SCHNEIDER NATIONAL, INC., 10-Q filed on 7/30/2020
Quarterly Report
v3.20.2
Cover Page - shares
6 Months Ended
Jun. 30, 2020
Jul. 24, 2020
Document Information    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2020  
Document Transition Report false  
Entity File Number 001-38054  
Entity Registrant Name Schneider National, Inc.  
Entity Incorporation, State or Country Code WI  
Entity Tax Identification Number 39-1258315  
Entity Address, Address Line One 3101 South Packerland Drive  
Entity Address, City or Town Green Bay  
Entity Address, State or Province WI  
Entity Address, Postal Zip Code 54313  
City Area Code 920  
Local Phone Number 592-2000  
Title of 12(b) Security Class B common stock, no par value  
Trading Symbol SNDR  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Amendment Flag false  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
Entity Central Index Key 0001692063  
Current Fiscal Year End Date --12-31  
Class A Common Shares    
Document Information    
Entity Common Stock, Shares Outstanding   83,029,500
Class B Common Stock    
Document Information    
Entity Common Stock, Shares Outstanding   94,309,795
v3.20.2
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)
shares in Millions, $ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Operating revenues $ 1,032.8 $ 1,212.7 $ 2,151.9 $ 2,406.8
Operating expenses:        
Purchased transportation 437.1 503.8 916.7 977.1
Salaries, wages, and benefits 247.8 286.3 512.2 599.3
Fuel and fuel taxes 42.1 76.2 103.0 151.0
Depreciation and amortization 72.3 74.9 142.1 148.3
Operating supplies and expenses 119.1 134.1 251.1 279.2
Insurance and related expenses 28.3 25.4 57.5 53.6
Other general expenses 22.5 28.2 52.0 63.0
Goodwill impairment charge 0.0 34.6 0.0 34.6
Restructuring—net 0.2 0.0 (1.0) 0.0
Total operating expenses 969.4 1,163.5 2,033.6 2,306.1
Income from operations 63.4 49.2 118.3 100.7
Other expenses (income):        
Interest income (0.5) (2.4) (2.3) (4.6)
Interest expense 3.3 5.4 7.1 9.3
Other expenses (income)—net (2.1) 0.3 (7.5) 0.7
Total other expenses (income) 0.7 3.3 (2.7) 5.4
Income before income taxes 62.7 45.9 121.0 95.3
Provision for income taxes 16.2 11.4 30.7 23.9
Net income 46.5 34.5 90.3 71.4
Other comprehensive income (loss):        
Foreign currency translation gain (loss) 0.1 (0.2) (0.7) 0.1
Net unrealized gain on marketable securities—net of tax 0.5 0.3 0.2 0.7
Total other comprehensive income (loss) 0.6 0.1 (0.5) 0.8
Comprehensive income $ 47.1 $ 34.6 $ 89.8 $ 72.2
Weighted average common shares outstanding 177.2 177.1 177.2 177.1
Basic earnings per common share $ 0.26 $ 0.19 $ 0.51 $ 0.40
Weighted average diluted shares outstanding 177.5 177.4 177.4 177.4
Diluted earnings per common share $ 0.26 $ 0.19 $ 0.51 $ 0.40
v3.20.2
Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Current Assets:    
Cash and cash equivalents $ 713.8 $ 551.6
Marketable securities 46.8 48.3
Trade accounts receivable—net of allowance of $3.7 million and $3.4 million, respectively 434.9 465.8
Other receivables 31.6 28.9
Current portion of lease receivables—net of allowance of $0.8 million and $0.6 million, respectively 109.5 121.5
Inventories 56.5 71.9
Prepaid expenses and other current assets 125.1 117.7
Total current assets 1,518.2 1,405.7
Property and equipment:    
Transportation equipment 2,841.2 2,790.1
Land, buildings, and improvements 201.4 199.3
Other property and equipment 165.0 162.7
Total property and equipment 3,207.6 3,152.1
Accumulated depreciation 1,382.1 1,300.5
Net property and equipment 1,825.5 1,851.6
Lease receivables—noncurrent 109.5 109.4
Capitalized software and other noncurrent assets 197.2 165.9
Goodwill 127.3 127.5
Total noncurrent assets 2,259.5 2,254.4
Total Assets 3,777.7 3,660.1
Current Liabilities:    
Trade accounts payable 221.6 207.7
Accrued salaries, wages, and benefits 66.7 63.8
Claims accruals—current 42.8 42.0
Current maturities of debt and finance lease obligations 30.4 55.5
Dividends payable 11.8 10.8
Other current liabilities 108.9 85.4
Total current liabilities 482.2 465.2
Noncurrent Liabilities:    
Long-term debt and finance lease obligations 306.4 305.8
Claims accruals—noncurrent 138.0 118.7
Deferred income taxes 451.8 449.0
Other noncurrent liabilities 93.5 85.0
Total noncurrent liabilities 989.7 958.5
Total liabilities 1,471.9 1,423.7
Shareholders' Equity:    
Additional paid-in capital 1,545.4 1,542.7
Retained earnings 760.8 693.6
Accumulated other comprehensive income (loss) (0.4) 0.1
Total Shareholders' Equity 2,305.8 2,236.4
Total Liabilities and Shareholders' Equity 3,777.7 3,660.1
Trade accounts receivable allowance 3.7 3.4
Lease receivables allowance 0.8 0.6
Class A Common Shares    
Shareholders' Equity:    
Common stock $ 0.0 $ 0.0
Common stock, shares authorized (shares) 250,000,000 250,000,000
Common stock, shares issued (shares) 83,029,500 83,029,500
Common stock, shares outstanding (shares) 83,029,500 83,029,500
Class B Common Stock    
Shareholders' Equity:    
Common stock $ 0.0 $ 0.0
Common stock, shares authorized (shares) 750,000,000 750,000,000
Common stock, shares issued (shares) 95,090,677 94,837,673
Common stock, shares outstanding (shares) 94,242,695 94,088,025
v3.20.2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Jun. 30, 2020
Dec. 31, 2019
Class A Common Shares    
Common stock, par value (usd per share) $ 0 $ 0
Class B Common Stock    
Common stock, par value (usd per share) $ 0 $ 0
v3.20.2
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Operating Activities:    
Net income $ 90.3 $ 71.4
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 142.1 148.3
Goodwill impairment charge 0.0 34.6
Losses (gains) on sales of property and equipment—net 3.8 (3.0)
Impairment on assets held for sale 3.9 0.3
Proceeds from lease receipts 35.7 40.1
Deferred income taxes 2.8 (1.9)
Long-term incentive and share-based compensation expense 3.4 6.0
Noncash restructuring—net (0.8) 0.0
Other noncash items (7.0) 1.8
Changes in operating assets and liabilities:    
Receivables 34.7 66.2
Other assets (36.5) (38.7)
Payables 12.1 (2.5)
Claims reserves and other receivables—net 8.6 3.9
Other liabilities 26.7 (24.5)
Net cash provided by operating activities 319.8 302.0
Investing Activities:    
Purchases of transportation equipment (83.3) (231.4)
Purchases of other property and equipment (25.0) (25.7)
Proceeds from sale of property and equipment 29.6 26.0
Proceeds from sale of off-lease inventory 9.0 10.0
Purchases of lease equipment (41.7) (42.9)
Proceeds from marketable securities 10.2 11.0
Purchases of marketable securities (8.9) (6.4)
Net cash used in investing activities (110.1) (259.4)
Financing Activities:    
Payments of debt and finance lease obligations (25.3) (3.6)
Payments of deferred consideration related to acquisition 0.0 (18.7)
Dividends paid (22.2) (21.3)
Net cash used in financing activities (47.5) (43.6)
Net increase (decrease) in cash and cash equivalents 162.2 (1.0)
Cash and Cash Equivalents:    
Beginning of period 551.6 378.7
End of period 713.8 377.7
Noncash investing and financing activity:    
Equipment and inventory purchases in accounts payable 20.9 46.7
Dividends declared but not yet paid 11.8 11.0
Cash Paid During the Period For:    
Interest 6.6 7.3
Income taxes—net of refunds $ 2.6 $ 20.5
v3.20.2
Consolidated Statements Shareholders' Equity - USD ($)
$ in Millions
Total
Class A Common Shares
Class B Common Stock
Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Balance at Dec. 31, 2018 $ 2,132.3     $ 0.0 $ 1,544.0 $ 589.3 $ (1.0)
Increase (Decrease) in Stockholders' Equity              
Net income 36.9     0.0 0.0 36.9 0.0
Other comprehensive income (loss) 0.7     0.0 0.0 0.0 0.7
Share-based compensation expense 2.0     0.0 2.0 0.0 0.0
Dividends declared (10.7)     0.0 0.0 (10.7) 0.0
Dividends declared per share   $ 0.06 $ 0.06        
Shares withheld for employee taxes (1.2)     0.0 (1.2) 0.0 0.0
Balance at Mar. 31, 2019 2,160.0     0.0 1,544.8 615.5 (0.3)
Balance at Dec. 31, 2018 2,132.3     0.0 1,544.0 589.3 (1.0)
Increase (Decrease) in Stockholders' Equity              
Net income 71.4            
Balance at Jun. 30, 2019 2,185.4     0.0 1,546.6 639.0 (0.2)
Balance at Mar. 31, 2019 2,160.0     0.0 1,544.8 615.5 (0.3)
Increase (Decrease) in Stockholders' Equity              
Net income 34.5     0.0 0.0 34.5 0.0
Other comprehensive income (loss) 0.1     0.0 0.0 0.0 0.1
Share-based compensation expense 1.6     0.0 1.6 0.0 0.0
Dividends declared (11.0)     0.0 0.0 (11.0) 0.0
Dividends declared per share   0.06 0.06        
Share issuances 0.2     0.0 0.2 0.0 0.0
Balance at Jun. 30, 2019 2,185.4     0.0 1,546.6 639.0 (0.2)
Balance at Dec. 31, 2019 2,236.4     0.0 1,542.7 693.6 0.1
Increase (Decrease) in Stockholders' Equity              
Net income 43.8     0.0 0.0 43.8 0.0
Other comprehensive income (loss) (1.1)     0.0 0.0 0.0 (1.1)
Share-based compensation expense 1.9     0.0 1.9 0.0 0.0
Dividends declared (11.7)     0.0 0.0 (11.7) 0.0
Dividends declared per share   0.065 0.065        
Share issuances 0.1     0.0 0.1 0.0 0.0
Shares withheld for employee taxes (0.9)     0.0 (0.9) 0.0 0.0
Balance at Mar. 31, 2020 2,268.5     0.0 1,543.8 725.7 (1.0)
Balance at Dec. 31, 2019 2,236.4     0.0 1,542.7 693.6 0.1
Increase (Decrease) in Stockholders' Equity              
Net income 90.3            
Balance at Jun. 30, 2020 2,305.8     0.0 1,545.4 760.8 (0.4)
Balance at Mar. 31, 2020 2,268.5     0.0 1,543.8 725.7 (1.0)
Increase (Decrease) in Stockholders' Equity              
Net income 46.5     0.0 0.0 46.5 0.0
Other comprehensive income (loss) 0.6     0.0 0.0 0.0 0.6
Share-based compensation expense 1.1     0.0 1.1 0.0 0.0
Dividends declared (11.4)     0.0 0.0 (11.4) 0.0
Dividends declared per share   $ 0.065 $ 0.065        
Share issuances 0.1     0.0 0.1 0.0 0.0
Exercise of employee stock options 0.4     0.0 0.4 0.0 0.0
Balance at Jun. 30, 2020 $ 2,305.8     $ 0.0 $ 1,545.4 $ 760.8 $ (0.4)
v3.20.2
General
6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
General GENERAL
Nature of Operations

In this report, when we refer to “the Company,” “us,” “we,” “our,” “ours,” or “Schneider,” we are referring to Schneider National, Inc. and its subsidiaries. Schneider is a transportation service organization headquartered in Green Bay, Wisconsin and has three reportable segments focused on providing truckload, intermodal, and logistics solutions.

Principles of Consolidation and Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in conformity with GAAP and the rules and regulations of the SEC applicable to quarterly reports on Form 10-Q. Therefore, these consolidated financial statements and footnotes do not include all disclosures required by GAAP for annual financial statements. These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2019. Financial results for an interim period are not necessarily indicative of the results for a full year. All intercompany transactions have been eliminated in consolidation.

In the opinion of management, these statements reflect all adjustments (consisting only of normal recurring adjustments) necessary for the fair presentation of our financial results for the interim periods presented.

COVID-19

With the uncertainties of COVID-19, the Company continues to monitor the impact of the pandemic on all aspects of its business, including the impact to its customers, associates, owner-operators, and business partners. The Company's operational and financial performance was negatively impacted by a reduction in volumes across our Truckload and Intermodal segments beginning in April 2020, however there was improvement as the second quarter progressed. A number of cost reduction initiatives implemented by the Company helped lessen the impact of reduced volumes, however those initiatives were unable to fully offset the loss of revenue. Due to our limited visibility into freight demand in the months to come, we are unable to predict the impact COVID-19 will have on our future financial position and operating results due to ongoing uncertainties.

Accounting Standards Issued but Not Yet Adopted

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which reduces complexity in accounting for income taxes by eliminating certain exceptions to the general principles in Topic 740 and clarifying and amending existing guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for us as of January 1, 2021 with early adoption permitted. We do not believe the adoption of this ASU will have a material impact on our consolidated financial statements and related disclosures and plan to adopt as of January 1, 2021.

Accounting Standards Recently Adopted

We adopted ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which was effective as of March 12, 2020 through December 31, 2022, when the reference rate replacement activity is expected to be complete. This guidance offers optional expedients and exceptions for applying GAAP to transactions, including contract modifications, hedging relationships, and the sale or transfer of debt securities classified as held-to-maturity affected by reference rate reform, if certain criteria are met. The adoption of this ASU did not have a material impact on our consolidated financial statements and related disclosures.

We adopted ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which amends ASC 350, as of January 1, 2020 on a prospective basis. This standard aligned the capitalization requirements for implementation costs incurred in a hosting arrangement that is a service contract with the existing capitalization requirements for implementation costs incurred to develop or obtain internal-use software. The adoption did not have a material impact on our consolidated financial statements or disclosures.

We adopted ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which is codified in ASC 326, as of January 1, 2020. The guidance replaced the incurred loss model with a methodology that reflects expected credit losses over the life of the financial assets held at the reporting date based on historical experience, as
well as considerations of current conditions and reasonable and supportable forecasts. This new model for estimating our expected credit losses was implemented for our trade accounts receivable (Note 2, Trade Accounts Receivable and Allowance), net investment in leases (Note 3, Leases), and available-for-sale debt securities (Note 6, Investments) and did not result in a material impact to our consolidated financial statements or disclosures upon adoption.
v3.20.2
Trade Accounts Receivable and Allowance (Notes)
6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
Trade accounts receivable and allowance TRADE ACCOUNTS RECEIVABLE AND ALLOWANCE
Our trade accounts receivable is recorded net of an allowance for doubtful accounts and revenue adjustments. The allowance is based on an aging analysis using historical experience, as well as any known and expected trends or uncertainties related to customer billing and account collectability. The adequacy of our allowance is reviewed at least quarterly, and reserves for receivables not expected to be collected are established. In circumstances where we are aware of a customer's inability to meet its financial obligations, a specific reserve is recorded to reduce the net receivable to the amount we reasonably expect to collect. Bad debt expense is included in other general expenses in the consolidated statements of comprehensive income.

The following table shows changes to our allowance for doubtful accounts for the three and six months ended June 30, 2020. Excluded from the amounts below is the portion of the allowance recorded for revenue adjustments, as that portion is not credit-related nor due to a customer’s inability to meet its financial obligations.
Three Months
Ended
Six Months
Ended
(in millions)June 30, 2020
Balance at beginning of period$1.0  $0.9  
Charges to expense0.8  1.1  
Write-offs(0.4) (0.7) 
Recoveries—  0.1  
Balance at end of period$1.4  $1.4  
v3.20.2
Leases (Notes)
6 Months Ended
Jun. 30, 2020
Leases [Abstract]  
Finance Leases LEASES
As Lessee

We lease real estate, transportation equipment, and office equipment under operating and finance leases. Our real estate operating leases include operating centers, distribution warehouses, offices, and drop yards. Our finance leases include office equipment and truck washes. The majority of our leases include an option to extend the lease, and a small number of our leases include an option to terminate the lease early, which may include a termination payment.

Additional information related to our leases is as follows:
Six Months Ended
June 30,
(in millions)20202019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$17.3  $17.7  
Operating cash flows from finance leases—  0.1  
Financing cash flows from finance leases0.3  1.3  
Right-of-use assets obtained in exchange for new lease liabilities
Operating leases$21.6  $28.7  
Finance leases0.7  —  

As Lessor

We finance various types of transportation-related equipment for independent third parties under lease contracts which are generally for one year to five years and accounted for as sales-type leases with fully guaranteed residual values. Our leases contain an option for the lessee to return, extend, or purchase the equipment at the end of the lease term for the guaranteed
contract residual amount. This contract residual amount is estimated to approximate the fair value of the equipment. Lease payments primarily include base rentals and guaranteed residual values.

As of June 30, 2020 and December 31, 2019, the investments in lease receivables were as follows:
(in millions)June 30, 2020December 31, 2019
Future minimum payments to be received on leases$138.4  $135.0  
Guaranteed residual lease values113.6  126.6  
Total minimum lease payments to be received252.0  261.6  
Unearned income(33.0) (30.7) 
Net investment in leases219.0  230.9  
Current maturities of lease receivables110.3  122.1  
Allowance for doubtful accounts(0.8) (0.6) 
Current portion of lease receivables—net of allowance109.5  121.5  
Lease receivables—noncurrent$109.5  $109.4  

Before entering into a lease contract, we assess the credit quality of the potential lessee through the use of credit checks and other relevant factors, ensuring that their inherent credit risk is consistent with our existing lease portfolio. We monitor the credit quality of our lease portfolio weekly by tracking amounts past due, days past due, and outstanding maintenance account balances, including running subsequent credit checks as needed. The following table presents our net investment in leases, which includes both current and future lease payments, as of June 30, 2020 by amounts past due, our primary ongoing credit quality indicator, and lease origination year.
Net Investment in Leases by Lease Origination Year (in millions)
Amounts Past Due (in ones)
20202019201820172016PriorTotal
Greater than $3,000$4.5  $4.6  $1.6  $2.3  $0.1  $0.1  $13.2  
Between $2,999 and $1,5006.9  4.0  1.9  0.1  0.2  —  13.1  
Less than $1,49911.1  10.9  5.9  1.7  0.5  —  30.1  
Total$22.5  $19.5  $9.4  $4.1  $0.8  $0.1  $56.4  

Lease payments are generally due on a weekly basis and are classified as past due when payment is not received by the due date. The following table presents an aging analysis of lease payments owed to us and classified as past due as of June 30, 2020.
(in millions)June 30, 2020
1-29 days$1.7  
30-59 days0.6  
60-89 days0.4  
90 days or greater0.4  
Total past due$3.1  

Our lease receivables are recorded net of an allowance for doubtful accounts based on an aging analysis to reserve amounts expected to be uncollectible. The terms of the lease agreements generally give us the ability to take possession of the underlying asset in the event of default. We may incur credit losses in excess of recorded allowances if the full amount of anticipated proceeds from the sale or re-lease of the asset supporting the third party’s financial obligation, which can be impacted by economic conditions, is not realized.

Accrued interest on leases is included within lease receivables on the consolidated balance sheets and was not material as of June 30, 2020 and December 31, 2019. Leases are generally placed on nonaccrual status (nonaccrual of interest and other fees) when a payment becomes 90 days past due or upon notification of bankruptcy, death, or other instances management concludes collectability is not reasonably assured. The accrual of interest and other fees resumes when all payments are less than 60 days past due. At both June 30, 2020 and December 31, 2019, our net investment in leases on nonaccrual status were not material.
The table below provides additional information on our sales-type leases.
Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions)2020201920202019
Revenue$44.7  $52.7  $99.4  $108.9  
Cost of goods sold(40.8) (47.3) (89.7) (97.2) 
Operating profit$3.9  $5.4  $9.7  $11.7  
Interest income on lease receivable$6.7  $6.8  $13.2  $13.4  
Operating Leases LEASES
As Lessee

We lease real estate, transportation equipment, and office equipment under operating and finance leases. Our real estate operating leases include operating centers, distribution warehouses, offices, and drop yards. Our finance leases include office equipment and truck washes. The majority of our leases include an option to extend the lease, and a small number of our leases include an option to terminate the lease early, which may include a termination payment.

Additional information related to our leases is as follows:
Six Months Ended
June 30,
(in millions)20202019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$17.3  $17.7  
Operating cash flows from finance leases—  0.1  
Financing cash flows from finance leases0.3  1.3  
Right-of-use assets obtained in exchange for new lease liabilities
Operating leases$21.6  $28.7  
Finance leases0.7  —  

As Lessor

We finance various types of transportation-related equipment for independent third parties under lease contracts which are generally for one year to five years and accounted for as sales-type leases with fully guaranteed residual values. Our leases contain an option for the lessee to return, extend, or purchase the equipment at the end of the lease term for the guaranteed
contract residual amount. This contract residual amount is estimated to approximate the fair value of the equipment. Lease payments primarily include base rentals and guaranteed residual values.

As of June 30, 2020 and December 31, 2019, the investments in lease receivables were as follows:
(in millions)June 30, 2020December 31, 2019
Future minimum payments to be received on leases$138.4  $135.0  
Guaranteed residual lease values113.6  126.6  
Total minimum lease payments to be received252.0  261.6  
Unearned income(33.0) (30.7) 
Net investment in leases219.0  230.9  
Current maturities of lease receivables110.3  122.1  
Allowance for doubtful accounts(0.8) (0.6) 
Current portion of lease receivables—net of allowance109.5  121.5  
Lease receivables—noncurrent$109.5  $109.4  

Before entering into a lease contract, we assess the credit quality of the potential lessee through the use of credit checks and other relevant factors, ensuring that their inherent credit risk is consistent with our existing lease portfolio. We monitor the credit quality of our lease portfolio weekly by tracking amounts past due, days past due, and outstanding maintenance account balances, including running subsequent credit checks as needed. The following table presents our net investment in leases, which includes both current and future lease payments, as of June 30, 2020 by amounts past due, our primary ongoing credit quality indicator, and lease origination year.
Net Investment in Leases by Lease Origination Year (in millions)
Amounts Past Due (in ones)
20202019201820172016PriorTotal
Greater than $3,000$4.5  $4.6  $1.6  $2.3  $0.1  $0.1  $13.2  
Between $2,999 and $1,5006.9  4.0  1.9  0.1  0.2  —  13.1  
Less than $1,49911.1  10.9  5.9  1.7  0.5  —  30.1  
Total$22.5  $19.5  $9.4  $4.1  $0.8  $0.1  $56.4  

Lease payments are generally due on a weekly basis and are classified as past due when payment is not received by the due date. The following table presents an aging analysis of lease payments owed to us and classified as past due as of June 30, 2020.
(in millions)June 30, 2020
1-29 days$1.7  
30-59 days0.6  
60-89 days0.4  
90 days or greater0.4  
Total past due$3.1  

Our lease receivables are recorded net of an allowance for doubtful accounts based on an aging analysis to reserve amounts expected to be uncollectible. The terms of the lease agreements generally give us the ability to take possession of the underlying asset in the event of default. We may incur credit losses in excess of recorded allowances if the full amount of anticipated proceeds from the sale or re-lease of the asset supporting the third party’s financial obligation, which can be impacted by economic conditions, is not realized.

Accrued interest on leases is included within lease receivables on the consolidated balance sheets and was not material as of June 30, 2020 and December 31, 2019. Leases are generally placed on nonaccrual status (nonaccrual of interest and other fees) when a payment becomes 90 days past due or upon notification of bankruptcy, death, or other instances management concludes collectability is not reasonably assured. The accrual of interest and other fees resumes when all payments are less than 60 days past due. At both June 30, 2020 and December 31, 2019, our net investment in leases on nonaccrual status were not material.
The table below provides additional information on our sales-type leases.
Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions)2020201920202019
Revenue$44.7  $52.7  $99.4  $108.9  
Cost of goods sold(40.8) (47.3) (89.7) (97.2) 
Operating profit$3.9  $5.4  $9.7  $11.7  
Interest income on lease receivable$6.7  $6.8  $13.2  $13.4  
Sales-type Leases LEASES
As Lessee

We lease real estate, transportation equipment, and office equipment under operating and finance leases. Our real estate operating leases include operating centers, distribution warehouses, offices, and drop yards. Our finance leases include office equipment and truck washes. The majority of our leases include an option to extend the lease, and a small number of our leases include an option to terminate the lease early, which may include a termination payment.

Additional information related to our leases is as follows:
Six Months Ended
June 30,
(in millions)20202019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$17.3  $17.7  
Operating cash flows from finance leases—  0.1  
Financing cash flows from finance leases0.3  1.3  
Right-of-use assets obtained in exchange for new lease liabilities
Operating leases$21.6  $28.7  
Finance leases0.7  —  

As Lessor

We finance various types of transportation-related equipment for independent third parties under lease contracts which are generally for one year to five years and accounted for as sales-type leases with fully guaranteed residual values. Our leases contain an option for the lessee to return, extend, or purchase the equipment at the end of the lease term for the guaranteed
contract residual amount. This contract residual amount is estimated to approximate the fair value of the equipment. Lease payments primarily include base rentals and guaranteed residual values.

As of June 30, 2020 and December 31, 2019, the investments in lease receivables were as follows:
(in millions)June 30, 2020December 31, 2019
Future minimum payments to be received on leases$138.4  $135.0  
Guaranteed residual lease values113.6  126.6  
Total minimum lease payments to be received252.0  261.6  
Unearned income(33.0) (30.7) 
Net investment in leases219.0  230.9  
Current maturities of lease receivables110.3  122.1  
Allowance for doubtful accounts(0.8) (0.6) 
Current portion of lease receivables—net of allowance109.5  121.5  
Lease receivables—noncurrent$109.5  $109.4  

Before entering into a lease contract, we assess the credit quality of the potential lessee through the use of credit checks and other relevant factors, ensuring that their inherent credit risk is consistent with our existing lease portfolio. We monitor the credit quality of our lease portfolio weekly by tracking amounts past due, days past due, and outstanding maintenance account balances, including running subsequent credit checks as needed. The following table presents our net investment in leases, which includes both current and future lease payments, as of June 30, 2020 by amounts past due, our primary ongoing credit quality indicator, and lease origination year.
Net Investment in Leases by Lease Origination Year (in millions)
Amounts Past Due (in ones)
20202019201820172016PriorTotal
Greater than $3,000$4.5  $4.6  $1.6  $2.3  $0.1  $0.1  $13.2  
Between $2,999 and $1,5006.9  4.0  1.9  0.1  0.2  —  13.1  
Less than $1,49911.1  10.9  5.9  1.7  0.5  —  30.1  
Total$22.5  $19.5  $9.4  $4.1  $0.8  $0.1  $56.4  

Lease payments are generally due on a weekly basis and are classified as past due when payment is not received by the due date. The following table presents an aging analysis of lease payments owed to us and classified as past due as of June 30, 2020.
(in millions)June 30, 2020
1-29 days$1.7  
30-59 days0.6  
60-89 days0.4  
90 days or greater0.4  
Total past due$3.1  

Our lease receivables are recorded net of an allowance for doubtful accounts based on an aging analysis to reserve amounts expected to be uncollectible. The terms of the lease agreements generally give us the ability to take possession of the underlying asset in the event of default. We may incur credit losses in excess of recorded allowances if the full amount of anticipated proceeds from the sale or re-lease of the asset supporting the third party’s financial obligation, which can be impacted by economic conditions, is not realized.

Accrued interest on leases is included within lease receivables on the consolidated balance sheets and was not material as of June 30, 2020 and December 31, 2019. Leases are generally placed on nonaccrual status (nonaccrual of interest and other fees) when a payment becomes 90 days past due or upon notification of bankruptcy, death, or other instances management concludes collectability is not reasonably assured. The accrual of interest and other fees resumes when all payments are less than 60 days past due. At both June 30, 2020 and December 31, 2019, our net investment in leases on nonaccrual status were not material.
The table below provides additional information on our sales-type leases.
Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions)2020201920202019
Revenue$44.7  $52.7  $99.4  $108.9  
Cost of goods sold(40.8) (47.3) (89.7) (97.2) 
Operating profit$3.9  $5.4  $9.7  $11.7  
Interest income on lease receivable$6.7  $6.8  $13.2  $13.4  
v3.20.2
Revenue Recognition
6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer REVENUE RECOGNITION
Disaggregated Revenues

The majority of our revenues are related to transportation and have similar characteristics. The following table summarizes our revenues by type of service.
Three Months Ended
June 30,
Six Months Ended
June 30,
Disaggregated Revenues (in millions)
2020201920202019
Transportation$951.1  $1,126.6  $1,979.4  $2,203.9  
Logistics management29.8  29.7  60.9  87.8  
Other51.9  56.4  111.6  115.1  
Total operating revenues$1,032.8  $1,212.7  $2,151.9  $2,406.8  

Quantitative Disclosures

The following table provides information for transactions and expected timing of revenue recognition related to performance obligations that are fixed in nature and pertain to contracts with terms greater than one year as of date shown.
Remaining Performance Obligations (in millions)
June 30, 2020
Expected to be recognized within one year
Transportation$1.3  
Logistics management11.9  
Expected to be recognized after one year
Transportation0.3  
Logistics management14.6  
Total$28.1  

The information provided in the above table does not include revenue related to performance obligations that are part of a contract whose original expected duration is one year or less. In addition, this disclosure does not include expected consideration related to performance obligations for which the Company elects to recognize revenue in the amount it has a right to invoice (e.g., usage-based pricing terms).

The following table provides information related to contract balances associated with our contracts with customers as of the dates shown.
Contract Balances (in millions)
June 30, 2020December 31, 2019
Other current assets - Contract assets$22.2  $17.6  
Other current liabilities - Contract liabilities—  —  
We generally receive payment within 40 days of completing our performance obligations. Contract assets in the table above relate to revenue in transit at the end of the reporting period. Contract liabilities relate to amounts that customers paid in advance of the associated service.
v3.20.2
Fair Value
6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Fair Value FAIR VALUE
Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability, which is referred to as the exit price. Inputs to valuation techniques used to measure fair value fall into three broad levels (Levels 1, 2, and 3) as follows:

Level 1—Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that we have the ability to access at the measurement date.

Level 2—Observable inputs, other than quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities.

Level 3—Unobservable inputs reflecting the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The table below sets forth the Company’s financial assets that are measured at fair value on a recurring basis in accordance with ASC 820.
Fair Value
(in millions)Level in Fair
Value Hierarchy
June 30, 2020December 31, 2019
Marketable securities (1)
2$46.8  $48.3  
(1)  Marketable securities are valued based on quoted prices for similar assets in active markets or quoted prices for identical or similar assets in markets that are not active and are, therefore, classified as Level 2 in the fair value hierarchy. We measure our marketable securities on a recurring, monthly basis. See Note 6, Investments, for additional information on the fair value of our marketable securities.

The fair value of the Company's debt was $345.3 million and $368.5 million as of June 30, 2020 and December 31, 2019, respectively. The carrying value of the Company's debt was $335.0 million and $360.0 million as of June 30, 2020 and December 31, 2019, respectively. The fair value of our debt was calculated using a fixed-rate debt portfolio with similar terms and maturities, which is based on the borrowing rates available to us in the applicable year. This valuation used Level 2 inputs.

The recorded value of cash, trade accounts receivable, lease receivables, and trade accounts payable approximates fair value.
Our ownership interest in PSI discussed in Note 6, Investments, does not have a readily determinable fair value and is accounted for using the measurement alternative in ASC 321-10-35-2.
v3.20.2
Investments
6 Months Ended
Jun. 30, 2020
Debt Securities, Available-for-sale [Abstract]  
Investments INVESTMENTS
Marketable Securities

Our marketable securities are classified as available-for-sale and carried at fair value in current assets on the consolidated balance sheets. While our intent is to hold our securities to maturity, sudden changes in the market or our liquidity needs may cause us to sell certain securities in advance of their maturity date.

With the adoption of ASU 2016-13, the guidance on reporting credit losses for available-for-sale debt securities was amended. Under this new guidance, credit losses are to be recorded through an allowance for credit losses rather than as a direct write-down to the security. As a result, any unrealized gains and losses, net of tax, are included as a component of accumulated other comprehensive income on the consolidated balance sheets, unless we determine that the amortized cost basis is not recoverable. If we determine that the amortized cost basis of the impaired security is not recoverable, we recognize the credit loss by increasing the allowance for those losses. Cost basis is determined using the specific identification method.
When adopting this standard, we elected to continue to present the accrued interest receivable balance associated with our investments in marketable securities separate from the marketable securities line in the consolidated balance sheets. As of June 30, 2020, accrued interest receivable associated with our investments in marketable securities was not material and is included within other receivables on the consolidated balance sheets. We have elected the practical expedient provided under the guidance to exclude the applicable accrued interest from the amortized cost basis disclosure of our marketable securities. We have also elected not to measure an allowance for credit losses on our accrued interest receivable and to write off accrued interest receivable by reversing interest income when it is not considered collectible.

The following table presents the maturities and values of our marketable securities as of the dates shown.
 June 30, 2020December 31, 2019
(in millions, except maturities in months)MaturitiesAmortized CostFair ValueAmortized CostFair Value
U.S. treasury and government agencies9 to 76$12.7  $12.8  $16.5  $17.0  
Asset-backed securities7—  —  0.1  0.1  
Corporate debt securities13 to 6417.3  18.1  15.1  15.4  
State and municipal bonds1 to 6911.5  11.9  11.6  11.8  
Other U.S. and non-U.S. government bonds1 to 514.0  4.0  4.0  4.0  
Total marketable securities$45.5  $46.8  $47.3  $48.3  

Gross realized gains and losses and net unrealized gains and losses, net of tax, on marketable securities were not material for the three and six months ended June 30, 2020 and 2019. Additionally, we did not have an allowance for credit losses on our marketable securities as of June 30, 2020 or any other-than-temporary impairments as of December 31, 2019, and our total unrealized gains and losses were not material as of June 30, 2020 and December 31, 2019.

Ownership Interest in Platform Science, Inc.

In 2018, the Company made a strategic decision to invest in PSI and acquired an ownership interest in exchange for granting them a non-exclusive license to our proprietary telematics mobile software that was developed to enable enhanced driver productivity and ensure regulatory compliance. Our ownership interest is being accounted for under ASC 321, Investments - Equity Securities using the measurement alternative and is recorded in other noncurrent assets on the consolidated balance sheets. During 2020, remeasurement events occurred which required the Company to revalue its interest in PSI. In the three and six months ended June 30, 2020, the Company recognized pre-tax gains of $2.7 million and $8.8 million, respectively, on its investment in PSI, which were recorded within other income on the consolidated statements of comprehensive income. The fair value of our ownership interest as of June 30, 2020 and December 31, 2019 was $12.3 million and $3.5 million, respectively, and our ownership percentage was 12.6% as of June 30, 2020.

Subsequent Event - Investment in Mastery Logistics Systems, Inc.

On July 2, 2020, Schneider entered into a strategic partnership with Mastery Logistics Systems, Inc. ("Mastery"), a transportation technology development company. We paid Mastery $5.0 million for a non-controlling interest and will collaborate with Mastery to develop a Transportation Management System using Mastery's SaaS technology which Schneider has agreed to license. The investment will be accounted for under ASC 321, Investments - Equity Securities.
v3.20.2
Goodwill
6 Months Ended
Jun. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill Disclosure GOODWILL
Goodwill represents the excess of the purchase price of acquisitions over the fair value of the identifiable net assets acquired. The following table shows changes to our goodwill balances by reportable segment during the period ended June 30, 2020.
(in millions)TruckloadLogisticsOtherTotal
Balance at December 31, 2019$103.6  $14.2  $9.7  $127.5  
Foreign currency translation loss—  —  (0.2) (0.2) 
Balance at June 30, 2020$103.6  $14.2  $9.5  $127.3  

At June 30, 2020 and December 31, 2019, we had accumulated goodwill impairment charges of $42.6 million.
v3.20.2
Debt and Credit Facilities
6 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Debt and Credit Facilities DEBT AND CREDIT FACILITIES
As of June 30, 2020 and December 31, 2019, debt included the following:
(in millions)June 30, 2020December 31, 2019
Unsecured senior notes: principal payable at maturities ranging from 2020 through 2025; interest payable in semiannual installments through the same timeframe; weighted-average interest rate of 3.54% and 3.42% for 2020 and 2019, respectively.
$335.0  $360.0  
Current maturities(30.0) (55.0) 
Debt issuance costs(0.3) (0.4) 
Long-term debt$304.7  $304.6  

Our Credit Agreement (the “2018 Credit Facility”) provides borrowing capacity of $250.0 million and allows us to request an increase in total commitment of up to $150.0 million, for a total potential commitment of $400.0 million through August 2023. The agreement also provides a sublimit of $100.0 million to be used for the issuance of letters of credit. We had no outstanding borrowings under this agreement as of June 30, 2020 or December 31, 2019. Standby letters of credit under this agreement amounted to $3.9 million and $3.8 million at June 30, 2020 and December 31, 2019, respectively, and were primarily related to the requirements of certain of our real estate leases.

We also have a Receivables Purchase Agreement (the “2018 Receivables Purchase Agreement”) that allows us to borrow funds against qualifying trade receivables at rates based on one-month LIBOR up to $200.0 million and provides for the issuance of standby letters of credit through September 2021. We had no outstanding borrowings under this facility at June 30, 2020 or December 31, 2019. At June 30, 2020 and December 31, 2019, standby letters of credit under this agreement amounted to $70.3 million and were primarily related to the requirements of certain of our insurance obligations.
v3.20.2
Income Taxes
6 Months Ended
Jun. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXESOur effective income tax rate was 25.8% and 24.8% for the three months ended June 30, 2020 and 2019, respectively, and 25.4% and 25.1% for the six months ended June 30, 2020 and 2019, respectively. In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate adjusted for discrete items. This rate is based on our expected annual income, statutory tax rates, and best estimates of nontaxable and nondeductible items of income and expense. On March 27, 2020, President Trump signed into U.S. federal law the CARES Act aimed at providing emergency assistance and health care for individuals, families, and businesses affected by COVID-19 and generally supporting the U.S. economy. The CARES Act, among other things, includes provisions related to refundable payroll tax credits, deferment of the employer portion of social security payments, net operating loss carryback periods, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. The Company is currently taking advantage of the cash deferral programs available for payment of employer social security taxes and federal and state income taxes.
v3.20.2
Common Equity
6 Months Ended
Jun. 30, 2020
Equity [Abstract]  
Common Equity COMMON EQUITY
Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2020 and 2019.
Three Months Ended
June 30,
Six Months Ended
June 30,
(in millions, except per share data)2020201920202019
Numerator:
Net income available to common shareholders$46.5  $34.5  $90.3  $71.4  
Denominator:
Weighted average common shares outstanding177.2  177.1  177.2  177.1  
Effect of dilutive restricted share units0.2  0.3  0.2  0.3  
Weighted average diluted common shares outstanding (1)
177.5  177.4  177.4  177.4  
Basic earnings per common share$0.26  $0.19  $0.51  $0.40  
Diluted earnings per common share0.26  0.19  0.51  0.40  
(1)  Weighted average diluted common shares outstanding may not sum due to rounding.

The calculation of diluted earnings per share for the three and six months ended June 30, 2020 and 2019 excluded an immaterial amount of share-based compensation awards that had an anti-dilutive effect.

Subsequent Event - Dividends Declared

In July of 2020, our Board of Directors declared a quarterly cash dividend for the third fiscal quarter of 2020 in the amount of $0.065 per share to holders of our Class A and Class B common stock. The dividend is payable to shareholders of record at the close of business on September 11, 2020 and is expected to be paid on October 8, 2020.
v3.20.2
Share-based Compensation
6 Months Ended
Jun. 30, 2020
Share-based Payment Arrangement [Abstract]  
Share-based Compensation SHARE-BASED COMPENSATIONWe grant various equity-based awards relating to Class B Common Stock under our 2017 Omnibus Incentive Plan (“the Plan”). These awards consist of the following: restricted shares, restricted stock units (“RSUs”), performance-based restricted shares (“Performance Shares”), performance-based restricted stock units (“PSUs”), and non-qualified stock options. Performance shares and PSUs are earned based on attainment of threshold performance of return on capital and earnings targets.Share-based compensation expense was $0.8 million and $0.3 million for the three months ended June 30, 2020 and 2019, respectively, and $2.5 million and $2.4 million for the six months ended June 30, 2020 and 2019, respectively. We recognize share-based compensation expense over the awards' vesting period. As of June 30, 2020, we had $17.2 million of pre-tax unrecognized compensation cost related to outstanding share-based compensation awards expected to be recognized over a weighted-average period of 2.8 years.
v3.20.2
Commitments and Contingencies
6 Months Ended
Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies COMMITMENTS AND CONTINGENCIES
In the ordinary course of conducting our business we become involved in certain legal matters and investigations including liability claims, taxes other than income taxes, contract disputes, employment, and other litigation matters. We accrue for anticipated costs to resolve matters that are probable and estimable. We believe the outcomes of these matters will not have a material impact on our business or our consolidated financial statements.

We record liabilities for claims against the Company based on our best estimate of expected losses. The primary claims arising for the Company through its trucking, intermodal, and logistics operations consist of accident-related claims for personal injury, collision, and comprehensive compensation, in addition to workers' compensation, property damage, cargo, and wage and benefit claims. We maintain excess liability insurance with licensed insurance carriers for liability in excess of amounts we self-
insure which serves to largely offset the Company’s liability associated with these claims, with the exception of wage and benefit claims for which we self-insure. We review our accruals periodically to ensure that the aggregate amounts of our accruals are appropriate at any period after consideration of available insurance coverage. Although we expect that our claims accruals will continue to vary based on future developments, assuming that we are able to continue to obtain and maintain excess liability insurance coverage for such claims, we do not anticipate that such accruals will, in any period, materially impact our results of operations.

At June 30, 2020, our firm commitments to purchase transportation equipment totaled $209.5 million.

In October 2017, the representative of the former owners of WSL filed a lawsuit in the Delaware Court of Chancery which alleges that we have not fulfilled certain obligations under the purchase and sale agreement relating to the post-closing operations of the business, and as a result, the former owners claim they are entitled to an additional payment of $40.0 million. A trial date has been set for September 2020. We believe that we have strong defenses to this claim. A judgment by the Court against us could have a material adverse effect on our results of operations.
v3.20.2
Segment Reporting
6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Segment Reporting SEGMENT REPORTING
We have three reportable segments – Truckload, Intermodal, and Logistics – which are based primarily on the services each segment provides.

The CODM reviews revenues for each segment exclusive of fuel surcharge revenues. For segment purposes, any fuel surcharge revenues earned are recorded as a reduction of the segment’s fuel expenses. Income from operations at the segment level reflects the measure presented to the CODM for each segment.

Separate balance sheets are not prepared by segment, and, as a result, assets are not separately identifiable by segment. All transactions between reportable segments are eliminated in consolidation.

Substantially all of our revenues and assets were generated or located within the U.S.

The following tables summarize our segment information. Intersegment revenues were immaterial for all segments, with the exception of Other, which includes revenues from insurance premiums charged to other segments for workers’ compensation, auto, and other types of insurance. Intersegment revenues included in Other revenues below were $22.5 million and $22.4 million for the three months ended June 30, 2020 and 2019, respectively, and $47.2 million and $46.0 million for the six months ended June 30, 2020 and 2019, respectively.
Revenues by SegmentThree Months Ended
June 30,
Six Months Ended
June 30,
(in millions)2020201920202019
Truckload$451.1  $534.9  $920.5  $1,066.7  
Intermodal219.0  259.8  457.0  497.4  
Logistics230.9  227.0  470.5  470.9  
Other89.8