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Business Segments
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Business Segments

NOTE 2.

Business Segments

We report two distinct business segments.  The first segment is Mode, which includes the Mode Transportation, LLC (“Mode LLC”) business we acquired on April 1, 2011.  The second segment is Hub, which is all business other than Mode.

Hub offers comprehensive intermodal, truck brokerage and logistics services.  Our employees operate the freight through a network of operating centers located in the United States, Canada and Mexico.  Each operating center is strategically located in a market with a significant concentration of shipping customers and one or more railheads.  Hub has full time employees located throughout the United States, Canada and Mexico.

Mode LLC has Independent Business Owners (“IBOs”) who sell and operate the business throughout North America, as well as sales only agents.  Mode LLC also has a company managed operation and corporate offices in Dallas, TX, a temperature protected services division, Temstar, located in Oak Brook, IL and corporate offices in Memphis, TN.

Mode LLC markets and operates its freight transportation services, consisting of intermodal, truck brokerage and logistics, primarily through agents who enter into contractual arrangements with Mode LLC.

The following is a summary of operating results and certain other financial data for our business segments (in thousands):

 

 

Three Months

 

 

Three Months

 

 

Ended September 30, 2016

 

 

Ended September 30, 2015

 

 

 

 

 

 

 

 

Inter-

 

Hub

 

 

 

 

 

 

 

 

Inter-

 

Hub

 

 

 

 

 

 

 

 

Segment

 

Group

 

 

 

 

 

 

 

 

Segment

 

Group

 

 

Hub

 

Mode

 

Elims

 

Total

 

 

Hub

 

Mode

 

Elims

 

Total

 

Revenue

$

716,699

 

$

251,611

 

$

(35,496

)

$

932,814

 

 

$

680,559

 

$

239,375

 

$

(20,065

)

$

899,869

 

Transportation costs

 

638,154

 

 

218,702

 

 

(35,496

)

 

821,360

 

 

 

606,081

 

 

208,789

 

 

(20,065

)

 

794,805

 

Gross margin

 

78,545

 

 

32,909

 

 

-

 

 

111,454

 

 

 

74,478

 

 

30,586

 

 

-

 

 

105,064

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

38,775

 

 

3,835

 

 

-

 

 

42,610

 

 

 

32,917

 

 

3,440

 

 

-

 

 

36,357

 

Agent fees and commissions

 

20

 

 

19,052

 

 

-

 

 

19,072

 

 

 

14

 

 

17,848

 

 

-

 

 

17,862

 

General and administrative

 

15,969

 

 

1,672

 

 

-

 

 

17,641

 

 

 

13,659

 

 

1,802

 

 

-

 

 

15,461

 

Depreciation and amortization

 

1,959

 

 

317

 

 

-

 

 

2,276

 

 

 

1,647

 

 

319

 

 

-

 

 

1,966

 

Total costs and expenses

 

56,723

 

 

24,876

 

 

-

 

 

81,599

 

 

 

48,237

 

 

23,409

 

 

-

 

 

71,646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

$

21,822

 

$

8,033

 

$

-

 

$

29,855

 

 

$

26,241

 

$

7,177

 

$

-

 

$

33,418

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures

$

34,411

 

$

255

 

$

-

 

$

34,666

 

 

$

15,817

 

$

1,418

 

$

-

 

$

17,235

 

 

The following tables summarize our revenue by segment and business line (in thousands) for the quarter ended September 30:

 

 

Three Months

 

 

Three Months

 

 

Ended September 30, 2016

 

 

Ended September 30, 2015

 

 

 

 

 

 

 

 

Inter-

 

Hub

 

 

 

 

 

 

 

 

Inter-

 

Hub

 

 

 

 

 

 

 

 

Segment

 

Group

 

 

 

 

 

 

 

 

Segment

 

Group

 

 

Hub

 

Mode

 

Elims

 

Total

 

 

Hub

 

Mode

 

Elims

 

Total

 

Intermodal

$

466,283

 

$

126,052

 

$

(21,857

)

$

570,478

 

 

$

459,921

 

$

124,009

 

$

(18,699

)

$

565,231

 

Truck brokerage

 

96,906

 

 

79,627

 

 

(174

)

 

176,359

 

 

 

83,828

 

 

80,612

 

 

(696

)

 

163,744

 

Logistics

 

153,510

 

 

45,932

 

 

(13,465

)

 

185,977

 

 

 

136,810

 

 

34,754

 

 

(670

)

 

170,894

 

Total revenue

$

716,699

 

$

251,611

 

$

(35,496

)

$

932,814

 

 

$

680,559

 

$

239,375

 

$

(20,065

)

$

899,869

 

 

The following is a summary of operating results and certain other financial data for our business segments (in thousands):

 

 

Nine Months

 

 

Nine Months

 

 

Ended September 30, 2016

 

 

Ended September 30, 2015

 

 

 

 

 

 

 

 

Inter-

 

Hub

 

 

 

 

 

 

 

 

Inter-

 

Hub

 

 

 

 

 

 

 

 

Segment

 

Group

 

 

 

 

 

 

 

 

Segment

 

Group

 

 

Hub

 

Mode

 

Elims

 

Total

 

 

Hub

 

Mode

 

Elims

 

Total

 

Revenue

$

1,980,450

 

$

692,366

 

$

(78,586

)

$

2,594,230

 

 

$

2,010,453

 

$

686,744

 

$

(61,874

)

$

2,635,323

 

Transportation costs

 

1,739,676

 

 

598,809

 

 

(78,586

)

 

2,259,899

 

 

 

1,800,628

 

 

600,648

 

 

(61,874

)

 

2,339,402

 

Gross margin

 

240,774

 

 

93,557

 

 

-

 

 

334,331

 

 

 

209,825

 

 

86,096

 

 

-

 

 

295,921

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

118,658

 

 

11,417

 

 

-

 

 

130,075

 

 

 

103,865

 

 

10,805

 

 

-

 

 

114,670

 

Agent fees and commissions

 

47

 

 

54,287

 

 

-

 

 

54,334

 

 

 

43

 

 

49,331

 

 

-

 

 

49,374

 

General and administrative

 

44,917

 

 

5,451

 

 

-

 

 

50,368

 

 

 

39,051

 

 

5,244

 

 

-

 

 

44,295

 

Depreciation and amortization

 

5,603

 

 

956

 

 

-

 

 

6,559

 

 

 

4,912

 

 

981

 

 

-

 

 

5,893

 

Total costs and expenses

 

169,225

 

 

72,111

 

 

-

 

 

241,336

 

 

 

147,871

 

 

66,361

 

 

-

 

 

214,232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

$

71,549

 

$

21,446

 

$

-

 

$

92,995

 

 

$

61,954

 

$

19,735

 

$

-

 

$

81,689

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures

$

59,356

 

$

527

 

$

-

 

$

59,883

 

 

$

39,365

 

$

1,586

 

$

-

 

$

40,951

 

 

 

 

 

As of September 30, 2016

 

 

As of December 31, 2015

 

 

 

 

 

 

 

 

Inter-

 

Hub

 

 

 

 

 

 

 

 

Inter-

 

Hub

 

 

 

 

 

 

 

 

Segment

 

Group

 

 

 

 

 

 

 

 

Segment

 

Group

 

 

Hub

 

Mode

 

Elims

 

Total

 

 

Hub

 

Mode

 

Elims

 

Total

 

Total assets

$

1,139,068

 

$

183,198

 

$

(10,049

)

$

1,312,217

 

 

$

1,127,042

 

$

181,514

 

$

(7,410

)

$

1,301,146

 

Goodwill

 

233,042

 

 

29,389

 

 

-

 

 

262,431

 

 

 

233,205

 

 

29,389

 

 

-

 

 

262,594

 

 

The following tables summarize our revenue by segment and business line (in thousands) for the nine months ended September 30:

 

 

Nine Months

 

 

Nine Months

 

 

Ended September 30, 2016

 

 

Ended September 30, 2015

 

 

 

 

 

 

 

 

Inter-

 

Hub

 

 

 

 

 

 

 

 

Inter-

 

Hub

 

 

 

 

 

 

 

 

Segment

 

Group

 

 

 

 

 

 

 

 

Segment

 

Group

 

 

Hub

 

Mode

 

Elims

 

Total

 

 

Hub

 

Mode

 

Elims

 

Total

 

Intermodal

$

1,318,223

 

$

355,379

 

$

(61,974

)

$

1,611,628

 

 

$

1,345,776

 

$

352,822

 

$

(59,066

)

$

1,639,532

 

Truck brokerage

 

261,456

 

 

228,350

 

 

(676

)

 

489,130

 

 

 

266,187

 

 

237,655

 

 

(1,278

)

 

502,564

 

Logistics

 

400,771

 

 

108,637

 

 

(15,936

)

 

493,472

 

 

 

398,490

 

 

96,267

 

 

(1,530

)

 

493,227

 

Total revenue

$

1,980,450

 

$

692,366

 

$

(78,586

)

$

2,594,230

 

 

$

2,010,453

 

$

686,744

 

$

(61,874

)

$

2,635,323