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Business Segment Information | 6 Months Ended
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Jun. 30, 2019
Segment Reporting [Abstract] |
Business Segment Information | Note 9. 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:
|  | UNITED STATES |  |  | OTHER NORTH AMERICA |  |  | LATIN AMERICA |  |  | NORTH ASIA |  |  | SOUTH ASIA |  |  | EUROPE |  |  | MIDDLE EAST, AFRICA AND INDIA |  |  | ELIMI- NATIONS |  |  | CONSOLI- DATED |
For the three months ended June 30, 2019: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues2 |  | $ | 681,076 |  |  |  | 85,537 |  |  |  | 38,757 |  |  |  | 621,951 |  |  |  | 181,380 |  |  |  | 319,331 |  |  |  | 108,311 |  |  |  | (764 | ) |  |  | 2,035,579 |
Net revenues1 |  | $ | 294,983 |  |  |  | 35,201 |  |  |  | 16,714 |  |  |  | 134,397 |  |  |  | 48,893 |  |  |  | 98,655 |  |  |  | 33,222 |  |  |  | (370 | ) |  |  | 661,695 |
Operating income |  | $ | 87,923 |  |  |  | 8,858 |  |  |  | 2,346 |  |  |  | 64,453 |  |  |  | 15,513 |  |  |  | 9,315 |  |  |  | 3,799 |  |  |  | (6 | ) |  |  | 192,201 |
Identifiable assets at period end |  | $ | 1,819,718 |  |  |  | 176,151 |  |  |  | 73,197 |  |  |  | 580,311 |  |  |  | 193,771 |  |  |  | 581,518 |  |  |  | 229,692 |  |  |  | (7,368 | ) |  |  | 3,646,990 |
Capital expenditures |  | $ | 8,985 |  |  |  | 768 |  |  |  | 145 |  |  |  | 300 |  |  |  | 428 |  |  |  | 1,914 |  |  |  | 447 |  |  |  | — |  |  |  | 12,987 |
Depreciation and amortization |  | $ | 7,687 |  |  |  | 459 |  |  |  | 380 |  |  |  | 1,384 |  |  |  | 496 |  |  |  | 1,775 |  |  |  | 496 |  |  |  | — |  |  |  | 12,677 |
Equity |  | $ | 1,303,381 |  |  |  | 83,417 |  |  |  | 31,014 |  |  |  | 282,192 |  |  |  | 107,229 |  |  |  | 168,570 |  |  |  | 109,790 |  |  |  | (33,199 | ) |  |  | 2,052,394 |
For the three months ended June 30, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues2 |  | $ | 598,076 |  |  |  | 84,244 |  |  |  | 42,618 |  |  |  | 680,227 |  |  |  | 179,528 |  |  |  | 330,775 |  |  |  | 114,005 |  |  |  | (71,914 | ) |  |  | 1,957,559 |
Net revenues1 |  | $ | 271,880 |  |  |  | 34,749 |  |  |  | 15,923 |  |  |  | 140,583 |  |  |  | 44,886 |  |  |  | 102,371 |  |  |  | 33,125 |  |  |  | (971 | ) |  |  | 642,546 |
Operating income |  | $ | 63,628 |  |  |  | 10,077 |  |  |  | 2,701 |  |  |  | 70,359 |  |  |  | 13,374 |  |  |  | 16,958 |  |  |  | 6,490 |  |  |  | (3 | ) |  |  | 183,584 |
Identifiable assets at period end |  | $ | 1,488,060 |  |  |  | 153,827 |  |  |  | 54,186 |  |  |  | 540,954 |  |  |  | 157,479 |  |  |  | 526,607 |  |  |  | 217,716 |  |  |  | (5,997 | ) |  |  | 3,132,832 |
Capital expenditures |  | $ | 6,032 |  |  |  | 2,191 |  |  |  | 167 |  |  |  | 559 |  |  |  | 695 |  |  |  | 1,225 |  |  |  | 1,244 |  |  |  | — |  |  |  | 12,113 |
Depreciation and amortization |  | $ | 8,447 |  |  |  | 473 |  |  |  | 395 |  |  |  | 1,303 |  |  |  | 542 |  |  |  | 1,955 |  |  |  | 461 |  |  |  | — |  |  |  | 13,576 |
Equity |  | $ | 1,196,226 |  |  |  | 56,702 |  |  |  | 26,625 |  |  |  | 250,513 |  |  |  | 112,259 |  |  |  | 157,493 |  |  |  | 127,032 |  |  |  | (34,291 | ) |  |  | 1,892,559 |
|  | UNITED STATES |  |  | OTHER NORTH AMERICA |  |  | LATIN AMERICA |  |  | NORTH ASIA |  |  | SOUTH ASIA |  |  | EUROPE |  |  | MIDDLE EAST, AFRICA AND INDIA |  |  | ELIMI- NATIONS |  |  | CONSOLI- DATED |
For the six months ended June 30, 2019: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues2 |  | $ | 1,340,859 |  |  |  | 176,947 |  |  |  | 72,936 |  |  |  | 1,254,804 |  |  |  | 358,559 |  |  |  | 632,021 |  |  |  | 220,986 |  |  |  | (1,482 | ) |  |  | 4,055,630 |
Net revenues1 |  | $ | 587,412 |  |  |  | 70,370 |  |  |  | 31,777 |  |  |  | 268,604 |  |  |  | 96,262 |  |  |  | 195,450 |  |  |  | 66,394 |  |  |  | (460 | ) |  |  | 1,315,809 |
Operating income |  | $ | 161,936 |  |  |  | 19,818 |  |  |  | 4,982 |  |  |  | 130,233 |  |  |  | 31,420 |  |  |  | 23,267 |  |  |  | 8,160 |  |  |  | (14 | ) |  |  | 379,802 |
Identifiable assets at period end |  | $ | 1,819,718 |  |  |  | 176,151 |  |  |  | 73,197 |  |  |  | 580,311 |  |  |  | 193,771 |  |  |  | 581,518 |  |  |  | 229,692 |  |  |  | (7,368 | ) |  |  | 3,646,990 |
Capital expenditures |  | $ | 15,900 |  |  |  | 996 |  |  |  | 238 |  |  |  | 644 |  |  |  | 604 |  |  |  | 2,896 |  |  |  | 1,144 |  |  |  | — |  |  |  | 22,422 |
Depreciation and amortization |  | $ | 15,909 |  |  |  | 926 |  |  |  | 812 |  |  |  | 2,791 |  |  |  | 1,032 |  |  |  | 3,606 |  |  |  | 994 |  |  |  | — |  |  |  | 26,070 |
Equity |  | $ | 1,303,381 |  |  |  | 83,417 |  |  |  | 31,014 |  |  |  | 282,192 |  |  |  | 107,229 |  |  |  | 168,570 |  |  |  | 109,790 |  |  |  | (33,199 | ) |  |  | 2,052,394 |
For the six months ended June 30, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues2 |  | $ | 1,161,826 |  |  |  | 164,331 |  |  |  | 78,727 |  |  |  | 1,316,816 |  |  |  | 354,678 |  |  |  | 650,755 |  |  |  | 224,542 |  |  |  | (139,854 | ) |  |  | 3,811,821 |
Net revenues1 |  | $ | 549,065 |  |  |  | 65,196 |  |  |  | 30,668 |  |  |  | 277,791 |  |  |  | 89,292 |  |  |  | 201,006 |  |  |  | 66,326 |  |  |  | (960 | ) |  |  | 1,278,384 |
Operating income |  | $ | 133,276 |  |  |  | 19,095 |  |  |  | 5,071 |  |  |  | 140,282 |  |  |  | 28,506 |  |  |  | 36,236 |  |  |  | 13,928 |  |  |  | 8 |  |  |  | 376,402 |
Identifiable assets at period end |  | $ | 1,488,060 |  |  |  | 153,827 |  |  |  | 54,186 |  |  |  | 540,954 |  |  |  | 157,479 |  |  |  | 526,607 |  |  |  | 217,716 |  |  |  | (5,997 | ) |  |  | 3,132,832 |
Capital expenditures |  | $ | 9,203 |  |  |  | 3,719 |  |  |  | 672 |  |  |  | 1,343 |  |  |  | 1,024 |  |  |  | 8,416 |  |  |  | 1,532 |  |  |  | — |  |  |  | 25,909 |
Depreciation and amortization |  | $ | 17,212 |  |  |  | 871 |  |  |  | 763 |  |  |  | 2,679 |  |  |  | 1,125 |  |  |  | 3,931 |  |  |  | 917 |  |  |  | — |  |  |  | 27,498 |
Equity |  | $ | 1,196,226 |  |  |  | 56,702 |  |  |  | 26,625 |  |  |  | 250,513 |  |  |  | 112,259 |  |  |  | 157,493 |  |  |  | 127,032 |  |  |  | (34,291 | ) |  |  | 1,892,559 |
1 | Net 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.
2 | In 2019, the Company revised its process to record the transfer, between its geographic operating segments, of revenues and the directly related cost of transportation expenses for freight service transactions between Company origin and destination locations. This change better aligns revenue reporting with the location where the services are performed, as well as the transactional reporting being developed as part of the Company’s new accounting systems and processes. The change in presentation had no impact on consolidated or segment net revenues or operating income. The 2019 results also include the effect of changing the presentation of certain import services from a net to a gross basis, which increased segment revenues and directly related operating expenses but did not change net revenues. The impact of these changes on reported segment revenues was immaterial and prior year segment revenues have not been revised.
The following table presents the calculation of consolidated net revenues:
|  | Three months ended June 30, |  |  | Six months ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Revenues |  | $ | 2,035,579 |  |  | $ | 1,957,559 |  |  | $ | 4,055,630 |  |  | $ | 3,811,821 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Airfreight services |  |  | 542,639 |  |  |  | 593,325 |  |  |  | 1,051,849 |  |  |  | 1,106,829 |
Ocean freight and ocean services |  |  | 390,299 |  |  |  | 385,156 |  |  |  | 810,630 |  |  |  | 764,574 |
Customs brokerage and other services |  |  | 440,946 |  |  |  | 336,532 |  |  |  | 877,342 |  |  |  | 662,034 |
Net revenues |  | $ | 661,695 |  |  | $ | 642,546 |  |  | $ | 1,315,809 |  |  | $ | 1,278,384 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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