REVENUE EARNING EQUIPMENT, NET

6 Months Ended

Jun. 30, 2019

Revenue Earning Equipment [Abstract]



	June 30, 2019					December 31, 2018
	Cost		Accumulated Depreciation		Net Book Value ⁽¹⁾	Cost	Accumulated Depreciation		Net Book Value ⁽¹⁾
	(In thousands)
Held for use:
ChoiceLease	$	11,791,913	(3,833,796	)	7,958,117	10,824,989	(3,645,655	)	7,179,334
Commercial rental	3,475,933		(1,041,299	)	2,434,634	3,152,908	(1,047,346	)	2,105,562
Held for sale	615,699		(447,439	)	168,260	467,093	(336,028	)	131,065
Total	$	15,883,545	(5,322,534	)	10,561,011	14,444,990	(5,029,029	)	9,415,961

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(1)	Revenue earning equipment, net includes vehicles under finance leases of $13 million, less accumulated depreciation of $7 million, at June 30, 2019, and $23 million, less accumulated depreciation of $13 million, at December 31, 2018.

Revenue earning equipment held for sale is stated at the lower of carrying amount or fair value less costs to sell. Losses on vehicles held for sale for which carrying values exceeded fair value are recognized at the time they arrive at our used truck sales centers and are presented within “Used vehicle sales, net” in the Consolidated Condensed Statements of Earnings. For revenue earning equipment held for sale, we stratify our fleet by vehicle type (trucks, tractors and trailers), weight class, age and other relevant characteristics and create classes of similar assets for analysis purposes. For a certain population of our revenue earning equipment held for sale, fair value was determined based upon recent market prices obtained from our own sales experience for sales of each class of similar assets and vehicle condition. Expected declines in market prices were also considered when valuing the vehicles held for sale. These vehicles held for sale were classified within Level 3 of the fair value hierarchy.

The following table presents our assets held for sale that are measured at fair value on a nonrecurring basis and considered a Level 3 fair value measurement:



				Total Losses ⁽²⁾
				Three months ended June 30,			Six months ended June 30,
	June 30, 2019		December 31, 2018	2019		2018	2019		2018
	(In thousands)
Assets held for sale:
Revenue earning equipment ⁽¹⁾:
Trucks	$	44,059	44,325	$	8,740	10,295	$	20,287	18,896
Tractors	52,620		35,397	14,053		2,101	19,021		5,478
Trailers	1,691		1,507	1,485		1,605	1,664		3,198
Total assets at fair value	$	98,370	81,229	$	24,278	14,001	$	40,972	27,572

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(1)	Assets held for sale in the above table only include the portion of revenue earning equipment held for sale where net book values exceeded fair values and fair value adjustments were recorded. The net book value of assets held for sale that were less than fair value was $70 million and $50 million as of June 30, 2019 and December 31, 2018, respectively.


(2)	Total losses represent fair value adjustments for all vehicles reclassified to held for sale throughout the period for which fair value was less than net book value.

The components of used vehicle sales, net were as follows:



	Three months ended June 30,					Six months ended June 30,
	2019			2018		2019			2018
	(In thousands)
Gains on vehicle sales, net	$	(6,138	)	(8,442	)	$	(14,615	)	(14,582	)
Losses from fair value adjustments	24,278			14,001		40,972			27,572
Used vehicle sales, net	$	18,140		5,559		$	26,357		12,990

We own the majority of our revenue earning equipment. Revenue earning equipment that we lease as a lessee are immaterial, and are therefore not separately disclosed from owned revenue earning equipment.