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Share-Based Compensation Plans | 12 Months Ended
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Dec. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
SHARE-BASED COMPENSATION PLANS | SHARE-BASED COMPENSATION PLANS The following table provides information on share-based compensation expense and income tax benefits recognized in 2012, 2011 and 2010:
|  | Years ended December 31,
|  | 2012 |  | 2011 |  | 2010
|  | (In thousands)
Stock option and stock purchase plans |  | $ | 9,469 |  |  | 9,497 |  |  | 9,069 |
Nonvested stock |  | 9,395 |  |  | 7,926 |  |  | 7,474 |
Share-based compensation expense |  | 18,864 |  |  | 17,423 |  |  | 16,543 |
Income tax benefit |  | (6,309 | ) |  | (5,794 | ) |  | (5,572 | )
Share-based compensation expense, net of tax |  | $ | 12,555 |  |  | 11,629 |  |  | 10,971 |
Total unrecognized pre-tax compensation expense related to share-based compensation arrangements at December 31, 2012 was $30 million and is expected to be recognized over a weighted-average period of approximately 1.7 years. The total fair value of equity awards vested during the years ended December 31, 2012, 2011, and 2010 were $12 million, $23 million and $11 million, respectively. Share-Based Incentive Awards Share-based incentive awards are provided to employees under the terms of three share-based compensation plans (collectively, the “Plans”). The Plans are administered by the Compensation Committee of the Board of Directors. Awards under the Plans principally include at-the-money stock options and nonvested stock at December 31, 2012. There are 3.5 million shares authorized and available to be granted under the Plans as of December 31, 2012. There were 3.45 million unused shares available to be granted under the Plans as of December 31, 2012. A majority of share-based compensation expense is generated from stock options. Stock options are awards which allow employees to purchase shares of our stock at a fixed price. Stock option awards are granted at an exercise price equal to the market price of our stock at the time of grant. These awards, which generally vest one-third each year, are fully vested three years from the grant date and generally have contractual terms of seven years. Restricted stock awards are nonvested stock rights that are granted to employees and entitle the holder to shares of common stock as the award vests. For grants prior to 2012, participants are entitled to non-forfeitable dividend equivalents on such awarded shares, but the sale or transfer of these shares is restricted during the vesting period. Time-vested restricted stock rights typically vest in three years regardless of company performance. The fair value of the time-vested awards is determined and fixed on the grant date based on Ryder’s stock price on the date of grant. Market-based restricted stock awards include a market-based vesting provision. For the 2012 grant, the awards were segmented into three equal performance periods of one, two and three years. At the end of each performance period, 25%-125% of the award may be earned based on Ryder's total shareholder return (TSR) compared to the target TSR of the S&P 500 over the applicable performance period. Employees will receive the grant of stock at the end of the three year period provided they continue to be employed with Ryder, subject to Compensation Committee approval. For grants prior to 2012, employees only receive the grant of stock if Ryder’s cumulative average total shareholder return (TSR) at least meets the S&P 500 cumulative average TSR for the applicable three-year period. The fair value of the market-based awards is determined on the date of grant and is based on the likelihood of Ryder achieving the market-based condition. Expense on the market-based restricted stock awards is recognized regardless of whether the awards vest. Certain employees also received market-based cash awards as part of our long-term incentive compensation program. The cash awards have the same vesting provisions as the market-based restricted stock rights granted in the respective years except that, for 2011 and 2010, Ryder’s TSR must at least meet the TSR of the 33rd percentile of the S&P 500. The cash awards are accounted for as liability awards as the awards are based upon the performance of our common stock and are settled in cash. As a result, the liability is adjusted to reflect fair value at the end of each reporting period. The fair value of the cash awards was estimated using a lattice-based option pricing valuation model that incorporates a Monte-Carlo simulation. The liability related to the cash awards was $4 million and $3 million at December 31, 2012 and December 31, 2011, respectively. The following table is a summary of compensation expense recognized related to cash awards in addition to share-based compensation expense reported in the previous table.
|  | Years ended December 31
|  | 2012 |  | 2011 |  | 2010
|  | (In thousands)
Cash awards |  | $ | 1,099 |  |  | 1,882 |  |  | 2,052 |
We grant restricted stock units (RSUs) to non-management members of the Board of Directors. Once granted, RSUs are eligible for non-forfeitable dividend equivalents but have no voting rights. The fair value of the awards is determined and fixed on the grant date based on Ryder’s stock price on the date of grant. The board member receives the RSUs upon their departure from the Board. The initial grant of RSUs will not vest unless the director has served a minimum of one year. When the board member receives the RSUs, they are redeemed for an equivalent number of shares of our common stock. Share-based compensation expense is recognized for RSUs in the year the RSUs are granted. Option Awards The following is a summary of option activity under our stock option plans as of and for the year ended December 31, 2012:
|  | Shares |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term |  | Aggregate Intrinsic Value
|  | (In thousands) |  |  |  | (In years) |  | (In thousands)
Options outstanding at January 1 |  | 3,297 |  |  | $ | 44.25 |  |  |  |  |
Granted |  | 456 |  |  | 53.63 |  |  |  |  |
Exercised |  | (508 | ) |  | 38.68 |  |  |  |  |
Forfeited or expired |  | (97 | ) |  | 48.92 |  |  |  |  |
Options outstanding at December 31 |  | 3,148 |  |  | $ | 46.36 |  |  | 3.6 |  | $ | 18,566 |
Vested and expected to vest at December 31 |  | 3,077 |  |  | $ | 46.31 |  |  | 3.1 |  | $ | 18,313 |
Exercisable at December 31 |  | 2,032 |  |  | $ | 45.76 |  |  | 2.6 |  | $ | 14,106 |
The aggregate intrinsic values in the table above represent the total pre-tax intrinsic value (the difference between the market price of our stock on the last trading day of the year and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options at year-end. The amount changes based on the fair market value of our stock. Information about options in various price ranges at December 31, 2012 follows:
|  | Options Outstanding |  | Options Exercisable
Price Ranges |  | Shares |  | Weighted- Average Remaining Contractual Term |  | Weighted- Average Exercise Price |  | Shares |  | Weighted- Average Exercise Price
|  | (In thousands) |  | (In years) |  |  |  |  | (In thousands) |  |
Less than $45.00 |  | 1,131 |  | 3.4 |  | $ | 33.82 |  |  | 881 |  | $ | 34.05 |
45.00-50.00 |  | 617 |  | 5.1 |  | 49.38 |  |  | 204 |  | 49.38 |
50.00-55.00 |  | 897 |  | 3.6 |  | 53.04 |  |  | 452 |  | 52.48 |
55.00 and over |  | 503 |  | 2.2 |  | 58.96 |  |  | 495 |  | 58.96 |
Total |  | 3,148 |  | 3.6 |  | $ | 46.36 |  |  | 2,032 |  | $ | 45.76 |
Restricted Stock Awards The following is a summary of the status of Ryder’s nonvested restricted stock awards as of and for the year ended December 31, 2012:
|  | Time-Vested |  | Market-Based Vested
|  | Shares |  | Weighted- Average Grant Date Fair Value |  | Shares |  | Weighted- Average Grant Date Fair Value
|  | (In thousands) |  |  |  | (In thousands) |  |
Nonvested stock outstanding at January 1 |  | 373 |  | $ | 46.72 |  |  | 476 |  | $ | 18.69 |
Granted |  | 129 |  | 52.38 |  |  | 93 |  | 43.39 |
Vested |  | (47) |  | 39.10 |  |  | — |  | — |
Forfeited |  | (15) |  | 49.76 |  |  | (182) |  | 32.20 |
Nonvested stock outstanding at December 31 |  | 440 |  | $ | 49.16 |  |  | 387 |  | $ | 25.35 |
Stock Purchase Plan We maintain an Employee Stock Purchase Plan (ESPP), which enables eligible participants in the U.S. and Canada to purchase full or fractional shares of Ryder common stock through payroll deductions of up to 15% of eligible compensation. The ESPP provides for quarterly offering periods during which shares may be purchased at 85% of the fair market value on either the first or the last trading day of the quarter, whichever is less. Stock purchased under the ESPP must generally be held for 90 days. The amount of shares authorized to be issued under the existing ESPP was 4.5 million at December 31, 2012. There were 0.7 million unused shares available to be purchased under the ESPP at December 31, 2012. The following table summarizes the status of Ryder’s ESPP:
|  | Shares |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term |  | Aggregate Intrinsic Value
|  | (In thousands) |  |  |  | (In years) |  | (In thousands)
Outstanding at January 1 |  | — |  |  | $ | — |  |  |  |  |
Granted |  | 268 |  |  | 33.72 |  |  |  |  |
Exercised |  | (268 | ) |  | 33.72 |  |  |  |  |
Forfeited or expired |  | — |  |  | — |  |  |  |  |
Outstanding at December 31 |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
Exercisable at December 31 |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
Share-Based Compensation Fair Value Assumptions The fair value of each option award is estimated on the date of grant using a Black-Scholes-Merton option-pricing valuation model that uses the weighted-average assumptions noted in the table below. Expected volatility is based on historical volatility of our stock and implied volatility from traded options on our stock. The risk-free rate for periods within the contractual life of the stock option award is based on the yield curve of a zero-coupon U.S. Treasury bond on the date the stock option award is granted with a maturity equal to the expected term of the stock option award. We use historical data to estimate stock option exercises and forfeitures within the valuation model. The expected term of stock option awards granted is derived from historical exercise experience under the share-based employee compensation arrangements and represents the period of time that stock option awards granted are expected to be outstanding. The fair value of market-based restricted stock awards is estimated using a lattice-based option-pricing valuation model that incorporates a Monte-Carlo simulation. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by Ryder. The following table presents the weighted-average assumptions used for options granted:
|  | Years ended December 31,
|  | 2012 |  | 2011 |  | 2010
Option plans: |  |  |  |  |  |
Expected dividends |  | 2.2% |  | 2.2% |  | 3.0%
Expected volatility |  | 40.7% |  | 38.7% |  | 43.9%
Risk-free rate |  | 0.6% |  | 1.7% |  | 1.7%
Expected term in years |  | 3.7 years |  | 3.6 years |  | 3.4 years
Grant-date fair value |  | $14.07 |  | $12.88 |  | $8.93
Purchase plan: |  |  |  |  |  |
Expected dividends |  | 2.7% |  | 2.4% |  | 2.5%
Expected volatility |  | 32.7% |  | 32.8% |  | 35.6%
Risk-free rate |  | 0.1% |  | 0.1% |  | 0.2%
Expected term in years |  | 0.25 years |  | 0.25 years |  | 0.25 years
Grant-date fair value |  | $9.53 |  | $10.21 |  | $8.95
Exercise of Employee Stock Options and Purchase Plans The total intrinsic value of options exercised during the years ended December 31, 2012, 2011 and 2010 was $6 million, $9 million, and $4 million, respectively. The total cash received from employees as a result of exercises under all share-based employee compensation arrangements for the years ended December 31, 2012, 2011 and 2010 was $28 million, $33 million, and $17 million, respectively. In connection with these exercises, the tax benefits realized from share-based employee compensation arrangements were $1 million for each of the years ended December 31, 2012, 2011, and 2010.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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