XML 46 R31.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Employee Benefit Plans | 12 Months Ended
--- | ---
Dec. 31, 2018
Retirement Benefits [Abstract] |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Pension Plans We historically sponsored several defined benefit pension plans covering most employees not covered by union-administered plans, including certain employees in foreign countries. These plans generally provided participants with benefits based on years of service and career-average compensation levels. In past years, we made amendments to defined benefit retirement plans that froze the retirement benefits for non-grandfathered and certain non-union employees in the U.S., Canada and the United Kingdom (U.K.). As a result of these amendments, non-grandfathered plan participants ceased accruing benefits under the plan as of the respective amendment effective date and began receiving an enhanced benefit under a defined contribution plan. All retirement benefits earned as of the amendment effective date were fully preserved and will be paid in accordance with the plan and legal requirements. The funding policy for these plans is to make contributions based on annual service costs plus amortization of unfunded past service liability, but not greater than the maximum allowable contribution deductible for federal income tax purposes. We may, from time to time, make voluntary contributions to our pension plans, which exceed the amount required by statute. The majority of the plans’ assets are invested in a master trust that, in turn, is invested primarily in commingled funds whose investments are listed stocks and bonds. We also have a non-qualified supplemental pension plan covering certain U.S. employees, which provides for incremental pension payments from our funds so that total pension payments equal the amounts that would have been payable from our principal pension plans if it were not for limitations imposed by income tax regulations. The accrued pension liability related to this plan was $53 million and $55 million at December 31, 2018 and 2017, respectively. Pension Expense Pension expense from continuing operations was as follows:
|  | Years ended December 31,
|  | 2018 |  | 2017 |  | 2016
|  | (In thousands)
Company-administered plans: |  |  |  |  |  |
Service cost |  | $ | 12,108 |  |  | 12,345 |  |  | 12,977 |
Interest cost |  | 78,234 |  |  | 86,431 |  |  | 94,476 |
Expected return on plan assets |  | (101,980 | ) |  | (91,062 | ) |  | (90,588 | )
Pension settlement expense |  | 3,061 |  |  | — |  |  | — |
Amortization of: |  |  |  |  |  |
Net actuarial loss |  | 28,593 |  |  | 32,987 |  |  | 31,777 |
Prior service cost |  | 550 |  |  | 579 |  |  | 2,976 |
|  | 20,566 |  |  | 41,280 |  |  | 51,618 |
Union-administered plans |  | 9,326 |  |  | 15,553 |  |  | 9,597 |
Net pension expense |  | $ | 29,892 |  |  | 56,833 |  |  | 61,215 |
Company-administered plans: |  |  |  |  |  |
U.S. |  | $ | 28,043 |  |  | 43,717 |  |  | 53,319 |
Foreign |  | (7,477 | ) |  | (2,437 | ) |  | (1,701 | )
|  | 20,566 |  |  | 41,280 |  |  | 51,618 |
Union-administered plans |  | 9,326 |  |  | 15,553 |  |  | 9,597 |
|  | $ | 29,892 |  |  | 56,833 |  |  | 61,215 |
During 2018, we paid employee benefit settlements from our U.K. pension plan that were individually immaterial but in the aggregate resulted in a settlement charge of $3 million, which is recorded in the "Non-operating pension costs" in our Consolidated Statement of Earnings. During 2016, we determined that certain pension benefit improvements made in 2009 had not been fully reflected in our projected benefit obligation. Because the amounts were not material to our consolidated financial statements in any individual period, and the cumulative amount is not material to 2016 results, we recognized a one-time, non-cash charge of $8 million in "Selling, general and administrative expenses" and a $13 million pre-tax increase to “Accumulated other comprehensive loss” in our consolidated financial statements to correctly state the pension benefit obligation and account for these 2009 benefit improvements. The following table sets forth the weighted-average actuarial assumptions used for Ryder’s pension plans in determining annual pension expense:
|  | U.S. Plans Years ended December 31, |  | Foreign Plans Years ended December 31,
|  | 2018 |  | 2017 |  | 2016 |  | 2018 |  | 2017 |  | 2016
Discount rate |  | 3.70% |  | 4.20% |  | 4.50% |  | 2.70% |  | 3.90% |  | 3.70%
Rate of increase in compensation levels |  | 3.00% |  | 3.00% |  | 3.00% |  | 3.08% |  | 3.10% |  | 3.10%
Expected long-term rate of return on plan assets |  | 5.40% |  | 5.40% |  | 5.85% |  | 5.50% |  | 5.48% |  | 5.44%
Gain and loss amortization period (years) |  | 21 |  | 21 |  | 23 |  | 26 |  | 26 |  | 27
The return on plan assets assumption reflects the weighted-average of the expected long-term rates of return for the broad categories of investments held in the plans. The expected long-term rate of return is adjusted when there are fundamental changes in expected returns or in asset allocation strategies of the plan assets. Obligations and Funded Status The following table sets forth the benefit obligations, assets and funded status associated with our pension plans:
|  | December 31,
|  | 2018 |  | 2017
|  | (In thousands)
Change in benefit obligations: |  |  |  |
Benefit obligations at January 1 |  | $ | 2,298,902 |  |  | 2,228,762 |
Service cost |  | 12,108 |  |  | 12,345 |
Interest cost |  | 78,234 |  |  | 86,431 |
Actuarial (gain) loss |  | (120,934 | ) |  | 100,905 |
Pension annuity settlement |  | — |  |  | (66,423 | )
Benefits paid |  | (104,560 | ) |  | (104,054 | )
Foreign currency exchange rate changes |  | (28,607 | ) |  | 40,936 |
Benefit obligations at December 31 |  | 2,135,143 |  |  | 2,298,902 |
Change in plan assets: |  |  |  |
Fair value of plan assets at January 1 |  | 1,941,330 |  |  | 1,787,075 |
Actual return on plan assets |  | (108,386 | ) |  | 244,916 |
Employer contribution |  | 27,741 |  |  | 41,219 |
Benefits paid |  | (104,560 | ) |  | (104,054 | )
Pension annuity settlement |  | — |  |  | (71,299 | )
Foreign currency exchange rate changes |  | (30,582 | ) |  | 43,473 |
Fair value of plan assets at December 31 |  | 1,725,543 |  |  | 1,941,330 |
Funded status |  | $ | (409,600 | ) |  | (357,572 | )
Funded percent |  | 81 | % |  | 84 | %
During 2017, we completed a transfer of future retiree benefits in our U.S. defined benefit plan to a third-party annuity company. We paid $71 million in connection with this transfer, which included a $66 million reduction in our projected benefit obligation and an annuity premium. We did not record a gain or loss on this transaction as the cost of all settlements during the year, including this transaction, were less than our combined service and interest costs for the year. The funded status of our pension plans was presented in the Consolidated Balance Sheets as follows:
|  | December 31,
|  | 2018 |  | 2017
|  | (In thousands)
Noncurrent asset |  | $ | 51,133 |  |  | 58,708 |
Current liability |  | (3,754 | ) |  | (3,863 | )
Noncurrent liability |  | (456,979 | ) |  | (412,417 | )
Net amount recognized |  | $ | (409,600 | ) |  | (357,572 | )
Amounts recognized in accumulated other comprehensive loss (pre-tax) consisted of:
|  | December 31,
|  | 2018 |  | 2017
|  | (In thousands)
Prior service cost |  | $ | 14,519 |  |  | 11,135 |
Net actuarial loss |  | 929,995 |  |  | 878,386 |
Net amount recognized |  | $ | 944,514 |  |  | 889,521 |
In 2019, we expect to recognize $32 million of net actuarial loss amortization as a component of pension expense. The following table sets forth the weighted-average actuarial assumptions used in determining funded status:
|  | U.S. Plans December 31, |  | Foreign Plans December 31,
|  | 2018 |  | 2017 |  | 2018 |  | 2017
Discount rate |  | 4.35% |  | 3.70% |  | 3.04% |  | 2.70%
Rate of increase in compensation levels |  | 3.00% |  | 3.00% |  | 3.08% |  | 3.10%
At December 31, 2018 and 2017, our accumulated benefit obligations, as well as, our pension obligations (accumulated benefit obligations (ABO), and projected benefit obligations (PBO)), greater than the fair value of the related plan assets for our U.S. and foreign plans were as follows:
|  | U.S. Plans December 31, |  | Foreign Plans December 31, |  | Total December 31,
|  | 2018 |  | 2017 |  | 2018 |  | 2017 |  | 2018 |  | 2017
|  | (In thousands)
Total accumulated benefit obligations |  | $ | 1,685,270 |  |  | 1,781,882 |  |  | 429,640 |  |  | 492,864 |  |  | 2,114,910 |  |  | 2,274,746 |
Plans with pension obligations in excess of plan assets: |  |  |  |  |  |  |  |  |  |  |  |
PBO |  | 1,703,847 |  |  | 1,804,260 |  |  | 6,912 |  |  | 7,802 |  |  | 1,710,759 |  |  | 1,812,062 |
ABO |  | 1,685,270 |  |  | 1,781,882 |  |  | 5,788 |  |  | 6,502 |  |  | 1,691,058 |  |  | 1,788,384 |
Fair value of plan assets |  | 1,250,032 |  |  | 1,395,790 |  |  | — |  |  | — |  |  | 1,250,032 |  |  | 1,395,790 |
Plan Assets Our pension investment strategy is to reduce the effects of future volatility on the fair value of our pension assets relative to our pension liabilities. We increase our allocation of high quality, longer-term fixed income securities and reduce our allocation of equity investments as the funded status of the plans improve. The plans utilize several investment strategies, including actively and passively managed equity and fixed income strategies. The investment policy establishes targeted allocations for each asset class that incorporate measures of asset and liability risks. Deviations between actual pension plan asset allocations and targeted asset allocations may occur as a result of investment performance and changes in the funded status from time to time. Rebalancing of our pension plan asset portfolios is evaluated periodically and rebalanced if actual allocations exceed an acceptable range. U.S. plans account for approximately 72% of our total pension plan assets. Equity securities primarily include investments in both domestic and international common collective trusts and publicly traded equities. Fixed income securities primarily include domestic collective trusts and corporate bonds. Other types of investments include private equity fund-of-funds and hedge fund-of-funds. Equity and fixed income securities in our international plans include actively and passively managed mutual funds. The following table presents the fair value of each major category of pension plan assets and the level of inputs used to measure fair value as of December 31, 2018 and 2017:
|  | Fair Value Measurements at December 31, 2018
Asset Category |  | Total |  | Level 1 |  | Level 2 |  | Level 3
|  | (In thousands)
Equity securities: |  |  |  |  |  |  |  |
U.S. common collective trusts |  | $ | 315,741 |  |  | — |  |  | 315,741 |  |  | — |
Foreign common collective trusts |  | 352,040 |  |  | — |  |  | 352,040 |  |  | — |
Fixed income securities: |  |  |  |  |  |  |  |
Corporate bonds |  | 79,155 |  |  | — |  |  | 79,155 |  |  | — |
Common collective trusts |  | 856,771 |  |  | — |  |  | 856,771 |  |  | — |
Private equity and hedge funds |  | 121,836 |  |  | — |  |  | — |  |  | 121,836 |
Total |  | $ | 1,725,543 |  |  | — |  |  | 1,603,707 |  |  | $ | 121,836 |
|  | Fair Value Measurements at December 31, 2017
Asset Category |  | Total |  | Level 1 |  | Level 2 |  | Level 3
|  | (In thousands)
Equity securities: |  |  |  |  |  |  |  |
U.S. common collective trusts |  | $ | 443,405 |  |  | — |  |  | 443,405 |  |  | — |
Foreign common collective trusts |  | 458,111 |  |  | — |  |  | 458,111 |  |  | — |
Fixed income securities: |  |  |  |  |  |  |  |
Corporate bonds |  | 85,117 |  |  | — |  |  | 85,117 |  |  | — |
Common collective trusts |  | 840,104 |  |  | — |  |  | 840,104 |  |  | — |
Private equity and hedge funds |  | 114,593 |  |  | — |  |  | — |  |  | 114,593 |
Total |  | $ | 1,941,330 |  |  | — |  |  | 1,826,737 |  |  | 114,593 |
The following is a description of the valuation methodologies used for our pension assets as well as the level of input used to measure fair value: Equity securities — These investments include common and preferred stocks and index common collective trusts that track U.S. and foreign indices. The common collective trusts were valued at the unit prices established by the funds’ sponsors based on the fair value of the assets underlying the funds. Since the units of the funds are not actively traded, the fair value measurements have been classified within Level 2 of the fair value hierarchy. Fixed income securities — These investments include investment grade bonds of U.S. issuers from diverse industries, government issuers, index common collective trusts that track the Barclays Aggregate Index and other fixed income investments (primarily mortgage-backed securities). Fair values for the corporate bonds were valued using third-party pricing services. These sources determine prices utilizing market income models which factor in, where applicable, transactions of similar assets in active markets, transactions of identical assets in infrequent markets, interest rates, bond or credit default swap spreads and volatility. Since the corporate bonds are not actively traded, the fair value measurements have been classified within Level 2 of the fair value hierarchy. The common collective trusts were valued at the unit prices established by the funds’ sponsors based on the fair value of the assets underlying the funds. Since the units of the funds are not actively traded, the fair value measurements have been classified within Level 2 of the fair value hierarchy. The other investments are not actively traded and fair values are estimated using bids provided by brokers, dealers or quoted prices of similar securities with similar characteristics or pricing models. Therefore, the other investments have been classified within Level 2 of the fair value hierarchy. Private equity and hedge funds — These investments represent limited partnership interests in private equity and hedge funds. The partnership interests are valued by the general partners based on the underlying assets in each fund. The limited partnership interests are valued using unobservable inputs and have been classified within Level 3 of the fair value hierarchy. The following table presents a summary of changes in the fair value of the pension plans’ Level 3 assets for the years ended December 31, 2018 and 2017:
|  | 2018 |  | 2017
|  | (In thousands)
Beginning balance at January 1 |  | $ | 114,593 |  |  | 102,884 |
Return on plan assets: |  |  |  |
Relating to assets still held at the reporting date |  | 6,762 |  |  | 10,795 |
Relating to assets sold during the period |  | (38 | ) |  | (405 | )
Purchases, sales, settlements and expenses |  | 519 |  |  | 1,319 |
Ending balance at December 31 |  | $ | 121,836 |  |  | 114,593 |
The following table details pension benefits expected to be paid in each of the next five fiscal years and in aggregate for the five fiscal years thereafter:
| (In thousands)
2019 | $ | 104,596 |
2020 | 107,603 |
2021 | 112,469 |
2022 | 116,601 |
2023 | 120,086 |
2024-2028 | 639,201 |
For 2019, required pension contributions to our pension plans are estimated to be $32 million. Multi-employer Plans We participate in multi-employer plans that provide defined benefits to certain employees covered by collective-bargaining agreements. Such plans are usually administered by a board of trustees comprised of the management of the participating companies and labor representatives. The net pension cost of these plans is equal to the annual contribution determined in accordance with the provisions of negotiated labor contracts. Assets contributed to such plans are not segregated or otherwise restricted to provide benefits only to our employees. The risks of participating in these multi-employer plans are different from single-employer plans in the following respects: 1) assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees and former employees of other participating employers; 2) if a participating employer is no longer able to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers at annual contribution rates under the collective bargaining agreements; 3) if there is a mass withdrawal of substantially all employers from the plan, we may be required to pay the plan an annual contribution based on historical contribution levels as prescribed by federal statute; and 4) if we choose to stop participating in some of our multi-employer plans, we may be required to pay those plans an amount based on the underfunded status of the plan, which is referred to as a withdrawal liability. During 2017, we recorded an estimated pension settlement charge of $5 million for the exit from the Central States Southeast and Southwest Areas multi-employer pension plan. This charge was recorded within “Selling, general, and administrative expenses” in our Consolidated Statement of Earnings and is included in the Union-administered plans expense. Our participation in these plans is outlined in the table below. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2018 and 2017 is for the plan years ended December 31, 2017 and December 31, 2016, respectively. The zone status is based on information that we received from the plan. Among other factors, plans in the red zone are generally less than sixty-five percent funded, plans in the yellow zone are less than eighty percent funded, and plans in the green zone are at least eighty percent funded.
|  |  |  | Pension Protection Act Zone Status |  |  |  | Ryder Contributions |  |  |  | Expiration Date(s) of Collective-Bargaining Agreement(s)
Pension Fund |  | Employer Identification Number |  | 2018 |  | 2017 |  | FIP/RP Status Pending/ Implemented (1) |  | 2018 |  | 2017 |  | 2016 |  | Surcharge Imposed |
|  |  |  |  |  |  |  |  |  | (Dollars in thousands) |  |  |  |
Western Conference Teamsters |  | 91-6145047 |  | Green |  | Green |  | No |  | $ | 3,488 |  |  | 3,245 |  |  | 2,613 |  |  | No |  | 01/12/18 to 03/31/21
IAM National |  | 51-6031295 |  | Green |  | Green |  | No |  | 3,953 |  |  | 3,891 |  |  | 4,162 |  |  | No |  | 03/31/17 to 11/30/19
Automobile Mechanics Local No. 701 |  | 36-6042061 |  | Yellow |  | Yellow |  | FIP Adopted |  | 1,435 |  |  | 2,048 |  |  | 2,201 |  |  | Yes |  | 10/31/17 to 05/31/19
Other funds |  |  |  |  |  |  |  |  |  | 931 |  |  | 915 |  |  | 760 |  |  |  |  |
Total contributions |  |  |  |  |  |  |  |  |  | 9,807 |  |  | 10,099 |  |  | 9,736 |  |  |  |  |
Pension settlement (benefit) charges |  |  |  |  |  |  |  |  |  | (481 | ) |  | 5,454 |  |  | (139 | ) |  |  |  |
Union-administered plans |  |  |  |  |  |  |  |  |  | $ | 9,326 |  |  | 15,553 |  |  | 9,597 |  |  |  |  |
_____________
(1) | The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented.
Our contributions are impacted by changes in contractual contributions rates as well as changes in the number of employees covered by each plan. Savings Plans Employees who do not actively participate in pension plans and are not covered by union-administered plans are generally eligible to participate in enhanced savings plans. These plans provide for (i) a company contribution even if employees do not make contributions for employees hired before January 1, 2016, (ii) a company match of employee contributions of eligible pay, subject to tax limits and (iii) a discretionary company match. Savings plan costs totaled $40 million in 2018, $39 million in 2017 and $38 million in 2016. Deferred Compensation and Long-Term Compensation Plans We have deferred compensation plans that permit eligible U.S. employees, officers and directors to defer a portion of their compensation. The deferred compensation liability, including Ryder matching amounts and accumulated earnings, totaled $60 million and $63 million at December 31, 2018 and 2017, respectively. We have established grantor trusts (Rabbi Trusts) to provide funding for benefits payable under the supplemental pension plan, deferred compensation plans and long-term incentive compensation plans. The assets held in the trusts were $60 million and $63 million at December 31, 2018 and 2017, respectively. The Rabbi Trusts’ assets consist of short-term cash investments and a managed portfolio of equity securities, including our common stock. These assets, except for the investment in our common stock, are included in “Direct financing leases and other assets” because they are available to our general creditors in the event of insolvency. The equity securities are classified as trading securities and stated at fair value. Both realized and unrealized gains and losses are included in “Miscellaneous income, net.” The Rabbi Trusts’ investments of $1 million in our common stock at December 31, 2018 and $2 million at December 31, 2017, are reflected at historical cost and included in shareholders’ equity. Other Postretirement Benefits We sponsor plans that provide retired U.S. and Canadian employees with certain healthcare and life insurance benefits. Substantially all U.S. and Canadian employees not covered by union-administered health and welfare plans are eligible for the healthcare benefits. Healthcare benefits for our principal plan are generally provided to qualified retirees under age 65 and eligible dependents. This plan requires employee contributions that vary based on years of service and include provisions that limit our contributions. In prior years, we made amendments to our healthcare benefits for early retirees, which modified future eligibility requirements for non-grandfathered retirees in the U.S. The post-retirement medical plan was closed to non-grandfathered participants in 2013. The benefit obligation was $19 million and $21 million at December 31, 2018 and 2017, respectively. The amount of postretirement benefit expense was not material for the years December 31, 2018, 2017 and 2016.

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration