Business Segment Information

9 Months Ended

Sep. 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 September 30, 2016:
Revenues from unaffiliated customers	$	423,362	56,747	21,592	590,622	154,156	228,256	87,659	—		1,562,394
Transfers between geographic areas	24,610		2,770	3,724	5,368	6,206	9,938	5,551	(58,167	)	—
Total revenues	$	447,972	59,517	25,316	595,990	160,362	238,194	93,210	(58,167	)	1,562,394
Net revenues1	$	229,773	30,211	14,063	124,251	42,711	74,888	29,363	(1	)	545,259
Operating income	$	69,457	6,200	3,328	59,682	14,045	7,018	7,534	(1	)	167,263
Identifiable assets at period end	$	1,429,860	95,390	56,192	480,587	117,333	388,543	237,104	8,788		2,813,797
Capital expenditures	$	8,319	720	139	739	319	2,127	296	—		12,659
Depreciation and amortization	$	7,566	369	328	1,404	594	1,116	505	—		11,882
Equity	$	1,145,293	41,542	37,765	293,383	87,926	129,989	150,395	(32,360	)	1,853,933
Three months ended September 30, 2015:
Revenues from unaffiliated customers	$	441,097	56,818	24,681	648,096	158,011	234,334	88,295	—		1,651,332
Transfers between geographic areas	29,168		3,492	4,991	5,206	6,289	11,125	5,459	(65,730	)	—
Total revenues	$	470,265	60,310	29,672	653,302	164,300	245,459	93,754	(65,730	)	1,651,332
Net revenues1	$	232,912	32,713	17,115	135,488	45,970	77,250	28,533	—		569,981
Operating income	$	65,389	11,905	5,007	69,690	18,574	14,188	7,140	—		191,893
Identifiable assets at period end	$	1,385,157	108,644	56,987	472,189	140,206	427,053	229,670	7,112		2,827,018
Capital expenditures	$	6,196	658	222	711	291	1,223	245	—		9,546
Depreciation and amortization	$	7,439	363	268	1,336	531	1,120	418	—		11,475
Equity	$	1,144,466	64,384	35,890	250,362	103,457	148,287	126,321	(30,975	)	1,842,192

(in thousands)	UNITED STATES		OTHER NORTH AMERICA	LATIN AMERICA	NORTH ASIA	SOUTH ASIA	EUROPE	MIDDLE EAST, AFRICA AND INDIA	ELIMI- NATIONS		CONSOLI- DATED
Nine months ended September 30, 2016:
Revenues from unaffiliated customers	$	1,248,923	165,527	62,825	1,605,343	442,464	680,035	250,913	—		4,456,030
Transfers between geographic areas	79,617		8,141	11,512	15,849	18,338	30,396	16,452	(180,305	)	—
Total revenues	$	1,328,540	173,668	74,337	1,621,192	460,802	710,431	267,365	(180,305	)	4,456,030
Net revenues1	$	683,331	88,404	42,264	357,159	128,486	227,068	88,745	(12	)	1,615,445
Operating income	$	184,876	23,091	11,016	176,621	48,090	31,109	23,162	(12	)	497,953
Identifiable assets at period end	$	1,429,860	95,390	56,192	480,587	117,333	388,543	237,104	8,788		2,813,797
Capital expenditures	$	25,234	1,476	941	2,502	1,325	6,386	2,109	—		39,973
Depreciation and amortization	$	22,264	1,113	869	4,111	1,649	3,402	1,445	—		34,853
Equity	$	1,145,293	41,542	37,765	293,383	87,926	129,989	150,395	(32,360	)	1,853,933
Nine months ended September 30, 2015:
Revenues from unaffiliated customers	$	1,334,900	170,351	73,076	1,943,441	524,254	716,373	258,016	—		5,020,411
Transfers between geographic areas	89,329		9,991	15,171	16,330	18,677	31,478	15,638	(196,614	)	—
Total revenues	$	1,424,229	180,342	88,247	1,959,771	542,931	747,851	273,654	(196,614	)	5,020,411
Net revenues1	$	681,868	93,967	51,159	377,384	135,114	229,745	82,371	—		1,651,608
Operating income	$	193,117	33,433	15,804	187,343	48,594	44,846	20,355	—		543,492
Identifiable assets at period end	$	1,385,157	108,644	56,987	472,189	140,206	427,053	229,670	7,112		2,827,018
Capital expenditures	$	20,232	2,602	1,408	1,476	1,599	3,292	1,294	—		31,903
Depreciation and amortization	$	22,171	965	784	4,114	1,609	3,542	1,239	—		34,424
Equity	$	1,144,466	64,384	35,890	250,362	103,457	148,287	126,321	(30,975	)	1,842,192

_______________________

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				Nine months ended
	September 30,				September 30,
	2016		2015		2016		2015
Total revenues	$	1,562,394	$	1,651,332	$	4,456,030	$	5,020,411
Expenses:
Airfreight services	444,359		464,161		1,236,555		1,484,150
Ocean freight and ocean services	359,991		416,075		1,006,710		1,294,887
Customs brokerage and other services	212,785		201,115		597,320		589,766
Net revenues	$	545,259	$	569,981	$	1,615,445	$	1,651,608