Segment Reporting

9 Months Ended

Sep. 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 nine months endedSeptember 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 September 30, 2014
Revenue from external customers	$	1,069,333	617,817	—		1,687,150
Inter-segment revenue	117,589		—	(117,589	)	—
Total revenue	$	1,186,922	617,817	(117,589	)	1,687,150
Segment EBT	$	120,980	36,152	(9,564	)	147,568
Unallocated CSS						(13,564		)
Non-operating pension costs						(2,455		)
Restructuring and other charges, net and other items (1)						(1,828		)
Earnings from continuing operations before income taxes						$	129,721
Segment capital expenditures paid (2), (3)	$	470,552	7,484	—		478,036
Unallocated CSS						7,915
Capital expenditures paid						$	485,951
For the three months ended September 30, 2013
Revenue from external customers	$	1,023,790	610,750	—		1,634,540
Inter-segment revenue	114,427		—	(114,427	)	—
Total revenue	$	1,138,217	610,750	(114,427	)	1,634,540
Segment EBT	$	96,428	39,607	(9,134	)	126,901
Unallocated CSS						(10,053		)
Non-operating pension costs						(5,090		)
Restructuring and other charges, net and other items (1)						(360		)
Earnings from continuing operations before income taxes						$	111,398
Segment capital expenditures paid (2), (3)	$	538,453	3,896	—		542,349
Unallocated CSS						5,361
Capital expenditures paid						$	547,710

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(1) See Note (O), "Other Items Impacting Comparability," for additional information.

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

(3) Excludes acquisition payments of $8.1 million and $0.5 million during the three months ended September 30, 2014 and 2013, respectively.

	FMS		SCS	Eliminations		Total
	(In thousands)
For the nine months ended September 30, 2014
Revenue from external customers	$	3,139,721	1,842,737	—		4,982,458
Inter-segment revenue	363,510		—	(363,510	)	—
Total revenue	$	3,503,231	1,842,737	(363,510	)	4,982,458
Segment EBT	$	311,480	88,664	(29,715	)	370,429
Unallocated CSS						(36,518		)
Non-operating pension costs						(7,313		)
Restructuring and other charges, net and other items (1)						(1,828		)
Earnings from continuing operations before income taxes						$	324,770
Segment capital expenditures paid (2), (3)	$	1,661,929	15,605	—		1,677,534
Unallocated CSS						63,639
Capital expenditures paid						$	1,741,173
For the nine months ended September 30, 2013
Revenue from external customers	$	3,017,150	1,784,406	—		4,801,556
Inter-segment revenue	342,057		—	(342,057	)	—
Total revenue	$	3,359,207	1,784,406	(342,057	)	4,801,556
Segment EBT	$	245,840	97,011	(25,782	)	317,069
Unallocated CSS						(32,012		)
Non-operating pension costs						(15,333		)
Restructuring and other recoveries, net and other items (1)						1,544
Earnings from continuing operations before income taxes						$	271,268
Segment capital expenditures paid (2), (3)	$	1,462,095	14,713	—		1,476,808
Unallocated CSS						19,016
Capital expenditures paid						$	1,495,824

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(1) See Note (O), "Other Items Impacting Comparability," for additional information.

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

(3) Excludes acquisition payments of $9.8 million and $1.9 million during the nine months ended September 30, 2014, and 2013, respectively.