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 |