SEGMENT REPORTING

We operate in two business segments: Fleet Management Solutions (FMS), which provides full service leasing, contract maintenance, contract-related maintenance and commercial rental of trucks, tractors and trailers to customers principally in the U.S., Canada and the U.K.; and Supply Chain Solutions (SCS), which provides comprehensive supply chain consulting including distribution and transportation services in North America and Asia. The SCS segment also provides dedicated contract carriage (DCC) services, which includes vehicles and drivers as part of a dedicated transportation solution in the U.S. Prior to 2012, DCC was reported as a separate business segment. In 2012, SCS and DCC were combined as a result of aligning our internal reporting with how we operate our business. While this change did not impact our consolidated results, segment data for prior periods have been recast to be consistent with the current year presentation.

Our primary measurement of segment financial performance, defined as “Earnings Before Tax” (EBT) from continuing operations, includes an allocation of CSS and excludes non-operating pension costs, restructuring and other charges, net described in Note 5, “Restructuring and Other Charges” and excludes the items discussed in Note 26, “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 and corporate communications. Beginning in 2012, we adjusted our segment financial performance measurement to exclude the non-operating components of pension costs in order to more accurately reflect the operating performance of the business segments. Prior year segment EBT has been recast to conform to the current year presentation. 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 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 in several ways, 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 SCS segment. 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) is included in both FMS and SCS 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,
	2012			2011		2010
	(In thousands)
Revenue:
Fleet Management Solutions:
Full service lease	$	1,956,812		1,862,304		1,804,420
Commercial rental	738,564			691,573		505,396
Full service lease and commercial rental	2,695,376			2,553,877		2,309,816
Contract maintenance	169,769			169,678		168,293
Contract-related maintenance	184,703			164,334		139,173
Other	71,955			69,124		67,448
Fuel services revenue	854,578			887,483		716,871
Total Fleet Management Solutions from external customers	3,976,381			3,844,496		3,401,601
Inter-segment revenue	428,944			373,834		310,552
Fleet Management Solutions	4,405,325			4,218,330		3,712,153
Supply Chain Solutions from external customers	2,280,586			2,206,038		1,734,834
Eliminations	(428,944		)	(373,834	)	(310,552	)
Total revenue	$	6,256,967		6,050,534		5,136,435

EBT:
Fleet Management Solutions	$	307,628		265,691		194,909
Supply Chain Solutions	115,193			104,898		81,683
Eliminations	(29,265		)	(24,212	)	(19,275	)
	$	393,556		346,377		257,317
Unallocated Central Support Services	(42,348		)	(42,549	)	(41,310	)
Non-operating pension costs	(31,423		)	(18,652	)	(26,551	)
Restructuring and other charges, net and other items⁽¹⁾	(16,668		)	(5,789	)	(3,151	)
Earnings before income taxes from continuing operations	$	303,117		279,387		186,305

______________


(1)	See Note 26, “Other Items Impacting Comparability,” for a discussion of items, in addition to restructuring and other charges, net that are excluded from our primary measure of segment performance.

The following table sets forth share-based compensation, depreciation expense, (gains) losses on vehicle sales, net, other non-cash charges (credits), net, interest expense (income), capital expenditures and total assets for the years ended December 31, 2012, 2011 and 2010 as provided to the chief operating decision-maker for each of Ryder’s reportable business segments:



	FMS			SCS		CSS		Eliminations		Total
	(In thousands)
2012
Share-based compensation expense	$	5,359		4,433		9,072		—		18,864
Depreciation expense ⁽¹⁾	$	910,352		28,275		1,050		—		939,677
Gains on vehicles sales, net	$	(89,075	)	(33	)	—		—		(89,108	)
Other non-cash charges (credits), net ⁽²⁾	$	15,567		2,768		30,874		—		49,209
Interest expense (income) ⁽³⁾	$	140,747		11		(201	)	—		140,557
Capital expenditures paid ⁽⁴⁾	$	2,090,443		19,278		23,514		—		2,133,235
Total assets	$	7,556,509		807,935		144,355		(189,820	)	8,318,979
2011
Share-based compensation expense	$	5,388		4,312		7,723		—		17,423
Depreciation expense ⁽¹⁾	$	842,094		29,118		1,050		—		872,262
Gains on vehicles sales, net	$	(62,496	)	(383	)	—		—		(62,879	)
Other non-cash charges (credits), net ⁽²⁾	$	16,271		3,214		20,443		—		39,928
Interest expense (income) ⁽³⁾	$	133,245		(74	)	(7	)	—		133,164
Capital expenditures paid ⁽⁴⁾	$	1,653,425		30,209		14,955		—		1,698,589
Total assets	$	6,815,404		827,169		198,476		(223,214	)	7,617,835
2010
Share-based compensation expense	$	5,011		3,430		8,102		—		16,543
Depreciation expense ⁽¹⁾	$	812,588		20,285		968		—		833,841
Gains on vehicle sales, net	$	(28,765	)	38		—		—		(28,727	)
Other non-cash charges, net ⁽²⁾	$	19,351		1,021		20,528		—		40,900
Interest expense (income) ⁽³⁾	$	130,742		(759	)	11		—		129,994
Capital expenditures paid ⁽⁴⁾	$	1,043,280		16,345		10,467		—		1,070,092
Total assets	$	5,944,971		791,791		106,906		(191,294	)	6,652,374

____________


(1)	Depreciation expense associated with CSS assets was allocated to business segments based upon estimated and planned asset utilization. Depreciation expense totaling $12 million, $9 million, and $9 million during 2012, 2011, and 2010, respectively, associated with CSS assets was allocated to other business segments.


(2)	Includes amortization expense.


(3)	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 expense (income) was also reflected in SCS based on targeted segment leverage ratios.


(4)	Excludes acquisition payments of $5 million, $362 million, and $212 million in 2012, 2011, and 2010, respectively, comprised primarily of long-lived assets. See Note 3, “Acquisitions,” for additional information.

Geographic Information



	Years ended December 31,
	2012		2011	2010
	(In thousands)
Revenue:
United States	$	5,231,899	5,075,432	4,313,483
Foreign:
Canada	477,495		481,593	466,405
Europe	384,105		324,214	219,508
Mexico	143,282		147,464	122,312
Asia	20,186		21,831	14,727
	1,025,068		975,102	822,952
Total	$	6,256,967	6,050,534	5,136,435
Long-lived assets:
United States	$	5,261,622	4,708,086	4,098,735
Foreign:
Canada	557,351		481,139	468,062
Europe	534,728		463,848	219,178
Mexico	24,973		19,931	21,194
Asia	787		847	892
	1,117,839		965,765	709,326
Total	$	6,379,461	5,673,851	4,808,061

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 2012, 2011 and 2010, the automotive industry accounted for approximately 30%, 27% and 31%, respectively, of SCS total revenue.