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 June 30, 2017 Ended June 30, 2016 Inter- Hub Inter- Hub Segment Group Segment Group Hub Mode Elims Total Hub Mode Elims Total Revenue $ 705,208 $ 243,051 $ (23,746 ) $ 924,513 $ 648,523 $ 231,924 $ (24,890 ) $ 855,557 Transportation costs 632,651 214,291 (23,746 ) 823,196 565,448 200,509 (24,890 ) 741,067 Gross margin 72,557 28,760 - 101,317 83,075 31,415 - 114,490 Costs and expenses: Salaries and benefits 41,569 3,469 - 45,038 39,787 3,815 - 43,602 Agent fees and commissions 14 17,024 - 17,038 13 18,347 - 18,360 General and administrative 18,331 1,783 - 20,114 14,226 1,857 - 16,083 Depreciation and amortization 2,249 300 - 2,549 1,830 318 - 2,148 Total costs and expenses 62,163 22,576 - 84,739 55,856 24,337 - 80,193 Operating income $ 10,394 $ 6,184 $ - $ 16,578 $ 27,219 $ 7,078 $ - $ 34,297 Capital Expenditures $ 22,937 $ 31 $ - $ 22,968 $ 20,314 $ 10 $ - $ 20,324 The following tables summarize our revenue by segment and business line (in thousands) for the quarter ended June 30: Three Months Three Months Ended June 30, 2017 Ended June 30, 2016 Inter- Hub Inter- Hub Segment Group Segment Group Hub Mode Elims Total Hub Mode Elims Total Intermodal $ 451,593 $ 112,119 $ (12,866 ) $ 550,846 $ 438,133 $ 116,963 $ (22,168 ) $ 532,928 Truck brokerage 104,980 82,891 (310 ) 187,561 83,140 81,374 (475 ) 164,039 Logistics 148,635 48,041 (10,570 ) 186,106 127,250 33,587 (2,247 ) 158,590 Total revenue $ 705,208 $ 243,051 $ (23,746 ) $ 924,513 $ 648,523 $ 231,924 $ (24,890 ) $ 855,557 The following is a summary of operating results and certain other financial data for our business segments (in thousands): Six Months Six Months Ended June 30, 2017 Ended June 30, 2016 Inter- Hub Inter- Hub Segment Group Segment Group Hub Mode Elims Total Hub Mode Elims Total Revenue $ 1,382,340 $ 484,925 $ (49,304 ) $ 1,817,961 $ 1,263,751 $ 440,755 $ (43,090 ) $ 1,661,416 Transportation costs 1,237,978 426,385 (49,304 ) 1,615,059 1,101,522 380,107 (43,090 ) 1,438,539 Gross margin 144,362 58,540 - 202,902 162,229 60,648 - 222,877 Costs and expenses: Salaries and benefits 81,164 7,053 - 88,217 79,883 7,582 - 87,465 Agent fees and commissions 31 35,000 - 35,031 27 35,235 - 35,262 General and administrative 36,810 4,128 - 40,938 28,948 3,779 - 32,727 Depreciation and amortization 4,357 604 - 4,961 3,644 639 - 4,283 Total costs and expenses 122,362 46,785 - 169,147 112,502 47,235 - 159,737 Operating income $ 22,000 $ 11,755 $ - $ 33,755 $ 49,727 $ 13,413 $ - $ 63,140 Capital Expenditures $ 29,562 $ 31 $ - $ 29,593 $ 24,945 $ 272 $ - $ 25,217 As of June 30, 2017 As of December 31, 2016 Inter- Hub Inter- Hub Segment Group Segment Group Hub Mode Elims Total Hub Mode Elims Total Total assets $ 1,201,733 $ 169,700 $ (7,663 ) $ 1,363,770 $ 1,178,110 $ 191,374 $ (9,225 ) $ 1,360,259 Goodwill 232,877 29,389 - 262,266 232,987 29,389 - 262,376 The following tables summarize our revenue by segment and business line (in thousands) for the six months ended June 30: Six Months Six Months Ended June 30, 2017 Ended June 30, 2016 Inter- Hub Inter- Hub Segment Group Segment Group Hub Mode Elims Total Hub Mode Elims Total Intermodal $ 876,189 $ 234,322 $ (28,103 ) $ 1,082,408 $ 851,940 $ 229,329 $ (40,117 ) $ 1,041,152 Truck brokerage 211,644 161,069 (695 ) 372,018 164,550 148,722 (502 ) 312,770 Logistics 294,507 89,534 (20,506 ) 363,535 247,261 62,704 (2,471 ) 307,494 Total revenue $ 1,382,340 $ 484,925 $ (49,304 ) $ 1,817,961 $ 1,263,751 $ 440,755 $ (43,090 ) $ 1,661,416 |