XML 31 R16.htm IDEA: XBRL DOCUMENT v3.10.0.1
Revenue Earning Equipment, Net
12 Months Ended
Dec. 31, 2018
Revenue Earning Equipment [Abstract]  
REVENUE EARNING EQUIPMENT, NET
REVENUE EARNING EQUIPMENT, NET
 
 
Estimated
Useful
Lives
 
December 31, 2018
 
December 31, 2017
Cost
 
Accumulated
Depreciation
 
Net (1)
 
Cost
 
Accumulated
Depreciation
 
Net (1)
(In years)
 
(In thousands)
Held for use:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ChoiceLease
 
3 — 12
 
$
10,955,447

 
(3,694,104
)
 
7,261,343

 
10,002,981

 
(3,367,431
)
 
6,635,550

Commercial rental
 
4.5 — 12
 
3,152,908

 
(1,047,346
)
 
2,105,562

 
2,616,706

 
(1,001,965
)
 
1,614,741

Held for sale
 
 
 
467,093

 
(336,028
)
 
131,065

 
403,229

 
(298,258
)
 
104,971

Total
 
 
 
$
14,575,448

 
(5,077,478
)
 
9,497,970

 
13,022,916

 
(4,667,654
)
 
8,355,262

_______________ 
(1)
Revenue earning equipment, net includes vehicles under capital leases of $18 million, less accumulated depreciation of $10 million, at December 31, 2018 and $29 million, less accumulated depreciation of $14 million, at December 31, 2017.

Depreciation expense was $1.29 billion, $1.16 billion and $1.10 billion in 2018, 2017 and 2016, respectively.
In 2018 and 2017, based on current and expected market conditions, we accelerated depreciation on certain classes of vehicles expected to be made available for sale through June 2020 and 2019, respectively. We recorded accelerated depreciation of $39 million in 2018 and $30 million in 2017.
Revenue earning equipment held for sale is stated at the lower of net book value or fair value less costs to sell. Losses on vehicles held for sale for which carrying values exceeded fair value are recognized at the time they arrive at our used truck centers and are presented within "Used vehicle sales, net" in the Consolidated Statements of Earnings. For revenue earning equipment held for sale, we stratify our fleet by vehicle type (trucks, tractors and trailers), weight class, age and other relevant characteristics and create classes of similar assets for analysis purposes. For a certain population of revenue earning equipment held for sale, fair value was determined based upon recent market prices obtained from our own sales experience for sales of each class of similar assets and vehicle condition. Expected declines in market prices were also considered when valuing the vehicles held for sale. These vehicles held for sale were classified within Level 3 of the fair value hierarchy. During 2018, 2017, and 2016, we recognized losses to reflect changes in fair value of $54 million, $58 million and $67 million, respectively.
The following table presents our assets that are measured at fair value on a nonrecurring basis and considered a Level 3 fair value measurement:
 
 
 
 
 
 
Total Losses (2)
 
 
December 31,
 
Year ended December 31,
 
 
2018
 
2017
 
2018
 
2017
Assets held for sale:
 
(In thousands)
 
(In thousands)
Revenue earning equipment: (1)
 
 
 
 
 
 
 
 
Trucks
 
$
44,325

 
33,208

 
$
40,220

 
30,812

Tractors
 
35,397

 
27,976

 
9,030

 
21,261

Trailers
 
1,507

 
2,100

 
4,478

 
5,992

Total assets at fair value
 
$
81,229

 
63,284

 
$
53,728

 
58,065

______________
(1)
Assets held for sale in the above table only include the portion of revenue earning equipment held for sale where net book values exceeded fair values and fair value adjustments were recorded. The net book value of assets held for sale not exceeding fair value was $50 million and $42 million as of December 31, 2018 and 2017, respectively.
(2)
Total losses represent fair value adjustments for all vehicles reclassified to held for sale throughout the period for which fair value was less than net book value.

The components of used vehicle sales, net were as follows:
 
Twelve months ended December 31,
 
2018
 
2017
 
2016
 
(In thousands)
Gains on vehicle sales, net
$
(31,989
)
 
(40,824
)
 
(68,387
)
Losses from fair value adjustments
53,728

 
58,065

 
67,415

Used vehicle sales, net
$
21,739

 
17,241

 
(972
)