Operating Segments

3 Months Ended

Mar. 31, 2016

Operating Segments [Abstract]

Operating Segments

NOTE 2 – OPERATING SEGMENTS

Prior to adopting our Strategic Plan, we operated six separate segments – Jones Act, Pure Car Truck Carriers, Dry Bulk Carriers, Rail Ferry, Specialty Contracts, and Other. We distinguish our segments 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 segment 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 segment 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.

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 measuring gross voyage profit is the most efficient way of measuring contribution margins by segment. We define gross voyage profit as the sum of revenue, less voyage expense, less amortization expense plus the results from our unconsolidated entities. Historically, we have included the results of two of our unconsolidated entities, Oslo Bulk, AS and Oslo Bulk Holding Pte. Ltd., in our Dry Bulk Carriers segment, the results of Terminales Transgolfo, S.A. de C.V., in ourRail Ferrysegment, and the results of our remaining unconsolidated entities, Saltholmen Shipping Ltd and Brattholmen Shipping Ltd in our Specialty Contracts segment. We do not allocate the following 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 on 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, which we eliminate in consolidation.

In connection with the implementation of our Strategic Plan, by the end of the first quarter of 2016, we had sold or exchanged all of the assets formerly included in our Dry Bulk Carriers segment. Accordingly, effective during first quarter of 2016, we have discontinued reporting under this segment. For more information regarding these disposals and the disposal of other of our unconsolidated entities, refer to Note 7 – Unconsolidated Entities.

As our financial position continues to change and as new or different divestiture opportunities arise, the number of vessels operated by us will continue to decrease, our operations will be further reconfigured and our fleet will be less diversified. Although the implementation of our Strategic Plan has reduced the number of our vessels and operating segments, we do not believe that the plan has significantly changed our business strategy or our historical practices.

RESULTS OF OPERATIONS

three MONTHS ENDED March 31, 2016

COMPARED TO THE three MONTHS ENDED March 31, 2015

(All Amounts in Thousands)			Pure Car
	Jones		Truck		Dry Bulk		Rail		Specialty
	Act		Carriers		Carriers		Ferry		Contracts		Other		Total
2016
Fixed Revenue	$	22,746	$	11,577	$	-	$	-	$	7,169	$	-	$	41,492
Variable Revenue		-		4,981		-		6,775		439		114		12,309
Total Revenue		22,746		16,558		-		6,775		7,608		114		53,801
Voyage Expenses		17,019		14,131		-		5,428		6,423		76		43,077
Amortization Expense		2,216		556		-		254		53		-		3,079
(Income) of Unconsolidated Entity		-		-		-		(142)		-		-		(142)
Gross Voyage Profit*	$	3,511	$	1,871	$	-	$	1,235	$	1,132	$	38	$	7,787
Gross Voyage Profit Margin		15%		11%		-		18%		15%		-		14%
2015
Fixed Revenue	$	24,595	$	14,247	$	1,868	$	-	$	10,571	$	-	$	51,281
Variable Revenue		-		7,533		1,255		7,534		185		238		16,745
Total Revenue		24,595		21,780		3,123		7,534		10,756		238		68,026
Voyage Expenses		18,590		17,020		2,580		6,635		7,557		(171)		52,211
Amortization Expense		3,828		715		61		285		298		-		5,187
(Income) Loss of Unconsolidated Entities		-		-		(635)		74		(332)		-		(893)
Gross Voyage Profit*	$	2,177	$	4,045	$	1,117	$	540	$	3,233	$	409	$	11,521
Gross Voyage Profit Margin		9%		19%		36%		7%		30%		-		17%
* Excludes Depreciation Expense

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
		March 31, 2016		March 31, 2015
Revenues	$	53,801	$	68,026
Voyage Expenses		43,077		52,211
Amortization Expense		3,079		5,187
Net Income of Unconsolidated Entities		(142)		(893)
Gross Voyage Profit		7,787		11,521
Vessel Depreciation		5,436		5,543
Other Depreciation		225		184
Gross Profit		2,126		5,794
Other Operating Expenses:
Administrative and General Expenses		4,513		5,022
Impairment Loss		1,934		-
Loss on Sale of Other Assets		-		68
Less:  Net Income of Unconsolidated Entities		142		893
Total Other Operating Expenses		6,589		5,983
Operating Loss	$	(4,463)	$	(189)