Debt

12 Months Ended

Dec. 31, 2019



	Weighted-Average Interest Rate
	December 31,			December 31,
	2019	2018	Maturities	2019			2018
				(In thousands)
Short-term debt and current portion of long-term debt:
Short-term debt	1.98%	2.69%		$	425,676		$	81,522
Current portion of long-term debt, including finance leases				728,888			855,609
Total short-term debt and current portion of long-term debt				1,154,564			937,131
Total long-term debt:
U.S. commercial paper ⁽¹⁾	1.99%	2.78%	2023	119,690			454,397
Canadian commercial paper ⁽¹⁾	2.04%	2.28%	2023	107,128			123,491
Trade receivables program	—%	3.15%	2020	—			200,000
Global revolving credit facility	2.10%	3.25%	2023	8,104			12,581
Unsecured U.S. notes – Medium-term notes^{(1) (2)}	3.17%	3.22%	2020-2026	5,965,064			4,853,496
Unsecured U.S. obligations	2.79%	3.50%	2024	200,000			50,000
Unsecured foreign obligations	2.18%	1.61%	2020-2024	265,910			216,719
Asset-backed U.S. obligations⁽³⁾	2.50%	2.37%	2020-2026	807,374			627,707
Finance lease obligations ⁽⁴⁾	8.18%	7.97%	2020-2073	51,717			47,452
Total long-term debt				7,524,987			6,585,843
Debt issuance costs				(25,875		)	(18,088		)
				7,499,112			6,567,755
Current portion of long-term debt, including finance leases				(728,888		)	(855,609		)
Long-term debt				6,770,224			5,712,146
Total debt				$	7,924,788		$	6,649,277

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(1)	Amounts are net of unamortized original issue discounts of $6 million and $7 million as of December 31, 2019 and 2018, respectively.


(2)	Amounts are inclusive of the fair market values of our hedging instruments on our notes of $10 million as of December 31, 2018. The fair market values of our hedging instruments were not material as of December 31, 2019. The notional amount of the interest rate swaps designated as fair value hedges was $525 million and $725 million as of December 31, 2019 and 2018, respectively.


(3)	Asset-backed U.S. obligations are related to financing transactions backed by a portion of our revenue earning equipment.


(4)	Refer to Note 13, "Leases," for additional information.

Contractual maturities of total debt, excluding finance lease obligations, are as follows:




Years ending December 31	(In thousands)
2020	$	1,322,055
2021	1,082,983
2022	1,295,782
2023	1,930,497
2024	1,511,262
Thereafter	755,905
Total ⁽¹⁾	7,898,484
Finance lease obligations (Refer to Note 13)	51,717
Debt issuance costs	(25,875		)
Impact of fair market value adjustments on notes subject to hedging	462
Total long-term debt	$	7,924,788

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(1)	Net of unamortized discount.

Debt Facilities

We maintain a $1.4 billion global revolving credit facility, which includes U.S. and Canadian commercial paper programs, with a syndicate of twelve lending institutions, which matures in September 2023. The agreement provides for annual facility fees which range from 7.5 basis points to 20 basis points based on our long-term credit ratings. The annual facility fee is currently 10 basis points. The credit facility is used primarily to finance working capital and vehicle purchases, but can also be used to issue up to $75 million in letters of credit (there were no letters of credit outstanding against the facility as of December 31, 2019). At our option, the interest rate on borrowings under the credit facility is based on LIBOR, prime, federal funds or local equivalent rates. The credit facility contains no provisions limiting its availability in the event of a material adverse change to our business operations; however, the credit facility does contain standard representations and warranties, events of default, cross-default provisions, and certain affirmative and negative covenants.

In order to maintain availability of funding, we must maintain a ratio of debt to consolidated net worth of less than or equal to 300%. Net worth, as defined in the credit facility, represents shareholders' equity excluding any accumulated other comprehensive income or loss associated with our pension and other postretirement plans. As of December 31, 2019, the ratio was 226%. As of December 31, 2019, there was $744 million available under the credit facility.

Our global revolving credit facility enables us to refinance short-term obligations on a long-term basis. Short-term commercial paper obligations not required for working capital needs are classified as long-term as we have both the intent and ability to refinance on a long-term basis. In addition, we have the intent and ability to refinance the current portion of long-term debt on a long-term basis. As of December 31, 2019, we classified $227 million of short-term commercial paper, $400 million of the current portion of long-term debt and $201 million of short-term debt as long-term debt. As of December 31, 2018, we classified $578 million of short-term commercial paper, $200 million of trade receivables borrowings, $250 million of the current portion of long-term debt and $50 million of short-term debt as long-term debt.

In 2019, we issued $2.1 billion of unsecured medium-term notes maturing in years 2022 through 2026. The proceeds from these notes were used to pay off maturing debt and for general corporate purposes. If these notes are downgraded below investment grade following, or as a result of, a change in control, the note holders can require us to repurchase all or a portion of the notes at a purchase price equal to 101% of principal value plus accrued and unpaid interest. We also executed a $50 million bank term loan at one of our Canadian subsidiaries and two $100 million bank term loans, all of which mature in 2024.

In 2019, we received $298 million from financing transactions backed by a portion of our revenue earning equipment. The proceeds from these transactions were used for general corporate purposes. We have provided end of term guarantees for the residual value of the revenue earning equipment in these transactions. The transaction proceeds, along with the end of term residual value guarantees, have been included within "asset-backed U.S. obligations" in the preceding table.

We have a trade receivables purchase and sale program, pursuant to which we sell certain of our domestic trade accounts receivable to a bankruptcy remote, consolidated subsidiary of Ryder, that in turn sells, on a revolving basis, an ownership interest in certain of these accounts receivable to a committed purchaser. The subsidiary is considered a VIE and is consolidated based on our control of the entity’s activities. We use this program to provide additional liquidity to fund our operations, particularly when it is cost effective to do so. The costs under the program may vary based on changes in interest rates. The available proceeds that may be received under the program are limited to $225 million. In June 2019, we renewed the trade receivables purchase and sale program. In February 2020, we increased the amount of available proceeds to $300 million. If no event occurs which causes early termination, the 365-day program will expire on June 11, 2020. The program contains provisions restricting its availability in the event of a material adverse change to our business operations or the collectibility of the collateralized receivables. Sales of receivables under this program are accounted for as secured borrowings based on our continuing involvement in the transferred assets.

In 2020, one of our Canadian subsidiaries executed bank term loans of approximately $80 million with maturity dates that range from one- to three-years, which included the refinancing of approximately $20 million of a term loan that matured in February 2020. The remaining proceeds were primarily used to repay intercompany debt.

The fair value of total debt (excluding finance lease and asset-backed U.S. obligations) was approximately $7.0 billion and $6.0 billion as of December 31, 2019 and 2018, respectively. For publicly-traded debt, estimates of fair value were based on market prices. For other debt, fair value is estimated based on a model-driven approach using rates currently available to us for debt with similar terms and remaining maturities. The fair value measurements of our publicly-traded debt and our other debt were classified within Level 2 of the fair value hierarchy.