Segment Reporting

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

Our primary measurement of segment financial performance, defined as segment “Earnings Before Tax” (EBT) from continuing operations, includes an allocation of Central Support Services (CSS) and excludes non-operating pension costs and certain professional fees associated with cost savings initiatives. Fleet Management Solutions (FMS) EBT, Dedicated Transportation Solutions (DTS) EBT and Supply Chain Solutions (SCS) EBT are our primary measures of segment performance. 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 FMS segment leases revenue earning equipment and provides fuel, maintenance and other ancillary services to the DTS and 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 nine months ended September 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 September 30, 2016
Revenue from external customers	$	1,046,599	260,921	416,898	—		1,724,418
Inter-segment revenue	108,412		—	—	(108,412	)	—
Total revenue	$	1,155,011	260,921	416,898	(108,412	)	1,724,418
Segment EBT	$	112,282	17,587	30,954	(12,606	)	148,217
Unallocated CSS							(9,313		)
Non-operating pension costs							(7,206		)
Earnings from continuing operations before income taxes							$	131,698
Segment capital expenditures paid (1)	$	375,779	1,060	8,181	—		385,020
Unallocated CSS capital expenditures paid							6,157
Capital expenditures paid							$	391,177
For the three months ended September 30, 2015
Revenue from external customers	$	1,054,840	226,921	387,305	—		1,669,066
Inter-segment revenue	102,738		—	—	(102,738	)	—
Total revenue	$	1,157,578	226,921	387,305	(102,738	)	1,669,066
Segment EBT	$	126,433	13,296	26,573	(11,998	)	154,304
Unallocated CSS							(10,070		)
Non-operating pension costs							(4,780		)
Other items (2)							446
Earnings from continuing operations before income taxes							$	139,900
Segment capital expenditures paid (1)	$	740,049	1,175	4,195	—		745,419
Unallocated CSS capital expenditures paid							12,657
Capital expenditures paid							$	758,076

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

(2) Consists of pension-related adjustments and certain professional fees associated with cost savings initiatives.

	FMS		DTS	SCS	Eliminations		Total
	(In thousands)
For the nine months ended September 30, 2016
Revenue from external customers	$	3,086,144	764,025	1,207,665	—		5,057,834
Inter-segment revenue	318,308		—	—	(318,308	)	—
Total revenue	$	3,404,452	764,025	1,207,665	(318,308	)	5,057,834
Segment EBT	$	306,387	48,327	79,121	(37,116	)	396,719
Unallocated CSS							(30,193		)
Non-operating pension costs							(21,691		)
Pension-related adjustments (1)							(7,650		)
Earnings from continuing operations before income taxes							$	337,185
Segment capital expenditures paid (2)	$	1,438,104	1,940	52,643	—		1,492,687
Unallocated CSS capital expenditures paid							18,672
Capital expenditures paid							$	1,511,359
For the nine months ended September 30, 2015
Revenue from external customers	$	3,080,756	663,094	1,155,300	—		4,899,150
Inter-segment revenue	313,321		—	—	(313,321	)	—
Total revenue	$	3,394,077	663,094	1,155,300	(313,321	)	4,899,150
Segment EBT	$	338,603	34,701	69,961	(35,120	)	408,145
Unallocated CSS							(32,936		)
Non-operating pension costs							(14,351		)
Other items (3)							(3,334		)
Earnings from continuing operations before income taxes							$	357,524
Segment capital expenditures paid (2)	$	2,040,334	2,530	13,752	—		2,056,616
Unallocated CSS capital expenditures paid							30,678
Capital expenditures paid							$	2,087,294

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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) Consists of pension-related adjustments and certain professional fees associated with cost savings initiatives.