Operating Segments

9 Months Ended

Sep. 30, 2015

Operating Segments [Abstract]

Operating Segments

NOTE 2 – OPERATING SEGMENTS

Our six operating segments, Jones Act, Pure Car Truck Carriers, Dry Bulk Carriers, Rail-Ferry, Specialty Contracts, and Other are distinguished primarily by the market in which the segment assets are deployed, the physical characteristics of those assets, and the type of services provided to our customers. We report in the Other category the results of several of our subsidiaries that provide ship and cargo charter brokerage, ship management services and agency services to our operating subsidiaries as well as third party customers.  Also included in the Other category are corporate related items, results of insignificant operations, and income and expense items not allocated to the other reportable segments. We manage each reportable segment separately, as each requires different resources depending on the nature of the contract or terms under which the vessels within the segment operate.  Our October 2015 Strategic Plan, if fully implemented, could significantly impact our reporting segments – see Note 1 – Business and Basis of Presentation for further discussion.

We allocate interest expense to the segments in proportion to the fixed assets (defined as the carrying value of vessels, property, and other equipment) within each segment.  Additionally, we include the results of two of our unconsolidated entities, Oslo Bulk, AS and  Oslo Bulk Holding Pte. Ltd, in our Dry Bulk Carriers segment, and the results of another unconsolidated entity, Terminales Transgolfo, S.A. de C.V., to our Rail-Ferry segment.  The results of our remaining unconsolidated entities, Saltholmen Shipping Ltd (a company owning two Chemical Tankers) and Brattholmen Shipping Ltd (a company owning two Asphalt Tankers), are included in our Specialty Contracts segment.  We do not allocate to our segments; (i) administrative and general expenses, (ii) (gain) loss on sale of other assets, (iii) derivative (gain) loss, (iv) income taxes, (v) impairment loss, (vi) loss of extinguishment of debt, (vii) other income from vessel financing, (viii) investment income, and (ix) foreign exchange loss.  Intersegment revenues are based on market prices and include revenues earned by our subsidiaries that provide specialized services to our operating companies. Finally, we use “gross voyage profit” as the primary measure for our segments’ profitability to assist our chief operating decision makers in monitoring and managing our business. Due to the diversity across our segments, we believe the most efficient way of measuring contribution margins is by measuring gross voyage profit by segment. Gross voyage profit is the sum of revenue less voyage expense less amortization expense, plus the results from our unconsolidated entities.

The following table presents information about segment profit and loss for the three months ended September 30, 2015 and 2014:

RESULTS OF OPERATIONS

three MONTHS ENDED SEPTEMBER 30, 2015

COMPARED TO THE three MONTHS ENDED SEPTEMBER 30, 2014

(All Amounts in Thousands)				Pure Car
	Jones			Truck			Dry Bulk			Rail			Specialty
	Act			Carriers			Carriers			Ferry			Contracts			Other		Total
2015
Fixed Revenue	$	19,199		$	13,131		$	1,933		$	-		$	11,391		$	-	$	45,654
Variable Revenue		-			8,665			1,695			10,402			541			(448)		20,855
Total Revenue		19,199			21,796			3,628			10,402			11,932			(448)		66,509
Voyage Expenses		17,342			16,228			2,305			8,038			9,435			(779)		52,569
Amortization Expense		2,450			604			60			258			285			-		3,657
(Income) Loss of Unconsolidated Entities		-			-			45			229			(432)			-		(158)
Gross Voyage Profit (Loss) (excluding Depreciation Expense)	$	(593)		$	4,964		$	1,218		$	1,877		$	2,644		$	331	$	10,441
Gross Voyage Profit Margin		(3)	%		23	%		34	%		18	%		22	%		-		16	%
2014
Fixed Revenue	$	32,101		$	15,290		$	1,910		$	-		$	9,462		$	-	$	58,763
Variable Revenue		-			3,520			1,786			9,435			1,497			(591)		15,647
Total Revenue		32,101			18,810			3,696			9,435			10,959			(591)		74,410
Voyage Expenses		20,541			15,606			2,870			7,644			9,923			(1,134)		55,450
Amortization Expense		4,799			593			63			259			428			-		6,142
(Income) Loss of Unconsolidated Entities		-			-			373			81			(278)			-		176
Gross Voyage Profit (excluding Depreciation Expense)	$	6,761		$	2,611		$	390		$	1,451		$	886		$	543	$	12,642
Gross Voyage Profit Margin		21	%		14	%		11	%		15	%		8	%		-		17	%

The following table presents information about segment profit and loss for the nine months ended September 30, 2015 and 2014:

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2015

COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2014

(All Amounts in Thousands)				Pure Car
	Jones			Truck			Dry Bulk			Rail			Specialty
	Act			Carriers			Carriers			Ferry			Contracts			Other		Total
2015
Fixed Revenue	$	63,344		$	41,890		$	5,667		$	-		$	33,035		$	-	$	143,936
Variable Revenue		-			24,854			4,063			28,014			1,373			(397)		57,907
Total Revenue		63,344			66,744			9,730			28,014			34,408			(397)		201,843
Voyage Expenses		52,634			51,289			6,821			22,514			26,654			(1,323)		158,589
Amortization Expense		9,392			2,095			181			679			845			-		13,192
(Income) Loss of Unconsolidated Entities		-			-			(797)			186			(1,105)			-		(1,716)
Gross Voyage Profit (excluding Depreciation Expense)	$	1,318		$	13,360		$	3,525		$	4,635		$	8,014		$	926	$	31,778
Gross Voyage Profit Margin		2	%		20	%		36	%		17	%		23	%		-		16	%
2014
Fixed Revenue	$	94,408		$	46,200		$	5,194		$	-		$	26,650		$	-	$	172,452
Variable Revenue		-			11,319			8,881			27,101			4,624			(521)		51,404
Total Revenue		94,408			57,519			14,075			27,101			31,274			(521)		223,856
Voyage Expenses		65,226			48,417			9,820			22,089			26,964			(1,831)		170,685
Amortization Expense		12,144			1,938			172			675			1,862			-		16,791
(Income) Loss of Unconsolidated Entities		-			-			542			148			(326)			-		364
Gross Voyage Profit (excluding Depreciation Expense)	$	17,038		$	7,164		$	3,541		$	4,189		$	2,774		$	1,310	$	36,016
Gross Voyage Profit Margin		18	%		12	%		25	%		15	%		9	%		-		16	%

The following table is a reconciliation of the totals reported for the operating segments to the applicable line items in the consolidated financial statements:

(All Amounts in Thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
		2015		2014		2015		2014
Revenues	$	66,509	$	74,410	$	201,843	$	223,856
Voyage Expenses		52,569		55,450		158,589		170,685
Amortization Expense		3,657		6,142		13,192		16,791
Net (Income) Loss of Unconsolidated Entities		(158)		176		(1,716)		364
Gross Voyage Profit		10,441		12,642		31,778		36,016
Vessel Depreciation		5,740		6,291		16,773		19,528
Other Depreciation		185		181		556		545
Gross Profit		4,516		6,170		14,449		15,943
Other Operating Expenses:
Administrative and General Expenses		5,476		5,271		15,286		15,828
Impairment Loss		3,042		-		4,870		-
(Gain) Loss on Sale of Other Assets		106		1		(4,573)		1
Less:  Net Income (Loss) of Unconsolidated Entities		158		(176)		1,716		(364)
Total Other Operating Expenses		8,782		5,096		17,299		15,465
Operating Income (Loss)	$	(4,266)	$	1,074	$	(2,850)	$	478