GENERAL

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 2015 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 presentation 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.

Beginning in 2016, we reclassified the losses from fair value adjustments on our used vehicles from "Other operating expenses" to "Gains on used vehicles, net" within the Consolidated Condensed Statement of Earnings. Prior year amounts have been reclassified to conform to the current period presentation. These reclassifications were immaterial to the financial statements taken as a whole as shown in Note 3, "Revenue Earning Equipment."

Revision of Prior Period Financial Statements

We periodically enter 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 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. For the quarter ended March 31, 2015, the revision primarily affected the presentation of our Consolidated Condensed Statement of Cash Flows. The effects of this revision on the individual line items within our Consolidated Condensed Statement of Cash Flows for the three months ended March 31, 2015 were as follows (in millions):



	As Previously Reported			Adjustment		As Revised
Net earnings	$	52.9		(0.1	)	52.8
Depreciation expense ⁽¹⁾	262.4			3.9		266.3
Deferred income tax expense	26.7			(0.1	)	26.6
Accrued expenses and other non-current liabilities	(21.5		)	(0.1	)	(21.6	)
Net cash provided by operating activities from continuing operations	277.9			6.0		283.8
Debt repaid, including capital and financing lease obligations	(457.6		)	(6.0	)	(463.5	)
Net cash provided by financing activities from continuing operations	184.8			(6.0	)	178.9

————————————

Adjustments may not be additive and may have minor differences within the table due to rounding.

(1) Includes revised gains on used vehicles, net as discussed above.