Business Segment Information

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Business Segment Information

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. The Company charges its subsidiaries and affiliates for services rendered in the United States on a cost recovery basis. 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.

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, 2015:
Revenues from unaffiliated customers	$	441,097	56,818	24,681	648,096	158,011	234,334	88,295	—		1,651,332
Transfers between geographic areas	29,168		3,492	4,991	5,206	6,289	11,125	5,459	(65,730	)	—
Total revenues	$	470,265	60,310	29,672	653,302	164,300	245,459	93,754	(65,730	)	1,651,332
Net revenues1	$	232,912	32,713	17,115	135,488	45,970	77,250	28,533	—		569,981
Operating income	$	65,389	11,905	5,007	69,690	18,574	14,188	7,140	—		191,893
Identifiable assets at period end	$	1,385,157	108,644	56,987	472,189	140,206	427,053	229,670	7,112		2,827,018
Capital expenditures	$	6,196	658	222	711	291	1,223	245	—		9,546
Depreciation and amortization	$	7,439	363	268	1,336	531	1,120	418	—		11,475
Equity	$	1,144,466	64,384	35,890	250,362	103,457	148,287	126,321	(30,975	)	1,842,192
Three months ended September 30, 2014:
Revenues from unaffiliated customers	$	438,882	55,209	22,962	670,763	174,839	259,960	82,490	—		1,705,105
Transfers between geographic areas	24,847		2,867	5,194	6,116	6,814	9,783	5,171	(60,792	)	—
Total revenues	$	463,729	58,076	28,156	676,879	181,653	269,743	87,661	(60,792	)	1,705,105
Net revenues1	$	215,320	27,323	16,792	106,225	42,023	80,024	25,549	—		513,256
Operating income	$	68,972	7,779	4,890	45,153	12,073	14,921	5,343	—		159,131
Identifiable assets at period end	$	1,333,124	113,621	53,939	580,260	152,236	476,799	204,378	11,696		2,926,053
Capital expenditures	$	3,171	361	369	1,648	1,247	1,016	443	—		8,255
Depreciation and amortization	$	8,369	303	226	1,493	523	1,391	436	—		12,741
Equity	$	1,074,837	75,848	34,218	341,092	111,556	185,332	114,229	(33,182	)	1,903,930

(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, 2015:
Revenues from unaffiliated customers	$	1,334,900	170,351	73,076	1,943,441	524,254	716,373	258,016	—		5,020,411
Transfers between geographic areas	89,329		9,991	15,171	16,330	18,677	31,478	15,638	(196,614	)	—
Total revenues	$	1,424,229	180,342	88,247	1,959,771	542,931	747,851	273,654	(196,614	)	5,020,411
Net revenues1	$	681,868	93,967	51,159	377,384	135,114	229,745	82,371	—		1,651,608
Operating income	$	193,117	33,433	15,804	187,343	48,594	44,846	20,355	—		543,492
Identifiable assets at period end	$	1,385,157	108,644	56,987	472,189	140,206	427,053	229,670	7,112		2,827,018
Capital expenditures	$	20,232	2,602	1,408	1,476	1,599	3,292	1,294	—		31,903
Depreciation and amortization	$	22,171	965	784	4,114	1,609	3,542	1,239	—		34,424
Equity	$	1,144,466	64,384	35,890	250,362	103,457	148,287	126,321	(30,975	)	1,842,192
Nine months ended September 30, 2014:
Revenues from unaffiliated customers	$	1,256,075	162,136	65,594	1,863,077	468,152	744,466	236,391	—		4,795,891
Transfers between geographic areas	67,266		7,829	15,965	17,170	20,072	28,931	14,638	(171,871	)	—
Total revenues	$	1,323,341	169,965	81,559	1,880,247	488,224	773,397	251,029	(171,871	)	4,795,891
Net revenues1	$	607,508	79,017	48,797	297,117	121,261	234,313	74,543	—		1,462,556
Operating income	$	180,650	23,155	14,425	124,528	36,371	41,515	16,133	—		436,777
Identifiable assets at period end	$	1,333,124	113,621	53,939	580,260	152,236	476,799	204,378	11,696		2,926,053
Capital expenditures	$	12,646	1,047	841	5,691	2,221	3,116	1,088	—		26,650
Depreciation and amortization	$	24,100	879	665	4,471	1,739	4,376	1,310	—		37,540
Equity	$	1,074,837	75,848	34,218	341,092	111,556	185,332	114,229	(33,182	)	1,903,930

_______________________

¹Net revenues are a non-GAAP measure calculated as revenues less directly related operations 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,
	2015		2014		2015		2014
Total revenues	$	1,651,332	$	1,705,105	$	5,020,411	$	4,795,891
Expenses:
Airfreight services	464,161		516,969		1,484,150		1,503,064
Ocean freight and ocean services	416,075		475,460		1,294,887		1,266,551
Customs brokerage and other services	201,115		199,420		589,766		563,720
Net revenues	$	569,981	$	513,256	$	1,651,608	$	1,462,556