SEGMENT REPORTING

Our operating segments are aggregated into reportable business segments based upon similar economic characteristics, products, services, customers and delivery methods. We report our financial performance in three business segments: (1) FMS, which provides leasing, commercial rental and 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 Singapore. 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 segment “Earnings Before Tax” (EBT) from continuing operations, includes an allocation of Central Support Services (CSS) and excludes non-operating pension costs and the restructuring and other items, net discussed in Note 15, "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 segment and, ultimately, to hold leadership of each 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 DTS and SCS customers (equipment contribution) are included in both FMS and the segment that served the customer and then eliminated (presented as “Eliminations”).

The following tables set forth financial information for each of our segments and provide a reconciliation between segment EBT and earnings from continuing operations before income taxes for the three months ended March 31, 2018 and 2017. 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. Prior period Segment EBT amounts have been reclassified to conform to the current period presentation. These reclassifications were immaterial to the financial statements taken as a whole.



	FMS		DTS	SCS	Eliminations		Total
	(In thousands)
For the three months ended March 31, 2018
Revenue from external customers	$	1,109,790	298,970	494,707	—		1,903,467
Inter-segment revenue	132,789		—	—	(132,789	)	—
Total revenue	$	1,242,579	298,970	494,707	(132,789	)	1,903,467

Segment EBT	$	49,822	13,052	26,203	(13,272	)	75,805
Unallocated CSS							(10,689		)
Non-operating pension costs⁽¹⁾							(1,222		)
Other items ⁽²⁾							(15,794		)
Earnings from continuing operations before income taxes							$	48,100

Segment capital expenditures paid ⁽³⁾	$	645,369	249	12,293	—		657,911
Unallocated CSS capital expenditures paid							4,833
Capital expenditures paid							$	662,744


For the three months ended March 31, 2017
Revenue from external customers	$	1,018,740	266,630	451,613	—		1,736,983
Inter-segment revenue	113,730		—	—	(113,730	)	—
Total revenue	$	1,132,470	266,630	451,613	(113,730	)	1,736,983

Segment EBT	$	52,277	11,283	28,036	(11,216	)	80,380
Unallocated CSS							(10,223		)
Non-operating pension costs⁽¹⁾							(7,330		)
Other items ⁽²⁾							(2,205		)
Earnings from continuing operations before income taxes							$	60,622

Segment capital expenditures paid ⁽³⁾	$	344,355	768	10,998	—		356,121
Unallocated CSS capital expenditures paid							5,218
Capital expenditures paid							$	361,339

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(1)	Non-operating pension costs include the amortization of net actuarial loss and prior service costs, interest costs and expected return on plan assets.


(2)	See Note 15, Other Items Impacting Comparability," for additional information.


(3)	Excludes revenue earning equipment acquired under capital leases.