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REPORTABLE SEGMENTS
 9 Months Ended
Sep. 30, 2017
REPORTABLE SEGMENTS  
REPORTABLE SEGMENTS

3.          REPORTABLE SEGMENTS

 

Reportable segments are components of an enterprise that engage in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.  The Company's chief operating decision maker is its Chief Executive Officer.

 

The Company consists of two reportable segments, Ocean Transportation and Logistics, which are further described in Note 1.  Reportable segments are measured based on operating income, exclusive of interest expense and income taxes.  In arrangements where the customer purchases ocean transportation and logistics services, the revenues are allocated to each reportable segment based upon the contractual amounts for each type of service.  The Company’s Terminal Joint Venture segment has been aggregated into the Company’s Ocean Transportation segment due to the operations of the Terminal Joint Venture being an integral part of the Company’s Ocean Transportation business.

 

The Company’s Ocean Transportation segment provides ocean transportation services to the Logistics segment.  Accordingly, inter-segment revenue of $12.6 million and $6.7 million for the three months ended September 30, 2017 and 2016, respectively, and $32.0 million and $10.3 million for the nine months ended September 30, 2017 and 2016, respectively, have been eliminated from Logistics segment operating revenue in the table below. 

 

Reportable segment results for the three and nine months ended September 30, 2017 and 2016 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 

 

September 30, 

 

(In millions)

    

2017

    

2016

    

2017

    

2016

    

Operating Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Ocean Transportation

 

$

419.2

 

$

398.0

 

$

1,181.9

 

$

1,135.0

 

Logistics (1)

 

 

124.7

 

 

102.4

 

 

348.9

 

 

287.3

 

Total Operating Revenue

 

$

543.9

 

$

500.4

 

$

1,530.8

 

$

1,422.3

 

Operating Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Ocean Transportation

 

$

54.6

 

$

43.2

 

$

108.1

 

$

110.1

 

Logistics (1)

 

 

7.2

 

 

3.5

 

 

16.0

 

 

7.3

 

Total Operating Income

 

 

61.8

 

 

46.7

 

 

124.1

 

 

117.4

 

Interest expense, net

 

 

(6.2)

 

 

(6.0)

 

 

(18.8)

 

 

(17.4)

 

Income before Income Taxes

 

 

55.6

 

 

40.7

 

 

105.3

 

 

100.0

 

Income taxes

 

 

(21.5)

 

 

(15.4)

 

 

(40.2)

 

 

(38.6)

 

Net Income

 

$

34.1

 

$

25.3

 

$

65.1

 

$

61.4

 

(1)

Logistics operating results include Span Alaska operating results from the date of acquisition on August 4, 2016.