inter-segment revenue	214,327		—	(214,327	)	—
Total revenue	$	2,172,296	1,142,167	(214,327	)	3,100,136
Segment EBT	$	127,334	52,272	(13,727	)	165,879
Unallocated CSS						(20,699		)
Non-operating pension costs						(15,706		)
Restructuring and other charges, net and other items						(8,007		)
Earnings from continuing operations before income taxes						$	121,467
Segment capital expenditures paid (1), (2)	$	1,185,560	8,436	—		1,193,996
Unallocated CSS						9,989
Capital expenditures paid						$	1,203,985

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(1) Excludes revenue earning equipment acquired under capital leases.

(2) Excludes acquisition payments of $1.4 million and $2.4 million during the six months ended June 30, 2013 and 2012, respectively.