Interim Financial Statements

The accompanying unaudited Consolidated Condensed Financial Statements include the accounts of Ryder System, Inc. (Ryder) and all entities in which Ryder has a controlling voting interest (subsidiaries) and variable interest entities (VIEs) required to be consolidated in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The accompanying unaudited Consolidated Condensed Financial Statements have been prepared in accordance with the accounting policies described in our 2014 Annual Report on Form 10-K and should be read in conjunction with the Consolidated Financial Statements and notes thereto. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal recurring accruals and items referenced under "Revision of Prior Period Financial Statements") considered necessary for a fair statement have been included and the disclosures herein are adequate. The operating results for interim periods are unaudited and are not necessarily indicative of the results that can be expected for a full year.

During the first quarter of 2015, our management structure changed within the supply chain business. We created the role of President of Dedicated Transportation Solutions (DTS) for the dedicated product offering which was previously within Supply Chain Solutions (SCS). We are now reporting our financial performance as follows: (1) Fleet Management Solutions (FMS), which provides full service leasing, commercial rental, contract maintenance, and contract-related maintenance of trucks, tractors and trailers to customers principally in the U.S., Canada and the U.K.; (2) DTS, which provides vehicles and drivers as part of a dedicated transportation solution in the U.S.; and (3) SCS, which provides comprehensive supply chain solutions including distribution and transportation services in North America and Asia. Dedicated transportation services provided as part of an integrated, multi-service, supply chain solution to SCS customers are reported in the SCS business segment. Prior period amounts have been recast to conform to the new presentation. This change impacted Note (P), "Segment Reporting," with no impact on consolidated revenues, net income or cash flows.

Revision of Prior Period Financial Statements

The Company periodically enters into sale and leaseback transactions to lower the total cost of funding our operations and to diversify funding among different classes of investors and among different types of funding instruments. These transactions historically resulted in a reduction of revenue earning equipment and debt on the balance sheet, as proceeds from the sale of revenue earning equipment were used to repay debt. During the second quarter of 2015, we reviewed and evaluated the structure of these transactions and determined that they should be accounted for as issuances of financial interests that do not qualify for deconsolidation. We evaluated the materiality of this revision, quantitatively and qualitatively, and concluded it was not material to any of our previously issued consolidated financial statements. However, we elected to revise previously issued financial statements to avoid inconsistencies in our financial statements. Accordingly, we revised previously reported results for the years ended December 31, 2014, 2013 and 2012 as well as previously reported results for the three and nine months ended September 30, 2014, the three and six months ended June 30, 2014, and the three months ended March 31, 2015 and 2014 in our Form 10-Q for the quarter ended June 30, 2015. The effects of this revision for the three and nine months ended September 30, 2014, and as of December 31, 2014 are presented in the tables below. Adjustments may not be additive and may have minor differences within the tables due to rounding.

The effects of this revision on our Consolidated Condensed Statements of Earnings were as follows (in millions):



	Three months ended September 30, 2014					Nine months ended September 30, 2014
	As Previously Reported		Adjustment		As Revised	As Previously Reported		Adjustment		As Revised
Cost of lease and rental	$	522.9	(0.7	)	522.2	$	1,524.0	(1.6	)	1,522.4
Interest expense	35.9		0.8		36.7	106.3		1.6		107.9
Earnings from continuing operations before income taxes	129.7		(0.1	)	129.6	324.8		(0.1	)	324.7
Provision for income taxes	45.8		(0.1	)	45.7	116.0		—		116.0
Earnings from continuing operations	84.0		(0.1	)	83.9	208.8		(0.1	)	208.7
Net earnings	83.7		(0.1	)	83.6	207.3		—		207.3

The effects of this revision on our Consolidated Condensed Statements of Comprehensive Income were as follows (in millions):



	Comprehensive Income
	As Previously Reported		Adjustment		As Revised
Three months ended September 30, 2014	$	39.8	(0.1	)	39.7
Nine months ended September 30, 2014	179.1		—		179.1

The effects of this revision on our Consolidated Balance Sheets were as follows (in millions):



	December 31, 2014
	As Previously Reported		Adjustment		As Revised
Revenue earning equipment, net	$	6,994.4	207.4		7,201.9
Total assets	9,676.0		207.4		9,883.4
Short-term debt and current portion of long-term debt	12.2		24.1		36.3
Accrued expenses and other current liabilities	520.5		(6.8	)	513.7
Total current liabilities	1,093.6		17.2		1,110.8
Long-term debt	4,500.3		194.0		4,694.3
Other non-current liabilities	786.7		(3.4	)	783.3
Deferred income taxes	1,476.0		(0.2	)	1,475.8
Total liabilities	7,856.5		207.8		8,064.3
Retained earnings	1,450.9		(0.4	)	1,450.5
Total shareholders’ equity	1,819.5		(0.4	)	1,819.1
Total liabilities and shareholders’ equity	9,676.0		207.4		9,883.4

The effects of this revision on the individual line items within our Consolidated Condensed Statements of Cash Flows were as follows (in millions):



	Nine months ended September 30, 2014
	As Previously Reported			Adjustment		As Revised
Net earnings	$	207.3		—		207.3
Depreciation expense	770.1			11.3		781.4
Accrued expenses and other non-current liabilities	(41.5		)	(4.9	)	(46.4	)
Net cash provided by operating activities from continuing operations	974.7			6.3		981.0
Debt proceeds	769.9			125.8		895.7
Debt repaid	(278.4		)	(6.4	)	(284.8	)
Net cash provided by financing activities from continuing operations	213.1			119.4		332.5
Sale and leaseback of revenue earning equipment	125.8			(125.8	)	—
Net cash used in investing activities from continuing operations	(1,171.5		)	(125.8	)	(1,297.3	)