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, 2018:
Revenues from unaffiliated customers	$	597,183	88,877	39,389	741,997	198,537	312,724	112,240	—		2,090,947
Transfers between geographic areas	31,860		3,998	4,054	6,592	6,855	14,488	5,807	(73,654	)	—
Total revenues	$	629,043	92,875	43,443	748,589	205,392	327,212	118,047	(73,654	)	2,090,947
Net revenues¹	$	283,807	34,411	15,808	146,890	47,166	99,794	34,055	(617	)	661,314
Operating income	$	79,567	10,476	2,409	72,823	15,543	15,658	6,671	7		203,154
Identifiable assets at period end	$	1,694,556	174,402	53,322	540,465	156,887	508,855	212,817	(6,504	)	3,334,800
Capital expenditures	$	6,889	301	227	1,280	910	751	1,375	—		11,733
Depreciation and amortization	$	8,185	497	375	1,319	554	1,958	447	—		13,335
Equity	$	1,334,952	66,399	25,663	197,939	86,048	157,973	119,718	(31,360	)	1,957,332
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




(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, 2018:
Revenues from unaffiliated customers	$	1,699,323	245,670	110,808	2,046,670	539,833	934,466	325,998	—		5,902,768
Transfers between geographic areas	91,546		11,536	11,362	18,735	20,237	43,501	16,591	(213,508	)	—
Total revenues	$	1,790,869	257,206	122,170	2,065,405	560,070	977,967	342,589	(213,508	)	5,902,768
Net revenues¹	$	832,872	99,607	46,476	424,681	136,458	300,800	100,381	(1,577	)	1,939,698
Operating income	$	212,843	29,571	7,480	213,105	44,049	51,894	20,599	15		579,556
Identifiable assets at period end	$	1,694,556	174,402	53,322	540,465	156,887	508,855	212,817	(6,504	)	3,334,800
Capital expenditures	$	16,092	4,020	899	2,623	1,934	9,167	2,907	—		37,642
Depreciation and amortization	$	25,397	1,368	1,138	3,998	1,679	5,889	1,364	—		40,833
Equity	$	1,334,952	66,399	25,663	197,939	86,048	157,973	119,718	(31,360	)	1,957,332
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

_______________________

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,
	2018		2017		2018		2017
Total revenues	$	2,090,947	$	1,802,166	$	5,902,768	$	5,019,577
Expenses:
Airfreight services	620,554		547,595		1,727,383		1,490,417
Ocean freight and ocean services	435,313		411,061		1,199,887		1,163,051
Customs brokerage and other services	373,766		244,368		1,035,800		675,729
Net revenues	$	661,314	$	599,142	$	1,939,698	$	1,690,380