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Segment Reporting
6 Months Ended
Jun. 30, 2014
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 management solutions 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 and the items discussed in Note (O), “Other Items Impacting Comparability.” CSS represents those costs incurred to support all business segments, including human resources, finance, corporate services, public affairs, information technology, health and safety, legal, marketing and corporate communications. The objective of the EBT measurement is to provide clarity on the profitability of each business segment and, ultimately, to hold leadership of each business segment and each operating segment within each business segment accountable for their allocated share of CSS costs. Certain costs are considered to be overhead not attributable to any segment and remain unallocated in CSS. Included among the unallocated overhead remaining within CSS are the costs for investor relations, public affairs and certain executive compensation.

Our FMS segment leases revenue earning equipment and provides fuel, maintenance and other ancillary services to the 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 ended June 30, 2014 and 2013. 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, 2014
 
 
 
 
 
 
Revenue from external customers
$
1,056,992

 
627,579

 

 
1,684,571

Inter-segment revenue
124,230

 

 
(124,230
)
 

Total revenue
$
1,181,222

 
627,579

 
(124,230
)
 
1,684,571

 
 
 
 
 
 
 
 
Segment EBT
$
113,509

 
30,728

 
(10,523
)
 
133,714

Unallocated CSS
 
 
 
 
 
 
(12,125
)
     Non-operating pension costs 
 
 
 
 
 
 
(1,544
)
Earnings from continuing operations before income taxes
 
 
 
 
 
 
$
120,045

 
 
 
 
 
 
 
 
Segment capital expenditures paid (1)
$
623,138

 
4,249

 

 
627,387

Unallocated CSS
 
 
 
 
 
 
49,113

Capital expenditures paid
 
 
 
 
 
 
$
676,500

 
 
 
 
 
 
 
 
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

 
32,968

 
(8,690
)
 
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)
$
517,131

 
5,017

 

 
522,148

Unallocated CSS
 
 
 
 
 
 
5,912

Capital expenditures paid
 
 
 
 
 
 
$
528,060

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

 
FMS
 
SCS
 
Eliminations
 
Total
 
(In thousands)
 
 
For the six months ended June 30, 2014
 
 
 
 
 
 
Revenue from external customers
$
2,070,388

 
1,224,920

 

 
3,295,308

Inter-segment revenue
245,921

 

 
(245,921
)
 

Total revenue
$
2,316,309

 
1,224,920

 
(245,921
)
 
3,295,308

 
 
 
 
 
 
 
 
Segment EBT
$
190,500

 
52,512

 
(20,151
)
 
222,861

Unallocated CSS
 
 
 
 
 
 
(22,954
)
     Non-operating pension costs 
 
 
 
 
 
 
(4,858
)
Earnings from continuing operations before income taxes
 
 
 
 
 
 
$
195,049

 
 
 
 
 
 
 
 
Segment capital expenditures paid (1), (2)
$
1,191,377

 
8,121

 

 
1,199,498

Unallocated CSS
 
 
 
 
 
 
55,724

Capital expenditures paid
 
 
 
 
 
 
$
1,255,222

 
 
 
 
 
 
 
 
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

 
57,404

 
(16,648
)
 
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

 ————————————
(1)
Excludes revenue earning equipment acquired under capital leases.
(2)
Excludes acquisition payments of $1.6 million and $1.4 million during the six months ended June 30, 2014, and 2013, respectively.