RYDER SYSTEM INC | 2013 | FY | 3

FAIR VALUE MEASUREMENTS
The following tables present our assets and liabilities that are measured at fair value on a recurring basis and the levels of inputs used to measure fair value:
 
 
 
 
Fair Value Measurements
At December 31, 2013 Using
 
 
 
 
Balance Sheet Location    
 
Level 1
 
Level 2
 
Level 3
 
Total    
 
 
 
 
(In thousands)
Assets:
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
DFL and other assets
 
$
—

 
9,333

 
—

 
9,333

Investments held in Rabbi Trusts:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
7,101

 
—

 
—

 
7,101

U.S. equity mutual funds
 
 
 
16,479

 
—

 
—

 
16,479

Foreign equity mutual funds
 
 
 
4,323

 
—

 
—

 
4,323

Fixed income mutual funds
 
 
 
4,616

 
—

 
—

 
4,616

Investments held in Rabbi Trusts
 
DFL and other assets
 
32,519

 
—

 
—

 
32,519

Total assets at fair value
 
 
 
$
32,519

 
9,333

 
—

 
41,852

Liabilities:
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
Other non-current liabilities
 
—

 
1,162

 
—

 
1,162

Total liabilities at fair value
 
 
 
$
—

 
1,162

 
—

 
1,162

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurements
At December 31, 2012 Using
 
 
 
 
Balance Sheet Location
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
 
(In thousands)
Assets:
 
 
 
 
 
 
 
 
 
 
Interest rate swap
 
Prepaid expenses and other current assets
 
$
—

 
1,313

 
—

 
1,313

Interest rate swaps
 
DFL and other assets
 
—

 
15,412

 
—

 
15,412

Investments held in Rabbi Trusts:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
4,055

 
—

 
—

 
4,055

U.S. equity mutual funds
 
 
 
10,871

 
—

 
—

 
10,871

Foreign equity mutual funds
 
 
 
2,974

 
—

 
—

 
2,974

Fixed income mutual funds
 
 
 
4,526

 
—

 
—

 
4,526

Investments held in Rabbi Trusts
 
DFL and other assets
 
22,426

 
—

 
—

 
22,426

Total assets at fair value
 
 
 
$
22,426

 
16,725

 
—

 
39,151

Liabilities:
 
 
 
 
 
 
 
 
 
 
Contingent consideration
 
Other non-current liabilities
 
—

 
—

 
478

 
478

Total liabilities at fair value
 
 
 
$
—

 
—

 
478

 
478


 

The following table presents our assets that are measured at fair value on a nonrecurring basis and the levels of inputs used to measure fair value:
 
 
Fair Value Measurements
At December 31, 2013 Using
 
Year ended
December 31, 2013
 
 
Level 1
 
Level 2
 
Level 3
 
Total Losses (2)
Assets held for sale:
 
 
 
 
 
 
 
 
Revenue earning equipment: (1)
 
 
 
 
 
 
 
 
Trucks
 
$
—

 
—

 
13,326

 
$
9,926

Tractors
 
—

 
—

 
10,339

 
4,824

Trailers
 
—

 
—

 
723

 
1,678

Total assets at fair value
 
$
—

 
—

 
24,388

 
$
16,428

 
 
 
 
 
 
 
 
 
 
 
Fair Value Measurements
    At December 31, 2012 Using
 
Year ended
December 31, 2012
 
 
Level 1
 
Level 2
 
Level 3
 
Total Losses (2)
Assets held for sale:
 
 
 
 
 
 
 
 
Revenue earning equipment (1)
 
 
 
 
 
 
 
 
Trucks
 
$
—

 
—

 
14,263

 
$
12,853

Tractors
 
—

 
—

 
11,619

 
4,058

Trailers
 
—

 
—

 
585

 
1,489

Total assets at fair value
 
$
—

 
—

 
26,467

 
$
18,400

______________
(1)
Represents the portion of all revenue earning equipment held for sale that is recorded at fair value, less costs to sell.
(2)
Total losses represent fair value adjustments for all vehicles held for sale throughout the period for which fair value less costs to sell was less than carrying value.
Revenue earning equipment held for sale is stated at the lower of carrying amount or fair value less costs to sell. Losses to reflect changes in fair value are presented within “Other operating expenses” in the Consolidated Statements of Earnings. For revenue earning equipment held for sale, we stratify our fleet by vehicle type (tractors, trucks and trailers), weight class, age and other relevant characteristics and create classes of similar assets for analysis purposes. Fair value was determined based upon recent market prices obtained from our own sales experience for sales of each class of similar assets and vehicle condition. Therefore, our revenue earning equipment held for sale was classified within Level 3 of the fair value hierarchy. During the years ended December 31, 2013, 2012, and 2011, we recorded losses to reflect changes in fair value of $16 million, $18 million and $9 million, respectively.
Total fair value of debt (excluding capital lease obligations) at December 31, 2013 and 2012 was $4.28 billion and $$3.99 billion, respectively. For publicly-traded debt, estimates of fair value are based on market prices. Since our publicly-traded debt is not actively traded, the fair value measurement was classified within Level 2 of the fair value hierarchy. For other debt, fair value is estimated based on rates currently available to us for debt with similar terms and remaining maturities. Therefore, the fair value measurement of our other debt was classified within Level 2 of the fair value hierarchy. The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the immediate or short-term maturities of these financial instruments.

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