Variable Interest Entities

6 Months Ended

Jun. 30, 2016

Variable Interest Entities [Abstract]

The Company applies the guidance under ASC 810-10 for the determination of its Variable Interest Entities (“VIE”) and the accounting determination for consolidation. The determination to consolidate these entities is based on a 4-step analysis to first identify those entities in which the Company holds a variable interest. Upon the determination that the Company holds a variable interest in the entity, the Company evaluated the criteria to determine if the entity met the definition of a VIE. These criteria include evaluating whether the equity investment at risk is insufficient to finance the activities of the entity, the holders of the equity interest lack decision making rights, the equity investment at risk was established with non-substantive voting rights, the holders of the equity investment at risk lack the obligation to absorb losses, and the holders of the equity investment at risk lack the right to receive residual returns. Upon the determination that an entity meets the criteria of a VIE, an evaluation is made over controlling interest and the determination of the primary beneficiary.

Based on the analysis completed, the Company determined it had variable interests in certain VIEs and consolidates these entities because it has the power to direct the activities that significantly affect the VIEs' economic performance, including having operational control over each VIE and operating the VIEs under the XPO brand or policies. The VIEs provide logistics services for their customers. Investors in these entities only have recourse to the assets owned by the entity and not to the Company’s general credit. The Company does not have implicit support arrangements with any VIE. Assets and liabilities of consolidated VIEs are outlined in the table below.



(In millions)	June 30, 2016		December 31, 2015
Assets
Cash and cash equivalents	$	16.2	$	14.3
Accounts receivable, net of allowance	63.8		54.7
Other current assets	5.3		3.8
Property and equipment, net of accumulated depreciation	3.9		4.8
Other long-term assets	2.7		3.0
Total	$	91.9	$	80.6

Liabilities
Accounts payable	$	46.2	$	44.9
Accrued expenses, other	12.4		8.1
Other current liabilities	9.5		8.9
Other long-term liabilities	9.1		5.2
Total	$	77.2	$	67.1

The following table summarizes total revenue and expenses in connection with the Company's consolidated VIEs. The Company did not have any VIEs prior to its June 2015 acquisition of ND.



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2016		2015		2016		2015
Revenue	$	82.4	$	30.3	$	156.5	$	30.3
Operating expenses	$	79.1	$	29.5	$	151.1	$	29.5