Business Segment Information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company is organized functionally in geographic operating segments. Accordingly, management focuses its attention on revenues, net revenues¹, operating income, identifiable assets, capital expenditures, depreciation and amortization and equity generated in each of these geographical areas when evaluating the effectiveness of geographic management. Transactions among the Company’s various offices are conducted using the same arms-length pricing methodologies the Company uses when its offices transact business with independent agents. Certain costs are allocated among the segments based on the relative value of the underlying services, which can include allocation based on actual costs incurred or estimated cost plus a profit margin.

Financial information regarding the Company’s operations by geographic area is as follows:

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	NORTH ASIA	SOUTH ASIA	EUROPE	MIDDLE EAST, AFRICA AND INDIA	ELIMI- NATIONS		CONSOLI- DATED
Three months ended June 30, 2016:
Revenues from unaffiliated customers	$	417,735	56,674	21,169	517,489	151,890	229,882	80,325	—		1,475,164
Transfers between geographic areas	28,973		2,671	4,187	5,385	6,326	10,097	5,507	(63,146	)	—
Total revenues	$	446,708	59,345	25,356	522,874	158,216	239,979	85,832	(63,146	)	1,475,164
Net revenues1	$	232,860	30,815	14,468	122,117	46,257	77,639	28,975	(14	)	553,117
Operating income	$	67,214	9,600	3,836	61,721	18,354	11,838	6,315	(14	)	178,864
Identifiable assets at period end	$	1,363,352	84,358	58,570	471,832	118,352	378,859	225,877	5,938		2,707,138
Capital expenditures	$	8,778	445	317	678	351	2,140	570	—		13,279
Depreciation and amortization	$	7,366	380	288	1,388	543	1,188	489	—		11,642
Equity	$	1,069,876	38,638	39,482	309,557	78,668	133,387	141,315	(31,418	)	1,779,505
Three months ended June 30, 2015:
Revenues from unaffiliated customers	$	449,622	58,739	24,314	649,901	184,862	239,953	84,162	—		1,691,553
Transfers between geographic areas	32,486		3,685	5,403	5,427	6,473	10,716	5,112	(69,302	)	—
Total revenues	$	482,108	62,424	29,717	655,328	191,335	250,669	89,274	(69,302	)	1,691,553
Net revenues1	$	229,353	30,576	17,485	124,491	46,944	76,607	26,685	—		552,141
Operating income	$	68,547	10,437	5,441	60,597	16,140	15,587	5,967	—		182,716
Identifiable assets at period end	$	1,381,755	103,613	57,711	572,425	141,344	448,475	219,280	7,772		2,932,375
Capital expenditures	$	7,711	1,656	569	475	989	921	591	—		12,912
Depreciation and amortization	$	7,339	310	248	1,379	548	1,176	420	—		11,420
Equity	$	1,075,703	59,374	38,447	344,479	118,175	166,569	124,564	(37,578	)	1,889,733

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	NORTH ASIA	SOUTH ASIA	EUROPE	MIDDLE EAST, AFRICA AND INDIA	ELIMI- NATIONS		CONSOLI- DATED
Six months ended June 30, 2016:
Revenues from unaffiliated customers	$	825,561	108,780	41,233	1,014,721	288,308	451,779	163,254	—		2,893,636
Transfers between geographic areas	55,007		5,371	7,788	10,481	12,132	20,458	10,901	(122,138	)	—
Total revenues	$	880,568	114,151	49,021	1,025,202	300,440	472,237	174,155	(122,138	)	2,893,636
Net revenues1	$	453,558	58,193	28,201	232,908	85,775	152,180	59,382	(11	)	1,070,186
Operating income	$	115,419	16,891	7,688	116,939	34,045	24,091	15,628	(11	)	330,690
Identifiable assets at period end	$	1,363,352	84,358	58,570	471,832	118,352	378,859	225,877	5,938		2,707,138
Capital expenditures	$	16,915	756	802	1,763	1,006	4,259	1,813	—		27,314
Depreciation and amortization	$	14,698	744	541	2,707	1,055	2,286	940	—		22,971
Equity	$	1,069,876	38,638	39,482	309,557	78,668	133,387	141,315	(31,418	)	1,779,505
Six months ended June 30, 2015:
Revenues from unaffiliated customers	$	893,803	113,533	48,395	1,295,345	366,243	482,039	169,721	—		3,369,079
Transfers between geographic areas	60,161		6,499	10,180	11,124	12,388	20,353	10,179	(130,884	)	—
Total revenues	$	953,964	120,032	58,575	1,306,469	378,631	502,392	179,900	(130,884	)	3,369,079
Net revenues1	$	448,956	61,254	34,044	241,896	89,144	152,495	53,838	—		1,081,627
Operating income	$	127,728	21,528	10,797	117,653	30,020	30,658	13,215	—		351,599
Identifiable assets at period end	$	1,381,755	103,613	57,711	572,425	141,344	448,475	219,280	7,772		2,932,375
Capital expenditures	$	14,036	1,944	1,186	765	1,308	2,069	1,049	—		22,357
Depreciation and amortization	$	14,732	602	516	2,778	1,078	2,422	821	—		22,949
Equity	$	1,075,703	59,374	38,447	344,479	118,175	166,569	124,564	(37,578	)	1,889,733

_______________________

¹Net revenues are a non-GAAP measure calculated as revenues less directly related operations expenses attributable to the Company's principal services. The Company's management believes that net revenues are a better measure than total revenues when evaluating the Company's operating segment performance since total revenues earned as a freight consolidator include the carriers' charges for carrying the shipment, whereas revenues earned in other capacities include primarily the commissions and fees earned by the Company. Net revenue is one of the Company's primary operational and financial measures and demonstrates the Company's ability to concentrate and leverage purchasing power through effective consolidation of shipments from customers utilizing a variety of transportation carriers and optimal routings.

The following table presents the calculation of consolidated net revenues:

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Total revenues	$	1,475,164	$	1,691,553	$	2,893,636	$	3,369,079
Expenses:
Airfreight services	403,419		506,988		792,196		1,019,989
Ocean freight and ocean services	323,699		433,356		646,719		878,812
Customs brokerage and other services	194,929		199,068		384,535		388,651
Net revenues	$	553,117	$	552,141	$	1,070,186	$	1,081,627