GENERAL

6 Months Ended

Jun. 30, 2020

Accounting Changes and Error Corrections [Abstract]

GENERAL

GENERAL

Interim Financial Statements

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Ryder System, Inc. (Ryder) and all entities in which Ryder has a controlling voting interest (subsidiaries) and variable interest entities (VIE) required to be consolidated in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the accounting policies described in our 2019 Annual Report on Form 10-K and should be read in conjunction with the Consolidated Financial Statements and notes thereto. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included and the disclosures herein are adequate. The operating results for interim periods are unaudited and are not necessarily indicative of the results that can be expected for a full year.

The coronavirus (COVID-19) pandemic has negatively impacted several areas of our businesses. In our Fleet Management Solutions (FMS) business segment, we experienced lower demand for commercial rental and declines in the used vehicle market. With respect to our ChoiceLease product line, our customers have signed long-term lease contracts and, therefore, we do not expect our revenue and cash flows to be materially affected provided our customers remain solvent and continue to make their payments. In our Supply Chain Solutions (SCS) business segment, there has been a deterioration in customer activity, primarily due to the temporary shutdowns in the automotive industry, which have restarted their operations during the second quarter of 2020. In addition, we have experienced a decline in our sales growth opportunities in all of our businesses. We have established additional bad debt reserves due to our expectations for COVID-19 related payment activity with certain customers as a result of increases in bankruptcies or insolvencies, or a delay in payments. We have attempted to mitigate the adverse impacts from the pandemic through cost reduction measures, including temporary employee furloughs, lower discretionary and overhead spending, and a reduction in capital expenditures. In addition, we took planned actions to reduce headcount, primarily in our North American and U.K. FMS operations.

Depending on the extent and duration of the pandemic and the related economic impacts, it may have a further impact on our business and financial results, as well as on significant judgments and estimates, including those related to goodwill and other asset impairments, residual values and other depreciation assumptions, deferred income taxes and annual effective tax rates, variable revenue considerations, the valuation of our pension plans, and allowance for credit losses.

Significant Accounting Policies

Our significant accounting policies are detailed in "Note 1: Summary of Significant Accounting Policies" within Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2019.