Business Segments | NOTE 3 . 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, dedicated 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 corporate office 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, 2017 Ended September 30, 2016 Inter- Hub Inter- Hub Segment Group Segment Group Hub Mode Elims Total Hub Mode Elims Total Revenue $ 820,802 $ 258,696 $ (25,138 ) $ 1,054,360 $ 716,699 $ 251,611 $ (35,496 ) $ 932,814 Transportation costs 734,747 228,227 (25,138 ) 937,836 638,154 218,702 (35,496 ) 821,360 Gross margin 86,055 30,469 - 116,524 78,545 32,909 - 111,454 Costs and expenses: Salaries and benefits 45,727 3,399 - 49,126 38,775 3,835 - 42,610 Agent fees and commissions 15 19,057 - 19,072 20 19,052 - 19,072 General and administrative 20,520 1,883 - 22,403 15,969 1,672 - 17,641 Depreciation and amortization 3,962 292 - 4,254 1,959 317 - 2,276 Total costs and expenses 70,224 24,631 - 94,855 56,723 24,876 - 81,599 Operating income $ 15,831 $ 5,838 $ - $ 21,669 $ 21,822 $ 8,033 $ - $ 29,855 Capital Expenditures $ 10,170 $ 173 $ - $ 10,343 $ 34,411 $ 255 $ - $ 34,666 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, 2017 Ended September 30, 2016 Inter- Hub Inter- Hub Segment Group Segment Group Hub Mode Elims Total Hub Mode Elims Total Intermodal $ 473,998 $ 123,194 $ (13,665 ) $ 583,527 $ 466,283 $ 126,052 $ (21,857 ) $ 570,478 Truck brokerage 113,179 87,242 (634 ) 199,787 96,906 79,627 (174 ) 176,359 Logistics 175,679 48,260 (10,794 ) 213,145 153,510 45,932 (13,465 ) 185,977 Dedicated 57,946 - (45 ) 57,901 - - - - Total revenue $ 820,802 $ 258,696 $ (25,138 ) $ 1,054,360 $ 716,699 $ 251,611 $ (35,496 ) $ 932,814 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, 2017 Ended September 30, 2016 Inter- Hub Inter- Hub Segment Group Segment Group Hub Mode Elims Total Hub Mode Elims Total Revenue $ 2,203,142 $ 743,621 $ (74,442 ) $ 2,872,321 $ 1,980,450 $ 692,366 $ (78,586 ) $ 2,594,230 Transportation costs 1,972,725 654,612 (74,442 ) 2,552,895 1,739,676 598,809 (78,586 ) 2,259,899 Gross margin 230,417 89,009 - 319,426 240,774 93,557 - 334,331 Costs and expenses: Salaries and benefits 126,891 10,452 - 137,343 118,658 11,417 - 130,075 Agent fees and commissions 46 54,057 - 54,103 47 54,287 - 54,334 General and administrative 57,330 6,011 - 63,341 44,917 5,451 - 50,368 Depreciation and amortization 8,319 896 - 9,215 5,603 956 - 6,559 Total costs and expenses 192,586 71,416 - 264,002 169,225 72,111 - 241,336 Operating income $ 37,831 $ 17,593 $ - $ 55,424 $ 71,549 $ 21,446 $ - $ 92,995 Capital Expenditures $ 39,732 $ 204 $ - $ 39,936 $ 59,356 $ 527 $ - $ 59,883 As of September 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 $ 1,421,628 $ 184,996 $ (6,761 ) $ 1,599,863 $ 1,178,110 $ 191,374 $ (9,225 ) $ 1,360,259 Goodwill 319,117 29,389 - 348,506 232,987 29,389 - 262,376 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, 2017 Ended September 30, 2016 Inter- Hub Inter- Hub Segment Group Segment Group Hub Mode Elims Total Hub Mode Elims Total Intermodal $ 1,350,187 $ 357,516 $ (41,768 ) $ 1,665,935 $ 1,318,223 $ 355,379 $ (61,974 ) $ 1,611,628 Truck brokerage 324,823 248,311 (1,330 ) 571,804 261,456 228,350 (676 ) 489,130 Logistics 470,186 137,794 (31,299 ) 576,681 400,771 108,637 (15,936 ) 493,472 Dedicated 57,946 - (45 ) 57,901 - - - - Total revenue $ 2,203,142 $ 743,621 $ (74,442 ) $ 2,872,321 $ 1,980,450 $ 692,366 $ (78,586 ) $ 2,594,230 |