DEBT

6 Months Ended

Jun. 30, 2019



	Weighted-Average Interest Rate
	June 30, 2019	December 31, 2018	Maturities	June 30, 2019			December 31, 2018
				(In thousands)
Short-term debt and current portion of long-term debt:
Short-term debt	1.60%	2.69%		$	238,370		81,522
Current portion of long-term debt, including finance leases				814,849			855,609
Total short-term debt and current portion of long-term debt				1,053,219			937,131
Long-term debt:
U.S. commercial paper ⁽¹⁾	2.69%	2.78%	2023	754,864			454,397
Canadian commercial paper ⁽¹⁾	2.00%	2.28%	2023	106,583			123,491
Trade receivables program	—%	3.15%	2020	—			200,000
Global revolving credit facility	2.71%	2.25%	2023	6,089			12,581
Unsecured U.S. notes — Medium-term notes⁽¹⁾⁽²⁾	3.28%	3.22%	2019-2025	5,413,106			4,853,496
Unsecured U.S. obligations	3.40%	3.50%	2024	200,000			50,000
Unsecured foreign obligations	2.98%	1.61%	2021-2024	65,276			216,719
Asset-backed U.S. obligations ⁽³⁾	2.49%	2.37%	2019-2026	866,093			627,707
Finance lease obligations	7.96%	7.97%	2019-2073	44,353			47,452
Total long-term debt				7,456,364			6,585,843
Debt issuance costs				(22,455		)	(18,088	)
				7,433,909			6,567,755
Current portion of long-term debt, including finance leases				(814,849		)	(855,609	)
Long-term debt				6,619,060			5,712,146
Total debt				$	7,672,279		6,649,277

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(1)	Amounts are net of unamortized original issue discounts of $7 million at June 30, 2019 and December 31, 2018, respectively.

(2)

Amounts are inclusive of fair market value adjustments on notes subject to hedging of $1 million and $10 million at June 30, 2019 and December 31, 2018, respectively. The notional amount of the executed interest rate swaps designated as fair value hedges was $625 million and $725 million at June 30, 2019 and December 31, 2018, respectively. Refer to Note 8, "Derivatives," for additional information.


(3)	Asset-backed U.S. obligations are related to financing transactions backed by a portion of our revenue earning equipment.

We maintain a $1.4 billion global revolving credit facility with a syndicate of twelve lending institutions led by Bank of America N.A., BNP Paribas, Lloyds Bank Plc, Mizuho Bank, Ltd., MUFG Bank, Ltd., Royal Bank of Canada, U.S. Bank N.A. and Wells Fargo Bank, N.A. The facility matures in September 2023. The agreement provides for annual facility fees that range from 7.5 basis points to 20 basis points based on Ryder's long-term credit ratings. The annual facility fee is currently 10 basis points, which applies to the total facility size of $1.4 billion.

The credit facility is primarily used to finance working capital but can also be used to issue up to $75 million in letters of credit (there were no letters of credit outstanding against the facility at June 30, 2019). At our option, the interest rate on borrowings under the credit facility is based on LIBOR, prime, federal funds or local equivalent rates. The credit facility contains no provisions limiting its availability in the event of a material adverse change to Ryder’s business operations; however, the credit facility does contain standard representations and warranties, events of default, cross-default provisions and certain affirmative and negative covenants.

In order to maintain availability of funding, we must maintain a ratio of debt to consolidated net worth of less than or equal to 300%. Net worth, as defined in the credit facility, represents shareholders' equity excluding any accumulated other comprehensive income or loss associated with our pension and other postretirement plans. The ratio at June 30, 2019, was 209%. At June 30, 2019, $501 million was available under the credit facility.

Our global revolving credit facility enables us to refinance short-term obligations on a long-term basis. Short-term commercial paper obligations not required for working capital needs are classified as long-term as we have both the intent and ability to refinance on a long-term basis. In addition, we have the intent and ability to refinance the current portion of certain long-term debt on a long-term basis. At June 30, 2019, we classified $861 million of short-term commercial paper and $400 million of the current portion of long-term debt as long-term debt. At December 31, 2018, we classified $578 million of short-term commercial paper, $200 million of trade receivables borrowings, $250 million of the current portion of long-term debt and $50 million of short-term debt as long-term debt.

In May 2019, we issued $550 million of unsecured medium-term notes maturing in June 2022. In February 2019, we issued $600 million of unsecured medium-term notes maturing in March 2024. The proceeds from these notes were used to pay off maturing debt and for general corporate purposes. If these notes are downgraded below investment grade following, and as a result of, a change in control, the note holders can require us to repurchase all or a portion of the notes at a purchase price equal to 101% of principal value plus accrued and unpaid interest.

In the second quarter of 2019, we executed a $50 million bank term loan maturing in April 2024 in one of our Canadian subsidiaries. In the first quarter of 2019, we executed two $100 million bank term loans maturing in February and March of 2024. The proceeds from these loans were used to pay off maturing debt and for general corporate purposes.

In May 2019, we received $298 million from financing transactions backed by a portion of our revenue earning equipment. The proceeds from these transactions were used for general corporate purposes. We have provided end of term guarantees for the residual value of the revenue earning equipment in these transactions. The transaction proceeds, along with the end of term residual value guarantees, have been included within "asset-backed U.S. obligations" in the preceding table.

We have a trade receivables purchase and sale program, pursuant to which we sell certain of our domestic trade accounts receivable to a bankruptcy remote, consolidated subsidiary of Ryder, that in turn sells, on a revolving basis, an ownership interest in certain of these accounts receivable to a committed purchaser. The subsidiary is considered a VIE and is consolidated based on our control of the entity’s activities. We use this program to provide additional liquidity to fund our operations, particularly when it is cost effective to do so. The costs under the program may vary based on changes in interest rates. The available proceeds that may be received under the program are limited to $225 million. If no event occurs that causes early termination, the 364-day program will expire on June 11, 2020. The program contains provisions restricting its availability in the event of a material adverse change to our business operations or the collectibility of the collateralized receivables. Sales of receivables under this program are accounted for as secured borrowings based on our continuing involvement in the transferred assets. No amounts were outstanding under the program at June 30, 2019. At December 31, 2018, $200 million was outstanding under the program.

At June 30, 2019 and December 31, 2018, we had letters of credit and surety bonds outstanding totaling $373 million and $375 million, respectively, which primarily guarantee the payment of insurance claims.

The fair value of total debt (excluding capital lease and asset-backed U.S. obligations) at June 30, 2019 and December 31, 2018, was approximately $6.89 billion and $5.97 billion, respectively. For publicly-traded debt, estimates of fair value were based on market prices. For other debt, fair value was estimated based on a model-driven approach using rates currently available to us for debt with similar terms and remaining maturities. The fair value measurements of our publicly-traded debt and other debt were classified within Level 2 of the fair value hierarchy. The carrying amounts reported in the Consolidated Condensed Balance Sheets for “Cash and cash equivalents,” “Receivables, net” and “Accounts payable” approximate fair value because of the immediate or short-term maturities of these financial instruments.