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10-Q
XPO LOGISTICS, INC. filed this Form 10-Q on 11/05/2018
Entire Document
 

The Company’s chief operating decision maker (“CODM”) regularly reviews financial information at the reporting segment level in order to make decisions about resources to be allocated to the segments and to assess their performance. Segment results that are reported to the CODM include items directly attributable to a segment, as well as those that can be allocated on a reasonable basis. Asset information by segment is not provided to the Company’s CODM, as the majority of the Company’s assets are managed at the corporate level.
The Company evaluates performance based on the various financial measures of its two business segments. The following table identifies selected financial data for the three and nine months ended September 30, 2018 and 2017:
(In millions)
 
Transportation
 
Logistics
 
Corporate
 
Eliminations
 
Total
Three Months Ended September 30, 2018 (1)
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
2,850.6

 
$
1,516.8

 
$

 
$
(32.3
)
 
$
4,335.1

Operating income (loss)
 
195.2

 
59.5

 
(45.7
)
 

 
209.0

Depreciation and amortization
 
117.4

 
59.3

 
3.2

 

 
179.9

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2017 (1)
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
2,579.5

 
$
1,340.7

 
$

 
$
(33.1
)
 
$
3,887.1

Operating income (loss)
 
145.2

 
67.3

 
(35.8
)
 

 
176.7

Depreciation and amortization
 
113.6

 
53.0

 
0.7

 

 
167.3

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2018 (1)
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
8,512.4

 
$
4,472.7

 
$

 
$
(95.0
)
 
$
12,890.1

Operating income (loss)
 
539.6

 
174.3

 
(135.9
)
 

 
578.0

Depreciation and amortization
 
347.3

 
172.4

 
7.5

 

 
527.2

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2017 (1)
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
7,494.0

 
$
3,781.9

 
$

 
$
(89.0
)
 
$
11,186.9

Operating income (loss)
 
415.5

 
149.6

 
(109.5
)
 

 
455.6

Depreciation and amortization
 
335.1

 
149.3

 
4.7

 

 
489.1

(1)
Certain immaterial organizational changes were made in the first quarter of 2018 related to the Company’s managed transportation business. Managed Transportation previously had been included in the Logistics segment, and as of January 1, 2018, it is reflected in the Transportation segment. Prior period information was recast to conform to the current year presentation.
3. Revenue Recognition
Adoption of Topic 606, “Revenue from Contracts with Customers”
On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts that were not completed as of the adoption date. The Company recorded an immaterial adjustment to opening Retained earnings as of January 1, 2018 for the cumulative impact of adoption related to the recognition of in-transit revenue in its transportation business. Results for 2018 are presented under Topic 606, while prior periods were not adjusted and are reported under Topic 605 “Revenue Recognition”. The adoption of Topic 606 did not have a material impact on the Condensed Consolidated Financial Statements as of the adoption date or for the nine months ended September 30, 2018.


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