Revenue

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables disaggregate our revenue by primary geographical market and industry:

Primary Geographical Markets



	Year ended December 31, 2019
	FMS		SCS		DTS		Eliminations			Total
	(In thousands)
United States	$	4,965,461	$	2,110,240	$	1,417,483	$	(593,170	)	$	7,900,014
Canada	302,956		215,380		—		(21,186		)	497,150
Europe	302,986		—		—		—			302,986
Mexico	—		222,358		—		—			222,358
Singapore	—		3,293		—		—			3,293
Total revenue	$	5,571,403	$	2,551,271	$	1,417,483	$	(614,356	)	$	8,925,801



	Year ended December 31, 2018
	FMS		SCS		DTS		Eliminations			Total
	(In thousands)
United States	$	4,639,494	$	1,990,486	$	1,333,313	$	(554,764	)	$	7,408,529
Canada	302,106		185,655		—		(21,440		)	466,321
Europe	317,093		—		—		—			317,093
Mexico	—		198,147		—		—			198,147
Singapore	—		23,856		—		—			23,856
Total revenue	$	5,258,693	$	2,398,144	$	1,333,313	$	(576,204	)	$	8,413,946



	Year ended December 31, 2017
	FMS		SCS		DTS		Eliminations			Total
	(In thousands)
United States	$	4,128,814	$	1,566,945	$	1,095,645	$	(449,896	)	$	6,341,508
Canada	282,438		169,090		—		(19,568		)	431,960
Europe	305,289		—		—		—			305,289
Mexico	—		170,525		—		—			170,525
Singapore	—		30,792		—		—			30,792
Total revenue	$	4,716,541	$	1,937,352	$	1,095,645	$	(469,464	)	$	7,280,074

Industry

We have a diversified portfolio of customers across a full array of transportation and logistics solutions and across many industries. We believe this will help to mitigate the impact of adverse downturns in specific sectors of the economy. Our portfolio of ChoiceLease and commercial rental customers is not concentrated in any one particular industry or geographic region. We derive a significant portion of our SCS revenue from the automotive industry, mostly from manufacturers and suppliers of original equipment parts.

Our SCS business segment includes revenue from the following industries:



		Years ended December 31,
		2019		2018		2017
	(In thousands)
Automotive		$	1,003,508	$	947,408	$	783,642
Technology and healthcare		432,107		480,026		387,253
CPG and retail		901,344		766,765		535,687
Industrial and other		214,312		203,945		230,770
Total revenue		$	2,551,271	$	2,398,144	$	1,937,352

Contract Balances

We record a receivable related to revenue recognized when we have an unconditional right to invoice. There were no material contract assets as of December 31, 2019 or 2018. Refer to Note 6, "Receivables, Net," for the amount of our trade receivables.

Contract liabilities relate to payments received in advance of performance under the contract. Changes in contract liabilities are due to additional billings and our performance under the contract. The amount of deferred revenue as of January 1, 2019 recognized as revenue during the year ended December 31, 2019 was $181 million. In addition, we deferred consideration of $203 million received in advance of performance during the year ended December 31, 2019 resulting in an increase in deferred revenue. Deferred revenue was $587 million and $566 million as of December 31, 2019 and 2018, respectively, related to the maintenance services component of our ChoiceLease product line.

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized (“contracted not recognized revenue”). Contracted not recognized revenue includes deferred revenue and amounts for full service ChoiceLease maintenance revenue that will be recognized as revenue in future periods as we provide maintenance services to our customers. Contracted not recognized revenue excludes variable consideration as it is not included in the transaction price consideration allocated at contract inception, as well as amounts from contracts with an original duration of one year or less. Further, contracted not recognized revenue does not include amounts from remaining performance obligations when we have the right to invoice the customer for the value to the customer of our performance completed to date. Contracted not recognized revenue was $2.9 billion as of December 31, 2019.

Costs to Obtain and Fulfill a Contract

We capitalize incremental sales commissions paid as a result of obtaining ChoiceLease, SCS and DTS contracts as contract costs. Capitalized sales commissions was $105 million and $107 million as of December 31, 2019 and 2018, respectively. Capitalized sales commissions include initial direct costs of our leases of $55 million and $53 million as of December 31, 2019 and 2018, respectively. Capitalized sales commissions are presented in “Sales-type leases and other assets” in the Consolidated Balance Sheets.

Capitalized sales commissions related to our ChoiceLease product are amortized based on the same pattern as the revenue is recognized for the underlying lease or non-lease components of the contract; generally on a straight-line basis for the lease component and consistent with the estimated pattern of maintenance costs for the non-lease component. We allocate the ChoiceLease commissions to the lease and non-lease components based on the same allocation of the contract consideration. The amortization period aligns with the term of our contract, which typically ranges from three to seven years, and the expense is included in “Selling, general and administrative expenses” in the Consolidated Statements of Earnings.

Capitalized sales commissions related to our SCS and DTS service contracts are amortized based on the same pattern as the revenue is recognized for the underlying contracts. This generally results in a straight-line amortization. The amortization period aligns with the expected term of the contract, which typically ranges from three to five years, and the expense is included in “Selling, general and administrative expenses” in the Consolidated Statement of Earnings.

For the years ended December 31, 2019, 2018, and 2017, sales commission expense was $43 million, $37 million and $33 million, respectively.