SEGMENT REPORTING

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING Our primary measurement of segment financial performance, defined as segment "Earnings from continuing operations before income taxes" (EBT), includes an allocation of costs from Central Support Services (CSS) and excludes Non-operating pension costs, net, intangible amortization expense, and certain other items as discussed in Note 13, "Other Items Impacting Comparability." 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 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. In the first quarter of 2023, we revised our primary measure of segment financial performance to exclude intangible amortization expense. We revised the presentation of the prior period to conform to the current period presentation. This change did not have a material impact to segment results. 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.

The following table sets forth financial information for each of our segments and provides a reconciliation between segment EBT and Earnings from continuing operations before income taxes:

	Three months ended June 30,				Six months ended June 30,
(In millions)	2023		2022		2023		2022
Revenue:
Fleet Management Solutions:
ChoiceLease	$	781	$	763	$	1,557	$	1,527
Commercial rental	301		336		605		642
SelectCare and other	172		153		354		301
FMS Europe (1)	—		55		—		119
Fuel services revenue	205		314		446		561
Fleet Management Solutions	1,459		1,621		2,962		3,150
Supply Chain Solutions	1,179		1,174		2,380		2,263
Dedicated Transportation Solutions	440		450		894		875
Eliminations (2)	(194)		(211)		(400)		(400)
Total revenue	$	2,884	$	3,034	$	5,836	$	5,888
Earnings from continuing operations before income taxes:
Fleet Management Solutions	$	180	$	286	$	362	$	535
Supply Chain Solutions	76		62		93		105
Dedicated Transportation Solutions	33		23		62		43
Eliminations	(24)		(30)		(49)		(56)
	265		341		468		627
Unallocated Central Support Services	(20)		(24)		(35)		(40)
Intangible amortization expense (3)	(8)		(9)		(17)		(19)
Non-operating pension costs, net (4)	(10)		(2)		(20)		(5)
Other items impacting comparability, net (5)	(183)		32		(151)		27
Earnings from continuing operations before income taxes	$	44	$	338	$	245	$	590

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(1)Refer to Note 13, "Other Items Impacting Comparability" for further information on the FMS U.K. business exit.

(2)Represents the elimination of intercompany revenue in our FMS business segment.

(3)Included within "Selling, general and administrative expenses" in our Condensed Consolidated Statements of Earnings.

(4)Refer to Note 12, "Employee Benefit Plans," for a discussion on this item.

(5)Refer to Note 13, "Other Items Impacting Comparability," for a discussion of items excluded from our primary measure of segment performance.

Long-Lived Asset Impairment

During the first quarter of 2023, we identified impairment indicators primarily associated with specialized sortation and conveyor equipment used in the warehouse operations of a specific SCS customer. The impairment indicators were triggered by the credit deterioration and eventual bankruptcy of this customer in April 2023. These events resulted in a significant decline in the current forecasted operating cash flows associated with the equipment. We performed an asset impairment test under the income-based approach using a discounted cash flow method of valuation and determined we had a $30 million impairment. Events or changes in circumstances may occur in the near term resulting in a change in management’s estimates of undiscounted cash flows. Any such events or changes could ultimately impact the amount of the impairment loss. In the fourth quarter of 2022, we were notified by this customer of their intent to early terminate operations at one of their distribution centers and we recorded an impairment charge of $20 million in the fourth quarter of 2022.

The following table sets forth the capital expenditures paid for each of our segments:

	Three months ended June 30,				Six months ended June 30,
(In millions)	2023		2022		2023		2022
Fleet Management Solutions	$	971	$	561	$	1,592	$	1,112
Supply Chain Solutions	32		40		44		66
Dedicated Transportation Solutions	1		1		1		1
Central Support Services	7		9		15		16
Purchases of property and revenue earning equipment	$	1,011	$	611	$	1,652	$	1,195