Segment Reporting

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

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 and professional fees. 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 segment and, ultimately, to hold leadership of each segment accountable for their allocated share of CSS costs. Certain costs are not attributable to any segment and remain unallocated in CSS, including costs for investor relations, public affairs and certain executive compensation.

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

The following tables set forth financial information for each of our segments and provide a reconciliation between segment EBT and earnings from continuing operations before income taxes for the three and six months ended June 30, 2016 and 2015. Segment results are not necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented.

	FMS		DTS	SCS	Eliminations		Total
	(In thousands)
For the three months ended June 30, 2016
Revenue from external customers	$	1,043,430	258,262	402,052	—		1,703,744
Inter-segment revenue	108,083		—	—	(108,083	)	—
Total revenue	$	1,151,513	258,262	402,052	(108,083	)	1,703,744
Segment EBT	$	111,184	16,472	28,371	(12,766	)	143,261
Unallocated CSS							(11,215		)
Non-operating pension costs							(7,617		)
Pension-related charge (1)							(7,650		)
Earnings from continuing operations before income taxes							$	116,779
Segment capital expenditures paid (2)	$	502,040	363	37,139	—		539,542
Unallocated CSS							5,609
Capital expenditures paid							$	545,151
For the three months ended June 30, 2015
Revenue from external customers	$	1,042,476	223,514	396,941	—		1,662,931
Inter-segment revenue	106,873		—	—	(106,873	)	—
Total revenue	$	1,149,349	223,514	396,941	(106,873	)	1,662,931
Segment EBT	$	122,452	12,435	27,699	(11,588	)	150,998
Unallocated CSS							(10,924		)
Non-operating pension costs							(4,688		)
Professional fees (3)							(1,939		)
Earnings from continuing operations before income taxes							$	133,447
Segment capital expenditures paid	$	761,542	646	3,570	—		765,758
Unallocated CSS							10,218
Capital expenditures paid							$	775,976

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(1) During the second quarter of 2016, we determined that certain pension benefit improvements made in 2009 were not fully reflected in our projected benefit obligation. We recognized a charge of $7.7 million related to these benefit improvements.

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

(3) Charges related to professional fees associated with cost savings initiatives.

	FMS		DTS	SCS	Eliminations		Total
	(In thousands)
For the six months ended June 30, 2016
Revenue from external customers	$	2,039,545	503,104	790,767	—		3,333,416
Inter-segment revenue	209,896		—	—	(209,896	)	—
Total revenue	$	2,249,441	503,104	790,767	(209,896	)	3,333,416
Segment EBT	$	194,105	30,740	48,167	(24,510	)	248,502
Unallocated CSS							(20,880		)
Non-operating pension costs							(14,485		)
Pension-related charge (1)							(7,650		)
Earnings from continuing operations before income taxes							$	205,487
Segment capital expenditures paid (2)	$	1,062,325	880	44,462	—		1,107,667
Unallocated CSS							12,515
Capital expenditures paid							$	1,120,182
For the six months ended June 30, 2015
Revenue from external customers	$	2,025,916	436,173	767,995	—		3,230,084
Inter-segment revenue	210,583		—	—	(210,583	)	—
Total revenue	$	2,236,499	436,173	767,995	(210,583	)	3,230,084
Segment EBT	$	212,170	21,405	43,388	(23,122	)	253,841
Unallocated CSS							(22,866		)
Non-operating pension costs							(9,571		)
Professional fees (3)							(3,780		)
Earnings from continuing operations before income taxes							$	217,624
Segment capital expenditures paid (2)	$	1,300,285	1,355	9,557	—		1,311,197
Unallocated CSS							18,021
Capital expenditures paid							$	1,329,218

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(1) During the second quarter of 2016, we determined that certain pension benefit improvements made in 2009 were not fully reflected in our projected benefit obligation. We recognized a charge of $7.7 million related to these benefit improvements.

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

(3) Charges related to professional fees associated with cost savings initiatives.