ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Wisconsin | 39-1258315 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) | |
3101 South Packerland Drive | ||
Green Bay, Wisconsin | 54313 | |
(Address of Registrant’s Principal Executive Offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Class B common stock, no par value | New York Stock Exchange |
Large accelerated filer | ý | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
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3PL | Provider of outsourced logistics services. In logistics and supply chain management, it means a company’s use of third-party businesses, the 3PL(s), to outsource elements of the company’s distribution, fulfillment, and supply chain management services. |
ASC | Accounting Standards Codification |
ASU | Accounting Standards Update |
CSA | Comprehensive Safety Analysis |
DOE | Department of Energy |
DOT | Department of Transportation |
EPA | United States Environmental Protection Agency |
FASB | Financial Accounting Standards Board |
FDIC | Federal Deposit Insurance Corporation |
FMCSA | Federal Motor Carrier Safety Administration |
FTFM | First to Final Mile operating segment |
GAAP | United States Generally Accepted Accounting Principles |
GDP | Gross Domestic Product. The total value of all the goods and services produced within a country's borders. |
HOS | Hours of Service |
IPO | Initial Public Offering |
LIBOR | London InterBank Offered Rate |
LTL | Less Than Load. LTL carriers pick up and deliver multiple shipments, each typically weighing less than 10,000 pounds, for multiple customers in a single trailer. |
NHTSA | National Highway Traffic Safety Administration |
NYSE | New York Stock Exchange |
SEC | United States Securities and Exchange Commission |
VTL | Van Truckload operating segment |
WSL | Watkins and Shepard Trucking, Inc. and Lodeso, Inc. These businesses were acquired simultaneously in June 2016. |
• | Economic and business risks inherent in the truckload and transportation industry, including competitive pressures pertaining to pricing, capacity, and service; |
• | Our ability to manage and implement effectively our growth and diversification strategies and cost saving initiatives; |
• | Our dependence on our reputation and the Schneider brand and the potential for adverse publicity, damage to our reputation, and the loss of brand equity; |
• | Risks related to demand for our service offerings; |
• | Risks associated with the loss of a significant customer or customers; |
• | Capital investments that fail to match customer demand or for which we cannot obtain adequate funding; |
• | Fluctuations in the price or availability of fuel, the volume and terms of diesel fuel purchase commitments, and our ability to recover fuel costs through our fuel surcharge programs; |
• | Our ability to attract and retain qualified drivers and owner-operators; |
• | Our reliance on owner-operators to provide a portion of our truck fleet; |
• | Our dependence on railroads in the operation of our intermodal business; |
• | Service instability from third-party capacity providers used by our logistics brokerage business; |
• | Changes in the outsourcing practices of our third-party logistics customers; |
• | Difficulty in obtaining material, equipment, goods, and services from our vendors and suppliers; |
• | Our ability to recruit, develop, and retain our key associates; |
• | Labor relations; |
• | Variability in insurance and claims expenses and the risks of insuring claims through our captive insurance company; |
• | The impact of laws and regulations that apply to our business, including those that relate to the environment, taxes, employees, owner-operators, and our captive insurance company; changes to those laws and regulations; and the increased costs of compliance with existing or future federal, state, and local regulations; |
• | Political, economic, and other risks from cross-border operations and operations in multiple countries; |
• | Risks associated with financial, credit, and equity markets, including our ability to service indebtedness and fund capital expenditures and strategic initiatives; |
• | Negative seasonal patterns generally experienced in the trucking industry during traditionally slower shipping periods and winter months; |
• | Risks associated with severe weather and similar events; |
• | Significant systems disruptions, including those caused by cybersecurity events; |
• | The potential that we will not successfully identify, negotiate, consummate, or integrate acquisitions; |
• | Exposure to claims and lawsuits in the ordinary course of business; and |
• | Our ability to adapt to new technologies and new participants in the truckload and transportation industry. |
• | Truckload – which consists of freight transported and delivered with standard and specialty equipment by our company-employed drivers in company trucks and by owner-operators. These services are executed through either for-hire or dedicated contracts. Our truckload services include standard long-haul and regional shipping services primarily using dry van equipment, bulk, temperature-controlled, FTFM “white glove” delivery, and customized solutions for high-value and time-sensitive loads. With our acquisition of WSL, we established a national footprint and expertise in shipping large parcel consumer items, such as furniture, mattresses, and other household goods. |
• | Intermodal – which consists of door-to-door container on flat car service by a combination of rail and over-the-road transportation, in association with our rail carrier partners. Our intermodal service uses company-owned containers, chassis, and trucks, using primarily company dray drivers to offer vast coverage throughout North America, including cross border. |
• | Logistics – which consists of non-asset freight brokerage services, supply chain services (including 3PL), and import/export services. Our logistics business typically provides value-added services using third-party capacity, augmented by our assets, to manage and move our customers’ freight. |
Revenue Equipment Type | Approximate Number of Units | |
Over-the-road sleeper cab tractors | 8,300 | |
Day cab tractors | 1,700 | |
Other tractors (yard tractors, straight trucks, and training tractors) | 500 | |
Trailers | 37,800 | |
Containers | 22,200 | |
Chassis | 18,800 |
• | Driver hiring and drug testing. We complement our comprehensive driver hiring with physical testing. We voluntarily choose to use hair follicle testing in addition to urine-based drug testing. While costing more per driver, hair follicle testing is generally more accurate than the alternative. |
• | Military drivers. We have a strong relationship with the United States military and employ many drivers with military experience. This experience produces quality truck drivers due to the discipline instilled through the military training programs. |
• | Training. Initial training is complemented by regularly scheduled follow-up training to sustain and enhance basic skills. We hire both experienced drivers and drivers new to the industry. We operate company-sponsored driver training facilities and have invested in simulators for both initial and sustainment training. |
• | Equipment and technology. We invest in trucks that are configured with roll stability capability, collision mitigation, and forward-facing cameras. Driving behavior is electronically monitored, alerts are provided to the driver situationally, and performance is documented for subsequent coaching. We also employ electronic logging, which ensures HOS compliance and reduces the instance of fatigue. |
• | Active management. Driver leaders and safety coordinators have real-time access to activity in the truck, facilitating situational and scheduled coaching. We have invested in predictive analytics that assist in proactively identifying drivers with potential safety issues and recommending a remediation path. |
• | an 11-hour daily driving time limit; |
• | a maximum number of hours a truck driver can work within a week of 70 hours; and |
• | a limit of eight consecutive driving hours a truck driver can work before being required to take a 30-minute break. |
Name | Age | Position | ||
Christopher B. Lofgren | 60 | President, Chief Executive Officer and Director | ||
Mark B. Rourke | 54 | Executive Vice President, Chief Operating Officer | ||
Stephen L. Bruffett | 55 | Executive Vice President, Chief Financial Officer | ||
Shaleen Devgun | 46 | Executive Vice President, Chief Information Officer | ||
Steven J. Matheys | 60 | Executive Vice President, Chief Administrative Officer |
• | Many of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth in the economy. This may make it difficult for us to maintain or increase freight rates or may require us to reduce our freight rates. Additionally, it may limit our ability to maintain or expand our business. |
• | We expanded our presence in the first to final mile market through our acquisition of WSL in 2016. With this growth opportunity comes variability as this supply chain is being defined in the market. |
• | Since some of our customers also operate their own private trucking fleets, they may decide to transport more of their own freight. |
• | Some shippers have selected core carriers for their shipping needs, for which we may not be selected. |
• | Many customers periodically solicit bids from multiple carriers for their shipping needs, despite the existence of dedicated contracts, which may depress freight rates or result in a loss of business to our competitors. |
• | The continuing trend toward consolidation in the trucking industry may result in more large carriers with greater financial resources and other competitive advantages, with which we may have difficulty competing. |
• | Higher fuel prices and higher fuel surcharges to our customers may cause some of our customers to consider freight transportation alternatives, including rail transportation. |
• | Advancements in technology may necessitate that we increase investments in order to remain competitive, and our customers may not be willing to accept higher freight rates to cover the cost of these investments. |
• | Competition from freight logistics and brokerage companies may negatively impact our customer relationships and freight rates. |
• | Smaller carriers may build economies of scale with procurement aggregation providers, which may improve such carriers’ abilities to compete with us. |
• | making significant capital expenditures, which could require substantial capital and cash flow that we may not have or may not be able to obtain on satisfactory terms; |
• | growth may strain our management, capital resources, information systems, and customer service; |
• | hiring new managers, drivers, and other associates, including in specialty equipment services, may increase training and compliance costs, and may result in temporary inefficiencies until those associates become proficient in their jobs; |
• | specialty transport of bulk chemicals and other hazardous materials, which subjects us to environmental, health, and safety laws and regulations by governmental authorities and, in the event of an accidental release of these commodities, could result in significant loss of life and extensive property damage, as well as environmental remediation obligations; and |
• | expanding our service offerings may require us to encounter new competitive challenges in markets in which we have not previously operated or with which we are unfamiliar. |
• | exposure to local economic and political conditions; |
• | foreign exchange rate fluctuations and currency controls; |
• | withholding and other taxes on remittances and other payments by subsidiaries; |
• | difficulties in enforcing contractual obligations and intellectual property rights; |
• | investment restrictions or requirements; and |
• | export and import restrictions. |
• | make it difficult for us to satisfy our obligations, including making interest payments on our debt obligations; |
• | limit our ability to obtain additional financing to operate our business; |
• | require us to dedicate a substantial portion of our cash flow to payments on our debt, reducing our ability to use our cash flow to fund capital expenditures, working capital, and other general operational requirements; |
• | limit our flexibility to plan for and react to changes in our business; |
• | place us at a competitive disadvantage relative to some of our competitors that have less, or less restrictive, debt than us; |
• | limit our ability to pursue acquisitions; and |
• | increase our vulnerability to general adverse economic and industry conditions, including changes in interest rates or a downturn in our business or the economy. |
• | difficulties in integrating the acquired company’s operations and in realizing anticipated economic, operational, and other benefits in a timely manner that could result in substantial costs and delays or other operational, technical, or financial problems; |
• | challenges in achieving anticipated revenue, earnings, or cash flows; |
• | assumption of liabilities that may exceed our estimates or what was disclosed to us; |
• | the diversion of our management’s attention from other business concerns; |
• | the potential loss of customers, key associates, and drivers of the acquired company; |
• | difficulties operating in markets in which we have had no or only limited direct experience; |
• | the incurrence of additional indebtedness; and |
• | the issuance of additional shares of our common stock, which would dilute shareholders' ownership in the company. |
• | Class A common stock, entitled to ten votes per share, of which there were 83,029,500 shares outstanding as of December 31, 2018; and |
• | Class B common stock, entitled to one vote per share, of which there were 93,969,268 shares outstanding as of December 31, 2018. |
• | market conditions in the broader stock market in general, or in our industry in particular; |
• | actual or anticipated fluctuations in our guidance, quarterly financial reports, and operating results; |
• | our ability to satisfy our ongoing capital needs and unanticipated cash requirements; |
• | adverse market reaction to any additional indebtedness incurred or securities we may issue in the future; |
• | introduction of new products and services by us or our competitors; |
• | announcements by our competitors of acquisitions, dispositions, strategic partnerships, joint ventures, or capital |
• | issuance of new or changed securities analysts’ reports or recommendations; |
• | sales of large blocks of our stock; |
• | additions or departures of key personnel; |
• | changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business; |
• | adverse publicity about our industry or individual scandals; |
• | litigation and governmental investigations; and |
• | economic and political conditions or events. |
• | a dual class common stock structure, which provides the Schneider National, Inc. Voting Trust with the ability to control the outcome of matters requiring shareholder approval, even if the Schneider National, Inc. Voting Trust beneficially owns significantly less than a majority of the shares of our outstanding Class A and Class B common stock; |
• | require that certain transactions be conditioned upon approval by 60 percent of the voting power of our capital stock, including any transaction which results in the Schneider family holding less than 40 percent of the voting power of our capital stock, a sale of substantially all of our assets, and a dissolution; |
• | do not provide for cumulative voting in the election of directors, which would otherwise allow holders of less than a majority of stock to elect some directors; |
• | provide that special meetings of shareholders may be called only by the Board of Directors and the chief executive officer and by our shareholders only if holders of at least ten percent of all votes entitled to be cast on the proposed issue submit a written demand in accordance with the WBCL and the other provisions of our Amended and Restated Articles of Incorporation and our Amended and Restated Bylaws; |
• | establish advance notice procedures for the nomination of candidates for election as directors or for proposing matters that can be acted upon at shareholder meetings; and |
• | authorize undesignated preferred stock, the terms of which may be established and shares of which may be issued by our Board of Directors without shareholder approval. |
As of December 31, 2018 | Facility Capabilities | |||||||||||
Location | Owned or Leased | Segment | Customer Service | Operations | Fuel | Maintenance | ||||||
Atlanta, GA | Owned | Truckload | X | X | X | X | ||||||
Carlisle/Harrisburg, PA | Leased | Truckload | X | X | X | X | ||||||
Charlotte, NC | Owned | Truckload | X | X | X | X | ||||||
Chicago, IL | Leased | Logistics | X | X | ||||||||
Chicago, IL | Leased | Intermodal | X | X | X | |||||||
Dallas, TX | Leased | Truckload | X | X | X | X | ||||||
Dallas, TX | Leased | Logistics | X | X | ||||||||
Des Moines, IA | Leased | Truckload | X | |||||||||
Edwardsville, IL | Owned | Truckload | X | X | X | X | ||||||
Farmington Hills, MI | Leased | Logistics | X | X | ||||||||
Gary, IN | Owned | Truckload | X | X | X | X | ||||||
Green Bay, WI | Owned | Truckload | X | |||||||||
Green Bay, WI (three facilities) | Both | Other | X | X | ||||||||
Helena, MT | Leased | Truckload | X | X | X | X | ||||||
Houston, TX | Leased | Truckload | X | X | X | X | ||||||
Houston, TX | Leased | Truckload | X | X | ||||||||
Indianapolis, IN | Owned | Truckload | X | X | X | X | ||||||
Laredo, TX | Leased | Truckload | X | X | X | X | ||||||
Missoula, MT | Leased | Truckload | X | X | ||||||||
Phoenix, AZ | Owned | Truckload | X | X | X | |||||||
Port Wentworth, GA | Leased | Logistics | X | |||||||||
Portland, OR | Owned | Truckload | X | X | X | X | ||||||
Puslinch/Guelph, ON | Owned | Truckload | X | X | X | X | ||||||
Reserve, LA | Leased | Truckload | X | X | ||||||||
San Bernardino, CA | Leased | Intermodal | X | |||||||||
Santa Fe/Mexico City, Mexico | Leased | Multiple | X | X | ||||||||
West Memphis, AR | Owned | Truckload | X | X | X | X | ||||||
Zeeland, MI | Leased | Truckload | X | X |
2018 Fiscal Month | Total Number of Shares Purchased(a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(b) | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
October 1 - October 31 | — | $ | — | — | $ | — | ||||||||
November 1 - November 30 | — | — | — | — | ||||||||||
December 1 - December 31 | 33 | 17.95 | — | — | ||||||||||
Total | 33 | $ | 17.95 | — | $ | — |
(b) | The Company is not currently participating in a share repurchase program. |
4/6/2017 | 6/30/2017 | 9/30/2017 | 12/31/2017 | 3/31/2018 | 6/30/2018 | 9/30/2018 | 12/31/2018 | ||||||||||||||||||||||||
Schneider National, Inc. | $ | 100.00 | $ | 118.01 | $ | 133.75 | $ | 151.26 | $ | 138.33 | $ | 146.33 | $ | 133.17 | $ | 99.83 | |||||||||||||||
S&P 500 - Total Returns | 100.00 | 103.25 | 107.88 | 115.05 | 114.18 | 118.10 | 127.20 | 110.00 | |||||||||||||||||||||||
Dow Jones Transportation Average | 100.00 | 105.10 | 109.34 | 117.46 | 115.46 | 115.31 | 127.28 | 102.98 | |||||||||||||||||||||||
Peer Group | 100.00 | 103.93 | 119.33 | 133.96 | 138.36 | 136.94 | 143.74 | 108.81 |
1 | Effective September 8, 2017, the businesses of Knight Transportation, Inc. and Swift Transportation Co. were merged under a single parent company, Knight-Swift Transportation Holding Inc. |
Consolidated Statement of Comprehensive Income GAAP Data | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
Operating revenues | $ | 4,977.0 | $ | 4,383.6 | $ | 4,045.7 | $ | 3,959.4 | $ | 3,940.6 | ||||||||||
Income from operations | 375.8 | 280.3 | 290.4 | 260.2 | 239.4 | |||||||||||||||
Net income (1) | 268.9 | 389.9 | 156.9 | 140.9 | 133.6 | |||||||||||||||
Basic earnings per share (1) | 1.52 | 2.28 | 1.00 | 0.91 | 0.86 | |||||||||||||||
Diluted earnings per share (1) | 1.52 | 2.28 | 1.00 | 0.91 | 0.86 | |||||||||||||||
Cash dividends per share | 0.24 | 0.20 | 0.20 | 0.16 | 0.13 | |||||||||||||||
Operating ratio (2) | 92.4 | % | 93.6 | % | 92.8 | % | 93.4 | % | 93.9 | % |
Non-GAAP Financial Data (Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
Revenues (excluding fuel surcharge) (3) | $ | 4,454.2 | $ | 3,997.3 | $ | 3,751.7 | $ | 3,588.2 | $ | 3,333.7 | ||||||||||
Adjusted income from operations (4) | 383.6 | 281.7 | 293.1 | 293.0 | 244.3 | |||||||||||||||
Adjusted net income (5) | 275.2 | 161.2 | 158.5 | 162.7 | 136.5 | |||||||||||||||
Adjusted operating ratio (6) | 91.4 | % | 93.0 | % | 92.2 | % | 91.8 | % | 92.7 | % |
Consolidated Balance Sheet GAAP Data | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
Total assets | $ | 3,624.5 | $ | 3,330.5 | $ | 3,054.6 | $ | 2,621.9 | $ | 2,320.2 | ||||||||||
Debt and capital lease obligations (7) | 411.3 | 439.7 | 698.3 | 545.6 | 514.4 |
Key Operating Metrics | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
Average trucks (8) (9) | 11,568 | 11,860 | 11,722 | 10,982 | 10,385 | |||||||||||||||
Revenue per truck per week (10) | $ | 3,840 | $ | 3,619 | $ | 3,488 | $ | 3,520 | $ | 3,518 | ||||||||||
Containers | 21,790 | 17,535 | 17,653 | 17,397 | 17,280 |
(1) | Includes the $229.5 million, or $1.34 per share, reduction in income tax expense in 2017 resulting from the revaluation of net deferred tax liabilities due to the Tax Cuts and Jobs Act. |
(2) | Operating ratio is calculated as total operating expenses as a percentage of operating revenues. |
(3) | Revenues (excluding fuel surcharge) represents operating revenues less fuel surcharge revenues. Refer to the Non-GAAP Financial Measures discussion within MD&A for a reconciliation of operating revenues, the most closely comparable GAAP financial measure, to revenues (excluding fuel surcharge). |
(4) | Adjusted income from operations is defined as income from operations, adjusted to exclude material items that do not reflect our core operating performance. Refer to the Non-GAAP Financial Measures discussion within MD&A for a reconciliation of income from operations, which is the most directly comparable GAAP measure, to adjusted income from operations. |
(5) | Adjusted net income is adjusted to exclude material items that do not reflect our core operating performance. Refer to the Non-GAAP Financial Measures discussion within MD&A for a reconciliation of net income, which is the most directly comparable GAAP measure, to adjusted net income. |
(6) | Adjusted operating ratio is adjusted to exclude material items that do not reflect our core operating performance, divided by revenues (excluding fuel surcharge). Refer to the Non-GAAP Financial Measures discussion within MD&A for a reconciliation of operating ratio, which is the most directly comparable GAAP measure, to adjusted operating ratio. |
(7) | Includes current and noncurrent portions of unsecured senior notes, accounts receivable facility, equipment financing agreements, and capital leases. |
(8) | Includes company trucks and owner-operator trucks. |
(9) | Calculated based on beginning and end of month counts and represents the average number of trucks available to haul freight over the specified timeframe. |
(10) | Calculated excluding fuel surcharge, consistent with how revenue is reported internally for segment purposes. |
Year Ended December 31, | ||||||||||||
(in millions, except ratios) | 2018 | 2017 | 2016 | |||||||||
Operating revenues | $ | 4,977.0 | $ | 4,383.6 | $ | 4,045.7 | ||||||
Revenues (excluding fuel surcharge) (1) | 4,454.2 | 3,997.3 | 3,751.7 | |||||||||
Income from operations | 375.8 | 280.3 | 290.4 | |||||||||
Adjusted income from operations (2) | 383.6 | 281.7 | 293.1 | |||||||||
Operating ratio | 92.4 | % | 93.6 | % | 92.8 | % | ||||||
Adjusted operating ratio (3) | 91.4 | % | 93.0 | % | 92.2 | % | ||||||
Net income | $ | 268.9 | $ | 389.9 | $ | 156.9 | ||||||
Adjusted net income (4) | 275.2 | 161.2 | 158.5 | |||||||||
Effective tax rate | 26.2 | % | (48.0 | )% | 40.9 | % | ||||||
Adjusted effective tax rate (5) | 26.2 | % | 39.1 | % | 40.9 | % |
(1) | We define “revenues (excluding fuel surcharge)” as operating revenues less fuel surcharge revenues. Included below is a reconciliation of operating revenues, the most closely comparable GAAP financial measure, to revenues (excluding fuel surcharge). |
(2) | We define “adjusted income from operations” as income from operations, adjusted to exclude material items that do not reflect our core operating performance. Included below is a reconciliation of income from operations, which is the most directly comparable GAAP measure, to adjusted income from operations. Excluded items for the periods shown are explained in the table and notes below. |
(3) | We define “adjusted operating ratio” as operating expenses, adjusted to exclude material items that do not reflect our core operating performance, divided by revenues (excluding fuel surcharge). Included below is a reconciliation of operating ratio, which is the most directly comparable GAAP measure, to adjusted operating ratio. Excluded items for the periods shown are explained below under our explanation of “adjusted income from operations.” |
(4) | We define “adjusted net income” as net income, adjusted to exclude material items that do not reflect our core operating performance. Included below is a reconciliation of net income, which is the most directly comparable GAAP measure, to adjusted net income. Excluded items for the periods shown are explained below under our explanation of “adjusted income from operations.” |
(5) | “Adjusted effective tax rate” represents our effective tax rate prior to the effect on our deferred tax assets and liabilities of the change in the federal income tax rate due to the Tax Cuts and Jobs Act. Included below is a reconciliation of our effective tax rate, which is the most directly comparable GAAP measure, to the adjusted effective tax rate. |
Year Ended December 31, | ||||||||||||
(in millions) | 2018 | 2017 | 2016 | |||||||||
Operating revenues | $ | 4,977.0 | $ | 4,383.6 | $ | 4,045.7 | ||||||
Less: Fuel surcharge revenues | 522.8 | 386.3 | 294.0 | |||||||||
Revenues (excluding fuel surcharge) | $ | 4,454.2 | $ | 3,997.3 | $ | 3,751.7 |
Year Ended December 31, | ||||||||||||
(in millions) | 2018 | 2017 | 2016 | |||||||||
Income from operations | $ | 375.8 | $ | 280.3 | $ | 290.4 | ||||||
Litigation (1) | 5.8 | — | — | |||||||||
Duplicate chassis costs (2) | — | 14.9 | — | |||||||||
WSL contingent consideration adjustment (3) | — | (13.5 | ) | — | ||||||||
Acquisition costs (4) | — | — | 1.4 | |||||||||
IPO costs (5) | — | — | 1.3 | |||||||||
Goodwill impairment (6) | 2.0 | — | — | |||||||||
Adjusted income from operations | $ | 383.6 | $ | 281.7 | $ | 293.1 |
(1) | Costs associated with the settlement of a lawsuit that challenged Washington State labor law compliance during 2018. |
(2) | As of December 31, 2017, we completed our migration to an owned chassis model, which required the replacement of rented chassis with owned chassis. Accordingly, we adjusted our income from operations for rental costs related to idle chassis as rental units were replaced. |
(3) | In 2017, we recorded fair value adjustments to the contingent consideration related to the acquisition of WSL. See Note 4, Acquisition, and Note 5, Fair Value, for more information. |
(4) | Costs related to the June 1, 2016 acquisition of WSL. |
(5) | Costs related to our IPO. |
(6) | As a result of our annual goodwill impairment test in the fourth quarter of 2018, we recorded an impairment charge for our Asia reporting unit. |
Year Ended December 31, | ||||||||||||
(in millions, except ratios) | 2018 | 2017 | 2016 | |||||||||
Total operating expenses | $ | 4,601.2 | $ | 4,103.3 | $ | 3,755.3 | ||||||
Divide by: Operating revenues | 4,977.0 | 4,383.6 | 4,045.7 | |||||||||
Operating ratio | 92.4 | % | 93.6 | % | 92.8 | % | ||||||
Total operating expenses | $ | 4,601.2 | $ | 4,103.3 | $ | 3,755.3 | ||||||
Adjusted for: | ||||||||||||
Fuel surcharge revenues | (522.8 | ) | (386.3 | ) | (294.0 | ) | ||||||
Litigation | (5.8 | ) | — | — | ||||||||
Duplicate chassis costs | — | (14.9 | ) | — | ||||||||
WSL contingent consideration adjustment | — | 13.5 | — | |||||||||
Acquisition costs | — | — | (1.4 | ) | ||||||||
IPO costs | — | — | (1.3 | ) | ||||||||
Goodwill impairment | (2.0 | ) | — | — | ||||||||
Adjusted total operating expenses | $ | 4,070.6 | $ | 3,715.6 | $ | 3,458.6 | ||||||
Operating revenues | $ | 4,977.0 | $ | 4,383.6 | $ | 4,045.7 | ||||||
Less: Fuel surcharge revenues | 522.8 | 386.3 | 294.0 | |||||||||
Revenues (excluding fuel surcharge) | $ | 4,454.2 | $ | 3,997.3 | $ | 3,751.7 | ||||||
Adjusted operating ratio | 91.4 | % | 93.0 | % | 92.2 | % |
Year Ended December 31, | ||||||||||||
(in millions) | 2018 | 2017 | 2016 | |||||||||
Net income | $ | 268.9 | $ | 389.9 | $ | 156.9 | ||||||
Impact of Tax Cuts and Jobs Act (1) | — | (229.5 | ) | — | ||||||||
Litigation | 5.8 | — | — | |||||||||
Duplicate chassis costs | — | 14.9 | — | |||||||||
WSL contingent consideration adjustment | — | (13.5 | ) | — | ||||||||
Acquisition costs | — | — | 1.4 | |||||||||
IPO costs | — | — | 1.3 | |||||||||
Goodwill impairment | 2.0 | — | — | |||||||||
Income tax effect of non-GAAP adjustments(2) | (1.5 | ) | (0.6 | ) | (1.1 | ) | ||||||
Adjusted net income | $ | 275.2 | $ | 161.2 | $ | 158.5 |
(2) | Tax impacts are calculated using the applicable consolidated federal and state effective tax rate, modified to remove the impact of tax credits and adjustments (such as the impact of the Tax Cuts and Jobs Act in 2017) that are not applicable to the item in question. If the underlying item has a materially different tax treatment, the actual or estimated tax rate applicable to the adjustment is used. A tax rate of 0% was used for the 2018 goodwill impairment. |
Year Ended December 31, | |||||||||
(in millions) | 2018 | 2017 | 2016 | ||||||
Effective tax rate | 26.2 | % | (48.0 | )% | 40.9 | % | |||
Impact of Tax Cuts and Jobs Act | — | % | 87.1 | % | — | % | |||
Adjusted effective tax rate | 26.2 | % | 39.1 | % | 40.9 | % |
• | a $136.5 million increase in fuel surcharge revenues, and |
• | a $80.6 million increase in our Truckload segment revenues (excluding fuel surcharge), primarily due to price. |
• | Purchased transportation costs increased $360.6 million, or 22%, year over year. The largest drivers of the increase were an increase in brokerage volumes in our Logistics segment, which relies heavily on third-party carriers, and increased third-party prices across all segments. As a percentage of revenues, purchased transportation costs increased 3% period over period. |
• | Salaries, wages, and benefits increased $35.9 million, or 3%, year over year, largely due to increased driver wages offset by lower driver counts caused by the industry wide shortage in driver capacity. Additional reasons for the increase included increased incentive compensation resulting from improved company performance and higher commissions in our brokerage business. As a percentage of revenues, salaries, wages, and benefits decreased 3% period over period. |
• | Fuel and fuel taxes increased $39.3 million, or 13%, year over year, driven by an increase in the cost of fuel per gallon, partially offset by decreased company driver miles in our Truckload segment. A significant portion of changes in fuel costs is recovered through our fuel surcharge programs, however there can be timing differences between when we incur fuel costs and when they are recovered. |
• | Depreciation and amortization increased $12.3 million, or 4%, year over year, primarily driven by increased trailer and tractor depreciation, as we replaced older units to maintain an appropriate age of fleet. The 2017 conversion from leased to owned chassis in our Intermodal segment also resulted in increased depreciation. |
• | Operating supplies and expenses decreased $2.6 million, or 1%, year over year. The decrease was mainly due to $26.2 million lower rent expense, primarily due to our 2017 conversion from leased to owned chassis, and a reduction in |
• | Insurance and related expenses increased $11.9 million, or 13%, year over year, primarily due to increased severity of auto losses and increased volume of cargo losses. |
• | Other general expenses increased $38.5 million, or 36%, year over year. In 2017, other general expenses were lowered by $13.5 million for the reduction of the contingent liability related to the WSL acquisition adjustment, while there was no comparable reduction in 2018. There was also $8.9 million higher driver recruiting and training costs, an increase in professional services fees, including additional costs associated with operating as a public company, and a $5.8 million increase in litigation costs. |
Revenues by Segment | Year Ended December 31, | ||||||||
(in millions) | 2018 | 2017 | |||||||
Truckload | $ | 2,268.0 | $ | 2,187.4 | |||||
Intermodal | 953.5 | 779.9 | |||||||
Logistics | 1,024.6 | 834.3 | |||||||
Other | 322.0 | 293.6 | |||||||
Fuel surcharge | 522.8 | 386.3 | |||||||
Inter-segment eliminations | (113.9 | ) | (97.9 | ) | |||||
Operating revenues | $ | 4,977.0 | $ | 4,383.6 |
Income (Loss) from Operations by Segment | Year Ended December 31, | ||||||||
(in millions) | 2018 | 2017 | |||||||
Truckload | $ | 240.5 | $ | 196.2 | |||||
Intermodal | 130.2 | 52.3 | |||||||
Logistics | 47.4 | 34.2 | |||||||
Other | (42.3 | ) | (2.4 | ) | |||||
Income from operations | 375.8 | 280.3 | |||||||
Adjustments: | |||||||||
Litigation | 5.8 | — | |||||||
Duplicate chassis costs | — | 14.9 | |||||||
WSL contingent consideration adjustment | — | (13.5 | ) | ||||||
Goodwill impairment | 2.0 | — | |||||||
Adjusted income from operations | $ | 383.6 | $ | 281.7 |
Year Ended December 31, | ||||||||
2018 | 2017 | |||||||
Dedicated standard | ||||||||
Revenues (excluding fuel surcharge) (1) | $ | 327.1 | $ | 291.8 | ||||
Average trucks (2) (3) | 1,678 | 1,645 | ||||||
Revenue per truck per week (4) | $ | 3,819 | $ | 3,480 | ||||
Dedicated specialty | ||||||||
Revenues (excluding fuel surcharge) (1) | $ | 405.5 | $ | 424.4 | ||||
Average trucks (2) (3) | 2,239 | 2,285 | ||||||
Revenue per truck per week (4) | $ | 3,546 | $ | 3,645 | ||||
For-hire standard | ||||||||
Revenues (excluding fuel surcharge) (1) | $ | 1,219.2 | $ | 1,162.8 | ||||
Average trucks (2) (3) | 6,105 | 6,340 | ||||||
Revenue per truck per week (4) | $ | 3,911 | $ | 3,599 | ||||
For-hire specialty | ||||||||
Revenues (excluding fuel surcharge) (1) | $ | 316.2 | $ | 308.4 | ||||
Average trucks (2) (3) | 1,546 | 1,590 | ||||||
Revenue per truck per week (4) | $ | 4,006 | $ | 3,807 | ||||
Total Truckload | ||||||||
Revenues (excluding fuel surcharge) (1) | $ | 2,268.0 | $ | 2,187.4 | ||||
Average trucks (2) (3) * | 11,568 | 11,860 | ||||||
Revenue per truck per week (4) | $ | 3,840 | $ | 3,619 | ||||
Average company trucks (3) | 8,814 | 9,101 | ||||||
Average owner-operator trucks (3) | 2,753 | 2,758 | ||||||
Trailers | 37,464 | 37,637 | ||||||
Operating ratio (5) | 89.4 | % | 91.0 | % |
(1) | Revenues (excluding fuel surcharge) in millions. |
(2) | Includes company trucks and owner-operator trucks. |
(3) | Calculated based on beginning and end of month counts and represents the average number of trucks available to haul freight over the specified time frame. |
(4) | Calculated excluding fuel surcharge, consistent with how revenue is reported internally for segment purposes, using weighted workdays. |
(5) | Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge). |
* | Amounts may not sum due to rounding. |
Year Ended December 31, | ||||||||
2018 | 2017 | |||||||
Orders | 449,330 | 408,928 | ||||||
Containers | 21,790 | 17,535 | ||||||
Trucks (1) | 1,474 | 1,283 | ||||||
Revenue per order (2) | $ | 2,122 | $ | 1,907 | ||||
Operating ratio (3) | 86.4 | % | 93.3 | % |
(1) | Includes company trucks and owner-operator trucks at the end of the period. |
(2) | Calculated excluding fuel surcharge, consistent with how revenue is reported internally for segment purposes. |
(3) | Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge). |
Year Ended December 31, | ||||||
2018 | 2017 | |||||
Operating ratio (1) | 95.4 | % | 95.9 | % |
(1) | Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge), consistent with how revenue is reported internally for segment purposes. |
• | A $97.1 million increase in revenues in our Logistics segment, driven by growth in our brokerage business, |
• | An $81.7 million increase in fuel surcharge revenues, excluding Logistics and WSL, |
• | A $68.7 million increase in revenues from WSL, which was acquired on June 1, 2016, |
• | A $42.8 million increase in revenues excluding fuel surcharge, driven by growth in Dedicated Specialty accounts, and |
• | A $22.4 million increase in revenues excluding fuel surcharge in our Intermodal segment, driven by a 7% increase in volumes offset by a 4% decrease in revenue per order. |
• | Purchased transportation costs increased $139.3 million, or 10%, year over year. The largest driver of the increase was an increase in volumes in our Logistics segment, which relies heavily on third-party carriers, resulting in $84.8 million higher purchased transportation costs. Truckload and Intermodal segments' purchased transportation costs also increased year over year due to growth in those segments. As a percentage of revenues, purchased transportation costs remained flat. |
• | Salaries, wages, and benefits increased $94.2 million, or 8%, year over year, driven by increased driver and administrative labor costs, and an increase in non-driver associate count. Overall, as a percentage of revenues, total salaries, wages, and benefits remained flat year over year. |
• | Fuel and fuel taxes increased $52.6 million, or 21%, year over year, driven by an increase in the cost of fuel per gallon and a full year of WSL business. A significant portion of changes in fuel costs is recovered through our fuel surcharge programs. |
• | Depreciation and amortization increased $13.0 million, or 5%, year over year. The main driver of the increase was additional depreciation for capital investments in trailers and owned chassis. |
• | Operating supplies and expenses increased $44.0 million, or 10%, year over year. $27.6 million of the increase was due to an increase in the amount of equipment sold by our leasing business, resulting in higher cost of goods sold, which flows through operating supplies and expenses. There were also $8.8 million lower gains on sales of equipment year over year. |
• | Insurance and related expenses increased $1.2 million year over year. |
• | Other general expenses increased $3.7 million, or 4%, year over year. The primary reasons for the increase were $9.4 million higher driver recruiting and training costs, $4.5 million higher professional fees, and $4.1 million higher bad debt expense, partially offset by the $13.5 million adjustment of a contingent liability related to the WSL acquisition. See Note 4, Acquisition, and Note 5, Fair Value, for more information. As a percentage of revenues, other general expenses remained flat year over year. |
Revenues by Segment | Year Ended December 31, | ||||||||
(in millions) | 2017 | 2016 | |||||||
Truckload | $ | 2,187.4 | $ | 2,091.0 | |||||
Intermodal | 779.9 | 757.5 | |||||||
Logistics | 834.3 | 737.7 | |||||||
Other | 293.6 | 240.5 | |||||||
Fuel surcharge | 386.3 | 294.0 | |||||||
Inter-segment eliminations | (97.9 | ) | (75.0 | ) | |||||
Operating revenues | $ | 4,383.6 | $ | 4,045.7 |
Income (Loss) from Operations by Segment | Year Ended December 31, | |||||||
(in millions) | 2017 | 2016 | ||||||
Truckload | $ | 196.2 | $ | 221.1 | ||||
Intermodal | 52.3 | 46.1 | ||||||
Logistics | 34.2 | 30.7 | ||||||
Other | (2.4 | ) | (7.5 | ) | ||||
Income from operations | 280.3 | 290.4 | ||||||
Adjustments: | ||||||||
Duplicate chassis costs | 14.9 | — | ||||||
WSL contingent consideration adjustment | (13.5 | ) | — | |||||
Acquisition costs | — | 1.4 | ||||||
IPO costs | — | 1.3 | ||||||
Adjusted income from operations | $ | 281.7 | $ | 293.1 |
Year Ended December 31, | |||||||
2017 | 2016 | ||||||
Dedicated standard | |||||||
Revenues (excluding fuel surcharge) (1) | $ | 291.8 | $ | 300.9 | |||
Average trucks (2) (3) | 1,645 | 1,758 | |||||
Revenue per truck per week (4) | $ | 3,480 | $ | 3,348 | |||
Dedicated specialty | |||||||
Revenues (excluding fuel surcharge) (1) | $ | 424.4 | $ | 381.6 | |||
Average trucks (2) (3) | 2,285 | 2,050 | |||||
Revenue per truck per week (4) | $ | 3,645 | $ | 3,639 | |||
For-hire standard | |||||||
Revenues (excluding fuel surcharge) (1) | $ | 1,162.8 | $ | 1,168.8 | |||
Average trucks (2) (3) | 6,340 | 6,641 | |||||
Revenue per truck per week (4) | $ | 3,599 | $ | 3,442 | |||
For-hire specialty | |||||||
Revenues (excluding fuel surcharge) (1) | $ | 308.4 | $ | 239.7 | |||
Average trucks (2) (3) | 1,590 | 1,274 | |||||
Revenue per truck per week (4) | $ | 3,807 | $ | 3,679 | |||
Total Truckload | |||||||
Revenues (excluding fuel surcharge) (1) | $ | 2,187.4 | $ | 2,091.0 | |||
Average trucks (2) (3) * | 11,860 | 11,722 | |||||
Revenue per truck per week (4) | $ | 3,619 | $ | 3,488 | |||
Average company trucks (3) | 9,101 | 9,026 | |||||
Average owner-operator trucks (3) | 2,758 | 2,696 | |||||
Trailers | 37,637 | 37,575 | |||||
Operating ratio (5) | 91.0 | % | 89.4 | % |
(1) | Revenues (excluding fuel surcharge) in millions. |
(2) | Includes company trucks and owner-operator trucks. |
(3) | Calculated based on beginning and end of month counts and represents the average number of trucks available to haul freight over the specified timeframe. |
(4) | Calculated excluding fuel surcharge, consistent with how revenue is reported internally for segment purposes. |
(5) | Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge). |
* | Amounts may not sum due to rounding. |
Year Ended December 31, | ||||||||
2017 | 2016 | |||||||
Orders | 408,928 | 381,425 | ||||||
Containers | 17,535 | 17,653 | ||||||
Trucks (1) | 1,283 | 1,244 | ||||||
Revenue per order (2) | $ | 1,907 | $ | 1,986 | ||||
Operating ratio (3) | 93.3 | % | 93.9 | % |
(1) | Includes company trucks and owner-operator trucks at the end of the period. |
(2) | Calculated excluding fuel surcharge, consistent with how revenue is reported internally for segment purposes. |
(3) | Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge). |
Year Ended December 31, | ||||||
2017 | 2016 | |||||
Operating ratio (1) | 95.9 | % | 95.8 | % |
(1) | Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge), consistent with how revenue is reported internally for segment purposes. |
(in millions) | December 31, 2018 | December 31, 2017 | ||||||
Cash and cash equivalents | $ | 378.7 | $ | 238.5 | ||||
Marketable securities | 51.3 | 41.6 | ||||||
Total cash, cash equivalents, and marketable securities | $ | 430.0 | $ | 280.1 | ||||
Debt: | ||||||||
Senior notes | $ | 400.0 | $ | 400.0 | ||||
Equipment financing | 5.0 | 29.8 | ||||||
Capital leases | 6.9 | 10.8 | ||||||
Total debt (1) | $ | 411.9 | $ | 440.6 |
(1) | Debt on our consolidated balance sheets is presented net of deferred financing costs. |
Year Ended December 31, | |||||||||||||
(in millions) | 2018 | 2017 | 2016 | ||||||||||
Cash provided by operating activities | $ | 566.5 | $ | 461.3 | $ | 455.3 | |||||||
Cash used in investing activities | (337.6 | ) | (390.5 | ) | (513.3 | ) | |||||||
Cash provided by (used in) financing activities | (88.7 | ) | 36.9 | 28.1 |
Year Ended December 31, | |||||||||||||
(in millions) | 2018 | 2017 | 2016 | ||||||||||
Transportation equipment | $ | 385.1 | $ | 388.5 | $ | 422.1 | |||||||
Other property and equipment | 36.9 | 33.4 | 37.0 | ||||||||||
Proceeds from sale of property and equipment | (90.5 | ) | (70.0 | ) | (52.0 | ) | |||||||
Net capital expenditures | $ | 331.5 | $ | 351.9 | $ | 407.1 |
• | A $240.0 million net cash outflow related to our accounts receivable facility. We borrowed a net $105.0 million during 2016 and repaid $135.0 million during 2017 using IPO proceeds. |
• | The repayment of a $100.0 million senior note using IPO proceeds. |
• | A deferred payment of approximately $19.0 million to the former owners of WSL, which included a reduction for a working capital adjustment. |
Payments Due by Period | ||||||||||||||||||||||||
(in millions) | Total Amounts Committed | 2019 | 2020-2021 | 2022-2023 | After 2023 | Other | ||||||||||||||||||
Long-term debt principal and interest obligations (1) | $ | 461.3 | $ | 58.5 | $ | 117.3 | $ | 144.8 | $ | 140.7 | $ | — | ||||||||||||
Purchase obligations (2) | 265.5 | 265.5 | — | — | — | — | ||||||||||||||||||
Capital lease obligations | 7.1 | 6.9 | 0.2 | — | — | — | ||||||||||||||||||
Operating lease obligations | 104.3 | 35.8 | 40.6 | 15.2 | 12.7 | — | ||||||||||||||||||
WSL guaranteed payments | 20.0 | 20.0 | — | — | — | — | ||||||||||||||||||
Unrecognized tax benefits (3) | 3.3 | — | — | — | — | 3.3 | ||||||||||||||||||
Total | $ | 861.5 | $ | 386.7 | $ | 158.1 | $ | 160.0 | $ | 153.4 | $ | 3.3 |
Asia Goodwill Assumptions | October 31, 2018 | October 31, 2017 | ||
Discount rate (1) | 13.0% | 12.0% | ||
Long-term growth rate (2) | 5.0% | 5.0% |
(1) | The discount rate is based on the Company's Weighted Average Cost of Capital (WACC) which increased from the analysis performed in the prior year primarily due to an increase in the risk-free interest rate. A 1.0% increase in the discount rate at October 31, 2018, would result in a decrease in fair value of approximately $2.1 million. |
(2) | The long-term growth rate applied to the terminal period in our discounted cash flow was 5.0%. In the forecasted periods leading up to the terminal period, the revenue growth rates ranged from 4.8% to 7.8% based on our current estimates for growth in those periods. |
FTFM Goodwill Assumptions | October 31, 2018 | April 1, 2018 | ||
Discount rate (1) | 12.5% | 12.0% | ||
Long-term growth rate (2) | 3.0% | 3.0% |
(1) | The discount rate is based on the Company's Weighted Average Cost of Capital (WACC) which increased from the analysis performed earlier in 2018 primarily due to an increase in the risk-free interest rate. A 1.0% increase in the discount rate at October 31, 2018, would result in a decrease in fair value of approximately $20.0 million. |
(2) | The long-term growth rate applied to the terminal period in our discounted cash flow was 3.0%. In the forecasted periods leading up to the terminal period, the revenue growth rates ranged from (0.2%) to 10.7% based on our current estimates for growth in those periods. |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Operating revenues | $ | 4,977.0 | $ | 4,383.6 | $ | 4,045.7 | |||||
Operating expenses: | |||||||||||
Purchased transportation | 1,965.9 | 1,605.3 | 1,466.0 | ||||||||
Salaries, wages, and benefits | 1,259.4 | 1,223.5 | 1,129.3 | ||||||||
Fuel and fuel taxes | 344.8 | 305.5 | 252.9 | ||||||||
Depreciation and amortization | 291.3 | 279.0 | 266.0 | ||||||||
Operating supplies and expenses | 491.3 | 493.9 | 449.9 | ||||||||
Insurance and related expenses | 102.2 | 90.3 | 89.1 | ||||||||
Other general expenses | 144.3 | 105.8 | 102.1 | ||||||||
Goodwill impairment charge | 2.0 | — | — | ||||||||
Total operating expenses | 4,601.2 | 4,103.3 | 3,755.3 | ||||||||
Income from operations | 375.8 | 280.3 | 290.4 | ||||||||
Other expenses (income): | |||||||||||
Interest expense—net | 12.5 | 17.4 | 21.4 | ||||||||
Other expense (income)—net | (1.3 | ) | (0.5 | ) | 3.4 | ||||||
Total other expenses | 11.2 | 16.9 | 24.8 | ||||||||
Income before income taxes | 364.6 | 263.4 | 265.6 | ||||||||
Provision for (benefit from) income taxes | 95.7 | (126.5 | ) | 108.7 | |||||||
Net income | 268.9 | 389.9 | 156.9 | ||||||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustments | (1.0 | ) | (0.9 | ) | 0.7 | ||||||
Unrealized loss on marketable securities—net of tax | — | — | (0.2 | ) | |||||||
Total other comprehensive income (loss) | (1.0 | ) | (0.9 | ) | 0.5 | ||||||
Comprehensive income | $ | 267.9 | $ | 389.0 | $ | 157.4 | |||||
Weighted average common shares outstanding | 177.0 | 171.1 | 156.6 | ||||||||
Basic earnings per share | $ | 1.52 | $ | 2.28 | $ | 1.00 | |||||
Weighted average diluted shares outstanding | 177.2 | 171.3 | 156.8 | ||||||||
Diluted earnings per share | $ | 1.52 | $ | 2.28 | $ | 1.00 | |||||
Dividends per share of common stock | $ | 0.24 | $ | 0.20 | $ | 0.20 |
December 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 378.7 | $ | 238.5 | |||
Marketable securities | 51.3 | 41.6 | |||||
Trade accounts receivable—net of allowance of $6.8 million and $5.2, million, respectively | 593.1 | 527.9 | |||||
Other receivables | 31.8 | 22.4 | |||||
Current portion of lease receivables—net of allowance of $0.5 million and $1.7 million, respectively | 129.1 | 104.9 | |||||
Inventories | 60.8 | 83.1 | |||||
Prepaid expenses and other current assets | 79.5 | 75.6 | |||||
Total current assets | 1,324.3 | 1,094.0 | |||||
Noncurrent Assets: | |||||||
Property and equipment: | |||||||
Transportation equipment | 2,900.2 | 2,770.1 | |||||
Land, buildings, and improvements | 177.2 | 183.8 | |||||
Other property and equipment | 157.6 | 175.7 | |||||
Total property and equipment | 3,235.0 | 3,129.6 | |||||
Accumulated depreciation | 1,312.8 | 1,271.5 | |||||
Net property and equipment | 1,922.2 | 1,858.1 | |||||
Lease receivables | 133.2 | 138.9 | |||||
Capitalized software and other noncurrent assets | 82.6 | 74.7 | |||||
Goodwill | 162.2 | 164.8 | |||||
Total noncurrent assets | 2,300.2 | 2,236.5 | |||||
Total Assets | $ | 3,624.5 | $ | 3,330.5 | |||
Liabilities and Shareholders' Equity | |||||||
Current Liabilities: | |||||||
Trade accounts payable | $ | 226.0 | $ | 230.4 | |||
Accrued salaries and wages | 94.8 | 85.8 | |||||
Claims accruals—current | 58.3 | 48.3 | |||||
Current maturities of debt and capital lease obligations | 51.7 | 19.1 | |||||
Dividends payable | 10.6 | 8.8 | |||||
Other current liabilities | 81.2 | 69.6 | |||||
Total current liabilities | 522.6 | 462.0 | |||||
Noncurrent Liabilities: | |||||||
Long-term debt and capital lease obligations | 359.6 | 420.6 | |||||
Claims accruals—noncurrent | 113.3 | 102.5 | |||||
Deferred income taxes | 450.6 | 386.6 | |||||
Other | 46.1 | 68.6 | |||||
Total noncurrent liabilities | 969.6 | 978.3 | |||||
Commitments and Contingencies (Note 16) | |||||||
Shareholders' Equity: | |||||||
Class A common shares, no par value, 250,000,000 shares authorized, 83,029,500 shares issued and outstanding | — | — | |||||
Class B common shares, no par value, 750,000,000 shares authorized, 94,593,588 and 93,850,011 shares issued, and 93,969,268 and 93,850,011 shares outstanding, respectively | — | — | |||||
Additional paid-in capital | 1,544.0 | 1,534.6 | |||||
Retained earnings | 589.3 | 355.6 | |||||
Accumulated other comprehensive income | (1.0 | ) | — | ||||
Total shareholders' equity | 2,132.3 | 1,890.2 | |||||
Total Liabilities and Shareholders' Equity | $ | 3,624.5 | $ | 3,330.5 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Operating Activities: | |||||||||||
Net income | $ | 268.9 | $ | 389.9 | $ | 156.9 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 291.3 | 279.0 | 266.0 | ||||||||
Gains on sales of property and equipment | (8.1 | ) | (9.4 | ) | (18.3 | ) | |||||
Goodwill impairment charge | 2.0 | — | — | ||||||||
Deferred income taxes | 62.2 | (152.0 | ) | 75.6 | |||||||
WSL contingent consideration adjustment | — | (13.5 | ) | — | |||||||
Long-term incentive compensation expense | 22.8 | 17.0 | 18.3 | ||||||||
Other noncash items | (3.5 | ) | (0.7 | ) | (1.4 | ) | |||||
Changes in operating assets and liabilities: | |||||||||||
Receivables | (74.8 | ) | (64.4 | ) | 1.1 | ||||||
Other assets | (9.0 | ) | 1.4 | (4.9 | ) | ||||||
Payables | 3.0 | 16.0 | (0.6 | ) | |||||||
Other liabilities | 11.7 | (2.0 | ) | (37.4 | ) | ||||||
Net cash provided by operating activities | 566.5 | 461.3 | 455.3 | ||||||||
Investing Activities: | |||||||||||
Purchases of transportation equipment | (385.1 | ) | (388.5 | ) | (422.1 | ) | |||||
Purchases of other property and equipment | (36.9 | ) | (33.4 | ) | (37.0 | ) | |||||
Proceeds from sale of property and equipment | 90.5 | 70.0 | 52.0 | ||||||||
Proceeds from lease receipts and sale of off-lease inventory | 94.6 | 61.0 | 63.5 | ||||||||
Purchases of lease equipment | (90.5 | ) | (110.1 | ) | (88.4 | ) | |||||
Sales of marketable securities | 9.9 | 10.5 | 11.1 | ||||||||
Purchases of marketable securities | (20.1 | ) | — | (14.2 | ) | ||||||
Acquisition of businesses, net of cash acquired | — | — | (78.2 | ) | |||||||
Net cash used in investing activities | (337.6 | ) | (390.5 | ) | (513.3 | ) | |||||
Financing Activities: | |||||||||||
Proceeds under revolving credit agreements | — | — | 176.0 | ||||||||
Payments under revolving credit agreements | — | (135.0 | ) | (89.9 | ) | ||||||
Proceeds from other debt | — | — | 0.5 | ||||||||
Payments of debt and capital lease obligations | (28.7 | ) | (123.7 | ) | (28.1 | ) | |||||
Payment of deferred consideration related to acquisition | (19.3 | ) | (19.4 | ) | — | ||||||
Proceeds from IPO, net of issuance costs | — | 340.6 | — | ||||||||
Dividends paid | (40.7 | ) | (25.5 | ) | (31.3 | ) | |||||
Redemptions of redeemable common shares | — | (0.1 | ) | (1.4 | ) | ||||||
Proceeds from issuances of redeemable common shares | — | — | 2.3 | ||||||||
Net cash provided by (used in) financing activities | (88.7 | ) | 36.9 | 28.1 | |||||||
Net increase (decrease) in cash and cash equivalents | 140.2 | 107.7 | (29.9 | ) | |||||||
Cash and Cash Equivalents: | |||||||||||
Beginning of period | 238.5 | 130.8 | 160.7 | ||||||||
End of period | $ | 378.7 | $ | 238.5 | $ | 130.8 | |||||
Additional Cash Flow Information: | |||||||||||
Noncash investing and financing activity: | |||||||||||
Equipment purchases in accounts payable | $ | 2.1 | $ | 9.5 | $ | 22.4 | |||||
Dividends declared but not yet paid | 10.6 | 8.8 | — | ||||||||
Costs in accounts payable related to our IPO | — | — | 2.3 | ||||||||
Increase in redemption value of redeemable common shares | — | 126.6 | 110.0 | ||||||||
Ownership interest in Platform Science, Inc. | 3.5 | — | — | ||||||||
Cash paid (refunded) during the year for: | |||||||||||
Interest | 15.5 | 19.2 | 21.6 | ||||||||
Income taxes—net of refunds | 39.0 | (4.2 | ) | 5.0 |
Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total | |||||||||||||||||
Balance—December 31, 2015 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Balance—December 31, 2016 | — | — | — | — | — | ||||||||||||||||
Repurchases and retirements of stock related to pre-IPO share-based awards | — | (0.1 | ) | — | — | (0.1 | ) | ||||||||||||||
Share issuances related to pre-IPO share-based awards | — | 2.9 | — | — | 2.9 | ||||||||||||||||
Share issuances - IPO | — | 340.6 | — | — | 340.6 | ||||||||||||||||
Transfer from temporary equity to permanent equity See Note 11, Temporary Equity | — | 1,187.0 | 13.3 | 0.9 | 1,201.2 | ||||||||||||||||
Net income - post-IPO | — | — | 367.4 | — | 367.4 | ||||||||||||||||
Other comprehensive loss - post-IPO | — | — | — | (0.9 | ) | (0.9 | ) | ||||||||||||||
Share-based compensation expense | — | 4.8 | — | — | 4.8 | ||||||||||||||||
Post-IPO dividends declared at $0.15 per share | — | — | (26.5 | ) | — | (26.5 | ) | ||||||||||||||
Post-IPO issuance of stock | — | 0.8 | — | — | 0.8 | ||||||||||||||||
Other | — | (1.4 | ) | 1.4 | — | — | |||||||||||||||
Balance—December 31, 2017 | — | 1,534.6 | 355.6 | — | 1,890.2 | ||||||||||||||||
Net income | — | — | 268.9 | — | 268.9 | ||||||||||||||||
Other comprehensive loss | — | — | — | (1.0 | ) | (1.0 | ) | ||||||||||||||
Share-based compensation expense | — | 10.9 | — | — | 10.9 | ||||||||||||||||
Dividends declared at $0.24 per share | — | — | (42.5 | ) | — | (42.5 | ) | ||||||||||||||
Share issuances | — | 0.5 | — | — | 0.5 | ||||||||||||||||
Exercise of employee stock options | — | 0.2 | — | — | 0.2 | ||||||||||||||||
Shares withheld for employee taxes | — | (2.3 | ) | — | — | (2.3 | ) | ||||||||||||||
Cumulative–effect adjustment of ASU 2014-09 adoption See Note 2, Revenue Recognition | — | — | 7.3 | — | 7.3 | ||||||||||||||||
Other | — | 0.1 | — | — | 0.1 | ||||||||||||||||
Balance—December 31, 2018 | $ | — | $ | 1,544.0 | $ | 589.3 | $ | (1.0 | ) | $ | 2,132.3 |
(in millions) | 2018 | 2017 | ||||||
Tractors and trailing equipment for sale or lease | $ | 48.1 | $ | 69.8 | ||||
Replacement parts | 11.4 | 11.8 | ||||||
Tires and other | 1.3 | 1.5 | ||||||
Total | $ | 60.8 | $ | 83.1 |
2018 | |
Tractors | 2 - 10 years |
Trailing equipment | 6 - 20 years |
Other transportation equipment | 4 - 5 years |
Buildings and improvements | 5 - 25 years |
Other property | 3 - 10 years |
(in millions) | 2018 | 2017 | ||||||
Truckload | $ | 19.5 | $ | 35.2 | ||||
Intermodal | 2.4 | 0.7 | ||||||
Total | $ | 21.9 | $ | 35.9 |
Year Ended December 31, 2018 | ||||||||||||
Financial Statement Line Item (in millions) | Under ASC 605 | Adjustment | As Reported | |||||||||
Consolidated Statement of Comprehensive Income | ||||||||||||
Operating revenues | $ | 4,977.6 | $ | (0.6 | ) | $ | 4,977.0 | |||||
Purchased transportation | 1,965.2 | 0.7 | 1,965.9 | |||||||||
Salaries, wages, and benefits | 1,260.3 | (0.9 | ) | 1,259.4 | ||||||||
Total operating expenses | 4,601.4 | (0.2 | ) | 4,601.2 | ||||||||
Income from operations | 376.2 | (0.4 | ) | 375.8 | ||||||||
Provision for income taxes | 364.6 | — | 364.6 | |||||||||
Net income | 269.3 | (0.4 | ) | 268.9 | ||||||||
Comprehensive income | 268.3 | (0.4 | ) | 267.9 |
December 31, 2018 | ||||||||||||
Financial Statement Line Item (in millions) | Under ASC 605 | Adjustment | As Reported | |||||||||
Consolidated Balance Sheet | ||||||||||||
Prepaid expenses and other current assets | $ | 59.8 | $ | 19.7 | $ | 79.5 | ||||||
Total current assets | 1,304.6 | 19.7 | 1,324.3 | |||||||||
Total assets | 3,604.8 | 19.7 | 3,624.5 | |||||||||
Other current liabilities | 70.8 | 10.4 | 81.2 | |||||||||
Total current liabilities | 512.2 | 10.4 | 522.6 | |||||||||
Deferred income taxes | 448.2 | 2.4 | 450.6 | |||||||||
Total noncurrent liabilities | 967.2 | 2.4 | 969.6 | |||||||||
Retained earnings | 582.4 | 6.9 | 589.3 | |||||||||
Total shareholders' equity | 2,125.4 | 6.9 | 2,132.3 | |||||||||
Total liabilities and shareholders' equity | 3,604.8 | 19.7 | 3,624.5 |
Year Ended December 31, 2018 | ||||||||||||
Financial Statement Line Item (in millions) | Under ASC 605 | Adjustment | As Reported | |||||||||
Consolidated Statement of Cash Flows | ||||||||||||
Operating Cash Flows | ||||||||||||
Net income | $ | 269.3 | $ | (0.4 | ) | $ | 268.9 | |||||
Change in: Other assets | (8.7 | ) | (0.3 | ) | (9.0 | ) | ||||||
Change in: Payables | 3.0 | — | 3.0 | |||||||||
Change in: Other liabilities | 11.0 | 0.7 | 11.7 |
Year Ended December 31, | ||||||||
Disaggregated Revenues (in millions) | 2018 | 2017 | ||||||
Transportation | $ | 4,589.7 | $ | 4,012.4 | ||||
Logistics management | 228.3 | 220.2 | ||||||
Other | 159.0 | 151.0 | ||||||
Total operating revenues | $ | 4,977.0 | $ | 4,383.6 |
Remaining Performance Obligations (in millions) | December 31, 2018 | |||
Expected to be recognized within one year | ||||
Transportation | $ | 5.6 | ||
Logistics Management | 17.4 | |||
Expected to be recognized after one year | ||||
Transportation | 2.2 | |||
Logistics Management | 4.0 | |||
Total | $ | 29.2 |
Contract Balances (in millions) | December 31, 2018 | January 1, 2018 | ||||||
Other current assets - Contract assets | $ | 21.7 | $ | 22.2 | ||||
Other current liabilities - Contract liabilities | — | — |
(in millions) | December 31, 2018 | January 1, 2018 | ||||||
Capitalized contract fulfillment costs | $ | 5.0 | $ | 3.7 |
Year Ended December 31, | ||||||||
(in millions) | 2018 | 2017 | ||||||
Amortization of contract fulfillment costs | $ | 2.5 | $ | 2.0 |
(in millions) | ||||
Recognized amounts of identifiable assets acquired and liabilities assumed | As of June 1, 2016 | |||
Cash | $ | 1.3 | ||
Receivables | 16.2 | |||
Inventories | 0.5 | |||
Prepaid expenses and other current assets | 4.4 | |||
Property and equipment | 81.8 | |||
Capitalized software and other noncurrent assets | 5.8 | |||
Intangible assets | 10.9 | |||
Goodwill | 138.2 | |||
Total assets acquired | 259.1 | |||
Payables assumed | 7.8 | |||
Accrued liabilities assumed | 5.3 | |||
Current maturities of debt and capital lease obligations assumed | 47.7 | |||
Debt and capital lease obligations assumed | 46.2 | |||
Other noncurrent liabilities assumed | 1.7 | |||
Fair value of total consideration transferred | $ | 150.4 |
(in millions, except per share data) | Year Ended December 31, 2016 | |||
Pro forma net sales | $ | 4,119.3 | ||
Pro forma net income | 155.0 | |||
Basic earnings per share as reported | 1.00 | |||
Pro forma basic earnings per share | 0.99 | |||
Diluted earnings per share as reported | 1.00 | |||
Pro forma diluted earnings per share | 0.99 |
(in millions) | 2018 | 2017 | ||||||
Beginning balance | $ | — | $ | 13.5 | ||||
Change in fair value | — | (13.5 | ) | |||||
Ending balance | $ | — | $ | — |
December 31, 2018 | December 31, 2017 | |||||||||||||||
(in millions) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Fixed-rate debt portfolio | $ | 405.0 | $ | 398.4 | $ | 429.8 | $ | 432.4 |
December 31, 2018 | December 31, 2017 | |||||||||||||||
(in millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||
Zero coupon bonds | $ | 3.9 | $ | 3.9 | $ | 3.8 | $ | 3.9 | ||||||||
U.S. treasury and government agencies | 20.0 | 19.8 | 6.0 | 6.0 | ||||||||||||
Asset-backed securities | 0.1 | 0.1 | 0.3 | 0.3 | ||||||||||||
Corporate debt securities | 15.1 | 15.0 | 9.1 | 9.2 | ||||||||||||
State and municipal bonds | 12.5 | 12.5 | 22.7 | 22.2 | ||||||||||||
Total marketable securities | $ | 51.6 | $ | 51.3 | $ | 41.9 | $ | 41.6 |
(in millions) | Truckload | Logistics | Other | Total | ||||||||||||
Balance at December 31, 2016 | $ | 138.2 | $ | 14.2 | $ | 11.6 | $ | 164.0 | ||||||||
Foreign currency translation | — | — | 0.8 | 0.8 | ||||||||||||
Balance at December 31, 2017 | 138.2 | 14.2 | 12.4 | 164.8 | ||||||||||||
Goodwill impairment charge | — | — | (2.0 | ) | (2.0 | ) | ||||||||||
Foreign currency translation | — | — | (0.6 | ) | (0.6 | ) | ||||||||||
Balance at December 31, 2018 | $ | 138.2 | $ | 14.2 | $ | 9.8 | $ | 162.2 |
December 31, 2018 | December 31, 2017 | |||||||||||||||||||||||
(in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
Customer lists | $ | 10.5 | $ | 3.5 | $ | 7.0 | $ | 10.5 | $ | 2.5 | $ | 8.0 | ||||||||||||
Trade names | 1.4 | 1.2 | 0.2 | 1.4 | 0.7 | 0.7 | ||||||||||||||||||
Total intangible assets | $ | 11.9 | $ | 4.7 | $ | 7.2 | $ | 11.9 | $ | 3.2 | $ | 8.7 |
2019 | $ | 1.1 | |
2020 | 1.0 | ||
2021 | 1.0 | ||
2022 | 1.0 | ||
2023 | 1.0 | ||
2024 and thereafter | 2.1 | ||
Total | $ | 7.2 |
(in millions) | December 31, 2018 | December 31, 2017 | ||||||
Unsecured senior notes: principal payable at maturities ranging from 2019 through 2025; interest payable in semiannual installments through the same time frame; weighted-average interest rate of 3.36% for both 2018 and 2017 | $ | 400.0 | $ | 400.0 | ||||
Equipment financing notes: principal and interest payable in monthly installments through 2019; weighted average interest rate of 3.72% and 3.76% for 2018 and 2017, respectively | 5.0 | 29.8 | ||||||
Total principal outstanding | 405.0 | 429.8 | ||||||
Current maturities of debt | (45.0 | ) | (15.2 | ) | ||||
Debt issuance costs | (0.6 | ) | (0.9 | ) | ||||
Long-term debt | $ | 359.4 | $ | 413.7 |
Years ending December 31, | (in millions) | |||
2019 | $ | 45.0 | ||
2020 | 55.0 | |||
2021 | 40.0 | |||
2022 | 60.0 | |||
2023 | 70.0 | |||
2024 and thereafter | 135.0 | |||
Total | $ | 405.0 |
(in millions) | Operating Leases | Capital Leases | ||||||
2019 | $ | 35.8 | $ | 6.9 | ||||
2020 | 25.7 | 0.2 | ||||||
2021 | 14.9 | — | ||||||
2022 | 8.4 | — | ||||||
2023 | 6.8 | — | ||||||
2024 and thereafter | 12.7 | — | ||||||
Total | $ | 104.3 | 7.1 | |||||
Amount representing interest | (0.2 | ) | ||||||
Present value of minimum lease payments | 6.9 | |||||||
Current maturities | (6.7 | ) | ||||||
Long-term capital lease obligations | $ | 0.2 |
(in millions) | 2018 | 2017 | ||||||
Transportation equipment | $ | 19.9 | $ | 25.0 | ||||
Real property | 0.8 | 0.8 | ||||||
Other property | 0.6 | 0.6 | ||||||
Accumulated amortization | (11.2 | ) | (12.6 | ) | ||||
Total | $ | 10.1 | $ | 13.8 |
(in millions) | 2018 | 2017 | ||||||
Future minimum payments to be received on leases | $ | 140.0 | $ | 141.2 | ||||
Guaranteed residual lease values | 151.0 | 130.7 | ||||||
Total minimum lease payments to be received | 291.0 | 271.9 | ||||||
Unearned income | (28.7 | ) | (28.1 | ) | ||||
Net investment in leases | 262.3 | 243.8 | ||||||
Current maturities of lease receivables | 129.6 | 106.6 | ||||||
Less—allowance for doubtful accounts | (0.5 | ) | (1.7 | ) | ||||
Current portion of lease receivables—net of allowance | 129.1 | 104.9 | ||||||
Lease receivables—noncurrent | $ | 133.2 | $ | 138.9 |
Years ending December 31 | (in millions) | ||
2019 | $ | 149.0 | |
2020 | 112.7 | ||
2021 | 29.0 | ||
2022 | 0.3 | ||
2023 | — | ||
2024 and thereafter | — | ||
Total | $ | 291.0 |
(in millions) | 2018 | 2017 | 2016 | ||||||||||
Current: | |||||||||||||
Federal | $ | 21.7 | $ | 19.3 | $ | 24.4 | |||||||
State and other | 11.8 | 5.6 | 7.5 | ||||||||||
33.5 | 24.9 | 31.9 | |||||||||||
Deferred: | |||||||||||||
Federal | 54.2 | 71.4 | 71.2 | ||||||||||
State and other | 6.7 | 6.7 | 5.6 | ||||||||||
Impact of the Tax Cuts and Jobs Act | 1.3 | (229.5 | ) | — | |||||||||
62.2 | (151.4 | ) | 76.8 | ||||||||||
Total provision for (benefit from) income taxes | $ | 95.7 | $ | (126.5 | ) | $ | 108.7 |
2018 | 2017 | 2016 | |||||||||||||||||
(in millions, except percentages) | Dollar Impact | Rate | Dollar Impact | Rate | Dollar Impact | Rate | |||||||||||||
Income tax at federal statutory rate | $ | 76.6 | 21.0 | % | $ | 92.2 | 35.0 | % | $ | 93.0 | 35.0 | % | |||||||
State tax, net of federal effect | 15.4 | 4.2 | % | 8.6 | 3.3 | % | 10.5 | 3.9 | % | ||||||||||
Nondeductible meals and entertainment | 2.1 | 0.6 | % | 3.4 | 1.3 | % | 3.4 | 1.3 | % | ||||||||||
Impact of the Tax Cuts and Jobs Act | 1.3 | 0.3 | % | (229.5 | ) | (87.1 | )% | — | — | ||||||||||
Other, net | 0.3 | 0.1 | % | (1.2 | ) | (0.5 | )% | 1.8 | 0.7 | % | |||||||||
Total provision for (benefit from) income taxes | $ | 95.7 | 26.2 | % | $ | (126.5 | ) | (48.0 | )% | $ | 108.7 | 40.9 | % |
(in millions) | 2018 | 2017 | |||||||
Deferred tax assets: | |||||||||
Allowances for doubtful accounts | $ | 1.1 | $ | 1.1 | |||||
Compensation and employee benefits | 14.7 | 15.6 | |||||||
Insurance and claims accruals | 2.6 | 2.8 | |||||||
State net operating losses and credit carryforwards | 18.2 | 17.7 | |||||||
Other | 5.0 | 4.0 | |||||||
Total gross deferred tax assets | 41.6 | 41.2 | |||||||
Valuation allowance | (5.8 | ) | (4.4 | ) | |||||
Total deferred tax assets, net of valuation allowance | 35.8 | 36.8 | |||||||
Deferred tax liabilities: | |||||||||
Property and equipment | 466.5 | 410.8 | |||||||
Prepaid expenses | 4.3 | 3.6 | |||||||
Intangibles | 11.1 | 8.7 | |||||||
Other | 4.5 | 0.3 | |||||||
Total gross deferred tax liabilities | 486.4 | 423.4 | |||||||
Net deferred tax liability | $ | 450.6 | $ | 386.6 |
(in millions) | 2018 | 2017 | 2016 | ||||||||||
Gross unrecognized tax benefits - beginning of year | $ | 2.8 | $ | 2.4 | $ | 2.0 | |||||||
Gross increases - tax positions related to current year | 0.8 | 0.4 | 0.5 | ||||||||||
Gross decreases - tax positions taken in prior years | — | — | (0.1 | ) | |||||||||
Lapse of statutes | (0.3 | ) | — | — | |||||||||
Gross unrecognized tax benefits - end of year | $ | 3.3 | $ | 2.8 | $ | 2.4 |
Class A Redeemable Common Shares | Class B Redeemable Common Shares | Accumulated Earnings | Accumulated Other Comprehensive Income | |||||||||||||||||||||||
(in millions) | Shares | Amount | Shares | Amount | Total | |||||||||||||||||||||
Balance—December 31, 2016 | 83.0 | $ | 563.2 | 73.3 | $ | 497.2 | $ | 125.1 | $ | 0.9 | $ | 1,186.4 | ||||||||||||||
Net income | — | — | — | — | 22.6 | — | 22.6 | |||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | |||||||||||||||||||
Dividends declared at $0.05 per share | — | — | — | — | (7.8 | ) | — | (7.8 | ) | |||||||||||||||||
Change in redemption value of redeemable common shares | — | 67.3 | — | 59.3 | (126.6 | ) | — | — | ||||||||||||||||||
Transfer from temporary equity to common equity | (83.0 | ) | (630.5 | ) | (73.3 | ) | (556.5 | ) | (13.3 | ) | (0.9 | ) | (1,201.2 | ) | ||||||||||||
Balance—December 31, 2017 | — | $ | — | — | $ | — | $ | — | $ | — | $ | — |
Year Ended December 31, | ||||||||||||
(in millions, except per share data) | 2018 | 2017 | 2016 | |||||||||
Numerator: | ||||||||||||
Net income available to common shareholders | $ | 268.9 | $ | 389.9 | $ | 156.9 | ||||||
Denominator: | ||||||||||||
Weighted average common shares issued and outstanding | 177.0 | 171.1 | 156.6 | |||||||||
Effect of dilutive restricted share units | 0.2 | 0.2 | 0.2 | |||||||||
Weighted average diluted common shares issued and outstanding | 177.2 | 171.3 | 156.8 | |||||||||
Basic earnings per common share | $ | 1.52 | $ | 2.28 | $ | 1.00 | ||||||
Diluted earnings per common share | $ | 1.52 | $ | 2.28 | $ | 1.00 |
(in millions) | Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | ||||||||||
Restricted Shares and RSUs | $ | 3.1 | $ | 1.5 | $ | — | ||||||
Pre-IPO Restricted Shares | 0.9 | 1.9 | 2.2 | |||||||||
Performance Shares and PSUs | 5.5 | 1.2 | — | |||||||||
Nonqualified Stock Options | 1.4 | 0.6 | — | |||||||||
Share-based compensation expense | $ | 10.9 | $ | 5.2 | $ | 2.2 | ||||||
Related tax benefit | $ | 2.8 | $ | 2.0 | $ | 0.9 |
Restricted Shares and RSUs | Number of Awards | Weighted Average Grant Date Fair Value | |||||
Unvested at December 31, 2016 | — | $ | — | ||||
Granted | 246,516 | 19.00 | |||||
Vested | — | — | |||||
Forfeited | (6,500 | ) | 19.00 | ||||
Unvested at December 31, 2017 | 240,016 | 19.00 | |||||
Granted | 229,272 | 26.82 | |||||
Vested | (74,828 | ) | 19.00 | ||||
Forfeited | (24,983 | ) | 21.26 | ||||
Unvested at December 31, 2018 | 369,477 | $ | 23.70 |
Pre-IPO Restricted Shares | Number of Awards | Weighted Average Grant Date Fair Value | |||||
Unvested at January 1, 2016 | 798,960 | $ | 5.63 | ||||
Granted | 386,370 | 6.78 | |||||
Vested | (398,220 | ) | 5.42 | ||||
Forfeited | (9,900 | ) | 6.17 | ||||
Unvested at December 31, 2016 | 777,210 | 6.31 | |||||
Granted | — | — | |||||
Vested | (621,722 | ) | 7.59 | ||||
Forfeited (a) | (3,289 | ) | 19.00 | ||||
Unvested at December 31, 2017 | 152,199 | 19.00 | |||||
Granted | — | — | |||||
Vested | (101,643 | ) | 19.00 | ||||
Forfeited | (6,225 | ) | 19.00 | ||||
Unvested at December 31, 2018 | 44,331 | $ | 19.00 |
Performance Shares and PSUs | Number of Awards | Weighted Average Grant Date Fair Value | |||||
Unvested at December 31, 2016 | — | $ | — | ||||
Granted | 396,201 | 19.00 | |||||
Vested | — | — | |||||
Forfeited | (4,660 | ) | 19.00 | ||||
Unvested at December 31, 2017 | 391,541 | 19.00 | |||||
Granted | 303,228 | 26.78 | |||||
Vested | — | — | |||||
Forfeited | (56,390 | ) | 19.65 | ||||
Unvested at December 31, 2018 | 638,379 | $ | 22.64 |
Nonqualified Stock Options Outstanding | Number of Awards | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value (1) | ||||||||||
(In years) | (In thousands) | |||||||||||||
Outstanding at December 31, 2016 | — | $ | — | — | $ | — | ||||||||
Granted | 229,620 | 19.00 | — | — | ||||||||||
Exercised (2) | — | — | — | — | ||||||||||
Forfeited | — | — | — | — | ||||||||||
Outstanding at December 31, 2017 | 229,620 | $ | 19.00 | 9.3 | $ | 2,195 | ||||||||
Granted | 173,024 | 26.74 | — | — | ||||||||||
Exercised (2) | (8,410 | ) | 19.00 | — | 67 | |||||||||
Forfeited | (25,230 | ) | 19.00 | — | — | |||||||||
Outstanding at December 31, 2018 | 369,004 | $ | 22.63 | 8.7 | $ | — | ||||||||
Exercisable as of: | ||||||||||||||
December 31, 2017 | — | — | — | — | ||||||||||
December 31, 2018 | 48,995 | $ | 19.00 | 8.3 | $ | — |
(1) | The aggregate intrinsic value was computed using the closing share price on December 31, 2018 of $18.67 and on December 29, 2017 of $28.56, as applicable. |
(2) | Cash received upon exercise of stock options was $0.2 million in 2018 and $0 in 2017. |
Unvested Nonqualified Stock Options | Number of Awards | Weighted Average Grant Date Fair Value | |||||
Unvested at December 31, 2016 | — | $ | — | ||||
Granted | 229,620 | 6.37 | |||||
Vested | — | — | |||||
Forfeited | — | — | |||||
Unvested at December 31, 2017 | 229,620 | 6.37 | |||||
Granted | 173,024 | 8.96 | |||||
Vested | (57,405 | ) | 6.37 | ||||
Forfeited | (25,230 | ) | 6.37 | ||||
Unvested at December 31, 2018 | 320,009 | $ | 7.77 |
Year Ended December 31, 2018 | Year Ended December 31, 2017 | |||||||
Weighted-average Black-Scholes value | $ | 8.96 | $ | 6.37 | ||||
Black-Scholes Assumptions: | ||||||||
Expected term | 6.25 years | 6.25 years | ||||||
Expected volatility | 32.2 | % | 35.0 | % | ||||
Expected dividend yield | 0.9 | % | 1.1 | % | ||||
Risk-free interest rate | 2.8 | % | 2.2 | % |
Revenues by Segment (in millions) | Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | ||||||||||
Truckload | $ | 2,268.0 | $ | 2,187.4 | $ | 2,091.0 | ||||||
Intermodal | 953.5 | 779.9 | 757.5 | |||||||||
Logistics | 1,024.6 | 834.3 | 737.7 | |||||||||
Other | 322.0 | 293.6 | 240.5 | |||||||||
Fuel surcharge | 522.8 | 386.3 | 294.0 | |||||||||
Inter-segment eliminations | (113.9 | ) | (97.9 | ) | (75.0 | ) | ||||||
Operating revenues | $ | 4,977.0 | $ | 4,383.6 | $ | 4,045.7 |
Income (Loss) from Operations by Segment (in millions) | Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | ||||||||||
Truckload | $ | 240.5 | $ | 196.2 | $ | 221.1 | ||||||
Intermodal | 130.2 | 52.3 | 46.1 | |||||||||
Logistics | 47.4 | 34.2 | 30.7 | |||||||||
Other | (42.3 | ) | (2.4 | ) | (7.5 | ) | ||||||
Income from operations | $ | 375.8 | $ | 280.3 | $ | 290.4 |
Depreciation and Amortization Expense by Segment (in millions) | Year Ended December 31, | |||||||||||
2018 | 2017 | 2015 | ||||||||||
Truckload | $ | 211.0 | $ | 205.9 | $ | 192.6 | ||||||
Intermodal | 39.8 | 34.5 | 30.9 | |||||||||
Logistics | 0.4 | 0.4 | 0.4 | |||||||||
Other | 40.1 | 38.2 | 42.1 | |||||||||
Depreciation and amortization expense | $ | 291.3 | $ | 279.0 | $ | 266.0 |
(in millions, except per share amounts)* | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | |||||||||||||||
2018 | ||||||||||||||||||||
Operating revenues | $ | 1,139.0 | $ | 1,236.3 | $ | 1,280.1 | $ | 1,321.6 | $ | 4,977.0 | ||||||||||
Income from operations | 67.6 | 91.7 | 97.9 | 118.6 | 375.8 | |||||||||||||||
Net income | 47.6 | 65.8 | 70.7 | 84.8 | 268.9 | |||||||||||||||
Basic earnings per share | 0.27 | 0.37 | 0.40 | 0.48 | 1.52 | |||||||||||||||
Diluted earnings per share | 0.27 | 0.37 | 0.40 | 0.48 | 1.52 | |||||||||||||||
2017 | ||||||||||||||||||||
Operating revenues | $ | 1,006.4 | $ | 1,075.2 | $ | 1,110.8 | $ | 1,191.2 | $ | 4,383.6 | ||||||||||
Income from operations | 43.5 | 79.0 | 64.1 | 93.7 | 280.3 | |||||||||||||||
Net income** | 22.6 | 46.5 | 36.9 | 283.9 | 389.9 | |||||||||||||||
Basic earnings per share** | 0.14 | 0.27 | 0.21 | 1.60 | 2.28 | |||||||||||||||
Diluted earnings per share** | 0.14 | 0.27 | 0.21 | 1.60 | 2.28 |
* | Table may not sum due to rounding |
** | Fourth quarter 2017 results include the impact of the Tax Cuts and Jobs Act, see Note 10, Income Taxes, for more information. |
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column) | |||||||
Equity compensation plans approved by security holders | 931,615 | $ | 22.63 | 6,283,529 | ||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||
Total | 931,615 | $ | 22.63 | 6,283,529 |
Allowance for Doubtful Accounts and Revenue Adjustments for the Year Ended | Balance at Beginning of Year | Charged to Expense / Against Revenue | Write-offs, Net of Recoveries | Balance at End of Year | ||||||||||||
December 31, 2016 | $ | 3.6 | $ | (0.3 | ) | $ | 0.2 | $ | 3.5 | |||||||
December 31, 2017 | 3.5 | 3.7 | (2.0 | ) | 5.2 | |||||||||||
December 31, 2018 | 5.2 | 3.7 | (2.1 | ) | 6.8 |
Exhibit Number | Exhibit Description | |
3.1 | ||
3.2 | ||
9.1 | ||
9.2 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4 | ||
10.5 | ||
10.6 |
10.7 | ||
10.8 | ||
10.9+ | ||
10.10+ | ||
10.11+ | ||
10.12+ | ||
10.13+ | ||
10.14+ | ||
10.15+ | ||
10.16+ | ||
10.17+ | ||
10.18+ | ||
10.19+ | ||
10.20+ | ||
10.21+ | ||
10.22+ | ||
10.23+ |
10.24+ | ||
10.25+ | ||
10.26+ | ||
10.27+ | ||
10.28+ | ||
10.29+ | ||
10.30+ | ||
10.31+ | ||
10.32+ | ||
10.33+ | ||
10.34+ | ||
10.35+ | ||
10.36+ | ||
10.37+ | ||
10.38+ | ||
21.1* | ||
23.1* | ||
24.1* | ||
31.1* | ||
31.2* | ||
32.1** | ||
32.2** | ||
101* | Interactive Data File |
SCHNEIDER NATIONAL, INC. | ||
Date: | February 26, 2019 | /s/ Christopher B. Lofgren |
Christopher B. Lofgren | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
Signature | Title | |
*/s/ Daniel J. Sullivan | ||
Daniel J. Sullivan | Chairman of the Board of Directors | |
*/s/ Mary P. DePrey | ||
Mary P. DePrey | Director | |
*/s/ Thomas A. Gannon | ||
Thomas A. Gannon | Director | |
*/s/ James R. Giertz | ||
James R. Giertz | Director | |
*/s/ Adam P. Godfrey | ||
Adam P. Godfrey | Director | |
*/s/ Robert W. Grubbs | ||
Robert W. Grubbs | Director | |
*/s/ Norman E. Johnson | ||
Norman E. Johnson | Director | |
*/s/ Christopher B. Lofgren | ||
Christopher B. Lofgren | Director | |
*/s/ James L. Welch | ||
James L. Welch | Director | |
*/s/ Kathleen M. Zimmermann | ||
Kathleen M. Zimmermann | Director | |
/s/ Christopher B. Lofgren | ||
Christopher B. Lofgren | President and Chief Executive Officer (Principal Executive Officer) | |
/s/ Stephen L. Bruffett | ||
Stephen L. Bruffett | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |
/s/ Amy G. Schilling | ||
Amy G. Schilling | Vice President and Controller (Principal Accounting Officer) |
* By: | /s/ Amy G. Schilling | |
Amy G. Schilling | Attorney-in-fact |
1. | 4488 International Holding Company Limited, a West Indies limited company (Barbados) |
2. | Bulk Fleet Operator, LLC, a Wisconsin limited liability company |
3. | Dedicated Fleet Operator, LLC, a Wisconsin limited liability company |
4. | Dray Fleet Operator National, LLC, a Wisconsin limited liability company |
5. | Dray Fleet Operator West, LLC, a Wisconsin limited liability company |
6. | Fleet Operator Master, Inc., a Wisconsin corporation |
7. | INS Insurance, Inc., a Vermont corporation, a Wisconsin limited liability company |
8. | Intermodal Fleet Operator, LLC |
9. | Lodeso Inc., a Michigan corporation |
10. | Schneider Enterprise Resources, LLC, a Wisconsin limited liability company |
11. | Schneider Finance, Inc., a Wisconsin corporation |
12. | Schneider IEP, Inc., a Wisconsin corporation |
13. | Schneider International Operations, LLC, a Wisconsin limited liability company |
14. | Schneider Leasing de Mexico S. de R.L de C.V., a Mexican Sociedad de Responsabilidad Limitada de Capital Variable |
15. | Schneider Logistics (Tianjin) Co., Ltd., a Chinese limited company |
16. | Schneider Logistics Canada, Ltd., a Canadian limited company (Ontario) |
17. | Schneider Logistics Transloading and Distribution, Inc., a Wisconsin corporation |
18. | Schneider Logistics Transportation, Inc., a Louisiana corporation |
19. | Schneider Logistics, Inc., a Wisconsin corporation |
20. | Schneider National Bulk Carriers, Inc., a Louisiana corporation |
21. | Schneider National Carriers, Inc., a Nevada corporation |
22. | Schneider National Carriers, Ltd., a Canadian limited company (Ontario) |
23. | Schneider National de Mexico, S.A. de C.V., a Mexican Sociedad Anónima de Capital Variable |
24. | Schneider National Leasing, Inc., a Nevada corporation |
25. | Schneider Receivables Corporation, a Delaware limited liability company |
26. | Schneider Resources, Inc., a Wisconsin corporation |
27. | Schneider Specialized Carriers, Inc., a North Dakota corporation |
28. | Schneider TECH Ventures LLC, a Wisconsin limited liability company |
29. | Schneider Transport, Inc., a Wisconsin corporation |
30. | VTL Illinois Fleet Operator, LLC, a Wisconsin limited liability company |
31. | VTL National Fleet Operator, LLC, a Wisconsin limited liability company |
32. | VTL New Jersey Fleet Operator, LLC, a Wisconsin limited liability company |
33. | VTL New York Fleet Operator, LLC, a Wisconsin limited liability company |
34. | VTL West Fleet Operator, LLC, a Nevada limited liability company |
35. | Watkins and Shepard Leasing LLC, a Montana limited liability company |
36. | Watkins and Shepard Trucking, Inc., a Montana corporation |
Signature | Title | |
/s/ Daniel J. Sullivan | ||
Daniel J. Sullivan | Chairman of the Board of Directors | |
/s/ Mary P. DePrey | ||
Mary P. DePrey | Director | |
/s/ Thomas A. Gannon | ||
Thomas A. Gannon | Director | |
/s/ James R. Giertz | ||
James R. Giertz | Director | |
/s/ Adam P. Godfrey | ||
Adam P. Godfrey | Director | |
/s/ Robert W. Grubbs | ||
Robert W. Grubbs | Director | |
/s/ Norman E. Johnson | ||
Norman E. Johnson | Director | |
/s/ Christopher B. Lofgren | ||
Christopher B. Lofgren | President, Chief Executive Officer, and Director | |
/s/ James L. Welch | ||
James L. Welch | Director | |
/s/ Kathleen M. Zimmermann | ||
Kathleen M. Zimmermann | Director |
Date: | February 26, 2019 | /s/ Christopher B. Lofgren | |||
Christopher B. Lofgren | |||||
President and Chief Executive Officer | |||||
(Principal Executive Officer) |
Date: | February 26, 2019 | /s/ Stephen L. Bruffett | |||
Stephen L. Bruffett | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) |
Date: | February 26, 2019 | /s/ Christopher B. Lofgren | |||
Christopher B. Lofgren | |||||
President and Chief Executive Officer | |||||
(Principal Executive Officer) |
Date: | February 26, 2019 | /s/ Stephen L. Bruffett | |||
Stephen L. Bruffett | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) |
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Document and Entity Information - USD ($) $ in Billions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Feb. 19, 2019 |
Jun. 29, 2018 |
|
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SNDR | ||
Entity Registrant Name | SCHNEIDER NATIONAL, INC. | ||
Entity Central Index Key | 0001692063 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Public Float | $ 1.3 | ||
Class A Common Shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding (shares) | 83,029,500 | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding (shares) | 93,995,072 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Trade allowance | $ 6.8 | $ 5.2 |
Allowance for lease receivables | $ 0.5 | $ 1.7 |
Class A Common Shares | ||
Common stock, par value (usd per share) | $ 0 | $ 0 |
Common stock, shares authorized (shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (shares) | 83,029,500 | 83,029,500 |
Common stock, shares outstanding (shares) | 83,029,500 | 83,029,500 |
Class B Common Stock | ||
Common stock, par value (usd per share) | $ 0 | $ 0 |
Common stock, shares authorized (shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (shares) | 94,593,588 | 93,850,011 |
Common stock, shares outstanding (shares) | 93,969,268 | 93,850,011 |
Consolidated Statements Shareholders' Equity (Parenthetical) - $ / shares |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per share (usd per share) | $ 0.15 | $ 0.24 | $ 0.2 | $ 0.2 |
Summary of Significant Accounting Policies |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a) Nature of Operations We are a leading transportation and logistics services company providing a broad portfolio of premier truckload, intermodal, and logistics solutions and operating one of the largest for-hire trucking fleets in North America. (b) Basis of Presentation As used in these notes, the term “financial statements” refers to the consolidated financial statements. This includes the consolidated statements of comprehensive income, consolidated balance sheets, consolidated statements of cash flows, and consolidated statements of shareholders' equity unless otherwise noted. Our consolidated financial statements include all of our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. (c) Use of Estimates The consolidated financial statements contained in this report have been prepared in conformity with GAAP. We make estimates and assumptions that affect assets, liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. (d) Cash and Cash Equivalents Cash in excess of current operating requirements is invested in short-term, highly liquid investments. We consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. (e) Receivables and Allowance for Doubtful Accounts Our trade accounts receivable and lease receivables are recorded net of an allowance for uncollectible accounts and revenue adjustments. The allowance is based on historical experience and an aging analysis, as well as any known trends or uncertainties related to customer billing and account collectability. The adequacy of our allowance is reviewed at least quarterly. Receivables are reserved when it is probable that amounts related to the receivable will not be collected. In circumstances where we are aware of a specific customer's inability to meet its financial obligations, a specific reserve is recorded against amounts due to reduce the net receivable to the amount reasonably expected to be collected. Bad debt expense is included in other general expenses in the consolidated statements of comprehensive income. (f) Inventory Our inventories consist of tractors and trailing equipment owned by our equipment leasing company to be sold or leased to independent contractors, as well as parts, tires, supplies, and fuel. These inventories are valued at the lower of cost or market using specific identification or average cost. The following table shows the components of our inventory balances as of December 31:
(g) Investments in Marketable Securities Our marketable securities are classified as available for sale and carried at fair value in current assets on the consolidated balance sheets. Our portfolio of securities has maturities ranging from 2 months to 81 months. While our intent is to hold our securities to maturity, sudden changes in the market or to our liquidity needs may cause us to sell certain securities in advance of their maturity date. Any unrealized gains and losses, net of tax, are included as a component of accumulated other comprehensive income on our consolidated balance sheets, unless we determine that an unrealized loss is other-than-temporary. If we determine that an unrealized loss is other-than-temporary, we recognize the loss in earnings. Cost basis is determined using the specific identification method. (h) Fair Value Fair value focuses on the estimated price that would be received to sell an asset or paid to transfer a liability, which is referred to as the exit price. Inputs to valuation techniques used to measure fair value fall into three broad levels (Levels 1, 2, and 3) as follows: Level 1—Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that we have the ability to access at the measurement date. Level 2—Observable inputs, other than quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities. Level 3—Unobservable inputs reflecting the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. All marketable securities were valued based on quoted prices for similar assets in active markets or quoted prices for identical or similar assets in markets that are not active (Level 2 in the fair value hierarchy). We measure our marketable securities on a recurring, monthly basis. (i) Property and Equipment Property and equipment are recorded at cost. Depreciation is calculated using the straight-line method based on the estimated useful lives and residual values. Generally, the estimated useful lives are as follows:
Salvage values, when applicable, generally don't exceed 25% of original cost for tractors and trailing equipment and reflect any agreements with tractor suppliers for residual or trade-in values for certain new equipment. Gains and losses on the sale or other disposition of equipment are based on the difference between the proceeds received less costs to sell and the net book value of the assets disposed. Gains and losses are recognized at the time of the sale or disposition and are classified in operating supplies and expenses in the consolidated statements of comprehensive income. (j) Assets Held for Sale Assets held for sale consist of revenue equipment and are included in prepaid expenses and other current assets in the consolidated balance sheets. Reclassification to assets held for sale occurs when the required criteria, as defined by ASC 360, Property, Plant and Equipment, are satisfied. As of December 31, 2018 and 2017, assets held for sale by segment were as follows:
(k) Asset Impairment Goodwill and other intangible assets with indefinite lives are subject to an annual impairment test. Interim impairment tests are performed when impairment indicators are present. Intangible assets with definite lives are reviewed for impairment on an annual basis. Other long-lived assets require an impairment review when events or circumstances indicate that the carrying amount may not be recoverable. We base our evaluation of other long-lived assets on the presence of impairment indicators such as the future economic benefit of the assets, any historical or future profitability measurements, and other external market conditions or factors. We perform annual goodwill impairment tests for each of our reporting units containing goodwill during the fourth quarter of each year. Beginning in 2017, we changed our annual goodwill impairment testing date from December 31 to October 31 to better align the testing date with our financial planning process and alleviate resource constraints. We would not expect a materially different outcome in any given year as a result of testing on October 31 as compared to December 31. The carrying amount of a reporting unit's goodwill is considered not recoverable, and an impairment loss is recorded if the carrying amount of the reporting unit exceeds the reporting unit's fair value, as determined based on a combination of an income approach and a market approach. See Note 7, Goodwill and Other Intangible Assets, for more information on our goodwill and other intangible assets. The carrying amount of tangible long-lived assets held and used is considered not recoverable if the carrying amount exceeds the undiscounted sum of cash flows expected to result from the use and eventual disposition of the asset. If the carrying amount is not recoverable, the impairment loss is measured as the excess of the asset's carrying amount over its fair value. Assets held for sale are evaluated for impairment at least annually and as impairment indicators are present. The carrying amount of assets held for sale is not recoverable if the carrying amount exceeds the fair value less estimated costs to sell the asset. An impairment loss is recorded for the excess of the asset’s carrying amount over the fair value less estimated costs to sell. Impairment losses are recorded in operating supplies and expenses in the consolidated statements of comprehensive income. Impairment losses were immaterial in 2018, 2017 and 2016. (l) Revenue Recognition Through December 31, 2017, we recorded transportation revenue at the time of delivery. Beginning in 2018, we implemented ASU 2014-09, Revenue from Contracts with Customers, which is codified as ASC 606 and replaces ASC 605, Revenue Recognition. With the adoption of ASC 606, we began recognizing revenue during the delivery period based on relative transit time in each reporting period, with expenses recognized as incurred. Accordingly, a portion of the total revenue that will be billed to the customer once a load is delivered is recognized in each reporting period based on the percentage of the freight pickup and delivery service that has been completed at the end of the reporting period. See Note 2, Revenue Recognition, for more information on the adoption of ASC 606. When we use third-party carriers, we generally record revenues on the gross basis at amounts charged to our customers because we are the primary obligor, we are a principal in the transaction, we invoice our customers and retain all credit risks, and we maintain discretion over pricing. Additionally, we are responsible for selection of third-party transportation providers to the extent used to satisfy customer freight requirements. We record revenues net of pass-through taxes in our consolidated statements of comprehensive income. For the year ended December 31, 2018, no customer accounted for more than 10% of our consolidated revenues. We had one customer who accounted for slightly more than 10% of our consolidated revenues in 2017. No customer accounted for more than 10% of our consolidated revenues in 2016. (m) Income Taxes Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. We record valuation allowances for deferred tax assets to the extent we believe these assets are not more likely than not to be realized through the reversal of existing taxable temporary differences, projected future taxable income, or tax-planning strategies. We record a liability for unrecognized tax benefits when the benefits of tax positions taken on a tax return are not more likely than not to be sustained upon audit. Interest and penalties related to uncertain tax positions are classified as income tax expense in the consolidated statements of comprehensive income. (n) Earnings Per Share We compute basic earnings per share by dividing net earnings available to common stockholders by the actual weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflect the potential dilution that could occur if holders of unvested restricted and performance share units or options exercised or converted their holdings into common stock. Awards that would have an antidilutive impact are excluded from the calculation and have been deemed immaterial. As disclosed in Note 3, IPO, our IPO of shares of Class B Common Stock was effective in April 2017. In connection with the offering, we subsequently sold additional shares of common stock. (o) Share-based Compensation We have share-based compensation plans covering certain employees, including officers and directors. We account for share-based compensation using the fair value recognition provisions of current accounting standards for share-based payments. We grant restricted share units, restricted shares, performance share units, performance shares, and nonqualified stock options. We recognize compensation expense over the requisite service periods within each award. See Note 14, Share-Based Compensation, for more information about our plans. (p) Claims Accruals We are self-insured for loss of and damage to our owned and leased revenue equipment. We purchase insurance coverage for a portion of expenses related to employee injuries, vehicular collisions, accidents, and cargo damage. Certain insurance arrangements include a level of self-insurance (deductible) coverage applicable to each claim. We have excess policies to limit our exposure to catastrophic claim costs. The amounts of self-insurance change from time to time based on measurement dates, policy expiration dates, and claim type. Our claims accrual policy for all self-insured claims is to recognize a liability at the time of the incident based on our analysis of the nature and severity of the claims and analyses provided by third-party claims administrators, as well as legal, economic, and regulatory factors. The ultimate cost of a claim develops over time as additional information regarding the nature, timing, and extent of damages claimed becomes available. Accordingly, we use an actuarial method to develop current claim information to derive an estimate of our ultimate claim liability. This process involves the use of loss-development factors based on our historical claims experience and includes a contractual premium adjustment factor, if applicable. In doing so, the recorded liability considers future claims growth and provides an allowance for incurred-but-not-reported claims. We do not discount our estimated losses. At December 31, 2018 and 2017, we had an accrual of approximately $156.0 million and $147.2 million, respectively, for estimated claims net of reinsurance receivables. In addition, we are required to pay certain advanced deposits and monthly premiums. At December 31, 2018 and 2017, we had an aggregate prepaid insurance asset of approximately $9.2 million and $7.9 million, respectively, which represented prefunded premiums and deposits. (q) Accounting Standards Issued but Not Yet Adopted In August 2018, the FASB issued ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the capitalization requirements for implementation costs incurred in a hosting arrangement that is a service contract with the existing capitalization requirements for implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for us as of January 1, 2020 with early adoption permitted. We currently cannot reasonably estimate the impact the adoption of this ASU will have on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Requirements, which removes, modifies, and adds certain disclosure requirements for fair value measurements. ASU 2018-13 is effective for us January 1, 2020 with early adoption permitted. We are currently evaluating the impact the adoption of this ASU will have on our consolidated financial statements and do not believe the impact will be material. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, which requires companies to use a forward-looking, expected loss model to estimate credit losses on various types of financial assets and net investments in leases. It also requires additional disclosure related to credit quality of trade and other receivables, including information related to management’s estimate of credit allowances. ASU 2016-13 is effective for us January 1, 2020. We currently cannot reasonably estimate the impact the adoption of this ASU will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which amended authoritative guidance on leases and is codified in ASC 842. The amended guidance requires lessees to recognize most leases on their balance sheets as right-of-use assets along with corresponding lease liabilities. The new standard also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. This guidance was effective for us January 1, 2019. In July 2018, the FASB issued additional authoritative guidance providing companies with the option to apply this ASU to new and existing leases within the scope of the guidance as of the beginning of the period of adoption. We elected this transition method of applying the new lease standard and recognized right-of-use assets, lease liabilities, and any cumulative-effect adjustments to the opening balance of retained earnings as of January 1, 2019. Prior period amounts will not be adjusted and will continue to be reported under the accounting standards in effect for those periods. Upon adoption of the new standard on January 1, 2019, we elected the package of practical expedients provided under the guidance. The practical expedient package applied to leases that commenced prior to adoption of the new standard and permitted companies not to reassess whether existing or expired contracts are or contain a lease, the lease classification, and any initial direct costs for any existing leases. The Company also elected the recognition exemption for equipment leases, which allows the Company to not recognize right-of-use assets and liabilities for leases with an initial term of 12 months or less. Additionally, the Company elected to take the practical expedient to include non-lease components as part of the right-of-use asset and lease liability. A cross-functional implementation team identified the Company's lease population, leveraged and expanded the use of our existing lease software to assist with the reporting and disclosure requirements under the standard, and abstracted and validated our lease information. The adoption of the standard added approximately $80 million in right-of-use assets and related lease obligations to our consolidated balance sheet for operating leases in which we were the lessee as of January 1, 2019. The adoption of this standard did not have a material impact on our consolidated statements of comprehensive income. Leasing activities in which we are the lessor in the transaction are also subject to ASC 842. As a lessor, adopting this standard did not have a material impact on our consolidated balance sheets but will add to both operating revenues and expenses in the consolidated statements of comprehensive income, as certain leases previously treated as direct financing leases will become sales-type leases. |
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Revenue Recognition | REVENUE RECOGNITION We implemented ASU 2014-09, Revenue from Contracts with Customers, which is codified as ASC 606 as of January 1, 2018 and replaces ASC 605, Revenue Recognition. We used the modified retrospective approach for adoption, which required us to record the cumulative effect of the transition through retained earnings as of January 1, 2018. Retained earnings increased by $7.3 million upon adoption. The adjustment related only to contracts that were not completed as of January 1, 2018. The following table shows the amount by which financial statement lines were affected by the adoption of the new standard. The changes relate to the recognition of transportation revenue over time rather than at delivery, as explained below under the Transportation heading. Revenue in transit and the related expenses are recorded within our Other segment, except for FTFM which is recorded within the Truckload segment.
ASC 606 requires us to look at revenue from customers at a contract level to determine the appropriate accounting. As defined by the new standard, a “contract” can range from an individual order to a multi-year agreement with a customer, depending on the specific arrangement. The majority of our revenues are related to transportation and have similar characteristics. The following table breaks down our revenues by type of service, and each type of service is further described below.
Transportation Transportation revenues relate to the Truckload and Intermodal reportable segments, as well as to our Brokerage business, which is included in the Logistics reportable segment. In the Transportation portfolio, our service obligation to customers is satisfied over time. We do not believe there is a significant impact on the nature, amount, timing, and uncertainty of revenue or cash flows based on the mode of transportation. The economic factors that impact our transportation revenue are generally consistent across these modes given the relatively short term nature of each contract. For the majority of our transportation business, the “contract with a customer” is identified as an individual order under a negotiated agreement. Some consideration is variable in that a final transaction price is uncertain and is susceptible to factors outside of the Company's influence, such as the weather or the accumulation of accessorial charges. Pricing information is supplied by the rate schedules that accompany negotiated contracts. Transportation orders are short-term in nature and generally have terms of significantly less than one year. They do not include significant financing components. A small portion of revenues in our transportation business relate to fixed payments in our Truckload segment. These payments are due regardless of volumes, and in these arrangements, the master agreement rather than the individual order may be considered the “contract.” See the Remaining Performance Obligations table below for more information on fixed payments. Prior to the adoption of ASC 606, we recognized revenue from transportation services when we completed our obligation to the customer, upon delivery. In accordance with the new standard, we now recognize revenue over the period transportation services are provided to the customer, including service performed as of the end of the reporting period for loads currently in transit, in order to recognize the value that is transferred to a customer over the course of the transportation service. We determine revenue in transit using the input method, under which revenue is recognized based on time lapsed from the departure date (start of transportation services) to the arrival date (completion of transportation services). Measurement of revenue in transit requires the application of significant judgment. We calculate the estimated percentage of an order's transit time that is complete at period end, and we apply that percentage of completion to the order's estimated revenue. Revenue recognized in the period ended December 31, 2018 includes amounts related to orders that were partially completed (in transit) in prior periods. In certain transportation arrangements, an unrelated party contributes a specified service to our customer. For example, we contract with third-party carriers to perform transportation services on behalf of our customers in our Brokerage business, and we use third-party rail carriers in our Intermodal segment. In situations that include the contributions of third parties, we act as principal in the arrangement, and, accordingly, we recognize gross revenues from these transactions. Logistics Management Logistics Management revenues relate to our Supply Chain Management and Import/Export Services operating segments, both of which are included in our Logistics reportable segment. Within this portfolio, the key service we provide to the customer is management of freight shipping and/or storage. The “contracts” in our Logistics Management portfolio are the negotiated agreements, which contain both fixed and variable components. The variability of revenues is driven by volumes and transactions, which are known as of an invoice date. See the Remaining Performance Obligations table below for additional information. Supply Chain Management and Import/Export Services contracts typically have terms that extend beyond one year, and they do not include financing components. Prior to the adoption of ASC 606, we recognized revenue under these contracts over time, based on pricing terms within the arrangements. Our recognition model will remain the same under the new standard, as we have elected to use the right to invoice practical expedient, which reflects the fact that a customer obtains the benefit associated with logistics services as they are provided (output method). In our Supply Chain Management business, we subcontract third parties to perform a portion of the services. We are responsible for ensuring the services are performed and that they are acceptable to the customer, and we are, therefore, considered to be the principal in these arrangements. Other Other revenues relate to activities that are out of scope for purposes of ASC 606, including our leasing and captive insurance businesses. Quantitative Disclosure The following table provides information related to transactions and expected timing of revenue recognition related to performance obligations that are fixed in nature and relate to contracts with terms greater than one year.
This disclosure does not include revenue related to performance obligations that are part of a contract whose original expected duration is one year or less. In addition, this disclosure does not include expected consideration related to performance obligations for which the Company elects to recognize revenue in the amount it has a right to invoice (e.g., usage-based pricing terms). The following table provides information related to contract balances associated with our contracts with customers as of the dates shown.
We generally receive payment within 40 days of completion of performance obligations. Contract assets in the table above relate to revenue in transit at the end of the reporting period. Contract liabilities relate to amounts that customers paid in advance of the associated service. For certain of our contracts, we incur upfront costs to fulfill the master agreement, including driver recruiting and equipment relocation, that are capitalized and amortized over the master contract term, which has been deemed to be the period of benefit. These costs usually relate to dedicated transportation arrangements. The following table presents the amounts capitalized for contract fulfillment costs as of the dates shown.
Amortization of capitalized contract fulfillment costs was as shown:
Impairment losses for the periods ended December 31, 2018 and December 31, 2017 were immaterial. Practical Expedients We elected to use the following practical expedients that are available under ASC 606: (i) not to adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised service to a customer and when the customer pays for that service will be one year or less; (ii) to apply the new revenue standard to a portfolio of contracts (or performance obligations) with similar characteristics, as we reasonably expect that the effects on the consolidated financial statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts (or performance obligations) within that portfolio; and (iii) to recognize revenue in the Logistics Management portfolio in the amount of consideration to which we have a right to invoice, that corresponds directly with the value to the customer of the service completed to date. |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
IPO | IPO Our IPO of shares of Class B Common Stock was completed in early April 2017, and additional shares were sold in May 2017 under an option granted to the underwriters. In connection with the offering, we sold a total of 20,145,000 shares of Class B common stock at $19 per share and received proceeds of $382.7 million. Expenses related to the offering totaled approximately $42.1 million, resulting in net proceeds of $340.6 million. |
Acquisition |
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Acquisition | ACQUISITION On June 1, 2016, we acquired 100% of the shares of WSL for $150.4 million in cash and future payments. WSL combines final-mile delivery with an innovative technology platform to provide LTL, truckload, and logistics services for large parcel goods, such as furniture and floor coverings, across North America. It uses proprietary technology to handle supply chain complexities within the national home delivery industry. We acquired WSL because it creates integrated first to final mile delivery capabilities, which reduce supply chain complexities for omnichannel retailers and manufacturers. The acquisition was accounted for as a purchase in accordance with ASC Topic 805, Business Combinations. Assets acquired and liabilities assumed were recorded in the Truckload segment at their fair values as of the acquisition date, as shown in the table below. The fair values of identifiable intangible assets, which were primarily customer relationships and trade names, were based on valuations using the income approach. The excess of the purchase price over the estimated fair values of tangible assets, identifiable intangible assets, and assumed liabilities was recorded as goodwill. The goodwill is attributable to expected synergies and expected growth opportunities. We believe that 100% of the goodwill will be deductible for United States income tax purposes.
In addition to cash of $79.5 million paid at closing, the purchase and sale agreement included guaranteed payments of $20.0 million to the former owners of WSL on each of the first three anniversary dates of the closing. The liability recorded was discounted between one percent and three percent, based on credit-adjusted discount rates. The initial payment in the amount of $19.7 million, including calculated interest based on the discounted amount recorded, was made in June 2017 and reflected an adjustment for a working capital true-up. The second payment in the amount of $20.0 million was made in June 2018. The present value of the remaining payment was $18.7 million at December 31, 2018, which is recorded in other current liabilities on the consolidated balance sheet. A contingent payment arrangement based on the achievement of specified earnings targets is also in place for three consecutive 12-month periods after the closing, with the aggregate payment total not to exceed $40.0 million. No payments have been made through December 31, 2018. See Note 5, Fair Value, for information regarding the fair value of this contingent arrangement. Acquisition-related costs included in other general expenses in our consolidated statements of comprehensive income for the year ended December 31, 2016, were $1.4 million. The representative of the former owners of WSL has claimed that we have not fulfilled certain obligations under the purchase and sale agreement relating to the post-closing operation of the business and that, as a result, the former owners are entitled to an accelerated payment of the contingent amount described above without regard to whether the specified earnings targets are met. We believe this claim is meritless and have filed an action in the Delaware Court of Chancery seeking a declaratory judgment that we have complied with our obligations under the agreement and that no accelerated payment is owed. The representative of the former owners has filed a counterclaim seeking the full amount of the accelerated payment. The following unaudited pro forma condensed combined financial information presents our results as if we had acquired WSL on January 1, 2016.
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Fair Value | FAIR VALUE Fair Value of WSL Contingent Consideration The fair value of the contingent consideration related to the 2016 acquisition of WSL was zero at December 31, 2018. This valuation was based on significant inputs that are not observable in the market, which are referred to as Level 3 inputs. One of the key assumptions was a probability-adjusted level of earnings before interest, taxes, depreciation, and amortization. The following table sets forth a reconciliation of changes in the fair value of the contingent consideration:
We recorded adjustments to the contingent consideration liability in the second, third, and fourth quarters of 2017, resulting in an increase in income from operations. The adjustments were caused by a change in the fair value of the contingent liability, which reflected three-year growth targets established by the seller prior to the close of the acquisition. No payments have been made through December 31, 2018. See Note 6, Investments, for information on the fair value of our marketable securities. Our ownership interest in Platform Science, Inc. discussed in Note 6, Investments, was valued based on Level 3 inputs. There were no transfers between levels for the periods shown. Fair Value of Other Financial Instruments The recorded value of cash, trade accounts receivable, and trade accounts payable approximates fair value. The table below presents the carrying value of our debt portfolio along with the fair value of a fixed-rate debt portfolio with similar terms and maturities, which is based on borrowing rates available to us in the applicable year. This valuation used Level 2 inputs.
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Investments | INVESTMENTS Marketable Securities The following table presents the values of our marketable securities as of the dates shown.
Gross realized gains and losses on marketable securities were not material for the years ended December 31, 2018, 2017, and 2016, respectively. Unrealized gains and losses on marketable securities were not material for the years ended December 31, 2018, and 2017, respectively. Ownership Interest in Platform Science, Inc. In 2018, we received a 30% ownership interest in Platform Science, Inc. in exchange for our contribution of a non-exclusive license for telematics mobile software that was developed to enable driver productivity and ensure regulatory compliance. Our ownership interest in Platform Science, Inc. is being accounted for under ASC 321, Investments - Equity Securities and is recorded at fair value in other noncurrent assets on the consolidated balance sheets. The fair value of our ownership interest at December 31, 2018 was determined to be $3.5 million through an independent valuation and is recorded in other income in the consolidated statements of comprehensive income. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill represents the excess of the purchase price of our acquisitions over the fair value of the identifiable net assets acquired. The following table shows changes to our goodwill balances by segment during the years ended December 31, 2018 and December 31, 2017.
At December 31, 2018 and 2017, we had accumulated goodwill impairment charges of $8.0 million and $6.0 million, respectively. During the second quarter of 2018, we reorganized the structure of the operating segments within the Truckload reportable segment to include FTFM as a separate operating segment and integrated the remaining Dedicated activities into the VTL operating segment. Each Truckload operating segment was determined to be its own reporting unit due to the level at which financial information is available and management reviews that information. As a result of the reorganization, goodwill within the Truckload reportable segment, which was previously attributable to the Dedicated reporting unit, was reallocated to the VTL-Dedicated Services and FTFM reporting units on a relative fair value basis. After the reallocation of goodwill, an impairment test was performed for these reporting units, and it was determined that goodwill was not impaired as each reporting unit had an estimated fair value in excess of its respective carrying amount. In the fourth quarter of 2018, annual impairment tests were performed on all four of our reporting units with goodwill. As a result of the testing performed, an impairment loss of $2.0 million was recorded for our Asia reporting unit as the discounted cash flows expected to be generated by this reporting unit were not sufficient to recover its carrying value. The identifiable intangible assets other than goodwill listed below are included in capitalized software and other noncurrent assets on the consolidated balance sheets. Our customer lists and trade names are amortized over weighted-average amortization periods of ten and three years, respectively.
Amortization expense for intangible assets was $1.4 million, $1.5 million and $0.9 million for the years ended December 31, 2018, 2017, and 2016, respectively. Accumulated amortization in the table above includes foreign currency translation related to a customer list. Estimated future amortization expense related to intangible assets is as follows (in millions):
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Debt and Credit Facilities |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Credit Facilities | DEBT AND CREDIT FACILITIES As of December 31, 2018 and 2017, debt included the following:
Scheduled principal payments of debt subsequent to December 31, 2018 are as follows:
On August 6, 2018, we entered into a $250.0 million Credit Agreement (the “2018 Credit Facility”) among us, the lenders party thereto (the “Lenders”) and JPMorgan Chase Bank, N.A., as administrative agent, and terminated our prior $250.0 million Credit Agreement dated February 18, 2011 (as amended). The 2018 Credit Facility is a revolving credit facility that matures on August 6, 2023 and allows us to request an increase in total commitment by up to $150.0 million for a total potential commitment of $400.0 million. The 2018 Credit Facility also provides a sublimit of $100.0 million to be used for the issuance of letters of credit. The applicable interest rate under the 2018 Credit Facility is based on the Prime Rate, the Federal Funds Rate, or the LIBOR, depending upon the type of borrowing, plus an applicable margin based on our consolidated net debt coverage ratio as of the end of each fiscal quarter. We had no outstanding borrowings under this agreement as of December 31, 2018 or 2017. Standby letters of credit under this agreement amounted to $3.9 million at both December 31, 2018 and 2017, respectively, and were primarily related to the requirements of certain of our real estate leases. On September 5, 2018, we entered into a Joinder and Amendment No. 2 to our Amended and Restated Receivables Purchase Agreement (the “2018 Receivables Purchase Agreement”) relating to our $200.0 million secured accounts receivable facility. The 2018 Receivables Purchase Agreement has a scheduled maturity date of September 3, 2021, allows us to borrow funds against qualifying trade receivables at rates based on one-month LIBOR, and provides for the issuance of standby letters of credit. We had no outstanding borrowings under this facility at December 31, 2018 or 2017. At December 31, 2018 and 2017, standby letters of credit under this agreement amounted to $65.3 million and $63.8 million, respectively, and were primarily related to the requirements of certain of our insurance obligations. Financing arrangements require us to maintain certain covenants and financial ratios. The credit agreements contain various financial and other covenants, including required minimum consolidated net worth, consolidated net debt, limitations on indebtedness, transactions with affiliates, shareholder debt, and restricted payments. The credit agreements and senior notes contain change of control provisions pursuant to which a change of control is defined to mean the Schneider family no longer owns more than 50% of the combined voting power of our capital shares. A change of control event causes an immediate termination of unused commitments under the credit agreements as well as requires repayment of all outstanding borrowings plus accrued interest and fees. The senior notes require us to provide notice to the note holders offering prepayment of the outstanding principal along with interest accrued to the date of prepayment. The prepayment date is required to be within 20 to 60 days from the date of notice. At December 31, 2018, the Company was in compliance with all financial covenants. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES As lessee — We have various real estate and equipment lease agreements. At December 31, 2018, scheduled future minimum lease payments under operating leases having initial or remaining noncancelable lease terms of more than one year and capital leases were as follows:
Lease expense for all operating leases was $37.0 million, $38.0 million, and $45.6 million in 2018, 2017, and 2016, respectively, and is classified in operating supplies and expenses in the consolidated statements of comprehensive income. The consolidated balance sheets include assets acquired under capital leases as components of property and equipment as of December 31, 2018 and 2017, as follows:
As lessor — We finance various types of transportation-related equipment for independent third parties. The transactions are generally for one year to five years and are accounted for as sales-type leases with fully guaranteed residual values or direct financing leases. As of December 31, 2018 and 2017, the investment in lease receivables was as follows:
The principal amounts to be received on lease receivables as of December 31, 2018, were as follows:
Leases are generally placed on nonaccrual status (nonaccrual of interest and other fees) when a payment becomes 90 days past due or upon receipt of notification of bankruptcy, upon the death of a customer, or in other instances in which management concludes collectability is not reasonably assured. The accrual of interest and other fees is resumed when all payments are less than 60 days past due. At December 31, 2018, there were $0.3 million of lease payments greater than 90 days past due. The terms of the lease agreements generally give us the ability to take possession of the underlying asset in the event of default. We may incur credit losses in excess of recorded allowances if the full amount of any anticipated proceeds from the sale or re-lease of the asset supporting the third party’s financial obligation is not realized. Costs to repossess and estimated reconditioning costs are recorded in the consolidated statements of comprehensive income in the period incurred. |
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Leases | LEASES As lessee — We have various real estate and equipment lease agreements. At December 31, 2018, scheduled future minimum lease payments under operating leases having initial or remaining noncancelable lease terms of more than one year and capital leases were as follows:
Lease expense for all operating leases was $37.0 million, $38.0 million, and $45.6 million in 2018, 2017, and 2016, respectively, and is classified in operating supplies and expenses in the consolidated statements of comprehensive income. The consolidated balance sheets include assets acquired under capital leases as components of property and equipment as of December 31, 2018 and 2017, as follows:
As lessor — We finance various types of transportation-related equipment for independent third parties. The transactions are generally for one year to five years and are accounted for as sales-type leases with fully guaranteed residual values or direct financing leases. As of December 31, 2018 and 2017, the investment in lease receivables was as follows:
The principal amounts to be received on lease receivables as of December 31, 2018, were as follows:
Leases are generally placed on nonaccrual status (nonaccrual of interest and other fees) when a payment becomes 90 days past due or upon receipt of notification of bankruptcy, upon the death of a customer, or in other instances in which management concludes collectability is not reasonably assured. The accrual of interest and other fees is resumed when all payments are less than 60 days past due. At December 31, 2018, there were $0.3 million of lease payments greater than 90 days past due. The terms of the lease agreements generally give us the ability to take possession of the underlying asset in the event of default. We may incur credit losses in excess of recorded allowances if the full amount of any anticipated proceeds from the sale or re-lease of the asset supporting the third party’s financial obligation is not realized. Costs to repossess and estimated reconditioning costs are recorded in the consolidated statements of comprehensive income in the period incurred. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. In accordance with GAAP, the effects of this legislation were recognized in 2017 upon enactment. The primary impact of the Act for us related to the reduction of the Federal corporate income tax rate from 35% to 21% beginning in 2018. At December 31, 2017, our previously recorded deferred tax assets and liabilities were remeasured to reflect the 21% rate at which these assets and liabilities would be realized in future periods. The net change in deferred taxes was recorded through our provision for income taxes. The provisional amounts recorded at December 31, 2017, in accordance with SEC Staff Accounting Bulletin No. 118, were finalized during the fourth quarter of 2018 and had an immaterial impact on the consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income, which allowed for a reclassification from accumulated other comprehensive income to retained earnings of stranded tax effects resulting from the Act. We early adopted this ASU during the fourth quarter of 2018, and the reclassification of stranded income tax effects had an immaterial impact on our consolidated financial statements. The components of the provision for income taxes as of December 31, 2018, 2017 and 2016, were as follows:
Foreign operations of the Company are insignificant in relation to our overall operating results. The provision for income taxes as of December 31, 2018, 2017, and 2016 differed from the amounts computed using the federal statutory rates in effect of 21% for December 31, 2018 and 35% for December 31, 2017 and 2016, as follows:
The components of the net deferred tax liability included in deferred income taxes in the consolidated balance sheets as of December 31, 2018 and 2017, were as follows:
Unrecognized Tax Benefits Our unrecognized tax benefits as of December 31, 2018 would reduce the provision for income taxes if subsequently recognized. Potential interest and penalties related to unrecognized tax benefits are recorded in income tax expense. Interest and penalties recorded in income tax expense for the years ended December 31, 2018, 2017, and 2016 were immaterial. Accrued interest and penalties for such unrecognized tax benefits as of December 31, 2018 and 2017 were $1.4 million and $1.2 million, respectively. We expect no significant increases or decreases for unrecognized tax benefits during the twelve months immediately following the December 31, 2018 reporting date. As of December 31, 2018, 2017, and 2016, a reconciliation of the beginning and ending amount of unrecognized tax benefits, which is recorded as other noncurrent liabilities in the consolidated balance sheets, is as follows:
Tax Examinations We file a U.S. federal income tax return, as well as income tax returns in a majority of state tax jurisdictions. We also file returns in foreign jurisdictions. The years 2015, 2016 and 2017 are open for examination by the Internal Revenue Service (“IRS”), and various years are open for examination by state and foreign tax authorities. In September 2018, the statute for 2014 expired. State and foreign jurisdictional statutes of limitations generally range from three to four years. Carryforwards As of December 31, 2018, we had $224.7 million of state net operating loss carryforwards which are subject to expiration from 2019 to 2039. We also had state credit carryforwards of $0.4 million, which are subject to expiration from 2019 to 2027, and no capital loss carryforwards. The deferred tax assets related to carryforwards at December 31, 2018 were $17.9 million for state net operating loss carryforwards and $0.3 million for state credit carryforwards. Carryforwards are reviewed for recoverability based on historical taxable income, the expected reversals of existing temporary differences, tax-planning strategies, and projections of future taxable income. At December 31, 2018, we carried a total valuation allowance of $5.8 million, which represents $5.5 million against state deferred tax assets and $0.3 million against state credit carryforwards. |
Temporary Equity |
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Temporary Equity Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Temporary Equity | TEMPORARY EQUITY Prior to our IPO in April 2017, our Class A and Class B Common Stock was considered redeemable under GAAP because of certain repurchase rights granted to our shareholders pursuant to the Schneider National, Inc. Employee Stock Purchase Plan and certain agreements governing ownership of our common stock held by existing shareholders, including members of the Schneider family and their family trusts. As a result, all vested Class A and Class B common shares were recorded as temporary equity (redeemable common shares) on the consolidated balance sheets at their redemption value as of the respective balance sheet dates. Accumulated earnings on the consolidated balance sheets were adjusted for the changes during the period in the current redemption value of vested Class A and Class B redeemable common shares. All contractual redemption features were removed at the time of the IPO. As a consequence, all outstanding shares of Class A and Class B Common Stock ceased to be considered temporary equity and were reclassified to Shareholders’ Equity, including the associated balances of accumulated earnings and accumulated other comprehensive income. As the common shares have no par value, the amounts recorded in temporary equity for the share redemption value were recorded to additional paid-in capital within Shareholders’ Equity upon the transfer. The following table shows changes to temporary equity during the year ended December 31, 2017.
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Common Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Equity | COMMON EQUITY On March 21, 2017, the Board declared pro rata share dividends entitling each holder of our Class A and Class B common stock outstanding as of March 21, 2017 to receive 29 shares of Class A or Class B common stock for each share of Class A or Class B common stock held by the shareholder. The share dividend was accounted for as a 30-for-1 stock split and is retroactively reflected in these consolidated financial statements. All share redemption provisions mentioned in Note 11, Temporary Equity, were removed effective with the IPO of Class B common shares in April 2017. Therefore, all Class A and Class B common shares were reclassified from temporary equity to permanent equity as of April 2017. Prior to the IPO, restricted share awards that were not yet vested and held for more than 180 days were classified as liabilities at their redemption values, taking into consideration the portion of the requisite service that had been provided as of the reporting date. At the IPO date, these unvested shares were reclassified to equity. Earnings Per Share As disclosed in Note 3, IPO, our IPO of shares of Class B Common Stock was effective in April 2017. In connection with the offering, we sold additional shares of common stock.
The calculation of diluted earnings per share for the twelve months ended December 31, 2018 excluded an immaterial amount of share-based compensation awards that had an anti-dilutive effect. Subsequent Event - Dividends Declared In January 2019, our Board of Directors declared a quarterly cash dividend for the first fiscal quarter of 2019 in the amount of $0.06 per share to holders of our Class A and Class B common stock. The dividend is payable to shareholders of record at the close of business on March 15, 2019, and is expected to be paid on April 8, 2019. |
Employee Benefit Plans |
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Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS We sponsor defined contribution plans for certain eligible employees. Under these plans, annual contribution levels, as defined in the plan agreements, are based upon years of service. Expense under these plans totaled $12.0 million, $11.2 million, and $10.7 million in 2018, 2017, and 2016, respectively, and is classified in salaries, wages, and benefits in the consolidated statements of comprehensive income. We also have a savings plan, organized pursuant to Section 401(k) of the Internal Revenue Code, to provide employees with additional income upon retirement. Under the terms of the plan, substantially all employees may contribute a percentage of their annual compensation, as defined, to the plan. We make contributions to the plan, up to a maximum amount per employee, based upon a percentage of employee contributions. Our net expense under this plan was $12.1 million, $10.7 million, and $10.0 million in 2018, 2017, and 2016, respectively. |
Share-based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation | SHARE-BASED COMPENSATION We grant various equity-based awards relating to Class B Common Stock under our 2017 Omnibus Incentive Plan (“the Plan”). These awards consist of the following: restricted shares, restricted stock units (“RSUs”), performance-based restricted shares (“Performance Shares”), performance-based restricted stock units (“PSUs”), and non-qualified stock options. Prior to our IPO, we granted restricted shares of Class B Common Stock. The pre-IPO restricted shares must be paid out in shares and are accounted for as equity awards. We account for our restricted shares, RSUs, performance shares, PSUs, and non-qualified stock options granted as equity awards in accordance with the applicable accounting standards for these types of share-based payments. These standards require that the cost of the awards be recognized in our consolidated financial statements based on the grant date fair value of those awards. This cost is recognized over the period for which an employee is required to provide service in exchange for the award, subject to the attainment of performance metrics established for performance-based restricted shares and PSUs. Share-based compensation expense is recorded in salaries, wages, and benefits in our consolidated statements of comprehensive income, along with other compensation expenses to employees. The following table summarizes the components of our share-based compensation program expense:
As of December 31, 2018, we had $11.6 million of pre-tax unrecognized compensation cost related to outstanding share-based compensation awards that is expected to be recognized over a weighted-average period of 2.5 years. Restricted Shares and RSUs Under the Plan, the majority of the restricted shares and RSUs granted in 2017 and 2018 vest ratably over a four-year period, with the first 25% of the grant vesting approximately one year after the date of grant, subject to continued employment through the vesting date or retirement eligibility. Dividend equivalents equal to dividends paid on our common shares during the vesting period are tracked and accumulated for each restricted share and RSU. The dividend equivalents are forfeitable and are distributed to participants in cash consistent with the date the awards vest. A portion of the restricted shares relate to a one-time 2018 grant, which vests 50% after a five-year period, with the remaining 50% vesting after a six-year period after the grant date, subject to continued employment through the vesting date. Dividend equivalents equal to dividends paid on our common shares during the vesting period are tracked and accumulated for each restricted share. The dividend equivalents are distributed to participants in cash consistent with the date the awards vest.
Prior to our IPO, we granted restricted shares of Class B Common Stock. Shares included in the pre-IPO restricted share grants vest ratably over a three-year period. Cash dividends are not paid on the unvested pre-IPO restricted shares, nor do they accumulate during the vesting period.
(a) In April 2017, unvested restricted shares were adjusted to the IPO share price of $19.00. Performance Shares and PSUs Performance shares and PSUs include a three-year performance period with vesting based on attainment of threshold performance of earnings and return on capital targets. These awards cliff-vest at the end of the three-year performance period, subject to continued employment through the vesting date or retirement eligibility, and payout ranges from 0%-200% for PSUs and from 0%-100% for performance shares. Dividend equivalents equal to dividends paid on our common shares during the vesting period are tracked and accumulated for each award. The dividend equivalents are forfeitable and are distributed to participants in cash consistent with the date the awards vest.
Nonqualified Stock Options The options granted under the Plan have an exercise price equal to the fair market value of the underlying stock at the date of grant and vest ratably over a four-year period, with the first 25% of the grant becoming exercisable approximately one year after the date of grant. The options expire ten years from the date of grant.
We estimated the grant date fair value of option awards using the Black-Scholes option pricing model. The Black-Scholes option valuation model uses assumptions over the expected term of the options. We used volatility analysis of comparable companies to determine the expected volatility of the stock. We used market data to estimate option exercise and employee termination within the valuation model. The expected term of options granted was based on the average of the contractual term and the weighted average of the vesting term, and it represents the average period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Assumptions used in calculating the Black-Scholes value of options granted during 2018 and 2017 were as follows:
Director Share Awards and Deferred Stock Units Equity awards are granted to each director annually on the date of our annual shareholder meeting, prospectively for the year of service following the annual shareholder meeting, and will vest on the earlier of (1) the one-year anniversary of the grant date and (2) the following year's shareholder meeting, subject to continued service. Any director who joins our Board mid-year will receive a pro-rata portion of equity-based compensation for service during the balance of the director's service year, which will vest on the date of the next annual meeting. We also grant equity retainer awards, or shares in lieu of cash retainer awards, on a quarterly basis to our non-employee directors. These awards consist of fully vested shares of our Class B Common Stock or deferred stock units (“DSUs”) that are granted in arrears on the first business day following a quarter close. The number of shares or DSUs granted each quarter is determined by dividing the quarterly retainer amount by the fair market value of the shares of common stock as of the grant date. We account for both the annual and quarterly director share awards and DSUs as liability awards in accordance with the applicable accounting standards for these types of share-based payments. Expense associated with director equity awards was $1.4 million in both 2018 and 2017. |
Other Long-Term Incentive Compensation |
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Dec. 31, 2018 | |
Compensation Related Costs [Abstract] | |
Other Long-Term Incentive Compensation | OTHER LONG-TERM INCENTIVE COMPENSATION We maintain legacy long-term cash incentive compensation plans. The total expense recognized for the plans that include executives was $11.2 million in 2018, $10.8 million in 2017, and $13.7 million in 2016. Under the 2011 Omnibus Long-term Incentive Plan (the “LTIP”), performance-based Long-Term Cash Awards (“Cash Plan Awards”) and service-based Stock Appreciation Rights (“SARs”) were granted to eligible employees, including our executive officers. Our Board of Directors originally adopted and approved the LTIP on February 7, 2011 and approved an amended and restated LTIP on November 8, 2011 and December 31, 2012. Payout on our Cash Plan Awards, which were granted annually from 2013-2016, is contingent on attainment of two pre-established performance metrics, measured over a five-year period: compounded net income growth (determined on the basis of GAAP with adjustments for significant, nonrecurring items approved by the Compensation Committee of the Board of Directors) and return on capital (“ROC”). While each grant is expressed as a fixed dollar amount, the actual amount earned may range from 0% to 250% of target for superior performance. The awards cliff-vest after three years, with payout occurring after completion of the five-year performance period, subject to compliance with certain restrictive covenants. Vested awards are paid out 90 days following completion of the five-year performance period, or on a subsequent deferral date elected by the executive pursuant to our 2005 Supplemental Savings Plan. The liability for the Cash Plan Awards was $22.7 million and $25.6 million at December 31, 2018 and 2017, respectively. SARs awards, which were granted in 2011 and 2012, became 100% vested on the date provided in the applicable award agreement (a three-year vesting period). Vested SARs were to be paid out on March 1 of the fifth year following the year of such grant (or as soon as practicable thereafter, but in no event later than June 1), or will be paid out on a subsequent deferral date elected by the participant (or within 90 days following a termination of employment or change in control, if earlier, subject to Internal Revenue Code Section 409A). Until payment, SARs will continue to appreciate (or depreciate) with changes in book value of outstanding common shares of company stock. The value of the SARs upon payment will equal the excess, if any, of the book value of a common share on the date of payment over the grant price set forth in the applicable award agreement, multiplied by the number of vested SARs, and subject to the discretion of the Compensation Committee. As of December 31, 2018, 2.5 million SARs units were outstanding. The liability for the SARs awards was $9.0 million and $8.4 million at December 31, 2018 and 2017, respectively. Under the 2005 Schneider National, Inc. Long-Term Incentive Plan (the “2005 LTIP”), awards of cash-settled retention credits were granted, including to certain of our named executive officers. Our Board of Directors adopted and approved the 2005 LTIP effective January 1, 2005. The retention credits are mandatorily deferred time-based cash credits which typically vest in 20% increments over a five-year period based on continued employment. Vested retention credits are paid out in March following the second anniversary of the date of the employee’s termination of employment, provided the employee has not violated the terms of their restrictive covenant agreements. The liability for the retention credits was $8.6 million and $8.8 million at December 31, 2018 and 2017, respectively. |
Commitments and Contingencies |
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Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES In the ordinary course of conducting our business we become involved in certain legal matters and investigations on a number of matters, including liability claims, taxes other than income taxes, contract disputes, employment, and other litigation matters. We accrue for anticipated costs to defend and resolve matters that are probable and estimable. We believe the outcomes of these matters will not have a material impact on our business or our financial statements. At December 31, 2018, our firm commitments to purchase transportation equipment totaled approximately $265.5 million. |
Segment Reporting |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | SEGMENT REPORTING We have three reportable segments – Truckload, Intermodal, and Logistics – which are based primarily on the services each segment provides. As of December 31, 2017, our operating segments within the Truckload reportable segment were VTL, Dedicated, and Bulk. During the second quarter of 2018, we reorganized the structure of the Truckload reportable segment, separating FTFM into its own operating segment and moving the remaining business that was previously under the Dedicated operating segment into the VTL operating segment. The Truckload reportable segment now consists of three operating segments (VTL, FTFM, and Bulk) that are aggregated because they have similar economic characteristics and meet the other aggregation criteria described in the accounting guidance for segment reporting. Van Truckload delivers truckload quantities over irregular routes using dry van trailers. First to Final Mile is similar except that it delivers large parcel consumer items, such as furniture, mattresses, and other household goods. Bulk transports key inputs to manufacturing processes, such as specialty chemicals using specialty trailers. The Intermodal reportable segment provides rail intermodal and drayage services to our customers. Company-owned containers, chassis, and dray tractors are used to provide these transportation services. The Logistics reportable segment consists of three operating segments (Brokerage, Supply Chain Management, and Import/Export Services) that are aggregated because they have similar economic characteristics and meet the other aggregation criteria described in the accounting guidance for segment reporting. In the Logistics segment, we provide additional sources of truck capacity, manage transportation-systems analysis requirements for individual customers, and provide trans-loading and warehousing services. We generate other revenues from a captive insurance business and from a leasing business which are operated by wholly owned subsidiaries. We also have operations in Asia that meet the definition of an operating segment. None of these operations meets the quantitative reporting thresholds. As a result, these operations are grouped in “Other” in the tables below. We have also included in “Other” revenues and expenses that are incidental to our activities and are not attributable to any of the reportable segments. The chief operating decision maker (CODM) reviews revenue for each segment without the inclusion of fuel surcharge revenue. For segment purposes, any fuel surcharge revenues earned are recorded as a reduction of the segment’s fuel expenses. For all operating segments except FTFM, revenue is recognized upon delivery, and in-transit revenue is not reflected in segment results. Income from operations at a segment level reflects the measures presented to the CODM for each segment. Separate balance sheets are not prepared by segment and, as a result, assets are not separately identifiable by segment. All transactions between reporting segments are eliminated in consolidation. The following tables summarize our segment information. Intersegment revenues were immaterial for all segments, with the exception of Other, which included revenues from insurance premiums charged to other segments for workers’ compensation, auto, and other types of insurance. Intersegment revenues included in Other revenues below were $82.7 million, $78.4 million and $54.4 million for the years ended December 31, 2018, 2017, and 2016 respectively.
Substantially all of our revenues and assets were generated or located within the United States. |
Quarterly Results of Operations (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Results of Operations (Unaudited) | QUARTERLY RESULTS OF OPERATIONS (Unaudited)
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Schedule II - Valuation and Qualifying Accounts |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II - Valuation and Qualifying Accounts | Schedule II - Valuation and Qualifying Accounts (in Million
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Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation As used in these notes, the term “financial statements” refers to the consolidated financial statements. This includes the consolidated statements of comprehensive income, consolidated balance sheets, consolidated statements of cash flows, and consolidated statements of shareholders' equity unless otherwise noted. Our consolidated financial statements include all of our wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates, Policy | Use of Estimates The consolidated financial statements contained in this report have been prepared in conformity with GAAP. We make estimates and assumptions that affect assets, liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash in excess of current operating requirements is invested in short-term, highly liquid investments. We consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. |
Accounts Receivable and Allowance | Receivables and Allowance for Doubtful Accounts Our trade accounts receivable and lease receivables are recorded net of an allowance for uncollectible accounts and revenue adjustments. The allowance is based on historical experience and an aging analysis, as well as any known trends or uncertainties related to customer billing and account collectability. The adequacy of our allowance is reviewed at least quarterly. Receivables are reserved when it is probable that amounts related to the receivable will not be collected. In circumstances where we are aware of a specific customer's inability to meet its financial obligations, a specific reserve is recorded against amounts due to reduce the net receivable to the amount reasonably expected to be collected. Bad debt expense is included in other general expenses in the consolidated statements of comprehensive income. |
Inventory | Inventory Our inventories consist of tractors and trailing equipment owned by our equipment leasing company to be sold or leased to independent contractors, as well as parts, tires, supplies, and fuel. These inventories are valued at the lower of cost or market using specific identification or average cost |
Investments in Marketable Equity Securities | Investments in Marketable Securities Our marketable securities are classified as available for sale and carried at fair value in current assets on the consolidated balance sheets. Our portfolio of securities has maturities ranging from 2 months to 81 months. While our intent is to hold our securities to maturity, sudden changes in the market or to our liquidity needs may cause us to sell certain securities in advance of their maturity date. Any unrealized gains and losses, net of tax, are included as a component of accumulated other comprehensive income on our consolidated balance sheets, unless we determine that an unrealized loss is other-than-temporary. If we determine that an unrealized loss is other-than-temporary, we recognize the loss in earnings. Cost basis is determined using the specific identification method. |
Fair Value | Fair Value Fair value focuses on the estimated price that would be received to sell an asset or paid to transfer a liability, which is referred to as the exit price. Inputs to valuation techniques used to measure fair value fall into three broad levels (Levels 1, 2, and 3) as follows: Level 1—Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that we have the ability to access at the measurement date. Level 2—Observable inputs, other than quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities. Level 3—Unobservable inputs reflecting the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. All marketable securities were valued based on quoted prices for similar assets in active markets or quoted prices for identical or similar assets in markets that are not active (Level 2 in the fair value hierarchy). We measure our marketable securities on a recurring, monthly basis. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation is calculated using the straight-line method based on the estimated useful lives and residual values. |
Assets Held for Sale | Assets Held for Sale Assets held for sale consist of revenue equipment and are included in prepaid expenses and other current assets in the consolidated balance sheets. Reclassification to assets held for sale occurs when the required criteria, as defined by ASC 360, Property, Plant and Equipment, are satisfied. |
Asset Impairment | Asset Impairment Goodwill and other intangible assets with indefinite lives are subject to an annual impairment test. Interim impairment tests are performed when impairment indicators are present. Intangible assets with definite lives are reviewed for impairment on an annual basis. Other long-lived assets require an impairment review when events or circumstances indicate that the carrying amount may not be recoverable. We base our evaluation of other long-lived assets on the presence of impairment indicators such as the future economic benefit of the assets, any historical or future profitability measurements, and other external market conditions or factors. We perform annual goodwill impairment tests for each of our reporting units containing goodwill during the fourth quarter of each year. Beginning in 2017, we changed our annual goodwill impairment testing date from December 31 to October 31 to better align the testing date with our financial planning process and alleviate resource constraints. We would not expect a materially different outcome in any given year as a result of testing on October 31 as compared to December 31. The carrying amount of a reporting unit's goodwill is considered not recoverable, and an impairment loss is recorded if the carrying amount of the reporting unit exceeds the reporting unit's fair value, as determined based on a combination of an income approach and a market approach. See Note 7, Goodwill and Other Intangible Assets, for more information on our goodwill and other intangible assets. The carrying amount of tangible long-lived assets held and used is considered not recoverable if the carrying amount exceeds the undiscounted sum of cash flows expected to result from the use and eventual disposition of the asset. If the carrying amount is not recoverable, the impairment loss is measured as the excess of the asset's carrying amount over its fair value. Assets held for sale are evaluated for impairment at least annually and as impairment indicators are present. The carrying amount of assets held for sale is not recoverable if the carrying amount exceeds the fair value less estimated costs to sell the asset. An impairment loss is recorded for the excess of the asset’s carrying amount over the fair value less estimated costs to sell. Impairment losses are recorded in operating supplies and expenses in the consolidated statements of comprehensive income. Impairment losses were immaterial in 2018, 2017 and 2016 |
Revenue Recognition | Revenue Recognition Through December 31, 2017, we recorded transportation revenue at the time of delivery. Beginning in 2018, we implemented ASU 2014-09, Revenue from Contracts with Customers, which is codified as ASC 606 and replaces ASC 605, Revenue Recognition. With the adoption of ASC 606, we began recognizing revenue during the delivery period based on relative transit time in each reporting period, with expenses recognized as incurred. Accordingly, a portion of the total revenue that will be billed to the customer once a load is delivered is recognized in each reporting period based on the percentage of the freight pickup and delivery service that has been completed at the end of the reporting period. See Note 2, Revenue Recognition, for more information on the adoption of ASC 606. When we use third-party carriers, we generally record revenues on the gross basis at amounts charged to our customers because we are the primary obligor, we are a principal in the transaction, we invoice our customers and retain all credit risks, and we maintain discretion over pricing. Additionally, we are responsible for selection of third-party transportation providers to the extent used to satisfy customer freight requirements. We record revenues net of pass-through taxes in our consolidated statements of comprehensive income. For the year ended December 31, 2018, no customer accounted for more than 10% of our consolidated revenues. We had one customer who accounted for slightly more than 10% of our consolidated revenues in 2017. No customer accounted for more than 10% of our consolidated revenues in 2016. |
Income Taxes | Income Taxes Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. We record valuation allowances for deferred tax assets to the extent we believe these assets are not more likely than not to be realized through the reversal of existing taxable temporary differences, projected future taxable income, or tax-planning strategies. We record a liability for unrecognized tax benefits when the benefits of tax positions taken on a tax return are not more likely than not to be sustained upon audit. Interest and penalties related to uncertain tax positions are classified as income tax expense in the consolidated statements of comprehensive income. |
Earnings Per Share | Earnings Per Share We compute basic earnings per share by dividing net earnings available to common stockholders by the actual weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflect the potential dilution that could occur if holders of unvested restricted and performance share units or options exercised or converted their holdings into common stock. Awards that would have an antidilutive impact are excluded from the calculation and have been deemed immaterial. As disclosed in Note 3, IPO, our IPO of shares of Class B Common Stock was effective in April 2017. In connection with the offering, we subsequently sold additional shares of common stock. |
Share-based Compensation | Share-based Compensation We have share-based compensation plans covering certain employees, including officers and directors. We account for share-based compensation using the fair value recognition provisions of current accounting standards for share-based payments. We grant restricted share units, restricted shares, performance share units, performance shares, and nonqualified stock options. We recognize compensation expense over the requisite service periods within each award. See Note 14, Share-Based Compensation, for more information about our plans. |
Claim Accruals | Claims Accruals We are self-insured for loss of and damage to our owned and leased revenue equipment. We purchase insurance coverage for a portion of expenses related to employee injuries, vehicular collisions, accidents, and cargo damage. Certain insurance arrangements include a level of self-insurance (deductible) coverage applicable to each claim. We have excess policies to limit our exposure to catastrophic claim costs. The amounts of self-insurance change from time to time based on measurement dates, policy expiration dates, and claim type. Our claims accrual policy for all self-insured claims is to recognize a liability at the time of the incident based on our analysis of the nature and severity of the claims and analyses provided by third-party claims administrators, as well as legal, economic, and regulatory factors. The ultimate cost of a claim develops over time as additional information regarding the nature, timing, and extent of damages claimed becomes available. Accordingly, we use an actuarial method to develop current claim information to derive an estimate of our ultimate claim liability. This process involves the use of loss-development factors based on our historical claims experience and includes a contractual premium adjustment factor, if applicable. In doing so, the recorded liability considers future claims growth and provides an allowance for incurred-but-not-reported claims. We do not discount our estimated losses. At December 31, 2018 and 2017, we had an accrual of approximately $156.0 million and $147.2 million, respectively, for estimated claims net of reinsurance receivables. In addition, we are required to pay certain advanced deposits and monthly premiums. At December 31, 2018 and 2017, we had an aggregate prepaid insurance asset of approximately $9.2 million and $7.9 million, respectively, which represented prefunded premiums and deposits. |
Accounting Standards Issued But Not Yet Adopted | Accounting Standards Issued but Not Yet Adopted In August 2018, the FASB issued ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the capitalization requirements for implementation costs incurred in a hosting arrangement that is a service contract with the existing capitalization requirements for implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for us as of January 1, 2020 with early adoption permitted. We currently cannot reasonably estimate the impact the adoption of this ASU will have on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Requirements, which removes, modifies, and adds certain disclosure requirements for fair value measurements. ASU 2018-13 is effective for us January 1, 2020 with early adoption permitted. We are currently evaluating the impact the adoption of this ASU will have on our consolidated financial statements and do not believe the impact will be material. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments, which requires companies to use a forward-looking, expected loss model to estimate credit losses on various types of financial assets and net investments in leases. It also requires additional disclosure related to credit quality of trade and other receivables, including information related to management’s estimate of credit allowances. ASU 2016-13 is effective for us January 1, 2020. We currently cannot reasonably estimate the impact the adoption of this ASU will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which amended authoritative guidance on leases and is codified in ASC 842. The amended guidance requires lessees to recognize most leases on their balance sheets as right-of-use assets along with corresponding lease liabilities. The new standard also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. This guidance was effective for us January 1, 2019. In July 2018, the FASB issued additional authoritative guidance providing companies with the option to apply this ASU to new and existing leases within the scope of the guidance as of the beginning of the period of adoption. We elected this transition method of applying the new lease standard and recognized right-of-use assets, lease liabilities, and any cumulative-effect adjustments to the opening balance of retained earnings as of January 1, 2019. Prior period amounts will not be adjusted and will continue to be reported under the accounting standards in effect for those periods. Upon adoption of the new standard on January 1, 2019, we elected the package of practical expedients provided under the guidance. The practical expedient package applied to leases that commenced prior to adoption of the new standard and permitted companies not to reassess whether existing or expired contracts are or contain a lease, the lease classification, and any initial direct costs for any existing leases. The Company also elected the recognition exemption for equipment leases, which allows the Company to not recognize right-of-use assets and liabilities for leases with an initial term of 12 months or less. Additionally, the Company elected to take the practical expedient to include non-lease components as part of the right-of-use asset and lease liability. A cross-functional implementation team identified the Company's lease population, leveraged and expanded the use of our existing lease software to assist with the reporting and disclosure requirements under the standard, and abstracted and validated our lease information. The adoption of the standard added approximately $80 million in right-of-use assets and related lease obligations to our consolidated balance sheet for operating leases in which we were the lessee as of January 1, 2019. The adoption of this standard did not have a material impact on our consolidated statements of comprehensive income. Leasing activities in which we are the lessor in the transaction are also subject to ASC 842. As a lessor, adopting this standard did not have a material impact on our consolidated balance sheets but will add to both operating revenues and expenses in the consolidated statements of comprehensive income, as certain leases previously treated as direct financing leases will become sales-type leases. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Balances | The following table shows the components of our inventory balances as of December 31:
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Estimated Useful Lives | Generally, the estimated useful lives are as follows:
Salvage values, when applicable, generally don't exceed 25% of original cost for tractors and trailing equipment and reflect any agreements with tractor suppliers for residual or trade-in values for certain new equipment. Gains and losses on the sale or other disposition of equipment are based on the difference between the proceeds received less costs to sell and the net book value of the assets disposed. Gains and losses are recognized at the time of the sale or disposition and are classified in operating supplies and expenses in the consolidated statements of comprehensive income. |
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Assets held for sale by segment | As of December 31, 2018 and 2017, assets held for sale by segment were as follows:
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Impact of Adoption of Accounting Standards | The changes relate to the recognition of transportation revenue over time rather than at delivery, as explained below under the Transportation heading. Revenue in transit and the related expenses are recorded within our Other segment, except for FTFM which is recorded within the Truckload segment.
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Disaggregation of Revenue | The following table breaks down our revenues by type of service, and each type of service is further described below.
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Remaining Performance Obligations | The following table provides information related to transactions and expected timing of revenue recognition related to performance obligations that are fixed in nature and relate to contracts with terms greater than one year.
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Contract Balances | The following table provides information related to contract balances associated with our contracts with customers as of the dates shown.
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Capitalized Contract Cost | The following table presents the amounts capitalized for contract fulfillment costs as of the dates shown.
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Amortization of Contract Fulfillment Costs | Amortization of capitalized contract fulfillment costs was as shown:
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Acquisition (Tables) - WSL |
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Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed |
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Schedule of Pro Forma Condensed Combined Financial Information | The following unaudited pro forma condensed combined financial information presents our results as if we had acquired WSL on January 1, 2016.
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Fair Value Fair Value (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table sets forth a reconciliation of changes in the fair value of the contingent consideration:
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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The table below presents the carrying value of our debt portfolio along with the fair value of a fixed-rate debt portfolio with similar terms and maturities, which is based on borrowing rates available to us in the applicable year. This valuation used Level 2 inputs.
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Investments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments Schedule [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Marketable Securities | The following table presents the values of our marketable securities as of the dates shown.
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Goodwill and Other Intangible Assets (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Carrying Amount of Goodwill | The following table shows changes to our goodwill balances by segment during the years ended December 31, 2018 and December 31, 2017.
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Estimated Useful Lives | The identifiable intangible assets other than goodwill listed below are included in capitalized software and other noncurrent assets on the consolidated balance sheets. Our customer lists and trade names are amortized over weighted-average amortization periods of ten and three years, respectively.
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Schedule Estimated Future Amortization Expense | Estimated future amortization expense related to intangible assets is as follows (in millions):
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Debt and Credit Facilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Debt | As of December 31, 2018 and 2017, debt included the following:
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Schedule of Maturities of Long-term Debt | Scheduled principal payments of debt subsequent to December 31, 2018 are as follows:
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | At December 31, 2018, scheduled future minimum lease payments under operating leases having initial or remaining noncancelable lease terms of more than one year and capital leases were as follows:
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Schedule of Future Minimum Lease Payments for Capital Leases | At December 31, 2018, scheduled future minimum lease payments under operating leases having initial or remaining noncancelable lease terms of more than one year and capital leases were as follows:
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Schedule of Capital Leased Assets | The consolidated balance sheets include assets acquired under capital leases as components of property and equipment as of December 31, 2018 and 2017, as follows:
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Schedule of Investment in Lease Receivables | As of December 31, 2018 and 2017, the investment in lease receivables was as follows:
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Schedule of Principal Amounts to be Received on Lease Receivables | The principal amounts to be received on lease receivables as of December 31, 2018, were as follows:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The components of the provision for income taxes as of December 31, 2018, 2017 and 2016, were as follows:
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Schedule of Effective Income Tax Rate Reconciliation | The provision for income taxes as of December 31, 2018, 2017, and 2016 differed from the amounts computed using the federal statutory rates in effect of 21% for December 31, 2018 and 35% for December 31, 2017 and 2016, as follows:
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Schedule of Deferred Tax Assets and Liabilities | The components of the net deferred tax liability included in deferred income taxes in the consolidated balance sheets as of December 31, 2018 and 2017, were as follows:
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Schedule of Unrecognized Tax Benefits Roll Forward | As of December 31, 2018, 2017, and 2016, a reconciliation of the beginning and ending amount of unrecognized tax benefits, which is recorded as other noncurrent liabilities in the consolidated balance sheets, is as follows:
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Temporary Equity (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Temporary Equity Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Temporary Equity | The following table shows changes to temporary equity during the year ended December 31, 2017.
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Common Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Basic and Diluted Earnings Per Share |
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Share-based Compensation (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of share-based compensation program expense | The following table summarizes the components of our share-based compensation program expense:
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Schedule of restricted shares and RSU's activity | A portion of the restricted shares relate to a one-time 2018 grant, which vests 50% after a five-year period, with the remaining 50% vesting after a six-year period after the grant date, subject to continued employment through the vesting date. Dividend equivalents equal to dividends paid on our common shares during the vesting period are tracked and accumulated for each restricted share. The dividend equivalents are distributed to participants in cash consistent with the date the awards vest.
Prior to our IPO, we granted restricted shares of Class B Common Stock. Shares included in the pre-IPO restricted share grants vest ratably over a three-year period. Cash dividends are not paid on the unvested pre-IPO restricted shares, nor do they accumulate during the vesting period.
(a) In April 2017, unvested restricted shares were adjusted to the IPO share price of $19.00. |
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Schedule of performance shares and PSU's activity | The dividend equivalents are forfeitable and are distributed to participants in cash consistent with the date the awards vest.
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Schedule of nonqualified stock options activity | The options granted under the Plan have an exercise price equal to the fair market value of the underlying stock at the date of grant and vest ratably over a four-year period, with the first 25% of the grant becoming exercisable approximately one year after the date of grant. The options expire ten years from the date of grant.
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Schedule of assumptions used in calculating value of stock options | Assumptions used in calculating the Black-Scholes value of options granted during 2018 and 2017 were as follows:
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Segment Reporting (Tables) |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Reporting Information | The following tables summarize our segment information. Intersegment revenues were immaterial for all segments, with the exception of Other, which included revenues from insurance premiums charged to other segments for workers’ compensation, auto, and other types of insurance. Intersegment revenues included in Other revenues below were $82.7 million, $78.4 million and $54.4 million for the years ended December 31, 2018, 2017, and 2016 respectively.
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Quarterly Results of Operations (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information |
|
Summary of Significant Accounting Policies - Inventory (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventory [Line Items] | ||
Inventory, Total | $ 60.8 | $ 83.1 |
Tractors and trailing equipment for sale or lease | ||
Inventory [Line Items] | ||
Inventory, Total | 48.1 | 69.8 |
Replacement parts | ||
Inventory [Line Items] | ||
Inventory, Total | 11.4 | 11.8 |
Tires and other | ||
Inventory [Line Items] | ||
Inventory, Total | $ 1.3 | $ 1.5 |
Summary of Significant Accounting Policies - Investments in Marketable Equity Securities (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Marketable securities maturity term | 2 months |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Marketable securities maturity term | 81 months |
Summary of Significant Accounting Policies - Assets Held for Sale (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Long Lived Assets Held-for-sale [Line Items] | ||
Assets Held for Sale, Total | $ 21.9 | $ 35.9 |
Truckload | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Assets Held for Sale, Total | 19.5 | 35.2 |
Intermodal | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Assets Held for Sale, Total | $ 2.4 | $ 0.7 |
Summary of Significant Accounting Policies - Asset Impairment (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Accounting Policies [Abstract] | |||
Asset Impairment Charges | $ 0.0 | $ 0.0 | $ 0.0 |
Summary of Significant Accounting Policies - Claims Accruals (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Accounting Policies [Abstract] | ||
Accrued Insurance | $ 156.0 | $ 147.2 |
Prepaid Insurance | $ 9.2 | $ 7.9 |
Summary of Significant Accounting Policies - Accounting Standards Issued But Not Yet Adopted (Details) - Scenario, Forecast - Accounting Standards Update 2016-02 $ in Millions |
Jan. 01, 2019
USD ($)
|
---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Right-of-use asset added | $ 80 |
Related lease obligations | $ 80 |
Revenue Recognition Disaggregation of Revenues (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Disaggregation of Revenue [Line Items] | |||||||||||
Operating revenues | $ 1,321.6 | $ 1,280.1 | $ 1,236.3 | $ 1,139.0 | $ 1,191.2 | $ 1,110.8 | $ 1,075.2 | $ 1,006.4 | $ 4,977.0 | $ 4,383.6 | $ 4,045.7 |
Transportation [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Operating revenues | 4,589.7 | 4,012.4 | |||||||||
Logistics Management [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Operating revenues | 228.3 | 220.2 | |||||||||
Other [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Operating revenues | $ 159.0 | $ 151.0 |
Revenue Recognition Contract with Customer, Asset and Liability (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Jan. 01, 2018 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Contract with Customer, Asset, Net | $ 21.7 | $ 22.2 |
Contract with Customer, Liability | $ 0.0 | $ 0.0 |
Revenue Recognition Capitalized Contract Cost (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Capitalized contract fulfillment costs | $ 5.0 | $ 3.7 |
Revenue Recognition Amortization of Contract Fulfillment Costs (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Revenue from Contract with Customer [Abstract] | ||
Amortization of contract fulfillment costs | $ 2.5 | $ 2.0 |
Revenue Recognition Initial Application Period Cumulative Effect Adjustment (Details) $ in Millions |
Jan. 01, 2018
USD ($)
|
---|---|
Revenue from Contract with Customer [Abstract] | |
Cumulative Effect on Retained Earnings, Net of Tax | $ 7.3 |
IPO (Details) - USD ($) $ / shares in Units, $ in Millions |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
May 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Subsidiary, Sale of Stock [Line Items] | ||||
Proceeds from IPO, net of issuance costs | $ 0.0 | $ 340.6 | $ 0.0 | |
IPO | Class B Common Stock | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Share issued during the period (shares) | 20,145,000 | |||
Share issued, (price per share) | $ 19 | |||
Proceeds from IPO, gross | $ 382.7 | |||
Expenses related to the offering | 42.1 | |||
Proceeds from IPO, net of issuance costs | $ 340.6 |
Acquisition - Additional Information (Details) - WSL $ in Millions |
1 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2018
USD ($)
|
Jun. 01, 2017 |
Jun. 01, 2016
USD ($)
payment
|
Jun. 30, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Business Acquisition [Line Items] | ||||||
Percentage of voting interest acquired | 100.00% | |||||
Purchase price of acquisition | $ 150.4 | |||||
Percentage of goodwill deductible for income tax purpose | 100.00% | |||||
Cash paid at closing | $ 79.5 | |||||
Initial guaranteed payment | $ 19.7 | |||||
Guaranteed payments | $ 18.7 | |||||
Aggregate payment of contingent consideration | $ 40.0 | |||||
Acquisition-related costs | $ 1.4 | |||||
Former Owners | ||||||
Business Acquisition [Line Items] | ||||||
Cash payments | $ 20.0 | |||||
Number of payments | payment | 3 | |||||
Contingent consideration period | 3 years | 3 years | ||||
Former Owners | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Credit adjusted discount rate on cash payment | 1.00% | |||||
Former Owners | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Credit adjusted discount rate on cash payment | 3.00% |
Acquisition - Schedule of Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions |
Jun. 01, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Recognized amounts of identifiable assets acquired and liabilities assumed | |||
Goodwill | $ 162.2 | $ 164.8 | |
WSL | |||
Recognized amounts of identifiable assets acquired and liabilities assumed | |||
Cash | $ 1.3 | ||
Receivables | 16.2 | ||
Inventories | 0.5 | ||
Prepaid expenses and other current assets | 4.4 | ||
Property and equipment | 81.8 | ||
Capitalized software and other noncurrent assets | 5.8 | ||
Intangible assets | 10.9 | ||
Goodwill | 138.2 | ||
Total assets acquired | 259.1 | ||
Payables assumed | 7.8 | ||
Accrued liabilities assumed | 5.3 | ||
Current maturities of debt and capital lease obligations assumed | 47.7 | ||
Debt and capital lease obligations assumed | 46.2 | ||
Other noncurrent liabilities assumed | 1.7 | ||
Fair value of total consideration transferred | $ 150.4 |
Acquisition - Schedule of Pro Forma Condensed Combined Financial Information (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Business Combination Segment Allocation [Line Items] | |||||||||||
Basic earnings per share as reported (usd per share) | $ 0.48 | $ 0.40 | $ 0.37 | $ 0.27 | $ 1.60 | $ 0.21 | $ 0.27 | $ 0.14 | $ 1.52 | $ 2.28 | $ 1.00 |
Diluted earnings per share as reported (usd per share) | $ 0.48 | $ 0.40 | $ 0.37 | $ 0.27 | $ 1.60 | $ 0.21 | $ 0.27 | $ 0.14 | $ 1.52 | $ 2.28 | $ 1.00 |
WSL | |||||||||||
Business Combination Segment Allocation [Line Items] | |||||||||||
Pro forma net sales | $ 4,119.3 | ||||||||||
Pro forma net income | $ 155.0 | ||||||||||
Basic earnings per share as reported (usd per share) | $ 1.00 | ||||||||||
Pro forma basic earnings per share (usd per share) | 0.99 | ||||||||||
Diluted earnings per share as reported (usd per share) | 1.00 | ||||||||||
Pro forma diluted earnings per share (usd per share) | $ 0.99 |
Fair Value - Additional Information (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Jun. 01, 2017 |
Jun. 01, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Transfers between fair value hierarchy levels | $ 0 | ||||
WSL | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent consideration | $ 0 | $ 0 | $ 13,500,000 | ||
Former Owners | WSL | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent consideration period | 3 years | 3 years |
Fair Value - Liability Rollforward (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Change in fair value | $ 0 | $ 13,500,000 | $ 0 |
WSL | Level 3 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 0 | 13,500,000 | |
Change in fair value | 0 | (13,500,000) | |
Ending balance | $ 0 | $ 0 | $ 13,500,000 |
Fair Value Far Value - Other Financial Instruments (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Total principal outstanding | $ 405.0 | $ 429.8 |
Fair Value | $ 398.4 | $ 432.4 |
Goodwill and Other Intangible Assets - Schedule of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | $ 164.8 | $ 164.0 | ||
Goodwill, Impairment Loss | $ (2.0) | (2.0) | 0.0 | $ 0.0 |
Foreign currency translation | (0.6) | 0.8 | ||
Goodwill, Ending Balance | 162.2 | 162.2 | 164.8 | 164.0 |
Truckload | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | 138.2 | 138.2 | ||
Goodwill, Impairment Loss | 0.0 | |||
Foreign currency translation | 0.0 | 0.0 | ||
Goodwill, Ending Balance | 138.2 | 138.2 | 138.2 | 138.2 |
Logistics | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | 14.2 | 14.2 | ||
Goodwill, Impairment Loss | 0.0 | |||
Foreign currency translation | 0.0 | 0.0 | ||
Goodwill, Ending Balance | 14.2 | 14.2 | 14.2 | 14.2 |
Other | ||||
Goodwill [Roll Forward] | ||||
Goodwill, Beginning Balance | 12.4 | 11.6 | ||
Goodwill, Impairment Loss | (2.0) | |||
Foreign currency translation | (0.6) | 0.8 | ||
Goodwill, Ending Balance | $ 9.8 | $ 9.8 | $ 12.4 | $ 11.6 |
Goodwill and Other Intangible Assets - Schedule of Identifiable Intangible Assets Other Than Goodwill (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 11.9 | $ 11.9 |
Accumulated Amortization | 4.7 | 3.2 |
Net Carrying Amount | 7.2 | 8.7 |
Customer lists | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10.5 | 10.5 |
Accumulated Amortization | 3.5 | 2.5 |
Net Carrying Amount | 7.0 | 8.0 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1.4 | 1.4 |
Accumulated Amortization | 1.2 | 0.7 |
Net Carrying Amount | $ 0.2 | $ 0.7 |
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Accumulated goodwill impairment charge | $ 8.0 | $ 8.0 | $ 6.0 | |
Goodwill impairment charge | $ 2.0 | 2.0 | 0.0 | $ 0.0 |
Amortization expense for intangible assets | $ 1.4 | $ 1.5 | $ 0.9 | |
Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted-average amortization periods | 10 years | |||
Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Weighted-average amortization periods | 3 years |
Goodwill and Other Intangible Assets - Schedule Estimated Future Amortization Expense (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule | ||
2019 | $ 1.1 | |
2020 | 1.0 | |
2021 | 1.0 | |
2022 | 1.0 | |
2023 | 1.0 | |
2024 and thereafter | 2.1 | |
Net Carrying Amount | $ 7.2 | $ 8.7 |
Debt and Credit Facilities - Summary of Debt (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Debt Instrument [Line Items] | ||
Total principal outstanding | $ 405.0 | $ 429.8 |
Current maturities of debt | (45.0) | (15.2) |
Debt issuance costs | (0.6) | (0.9) |
Long-term debt | 359.4 | 413.7 |
Unsecured Senior Notes | ||
Debt Instrument [Line Items] | ||
Total principal outstanding | $ 400.0 | $ 400.0 |
Maturity year | 2025 | |
Weighted-average interest rate | 3.36% | 3.36% |
Equipment Financing Notes | ||
Debt Instrument [Line Items] | ||
Total principal outstanding | $ 5.0 | $ 29.8 |
Maturity year | 2019 | |
Weighted-average interest rate | 3.72% | 3.76% |
Debt and Credit Facilities - Schedule of Debt Maturities (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Disclosure [Abstract] | ||
2019 | $ 45.0 | |
2020 | 55.0 | |
2021 | 40.0 | |
2022 | 60.0 | |
2023 | 70.0 | |
2024 and thereafter | 135.0 | |
Total | $ 405.0 | $ 429.8 |
Leases - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Operating Leased Assets [Line Items] | |||
Lease expense | $ 37.0 | $ 38.0 | $ 45.6 |
Leases - Schedule of Operating and Capital Lease Future Payments (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Operating Leases | |
2019 | $ 35.8 |
2020 | 25.7 |
2021 | 14.9 |
2022 | 8.4 |
2023 | 6.8 |
2024 and thereafter | 12.7 |
Total | 104.3 |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2019 | 6.9 |
2020 | 0.2 |
2021 | 0.0 |
2022 | 0.0 |
2023 | 0.0 |
2024 and thereafter | 0.0 |
Total | 7.1 |
Amount representing interest | (0.2) |
Present value of minimum lease payments | 6.9 |
Current maturities | (6.7) |
Long-term capital lease obligations | $ 0.2 |
Leases - Schedule of Capital Leased Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Capital Leased Assets [Line Items] | ||
Accumulated amortization | $ (11.2) | $ (12.6) |
Total | 10.1 | 13.8 |
Transportation equipment | ||
Capital Leased Assets [Line Items] | ||
Capital leased assets, gross | 19.9 | 25.0 |
Real property | ||
Capital Leased Assets [Line Items] | ||
Capital leased assets, gross | 0.8 | 0.8 |
Other property | ||
Capital Leased Assets [Line Items] | ||
Capital leased assets, gross | $ 0.6 | $ 0.6 |
Leases - Summary of Investment in Lease Receivables (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Operating Leased Assets [Line Items] | ||
Future minimum payments to be received on leases | $ 140.0 | $ 141.2 |
Guaranteed residual lease values | 151.0 | 130.7 |
Total minimum lease payments to be received | 291.0 | 271.9 |
Unearned income | (28.7) | (28.1) |
Net investment in leases | 262.3 | 243.8 |
Current maturities of lease receivables | 129.6 | 106.6 |
Less—allowance for doubtful accounts | (0.5) | (1.7) |
Current portion of lease receivables—net of allowance | 129.1 | 104.9 |
Lease receivables—noncurrent | $ 133.2 | $ 138.9 |
Minimum | ||
Operating Leased Assets [Line Items] | ||
Terms of direct financing lease (in years) | 1 year | |
Maximum | ||
Operating Leased Assets [Line Items] | ||
Terms of direct financing lease (in years) | 5 years |
Leases - Summary of Principal Amounts to be Received on Lease Receivables (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Leases [Abstract] | ||
2019 | $ 149.0 | |
2020 | 112.7 | |
2021 | 29.0 | |
2022 | 0.3 | |
2023 | 0.0 | |
2024 and thereafter | 0.0 | |
Total minimum lease payments to be received | 291.0 | $ 271.9 |
Lease payments greater than 90 days past due | $ 0.3 |
Income Taxes - Additional Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Corporate income tax rate | 21.00% | 35.00% | 35.00% |
Accrued interest and penalties on unrecognized tax benefits | $ 1.4 | $ 1.2 | |
Net operating loss carryforwards | 224.7 | ||
Tax credit carryforwards | 0.4 | ||
Deferred tax assets, operating loss carryforwards | 17.9 | ||
Deferred tax asset, tax credit carryforwards | 0.3 | ||
Deferred tax assets, valuation allowance | 5.8 | $ 4.4 | |
Operating loss carryforwards, valuation allowance | 5.5 | ||
Tax credit carryforwards, valuation allowance | $ 0.3 |
Income Taxes - Components of the Provision for Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Current: | |||
Federal | $ 21.7 | $ 19.3 | $ 24.4 |
State and other | 11.8 | 5.6 | 7.5 |
Current income tax provision | 33.5 | 24.9 | 31.9 |
Deferred: | |||
Federal | 54.2 | 71.4 | 71.2 |
State and other | 6.7 | 6.7 | 5.6 |
Impact of the Tax Cuts and Jobs Act | 1.3 | (229.5) | 0.0 |
Deferred income tax provision | 62.2 | (151.4) | 76.8 |
Total provision for (benefit from) income taxes | $ 95.7 | $ (126.5) | $ 108.7 |
Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Income tax at federal statutory rate | $ 76.6 | $ 92.2 | $ 93.0 |
Corporate income tax rate | 21.00% | 35.00% | 35.00% |
State tax, net of federal effect | $ 15.4 | $ 8.6 | $ 10.5 |
State tax, net of federal effect, rate | 4.20% | 3.30% | 3.90% |
Nondeductible meals and entertainment | $ 2.1 | $ 3.4 | $ 3.4 |
Nondeductible meals and entertainment, rate | 0.60% | 1.30% | 1.30% |
Impact of the Tax Cuts and Jobs Act | $ 1.3 | $ (229.5) | $ 0.0 |
Impact of the Tax Cuts and Jobs Act, rate | 0.30% | (87.10%) | 0.00% |
Other, net | $ 0.3 | $ (1.2) | $ 1.8 |
Other, net, rate | 0.10% | (0.50%) | 0.70% |
Total provision for (benefit from) income taxes | $ 95.7 | $ (126.5) | $ 108.7 |
Total provision for income taxes, rate | 26.20% | (48.00%) | 40.90% |
Income Taxes - Summary of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Deferred tax assets: | ||
Allowances for doubtful accounts | $ 1.1 | $ 1.1 |
Compensation and employee benefits | 14.7 | 15.6 |
Insurance and claims accruals | 2.6 | 2.8 |
State net operating losses and credit carryforwards | 18.2 | 17.7 |
Other | 5.0 | 4.0 |
Total gross deferred tax assets | 41.6 | 41.2 |
Valuation allowance | (5.8) | (4.4) |
Total deferred tax assets, net of valuation allowance | 35.8 | 36.8 |
Deferred tax liabilities: | ||
Property and equipment | 466.5 | 410.8 |
Prepaid expenses | 4.3 | 3.6 |
Intangibles | 11.1 | 8.7 |
Other | 4.5 | 0.3 |
Total gross deferred tax liabilities | 486.4 | 423.4 |
Net deferred tax liability | $ 450.6 | $ 386.6 |
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized tax benefits - beginning of year | $ 2.8 | $ 2.4 | $ 2.0 |
Gross increases - tax positions related to current year | 0.8 | 0.4 | 0.5 |
Gross decreases - tax positions taken in prior years | 0.0 | 0.0 | (0.1) |
Lapse of statutes | (0.3) | 0.0 | 0.0 |
Gross unrecognized tax benefits - end of year | $ 3.3 | $ 2.8 | $ 2.4 |
Common Equity - Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Basic earnings per common share | ||||||||||||
Net income available to common shareholders | $ 84.8 | $ 70.7 | $ 65.8 | $ 47.6 | $ 283.9 | $ 36.9 | $ 46.5 | $ 22.6 | $ 367.4 | $ 268.9 | $ 389.9 | $ 156.9 |
Weighted average common shares issued and outstanding | 177.0 | 171.1 | 156.6 | |||||||||
Diluted earnings per common share | ||||||||||||
Effect of dilutive restricted share units | 0.2 | 0.2 | 0.2 | |||||||||
Weighted average diluted common shares issued and outstanding | 177.2 | 171.3 | 156.8 | |||||||||
Basic earnings per common share | $ 0.48 | $ 0.40 | $ 0.37 | $ 0.27 | $ 1.60 | $ 0.21 | $ 0.27 | $ 0.14 | $ 1.52 | $ 2.28 | $ 1.00 | |
Diluted earnings per common share | $ 0.48 | $ 0.40 | $ 0.37 | $ 0.27 | $ 1.60 | $ 0.21 | $ 0.27 | $ 0.14 | $ 1.52 | $ 2.28 | $ 1.00 |
Common Equity - Additional Information (Details) |
1 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Mar. 21, 2017
shares
|
Jan. 31, 2019
$ / shares
|
Dec. 31, 2017
$ / shares
|
Dec. 31, 2018
$ / shares
|
Dec. 31, 2017
$ / shares
|
Dec. 31, 2016
$ / shares
|
|
Class of Stock [Line Items] | ||||||
Shares issued, stock split | shares | 29 | |||||
Stockholders' equity, stock split, conversion ratio | 30 | |||||
Dividends declared per share (usd per share) | $ 0.15 | $ 0.24 | $ 0.2 | $ 0.2 | ||
Subsequent Event | Class A Common Shares | ||||||
Class of Stock [Line Items] | ||||||
Dividends declared per share (usd per share) | $ 0.06 |
Employee Benefit Plans (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Defined Contribution Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, expense | $ 12.0 | $ 11.2 | $ 10.7 |
401K Plan | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, expense | $ 12.1 | $ 10.7 | $ 10.0 |
Share-based Compensation - Components of Share-Based Compensation Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 10.9 | $ 5.2 | $ 2.2 |
Related tax benefit | 2.8 | 2.0 | 0.9 |
Restricted Shares and RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 3.1 | 1.5 | 0.0 |
Pre-IPO Restricted Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 0.9 | 1.9 | 2.2 |
Performance Shares and PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 5.5 | 1.2 | 0.0 |
Nonqualified Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 1.4 | $ 0.6 | $ 0.0 |
Share-based Compensation - Stock Option Assumptions (Details) - Nonqualified Stock Options - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average Black-Scholes value (usd per share) | $ 8.96 | $ 6.37 |
Black-Scholes Assumptions: | ||
Expected term | 6 years 3 months | 6 years 3 months |
Expected volatility | 32.20% | 35.00% |
Expected dividend yield | 0.90% | 1.10% |
Risk-free interest rate | 2.80% | 2.20% |
Commitments and Contingencies - Additional Information (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Commitments to purchase transportation equipment | $ 265.5 |
Segment Reporting - Additional Information (Details) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
|
Mar. 31, 2017
USD ($)
|
Dec. 31, 2018
USD ($)
Segment
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Segment Reporting Information [Line Items] | |||||||||||
Number of reportable segments | Segment | 3 | ||||||||||
Operating revenues | $ 1,321.6 | $ 1,280.1 | $ 1,236.3 | $ 1,139.0 | $ 1,191.2 | $ 1,110.8 | $ 1,075.2 | $ 1,006.4 | $ 4,977.0 | $ 4,383.6 | $ 4,045.7 |
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | 322.0 | 293.6 | 240.5 | ||||||||
Other | Other Insurance | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating revenues | $ 82.7 | $ 78.4 | $ 54.4 | ||||||||
Logistics | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Number of operating segments | Segment | 3 |
Segment Reporting - Income From Operations (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Segment Reporting Information [Line Items] | |||||||||||
Income from operations | $ 118.6 | $ 97.9 | $ 91.7 | $ 67.6 | $ 93.7 | $ 64.1 | $ 79.0 | $ 43.5 | $ 375.8 | $ 280.3 | $ 290.4 |
Reportable segments | Truckload | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income from operations | 240.5 | 196.2 | 221.1 | ||||||||
Reportable segments | Intermodal | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income from operations | 130.2 | 52.3 | 46.1 | ||||||||
Reportable segments | Logistics | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income from operations | 47.4 | 34.2 | 30.7 | ||||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income from operations | $ (42.3) | $ (2.4) | $ (7.5) |
Segment Reporting - Depreciation and Amortization Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Segment Reporting Information [Line Items] | |||
Depreciation and amortization expense | $ 291.3 | $ 279.0 | $ 266.0 |
Reportable segments | Truckload | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization expense | 211.0 | 205.9 | 192.6 |
Reportable segments | Intermodal | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization expense | 39.8 | 34.5 | 30.9 |
Reportable segments | Logistics | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization expense | 0.4 | 0.4 | 0.4 |
Other | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization expense | $ 40.1 | $ 38.2 | $ 42.1 |
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Operating revenues | $ 1,321.6 | $ 1,280.1 | $ 1,236.3 | $ 1,139.0 | $ 1,191.2 | $ 1,110.8 | $ 1,075.2 | $ 1,006.4 | $ 4,977.0 | $ 4,383.6 | $ 4,045.7 | |
Income from operations | 118.6 | 97.9 | 91.7 | 67.6 | 93.7 | 64.1 | 79.0 | 43.5 | 375.8 | 280.3 | 290.4 | |
Net income | $ 84.8 | $ 70.7 | $ 65.8 | $ 47.6 | $ 283.9 | $ 36.9 | $ 46.5 | $ 22.6 | $ 367.4 | $ 268.9 | $ 389.9 | $ 156.9 |
Basic earnings per common share | $ 0.48 | $ 0.40 | $ 0.37 | $ 0.27 | $ 1.60 | $ 0.21 | $ 0.27 | $ 0.14 | $ 1.52 | $ 2.28 | $ 1.00 | |
Diluted earnings per common share | $ 0.48 | $ 0.40 | $ 0.37 | $ 0.27 | $ 1.60 | $ 0.21 | $ 0.27 | $ 0.14 | $ 1.52 | $ 2.28 | $ 1.00 |
Schedule II - Valuation and Qualifying Accounts (Details) - Allowance for Doubtful Accounts - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 5.2 | $ 3.5 | $ 3.6 |
Charged to Expense / Against Revenue | 3.7 | 3.7 | (0.3) |
Write-offs, Net of Recoveries | (2.1) | (2.0) | 0.2 |
Balance at End of Year | $ 6.8 | $ 5.2 | $ 3.5 |
Label | Element | Value |
---|---|---|
Dividends | us-gaap_Dividends | $ 26,500,000 |
Stock Issued During Period, Value, Other | us-gaap_StockIssuedDuringPeriodValueOther | 2,900,000 |
Stock Repurchased and Retired During Period, Value | us-gaap_StockRepurchasedAndRetiredDuringPeriodValue | 100,000 |
Stock Issued During Period, Value, Issued for Services | us-gaap_StockIssuedDuringPeriodValueIssuedForServices | 800,000 |
Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Value, Other | us-gaap_StockIssuedDuringPeriodValueOther | 2,900,000 |
Stock Repurchased and Retired During Period, Value | us-gaap_StockRepurchasedAndRetiredDuringPeriodValue | 100,000 |
Stock Issued During Period, Value, Issued for Services | us-gaap_StockIssuedDuringPeriodValueIssuedForServices | 800,000 |
Retained Earnings [Member] | ||
Dividends | us-gaap_Dividends | 26,500,000 |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | $ 367,400,000 |
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