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, 2017:
Revenues from unaffiliated customers	$	476,575	65,544	24,181	686,915	170,225	273,606	105,120	—		1,802,166
Transfers between geographic areas	26,888		2,782	3,679	5,253	5,681	10,302	5,318	(59,903	)	—
Total revenues	$	503,463	68,326	27,860	692,168	175,906	283,908	110,438	(59,903	)	1,802,166
Net revenues¹	$	257,030	30,664	14,710	138,667	41,411	85,390	29,956	1,314		599,142
Operating income	$	74,645	9,215	2,652	72,070	11,697	11,124	5,495	(3	)	186,895
Identifiable assets at period end	$	1,636,293	100,651	52,238	446,826	143,893	473,509	212,210	3,261		3,068,881
Capital expenditures	$	7,398	263	2,436	589	390	23,138	248	—		34,462
Depreciation and amortization	$	7,905	405	310	1,313	569	1,309	461	—		12,272
Equity	$	1,345,266	52,212	25,709	231,831	102,477	139,688	119,649	(35,751	)	1,981,081
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	$	1,410,287	95,390	56,192	480,587	117,333	388,543	237,104	8,788		2,794,224
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



(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, 2017:
Revenues from unaffiliated customers	$	1,354,811	187,997	69,747	1,873,393	475,163	764,596	293,870	—		5,019,577
Transfers between geographic areas	79,356		8,246	11,073	15,139	16,520	29,288	15,316	(174,938	)	—
Total revenues	$	1,434,167	196,243	80,820	1,888,532	491,683	793,884	309,186	(174,938	)	5,019,577
Net revenues¹	$	737,842	84,630	43,634	371,459	117,634	242,244	89,973	2,964		1,690,380
Operating income	$	191,256	26,583	8,349	183,515	37,434	36,189	17,928	(5	)	501,249
Identifiable assets at period end	$	1,636,293	100,651	52,238	446,826	143,893	473,509	212,210	3,261		3,068,881
Capital expenditures	$	19,492	1,066	3,648	2,492	1,172	38,717	1,016	—		67,603
Depreciation and amortization	$	23,389	1,163	930	3,995	1,656	3,707	1,401	—		36,241
Equity	$	1,345,266	52,212	25,709	231,831	102,477	139,688	119,649	(35,751	)	1,981,081
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	$	1,410,287	95,390	56,192	480,587	117,333	388,543	237,104	8,788		2,794,224
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

_______________________

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				Nine months ended
	September 30,				September 30,
	2017		2016		2017		2016
Total revenues	$	1,802,166	$	1,562,394	$	5,019,577	$	4,456,030
Expenses:
Airfreight services	547,595		444,359		1,490,417		1,236,555
Ocean freight and ocean services	411,061		359,991		1,163,051		1,006,710
Customs brokerage and other services	244,368		212,785		675,729		597,320
Net revenues	$	599,142	$	545,259	$	1,690,380	$	1,615,445