NOTE

– SEGMENT REPORTING

The Company’s

two

reportable segments are Trucking and USAT Logistics.

Trucking

. Trucking is comprised of

one

-way truckload and dedicated freight motor carrier services. Truckload provides

one

-way motor carrier services as a common and contract carrier, in which volumes typically are

not

contractually committed, and dedicated contract motor carrier services, in which a combination of equipment and drivers is contractually committed to a particular customer, typically for a duration of at least

one

year, subject to certain cancellation rights. USA Truck has provided truckload motor carrier services since its inception, and continues to derive the largest portion of its gross revenue from these services.

USAT Logistics

. USAT Logistics’ service offerings consist of freight brokerage, logistics, and rail intermodal services. Each of these service offerings match customer shipments with available equipment of authorized

third

-party motor carriers and other service providers and provide services that complement the Company’s Trucking operations. The Company provides these services primarily to existing Trucking customers, many of whom prefer to rely on a single service provider, or a small group of service providers, to provide all their transportation solutions.

Revenue equipment assets are

not

allocated to USAT Logistics as freight services for customers are brokered through arrangements with

third

-party motor carriers who utilize their own equipment. To the extent rail intermodal operations require the use of Company-owned assets, they are obtained from the Company’s Trucking segment on an as-needed basis. Depreciation and amortization expense is allocated to USAT Logistics based on the Company-owned assets specifically utilized to generate USAT Logistics revenue. All intercompany transactions between segments reflect rates similar to those that would be negotiated with independent

third

parties. All other expenses for USAT Logistics are specifically identifiable direct costs or are allocated to USAT Logistics based on relevant cost drivers, as determined by management.

In determining its reportable segments, the Company’s management focuses on financial information, such as operating revenue, operating expense categories, operating ratios and operating income, as well as on key operating statistics, to make operating decisions.

A summary of operating revenue by segment is as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
Operating revenue	201 8			2017			201 8			2017
Trucking revenue (1)	$	85,685		$	71,731		$	164,531		$	142,202
Trucking intersegment eliminations		(116	)		(186	)		(229	)		(377	)
Trucking operating revenue		85,569			71,545			164,302			141,825
USAT Logistics revenue		50,616			36,878			97,391			69,528
USAT Logistics intersegment eliminations		(804	)		(1,065	)		(1,299	)		(2,325	)
USAT Logistics operating revenue		49,812			35,813			96,092			67,203
Total operating revenue	$	135,381		$	107,358		$	260,394		$	209,028

(

)

Includes foreign revenue of

$11.0

million and

$20.9

million for the

three

and

six

months ended

June 30, 2018,

respectively, and

$9.1

million and

$17.9

million for the

three

and

six

months ended

June

30,

2017,

respectively. All foreign revenue is collected in U.S. dollars.

A summary of operating income (loss) by segment is as follows (in thousands):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
Operating income (loss)	201 8		2017			201 8		2017
Trucking	$	2,153	$	(4,843	)	$	1,689	$	(11,971	)
USAT Logistics		2,158		1,877			5,014		2,606
Total operating income (loss)	$	4,311	$	(2,966	)	$	6,703	$	(9,365	)

A summary of depreciation and amortization by segment is as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Depreciation and amortization	201 8		2017		201 8		2017
Trucking	$	7,299	$	6,759	$	14,325	$	14,323
USAT Logistics		178		120		332		200
Total depreciation and amortization	$	7,477	$	6,879	$	14,657	$	14,523