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 March 31, 2018:
Revenues from unaffiliated customers	$	534,869	76,525	32,722	630,572	168,600	305,792	105,182	—		1,854,262
Transfers between geographic areas	28,881		3,562	3,387	6,017	6,550	14,188	5,355	(67,940	)	—
Total revenues	$	563,750	80,087	36,109	636,589	175,150	319,980	110,537	(67,940	)	1,854,262
Net revenues¹	$	277,185	30,447	14,745	137,208	44,406	98,635	33,201	11		635,838
Operating income	$	69,648	9,018	2,370	69,923	15,132	19,278	7,438	11		192,818
Identifiable assets at period end	$	1,558,181	165,368	55,036	542,965	153,411	533,012	208,173	(3,665	)	3,212,481
Capital expenditures	$	3,171	1,528	505	784	329	7,191	288	—		13,796
Depreciation and amortization	$	8,765	398	368	1,376	583	1,976	456	—		13,922
Equity	$	1,247,522	68,050	27,226	278,651	105,642	160,038	128,487	(33,350	)	1,982,266
Three months ended March 31, 2017:
Revenues from unaffiliated customers	$	426,019	59,899	22,103	566,428	147,240	231,457	91,986	—		1,545,132
Transfers between geographic areas	24,313		2,639	3,635	5,051	5,431	9,322	4,964	(55,355	)	—
Total revenues	$	450,332	62,538	25,738	571,479	152,671	240,779	96,950	(55,355	)	1,545,132
Net revenues¹	$	230,785	25,793	14,916	111,833	37,995	75,958	29,731	594		527,605
Operating income	$	52,346	5,051	3,451	53,352	13,224	11,646	7,043	1		146,114
Identifiable assets at period end	$	1,536,520	106,068	50,344	514,509	122,765	379,853	188,098	4,562		2,902,719
Capital expenditures	$	5,242	234	255	1,240	373	5,078	339	—		12,761
Depreciation and amortization	$	7,753	372	320	1,320	531	1,171	460	—		11,927
Equity	$	1,192,601	51,812	27,248	371,152	105,726	118,211	119,627	(34,657	)	1,951,720

_______________________

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
	March 31,
	2018		2017
Total revenues	$	1,854,262	$	1,545,132
Expenses:
Airfreight services	513,504		443,404
Ocean freight and ocean services	379,418		366,063
Customs brokerage and other services	325,502		208,060
Net revenues	$	635,838	$	527,605