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, 2017:
Revenues from unaffiliated customers	$	452,217	62,554	23,463	620,050	157,698	259,533	96,764	—		1,672,279
Transfers between geographic areas	28,155		2,825	3,759	4,835	5,408	9,664	5,034	(59,680	)	—
Total revenues	$	480,372	65,379	27,222	624,885	163,106	269,197	101,798	(59,680	)	1,672,279
Net revenues¹	$	250,027	28,173	14,008	120,959	38,228	80,896	30,286	1,056		563,633
Operating income	$	64,265	12,317	2,246	58,093	12,513	13,419	5,390	(3	)	168,240
Identifiable assets at period end	$	1,487,582	129,830	48,064	576,655	129,002	437,628	207,191	6,804		3,022,756
Capital expenditures	$	6,852	569	957	663	409	10,501	429	—		20,380
Depreciation and amortization	$	7,731	386	300	1,362	556	1,227	480	—		12,042
Equity	$	1,147,962	61,957	24,320	402,211	117,077	135,726	124,628	(35,244	)	1,978,637
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	$	1,343,669	84,358	58,570	471,832	118,352	378,859	225,877	5,938		2,687,455
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



(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, 2017:
Revenues from unaffiliated customers	$	878,236	122,453	45,566	1,186,478	304,938	490,990	188,750	—		3,217,411
Transfers between geographic areas	52,468		5,464	7,394	9,886	10,839	18,986	9,998	(115,035	)	—
Total revenues	$	930,704	127,917	52,960	1,196,364	315,777	509,976	198,748	(115,035	)	3,217,411
Net revenues¹	$	480,812	53,966	28,924	232,792	76,223	156,854	60,017	1,650		1,091,238
Operating income	$	116,611	17,368	5,697	111,445	25,737	25,065	12,433	(2	)	314,354
Identifiable assets at period end	$	1,487,582	129,830	48,064	576,655	129,002	437,628	207,191	6,804		3,022,756
Capital expenditures	$	12,094	803	1,212	1,903	782	15,579	768	—		33,141
Depreciation and amortization	$	15,484	758	620	2,682	1,087	2,398	940	—		23,969
Equity	$	1,147,962	61,957	24,320	402,211	117,077	135,726	124,628	(35,244	)	1,978,637
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	$	1,343,669	84,358	58,570	471,832	118,352	378,859	225,877	5,938		2,687,455
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

_______________________

¹Net revenues are a non-GAAP measure calculated as revenues less directly related operating 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,
	2017		2016		2017		2016
Total revenues	$	1,672,279	$	1,475,164	$	3,217,411	$	2,893,636
Expenses:
Airfreight services	499,418		403,419		942,822		792,196
Ocean freight and ocean services	385,927		323,699		751,990		646,719
Customs brokerage and other services	223,301		194,929		431,361		384,535
Net revenues	$	563,633	$	553,117	$	1,091,238	$	1,070,186