(

) Revenue and Business Segments

We account for our revenue in accordance with ASC

606,

Revenue from Contracts with Customers

, which we adopted on

January 1, 2018

using the modified retrospective method. We combine our

five

current operating segments into

four

reporting segments (Truckload, Dedicated, Intermodal and Brokerage) for financial reporting purposes. These

four

reporting segments are also the appropriate categories for the disaggregation of our revenue under ASC

606.

The primary source of our operating revenue is provided by our Truckload segment through a combination of regional short-haul and medium-to-long-haul full-load transportation services. We transport food and other consumer packaged goods that require a temperature-controlled or insulated environment, along with dry freight, across the United States and into and out of Mexico and Canada.

Our Dedicated segment provides customized transportation solutions tailored to meet individual customers’ requirements, utilizing temperature-controlled trailers, dry vans and other specialized equipment within the United States. Our agreements with customers range from

three

five

years and are subject to annual rate reviews.

Generally, we are paid by the mile for our Truckload and Dedicated services. We also derive Truckload and Dedicated revenue from fuel surcharges, loading and unloading activities, equipment detention and other ancillary services. The main factors that affect our Truckload and Dedicated revenue are the rate per mile we receive from our customers, the percentage of miles for which we are compensated, the number of miles we generate with our equipment and changes in fuel prices. We monitor our revenue production primarily through average Truckload and Dedicated revenue, net of fuel surcharges, per tractor per week. We also analyze our average Truckload and Dedicated revenue, net of fuel surcharges, per total mile, non-revenue miles percentage, the miles per tractor we generate, our fuel surcharge revenue, our accessorial revenue and our other sources of operating revenue.

Our Intermodal segment transports our customers’ freight within the United States utilizing our temperature-controlled trailers on railroad flatcars for portions of trips, with the balance of the trips using our tractors or, to a lesser extent, contracted carriers. The main factors that affect our Intermodal revenue are the rate per mile and other charges we receive from our customers.

Our Brokerage segment develops contractual relationships with and arranges for

third

-party carriers to transport freight for our customers in temperature-controlled trailers and dry vans within the United States and into and out of Mexico through Marten Transport Logistics, LLC, which was established in

2007

and operates pursuant to brokerage authority granted by the DOT. We retain the billing, collection and customer management responsibilities. The main factors that affect our Brokerage revenue are the rate per mile and other charges that we receive from our customers.

Our customer agreements are typically for

one

-year terms except for our Dedicated agreements which range from

three

five

years with annual rate reviews. Under ASC

606,

the contract date for each individual load within each of our

four

reporting segments is generally the date that each load is tendered to and accepted by us. For each load transported within each of our

four

reporting segments, the entire amount of revenue to be recognized is a single performance obligation and our agreements with our customers detail the per-mile charges for line haul and fuel surcharges, along with the rates for loading and unloading, stop offs and drops, equipment detention and other ancillary services, which is the transaction price. There are

discounts that would be a material right or consideration payable to a customer. We are required to recognize revenue and related expenses over time, from load pickup to delivery, for each load within each of our

four

reporting segments. We base our calculation of the amount of revenue to record in each period for individual loads picking up in

one

period and delivering in the following period using the number of hours estimated to be incurred within each period applied to each estimated transaction price. Contract assets for this estimated revenue are classified within prepaid expenses and other within our consolidated condensed balance sheet as of

March 31, 2018.

We had

impairment losses on contract assets in the

three

months ended

March 31, 2018.

We bill our customers for loads after delivery is complete with standard payment terms of

days.

We account for revenue of our Intermodal and Brokerage segments and revenue on freight transported by independent contractors within our Truckload and Dedicated segments on a gross basis because we are the principal service provider controlling the promised service before it is transferred to each customer. We are primarily responsible for fulfilling the promise to provide each specified service to each customer. We bear the primary risk of loss in the event of cargo claims by our customers. We also have complete control and discretion in establishing the price for each specified service. Accordingly, all such revenue billed to customers is classified as operating revenue and all corresponding payments to carriers for transportation services we arrange in connection with brokerage and intermodal activities and to independent contractor providers of revenue equipment are classified as purchased transportation expense within our consolidated condensed statements of operations.

The following table sets forth for the periods indicated our operating revenue and operating income by segment. We do

not

prepare separate balance sheets by segment and, as a result, assets are

not

separately identifiable by segment.

	Three Months
	Ended March 31,
(In thousands)	2018		2017
Operating revenue:
Truckload revenue, net of fuel surcharge revenue	$	80,216	$	84,811
Truckload fuel surcharge revenue		12,801		10,847
Total Truckload revenue		93,017		95,658

Dedicated revenue, net of fuel surcharge revenue		42,364		36,899
Dedicated fuel surcharge revenue		6,469		3,378
Total Dedicated revenue		48,833		40,277

Intermodal revenue, net of fuel surcharge revenue		20,808		16,811
Intermodal fuel surcharge revenue		3,844		2,375
Total Intermodal revenue		24,652		19,186

Brokerage revenue		20,458		18,038
Total operating revenue	$	186,960	$	173,159

Operating income:
Truckload	$	6,815	$	5,974
Dedicated		2,488		4,487
Intermodal		2,978		2,149
Brokerage		1,313		1,328
Total operating income	$	13,594	$	13,938

Truckload segment depreciation expense was

$13.5

million and

$14.6

million, Dedicated segment depreciation expense was

$6.7

million and

$5.3

million, Intermodal segment depreciation expense was

$1.3

million and

$1.1

million, and Brokerage segment depreciation expense was

$323,000

and

$334,000,

in the

three

-month periods ended

March 31, 2018

and

2017,

respectively.