SEGMENT REPORTING

Our operating segments are aggregated into reportable business segments based upon similar economic characteristics, products, services, customers and delivery methods. During the first quarter of 2015, our management structure changed within the supply chain business. We created the role of President of DTS for the dedicated product offering which previously was within SCS. We are now reporting our financial performance as follows: (1) 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.

Our primary measurement of segment financial performance, defined as “Earnings Before Tax” (EBT) from continuing operations, includes an allocation of Central Support Services (CSS) and excludes non-operating pension costs, restructuring and other charges (recoveries), net discussed in Note 5, "Restructuring and Other Charges (Recoveries)" and items discussed in Note 25, "Other Items Impacting Comparability." CSS represents those costs incurred to support all business segments, including human resources, finance, corporate services, public affairs, information technology, health and safety, legal, marketing and corporate communications. The objective of the EBT measurement is to provide clarity on the profitability of each business segment and, ultimately, to hold leadership of each business segment and each operating segment within each business segment accountable for their allocated share of CSS costs. Certain costs are considered to be overhead not attributable to any segment and remain unallocated in CSS. Included among the unallocated overhead remaining within CSS are the costs for investor relations, public affairs and certain executive compensation. CSS costs attributable to the business segments are predominantly allocated to FMS, DTS and SCS as follows:

•Finance, corporate services, and health and safety — allocated based upon estimated and planned resource utilization;

•Human resources — individual costs within this category are allocated under various methods, including allocation based on estimated utilization and number of personnel supported;

•Information technology — principally allocated based upon utilization-related metrics such as number of users or minutes of CPU time. Customer-related project costs and expenses are allocated to the business segment responsible for the project; and

•Other — represents legal and other centralized costs and expenses including certain share-based incentive compensation costs. Expenses, where allocated, are based primarily on the number of personnel supported.

Our FMS segment leases revenue earning equipment and provides fuel, maintenance and other ancillary services to the DTS and SCS segments. Inter-segment revenue and EBT are accounted for at rates similar to those executed with third parties. EBT related to inter-segment equipment and services billed to customers (equipment contribution) are included in both FMS and the business segment which served the customer and then eliminated (presented as “Eliminations”).

Segment results are not necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented. Each business segment follows the same accounting policies as described in Note 1, “Summary of Significant Accounting Policies.” Business segment revenue and EBT from continuing operations is as follows:



	Years ended December 31,
	2015			2014		2013
	(In thousands)
Revenue:
Fleet Management Solutions:
Full service lease	$	2,220,929		2,102,703		2,016,570
Commercial rental	900,624			836,719		753,456
Full service lease and commercial rental	3,121,553			2,939,422		2,770,026
Contract maintenance	190,989			182,411		178,001
Contract-related maintenance	200,148			196,841		186,580
Other	77,625			71,064		72,029
Fuel services revenue	538,277			787,887		829,586
Total Fleet Management Solutions from external customers	4,128,592			4,177,625		4,036,222
Inter-segment revenue	417,100			478,133		458,464
Fleet Management Solutions	4,545,692			4,655,758		4,494,686
Dedicated Transportation Solutions	895,538			899,802		831,599
Supply Chain Solutions	1,547,763			1,561,347		1,551,464
Eliminations	(417,100		)	(478,133	)	(458,464	)
Total revenue	$	6,571,893		6,638,774		6,419,285

EBT:
Fleet Management Solutions	$	462,109		433,736		344,169
Dedicated Transportation Solutions	45,800			44,556		40,926
Supply Chain Solutions	93,754			77,800		89,033
Eliminations	(47,193		)	(41,361	)	(35,489	)
	$	554,470		514,731		438,639
Unallocated Central Support Services	(48,510		)	(51,740	)	(45,493	)
Non-operating pension costs	(19,186		)	(9,768	)	(24,285	)
Restructuring and other (charges) recoveries, net and other items⁽¹⁾	(17,559		)	(114,956	)	154
Earnings before income taxes from continuing operations	$	469,215		338,267		369,015

______________


(1)	See Note 25, “Other Items Impacting Comparability,” for a discussion of items excluded from our primary measure of segment performance.

The following table sets forth share-based compensation expense, depreciation expense, gains on vehicle sales, net, amortization expense and other non-cash charges, net, interest expense (income), capital expenditures paid and total assets for the years ended December 31, 2015, 2014 and 2013 as provided to the chief operating decision-maker for each of Ryder’s reportable business segments. The table reflects the reclassification of current deferred tax assets to non-current as discussed in Note 2, "Recent Accounting Pronouncements":



	FMS			DTS		SCS		CSS		Eliminations		Total
	(In thousands)
2015
Share-based compensation expense	$	5,672		1,155		3,400		10,954		—		21,181
Depreciation expense ⁽¹⁾	$	1,110,706		3,184		25,721		311		—		1,139,922
Gains on vehicles sales, net	$	(117,714	)	(54	)	(41	)	—		—		(117,809	)
Amortization expense and other non-cash charges, net	$	36,348		1,878		2,971		29,565		—		70,762
Interest expense (income) ⁽²⁾	$	154,276		(1,597	)	(2,174	)	(71	)	—		150,434
Capital expenditures paid	$	2,595,961		3,570		27,841		40,606		—		2,667,978
Total assets	$	10,076,321		275,634		636,647		202,129		(222,922	)	10,967,809
2014
Share-based compensation expense	$	4,895		720		3,661		11,629		—		20,905
Depreciation expense ⁽¹⁾	$	1,028,781		3,211		25,636		185		—		1,057,813
Gains on vehicles sales, net	$	(126,410	)	5		(419	)	—		—		(126,824	)
Pension lump sum settlement expense	$	76,239		3,335		3,277		14,380		—		97,231
Amortization expense and other non-cash charges, net	$	19,936		516		1,309		25,502		—		47,263
Interest expense (income) ⁽²⁾	$	147,247		(1,520	)	(807	)	(181	)	—		144,739
Capital expenditures paid ⁽³⁾	$	2,166,319		1,883		20,941		70,021		—		2,259,164
Total assets	$	9,011,883		211,388		673,876		193,484		(239,760	)	9,850,871
2013
Share-based compensation expense	$	4,979		851		4,083		9,397		—		19,310
Depreciation expense ⁽¹⁾	$	953,193		3,335		26,225		857		—		983,610
Gains on vehicle sales, net	$	(96,011	)	(117	)	(47	)	—		—		(96,175	)
Amortization expense and other non-cash charges, net	$	19,071		946		2,694		33,678		—		56,389
Interest expense (income) ⁽²⁾	$	142,555		(1,316	)	(548	)	(228	)	—		140,463
Capital expenditures paid ⁽³⁾	$	2,074,708		1,563		21,114		25,243		—		2,122,628
Total assets	$	8,404,606		203,563		640,837		154,024		(234,690	)	9,168,340

____________


(1)	Depreciation expense associated with CSS assets was allocated to business segments based upon estimated and planned asset utilization. Depreciation expense totaling $22 million, $21 million and $14 million during 2015, 2014 and 2013, respectively, associated with CSS assets was allocated to other business segments.


(2)	Interest expense was primarily allocated to the FMS segment since such borrowings were used principally to fund the purchase of revenue earning equipment used in FMS; however, interest income was also reflected in DTS and SCS based on targeted segment leverage ratios.


(3)	Excludes acquisition payments of $10 million and $2 million in 2014 and 2013, respectively. See Note 4, “Acquisitions,” for additional information.

Geographic Information



	Years ended December 31,
	2015		2014	2013
	(In thousands)
Revenue:
United States	$	5,603,697	5,614,037	5,411,376
Foreign:
Canada	408,325		435,280	455,440
Europe	391,339		400,853	372,209
Mexico	139,583		158,481	161,279
Asia	28,949		30,123	18,981
	968,196		1,024,737	1,007,909
Total	$	6,571,893	6,638,774	6,419,285
Long-lived assets:
United States	$	7,817,628	6,790,946	6,098,635
Foreign:
Canada	504,027		530,316	529,880
Europe	545,630		553,467	568,850
Mexico	31,993		26,230	29,008
Asia	427		521	279
	1,082,077		1,110,534	1,128,017
Total	$	8,899,705	7,901,480	7,226,652

Certain Concentrations

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 full service lease 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. During 2015, 2014 and 2013, the automotive industry accounted for approximately 41%, 43% and 44%, respectively, of SCS total revenue.