Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | ARCBEST CORP /DE/ | |
Entity Central Index Key | 894,405 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 25,749,698 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 152,236 | $ 164,973 |
Short-term investments | 64,081 | 61,597 |
Restricted cash | 961 | 1,384 |
Accounts receivable, less allowances (2016 – $4,789; 2015 – $4,825) | 238,775 | 236,097 |
Other accounts receivable, less allowances (2016 – $810; 2015 – $1,029) | 7,346 | 6,718 |
Prepaid expenses | 21,558 | 20,801 |
Deferred income taxes | 37,316 | 38,443 |
Prepaid and refundable income taxes | 20,386 | 18,134 |
Other | 5,220 | 3,936 |
TOTAL CURRENT ASSETS | 547,879 | 552,083 |
PROPERTY, PLANT AND EQUIPMENT | ||
Land and structures | 287,545 | 273,839 |
Revenue equipment | 723,312 | 699,844 |
Service, office, and other equipment | 151,520 | 145,286 |
Software | 131,328 | 127,010 |
Leasehold improvements | 25,955 | 25,419 |
TOTAL PROPERTY, PLANT AND EQUIPMENT, GROSS | 1,319,660 | 1,271,398 |
Less allowances for depreciation and amortization | 812,287 | 788,351 |
PROPERTY, PLANT AND EQUIPMENT, net | 507,373 | 483,047 |
GOODWILL | 96,572 | 96,465 |
INTANGIBLE ASSETS, net | 75,300 | 76,787 |
OTHER ASSETS | 56,050 | 54,527 |
TOTAL ASSETS | 1,283,174 | 1,262,909 |
CURRENT LIABILITIES | ||
Accounts payable | 145,423 | 130,869 |
Income taxes payable | 91 | |
Accrued expenses | 184,141 | 188,727 |
Current portion of long-term debt | 55,406 | 44,910 |
TOTAL CURRENT LIABILITIES | 384,970 | 364,597 |
LONG-TERM DEBT, less current portion | 170,044 | 167,599 |
PENSION AND POSTRETIREMENT LIABILITIES | 45,595 | 51,241 |
OTHER LIABILITIES | 12,301 | 12,689 |
DEFERRED INCOME TAXES | 87,773 | 78,055 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2016: 28,113,231 shares; 2015: 27,938,319 shares | 281 | 279 |
Additional paid-in capital | 311,924 | 309,653 |
Retained earnings | 376,780 | 376,827 |
Treasury stock, at cost, 2016: 2,363,533 shares; 2015: 2,080,187 shares | (75,651) | (70,535) |
Accumulated other comprehensive loss | (30,843) | (27,496) |
TOTAL STOCKHOLDERS' EQUITY | 582,491 | 588,728 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,283,174 | $ 1,262,909 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 4,789 | $ 4,825 |
Other accounts receivable, allowances (in dollars) | $ 810 | $ 1,029 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 70,000,000 | 70,000,000 |
Common stock, issued shares | 28,113,231 | 27,938,319 |
Treasury stock, at cost, shares | 2,363,533 | 2,080,187 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
REVENUES | $ 676,627 | $ 696,115 | $ 1,298,082 | $ 1,309,391 |
OPERATING EXPENSES | 659,973 | 662,649 | 1,290,693 | 1,274,645 |
OPERATING INCOME | 16,654 | 33,466 | 7,389 | 34,746 |
OTHER INCOME (COSTS) | ||||
Interest and dividend income | 387 | 271 | 788 | 505 |
Interest and other related financing costs | (1,231) | (1,025) | (2,478) | (2,027) |
Other, net | 571 | 197 | 937 | 597 |
TOTAL OTHER INCOME (COSTS) | (273) | (557) | (753) | (925) |
INCOME BEFORE INCOME TAXES | 16,381 | 32,909 | 6,636 | 33,821 |
INCOME TAX PROVISION | 6,150 | 12,942 | 2,508 | 13,109 |
NET INCOME | $ 10,231 | $ 19,967 | $ 4,128 | $ 20,712 |
EARNINGS PER COMMON SHARE | ||||
Basic (in dollars per share) | $ 0.39 | $ 0.76 | $ 0.16 | $ 0.79 |
Diluted (in dollars per share) | $ 0.39 | $ 0.74 | $ 0.16 | $ 0.77 |
AVERAGE COMMON SHARES OUTSTANDING | ||||
Basic (in shares) | 25,791,026 | 26,021,874 | 25,806,774 | 26,036,375 |
Diluted (in shares) | 26,246,868 | 26,593,451 | 26,295,683 | 26,592,615 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.08 | $ 0.06 | $ 0.16 | $ 0.12 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
NET INCOME | $ 10,231 | $ 19,967 | $ 4,128 | $ 20,712 |
Pension and other postretirement benefit plans: | ||||
Net actuarial gain (loss), net of tax of: (2016 – Three-month period $1,229, Six-month period $3,459; 2015 – Three-month period $1,515, Six-month period $349) | (1,931) | 2,379 | (5,435) | 548 |
Pension settlement expense, net of tax of: (2016 – Three-month period $219, Six-month period $569; 2015 – Three-month period $233, Six-month period $668) | 345 | 364 | 895 | 1,048 |
Amortization of unrecognized net periodic benefit costs, net of tax of: (2016 – Three-month period $477, Six-month period $914 ; 2015 – Three-month period $396, Six-month period $796) | ||||
Net actuarial loss | 780 | 653 | 1,494 | 1,309 |
Prior service credit | (29) | (29) | (58) | (58) |
Interest rate swap and foreign currency translation: | ||||
Change in unrealized income (loss) on interest rate swap, net of tax of: (2016 – Three-month period $93, Six-month period $446; 2015 – Three-month period $158, Six-month period $77) | (146) | 244 | (692) | (120) |
Change in foreign currency translation, net of tax of: (2016 – Three-month period $86, Six-month period $285; 2015 – Three-month period $61, Six-month period $126) | (135) | 97 | 449 | (198) |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (1,116) | 3,708 | (3,347) | 2,529 |
TOTAL COMPREHENSIVE INCOME | $ 9,115 | $ 23,675 | $ 781 | $ 23,241 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net actuarial gain (loss), tax | $ 1,229 | $ 1,515 | $ 3,459 | $ 349 |
Pension settlement expense, tax | 219 | 233 | 569 | 668 |
Amortization of unrecognized net periodic benefit costs, tax | 477 | 396 | 914 | 796 |
Change in unrealized income (loss) on interest rate swap, tax | 93 | 158 | 446 | 77 |
Change in foreign currency translation, tax | $ 86 | $ 61 | $ 285 | $ 126 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total |
Balances at Dec. 31, 2014 | $ (23,479) | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | $ 20,712 | |||||
Other comprehensive loss, net of tax | 2,529 | 2,529 | ||||
Balances at Jun. 30, 2015 | (20,950) | |||||
Balances at Dec. 31, 2015 | $ 279 | $ 309,653 | $ 376,827 | $ (70,535) | (27,496) | 588,728 |
Balances (in shares) at Dec. 31, 2015 | 27,938 | 2,080 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 4,128 | 4,128 | ||||
Other comprehensive loss, net of tax | (3,347) | (3,347) | ||||
Issuance of common stock under share-based compensation plans | $ 2 | (2) | ||||
Issuance of common stock under share-based compensation plans (in shares) | 175 | |||||
Tax effect of share-based compensation plans | (1,927) | (1,927) | ||||
Share-based compensation expense | 4,200 | 4,200 | ||||
Purchase of treasury stock | $ (5,116) | (5,116) | ||||
Purchase of treasury stock (in shares) | 283 | |||||
Dividends declared on common stock | (4,175) | (4,175) | ||||
Balances at Jun. 30, 2016 | $ 281 | $ 311,924 | $ 376,780 | $ (75,651) | $ (30,843) | $ 582,491 |
Balances (in shares) at Jun. 30, 2016 | 28,113 | 2,363 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
OPERATING ACTIVITIES | ||
Net income | $ 4,128 | $ 20,712 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 48,913 | 42,630 |
Amortization of intangibles | 1,986 | 2,218 |
Pension settlement expense | 1,464 | 1,716 |
Share-based compensation expense | 4,200 | 4,233 |
Provision for losses on accounts receivable | 418 | 627 |
Deferred income tax provision (benefit) | 13,535 | (2,559) |
Gain on sale of property and equipment | (2,486) | (1,049) |
Changes in operating assets and liabilities: | ||
Receivables | (3,815) | (16,560) |
Prepaid expenses | (806) | 1,691 |
Other assets | (3,286) | 385 |
Income taxes | (4,262) | 12,306 |
Accounts payable, accrued expenses, and other liabilities | (7,539) | 8,316 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 52,450 | 74,666 |
INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment, net of financings | (26,082) | (34,205) |
Proceeds from sale of property and equipment | 6,250 | 2,690 |
Purchases of short-term investments | (18,685) | (10,780) |
Proceeds from sale of short-term investments | 16,415 | 2,967 |
Business acquisitions, net of cash acquired | 197 | (5,219) |
Capitalization of internally developed software | (5,098) | (4,099) |
NET CASH USED IN INVESTING ACTIVITIES | (27,003) | (48,646) |
FINANCING ACTIVITIES | ||
Borrowings under credit facilities | 70,000 | |
Borrowings under accounts receivable securitization program | 35,000 | |
Payments on long-term debt | (22,827) | (84,555) |
Net change in book overdrafts | (6,489) | (1,522) |
Net change in restricted cash | 423 | (1) |
Deferred financing costs | (824) | |
Payment of common stock dividends | (4,175) | (3,162) |
Purchase of treasury stock | (5,116) | (5,982) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (38,184) | 8,954 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (12,737) | 34,974 |
Cash and cash equivalents at beginning of period | 164,973 | 157,042 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 152,236 | 192,016 |
NONCASH INVESTING ACTIVITIES | ||
Accruals for equipment received | 10,614 | 8,972 |
Equipment financed | $ 35,768 | $ 12,670 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | 6 Months Ended |
Jun. 30, 2016 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | NOTE A – ORGANIZATIO N AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION ArcBest Corporation ® (the “Company”) is the parent holding company of businesses providing freight transportation services and logistics solutions. The Company’s principal operations are conducted through its Freight Transportation (ABF Freight ® ) segment, which consists of ABF Freight System, Inc. and certain other subsidiaries. The Company’s other reportable operating segments are the following asset-light logistics businesses: Premium Logistics (Panther), Transportation Management (ABF Logistics ® ), Emergency & Preventative Maintenance (FleetNet), and Household Goods Moving Services (ABF Moving ® ). References to the Company in this Quarterly Report on Form 10-Q are primarily to the Company and its subsidiaries on a consolidated basis. ABF Freight represented approximately 70% of the Company’s total revenues before other revenues and intercompany eliminations for the six months ended June 30, 2016. As of June 2016, approximately 77% of ABF Freight’s employees were covered under a collective bargaining agreement, the ABF National Master Freight Agreement (the “ABF NMFA”), with the International Brotherhood of Teamsters (the “IBT”), which extends through March 31, 2018. The ABF NMFA included a 7% wage rate reduction upon the November 3, 2013 implementation date, followed by wage rate increases of 2% on July 1 in each of the next three years, which began in 2014, and a 2.5% increase on July 1, 2017; a one -week reduction in annual compensated vacation effective for employee anniversary dates on or after April 1, 2013; the option to expand the use of purchased transportation; and increased flexibility in labor work rules. The ABF NMFA and the related supplemental agreements provide for continued contributions to various multiemployer health, welfare, and pension plans maintained for the benefit of ABF Freight’s employees who are members of the IBT. The estimated net effect of the November 3, 2013 wage rate reduction and the benefit rate increase which was applied retroactively to August 1, 2013 was an initial reduction of approximately 4% to the combined total contractual wage and benefit rate under the ABF NMFA. Following the initial reduction, the combined contractual wage and benefit contribution rate under the ABF NMFA is estimated to increase approximately 2.5% on a compounded annual basis throughout the contract period which extends through March 31, 2018. On December 1, 2015, ABF Logistics acquired Bear Transportation Services, L.P. (“Bear”), a private, non-asset truckload brokerage firm, for net cash consideration of $24.4 million (subject to post-closing adjustments). On January 2, 2015, ABF Logistics acquired Smart Lines Transportation Group, LLC, a privately-owned truckload brokerage firm, for net cash consideration of $5.2 million. As these acquired businesses are not significant to the Company’s consolidated operating results and financial condition, pro forma financial information and the purchase price allocations of acquired assets and liabilities have not been presented. The results of the acquired operations subsequent to the acquisition dates have been included in the accompanying consolidated financial statements. The Company is in the process of making a final determination of acquired assets and liabilities for the Bear transaction and the provisional measurements are subject to change during the measurement period. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and applicable rules and regulations of the Securities and Exchange Commission (the “Commission”) pertaining to interim financial information. Accordingly, these interim financial statements do not include all information or footnote disclosures required by accounting principles generally accepted in the United States for complete financial statements and, therefore, should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s 2015 Annual Report on Form 10-K and other current filings with the Commission. In the opinion of management, all adjustments (which are of a normal and recurring nature) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual amounts may differ from those estimates. Adopted Accounting Pronouncements In the first quarter of 2016, the Company adopted guidance issued by the Financial Accounting Standards Board (the “FASB”) which amended Accounting Standards Codification (“ASC”) Topic 835, Interest – Imputation of Interest, and addresses the presentation of debt issuance costs in the balance sheet. The Company’s debt issuance costs related to its revolving credit agreements continue to be presented as an asset, as permitted, and amortized over the term of the agreements within interest expense. The new guidance did not result in retrospective adjustments to the consolidated financial statements or disclosures. During the first quarter 2016, the Company adopted amended ASC Topic 805, Business Combinations , issued by the FASB. The amendment eliminated the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively and instead recognize measurement-period adjustments during the period in which it determines the amount of the adjustments, including the effect on earnings of any amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date. The amendment was prospectively adopted and did not result in significant adjustments to financial statements or disclosure presentation. Accounting Pronouncements Not Yet Adopted ASC Topic 740 was amended with the addition of Balance Sheet Classification of Deferred Taxes . The amendment is effective for the Company beginning January 1, 2017. The update will result in all deferred tax assets and liabilities being classified as noncurrent in the consolidated balance sheets. An amendment to ASC Topic 718, Compensation – Stock Compensation , was issued to simplify the accounting for share-based compensation, which will require the income tax effects of awards to be recognized in the statement of operations when awards vest or are settled and will allow employers to make a policy election to account for forfeitures as they occur. The amendment is effective for the Company beginning January 1, 2017. The Company is currently assessing the impact this update will have on the consolidated financial statements or disclosures. ASC Topic 606, which amends the guidance in former ASC Topic 605, Revenue Recognition , provides a single comprehensive revenue recognition model for all contracts with customers and contains principles to apply to determine the measurement of revenue and timing of when it is recognized. The standard is effective for the Company on January 1, 2018. The Company is evaluating the impact of the new standard on the consolidated financial statements. ASC Topic 842, Leases , which is effective for the Company beginning January 1, 2019, will require leases with a term greater than twelve months to be reflected as liabilities with associated right-of-use assets in the Company’s consolidated balance sheet. The Company is evaluating the impact of the new standard on the consolidated financial statements. An amendment to ASC Topic 326, Measurement of Credit Losses on Financial Instruments , which changes the impairment model for most financial assets and certain other instruments, is effective for the Company beginning January 1, 2020. The Company is currently assessing the impact this update will have on the Company’s financial statements or disclosures. Management believes that there is no other new accounting guidance issued but not yet effective that is relevant to the Company’s current financial statements. However, there are new proposals under development by the standard setting bodies which, if and when enacted, may have a significant impact on the Company’s financial statement disclosures, including changes in disclosure requirements for defined benefit plans. |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2016 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | NOTE B – FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Financial Instruments The following table presents the components of cash and cash equivalents, short-term investments, and restricted funds: June 30 December 31 2016 2015 (in thousands) Cash and cash equivalents Cash deposits (1) $ $ Variable rate demand notes (1)(2) Money market funds (3) Total cash and cash equivalents $ $ Short-term investments Certificates of deposit (1) $ $ Restricted cash (4) Cash deposits (1) $ $ (1) Recorded at cost plus accrued interest, which approximates fair value. (2) Amounts may be redeemed on a daily basis with the original issuer. (3) Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note). (4) Amounts restricted for use are subject to change based on the requirements of the Company’s collateralized facilities (see Note E). The Company’s long-term investment financial instruments are presented in the table of financial assets and liabilities measured at fair value within this Note. Concentrations of Credit Risk of Financial Instruments The Company is potentially subject to concentrations of credit risk related to its cash, cash equivalents, and short-term investments. The Company reduces credit risk by maintaining its cash deposits primarily in FDIC-insured accounts and placing its unrestricted short-term investments primarily in FDIC-insured certificates of deposit. However, certain cash deposits and certificates of deposit may exceed federally insured limits. Cash and cash equivalents totaling $71.1 million and $69.9 million were not FDIC insured at June 30, 2016 and December 31, 2015, respectively. Fair Value Disclosure of Financial Instruments Fair value disclosures are made in accordance with the following hierarchy of valuation techniques based on whether the inputs of market data and market assumptions used to measure fair value are observable or unobservable: · Level 1 — Quoted prices for identical assets and liabilities in active markets. · Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. · Level 3 — Unobservable inputs (Company’s market assumptions) that are significant to the valuation model. Fair value and carrying value disclosures of financial instruments are presented in the following table: June 30 December 31 2016 2015 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ $ $ $ Accounts receivable securitization borrowings (2) Notes payable (3) $ $ $ $ (1) The revolving credit facility (the “Credit Facility”) under the Company’s Amended and Restated Credit Agreement carries a variable interest rate based on LIBOR, plus a margin. The Credit Facility is considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (2) Borrowings under the Company’s accounts receivable securitization program carry a variable interest rate based on LIBOR, plus a margin. The borrowings are considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (3) Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy). Assets and Liabilities Measured at Fair Value on Recurring Basis The following table presents the assets and liabilities that are measured at fair value on a recurring basis. June 30, 2016 Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Assets: Money market funds (1)(3) $ $ $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2)(3) — — $ $ $ — $ — Liabilities: Interest rate swap (4) $ $ — $ $ — December 31, 2015 Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Assets: Money market funds (1)(3) $ $ $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2)(3) — — $ $ $ — $ — Liabilities: Interest rate swap (4) $ $ — $ $ — (1) Included in cash and cash equivalents. (2) Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third-party brokerage firm. Quoted market prices are used to determine fair values of the investments which are included in other long-term assets, with a corresponding liability reported in other long-term liabilities. (3) Fair value measured using quoted prices of identical assets in active markets. (4) Included in other long-term liabilities. The interest rate swap fair value was determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are considered to be in Level 3 of the fair value hierarchy. The Company assessed Level 3 inputs as insignificant to the valuation at June 30, 2016 and December 31, 2015 and considers the interest rate swap valuation in Level 2 of the fair value hierarchy. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2016 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE C – GOODWILL AND INTANGIBLE ASSETS Goodwill represents the excess of cost over the fair value of net identifiable tangible and intangible assets acquired. Goodwill by reportable operating segment consisted of the following: ABF ABF Total Panther Logistics FleetNet Moving (in thousands) Balances at December 31, 2015 $ $ $ $ $ Purchase accounting adjustments — — — Balances at June 30, 2016 $ $ $ $ $ Intangible assets consisted of the following: June 30, 2016 December 31, 2015 Weighted-Average Accumulated Net Accumulated Net Amortization Period Cost Amortization Value Cost Amortization Value (in years) (in thousands) (in thousands) Finite-lived intangible assets Customer relationships $ $ $ $ $ $ Driver network — — Other Indefinite-lived intangible assets Trade name N/A N/A N/A Other N/A N/A N/A Total intangible assets N/A $ $ $ $ $ $ Amortization expense on intangible assets totaled $1.0 million and $2.0 million for the three and six months ended June 30, 2016, respectively, and $1.1 million and $2.2 million for the three and six months ended June 30, 2015. As of June 30, 2016, amortization expense on intangible assets (excluding acquired software which is reported within property, plant and equipment) is anticipated to be approximately $4.0 million per year for the years ended December 31, 2016 through 2020. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2016 | |
INCOME TAXES | |
INCOME TAXES | NOTE D – INCOME TAXES The Company’s statutory federal tax rate is 35% . State tax rates vary among states and average approximately 6.0% to 6.5% , although some state rates are higher and a small number of states do not impose an income tax. The effective tax rate for the three and six months ended June 30, 2016 was 37.5% and 37.8% , respectively. The effective tax rate for the three and six months ended June 30, 2015 was 39.3% and 38.8% , respectively. In the first six months of 2016 and 2015, the difference between the Company’s effective tax rate and the federal statutory rate primarily results from state income taxes, nondeductible expenses, and changes in the cash surrender value of life insurance. The first six months of 2016 were also impacted by the alternative fuel tax credit. As of June 30, 2016, the Company’s deferred tax liabilities, which will reverse in future years, exceeded the deferred tax assets. The Company evaluated the total deferred tax assets at June 30, 2016 and concluded that, other than for certain deferred tax assets related to foreign net operating loss carryforwards, the assets did not exceed the amount for which realization is more likely than not. In making this determination, the Company considered the future reversal of existing taxable temporary differences, taxable income in carryback years, future taxable income, and tax planning strategies. The Company paid state and foreign income taxes of $2.2 million and $2.9 million during the six months ended June 30, 2016 and 2015, respectively. T he Company received refunds of $10.8 million and $0.1 million of federal and state income taxes that were paid in prior years d uring the six months ended June 30, 2016 and 2015, respectively . |
LONG-TERM DEBT AND FINANCING AR
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | 6 Months Ended |
Jun. 30, 2016 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | NOTE E – LONG-TERM DEBT AND FINANCING ARRANGEMENTS Long-Term Debt Obligations Long-term debt consisted of borrowings outstanding under the Company’s revolving credit facility and accounts receivable securitization program, both of which are further described in Financing Arrangements within this Note, and notes payable and capital lease obligations related to the financing of revenue equipment (tractors and trailers used primarily in ABF Freight’s operations), real estate, and certain other equipment as follows: June 30 December 31 2016 2015 (in thousands) Credit Facility (interest rate of 1.7% at June 30, 2016) $ $ Accounts receivable securitization borrowings (interest rate of 1.3% at June 30, 2016) Notes payable (weighted-average interest rate of 2.0% at June 30, 2016) Capital lease obligations (weighted-average interest rate of 5.8% at June 30, 2016) Less current portion Long-term debt, less current portion $ $ Scheduled maturities of long-term debt obligations as of June 30, 2016 were as follows: Accounts Receivable Credit Securitization Notes Capital Lease Total Facility (1) Program (1) Payable Obligations (2) (in thousands) Due in one year or less $ $ $ $ $ Due after one year through two years Due after two years through three years — Due after three years through four years — Due after four years through five years — — — Due after five years — — — Total payments Less amounts representing interest Long-term debt $ $ $ $ $ (1) The future interest payments included in the scheduled maturities due are calculated using variable interest rates based on the LIBOR swap curve, plus the anticipated applicable margin. (2) Minimum payments of capital lease obligations include maximum amounts due under rental adjustment clauses contained in the capital lease agreements. Assets securing notes payable or held under capital leases were included in property, plant and equipment as follows: June 30 December 31 2016 2015 (in thousands) Revenue equipment $ $ Land and structures (terminals) Total assets securing notes payable or held under capital leases Less accumulated depreciation and amortization (1) Net assets securing notes payable or held under capital leases $ $ (1) Amortization of assets under capital leases and depreciation of assets securing notes payable are included in depreciation expense. Financing Arrangements Credit Facility On January 2, 2015, the Company and its lenders entered into an agreement to amend and restate its credit agreement (the “Amended and Restated Credit Agreement”). The Amended and Restated Credit Agreement refinanced a $70.0 million term loan, which was outstanding under the credit agreement at December 31, 2014, with a revolving credit facility (the “Credit Facility”). The Credit Facility, which matures on January 2, 2020, has an initial maximum credit amount of $150.0 million, including a swing line facility and a letter of credit sub-facility providing for the issuance of letters of credit up to an aggregate amount of $20.0 million. The Credit Facility allows the Company to request additional revolving commitments or incremental term loans thereunder up to an aggregate additional amount of $75.0 million, subject to certain additional conditions as provided in the Amended and Restated Credit Agreement. Principal payments under the Credit Facility are due upon maturity; however, borrowings may be repaid, at the Company’s discretion, in whole or in part at any time, without penalty, subject to required notice periods and compliance with minimum prepayment amounts. Borrowings under the Amended and Restated Credit Agreement can either be, at the Company’s election: (i) at an alternate base rate (as defined in the Amended and Restated Credit Agreement) plus a spread; or (ii) at a Eurodollar rate (as defined in the Amended and Restated Credit Agreement) plus a spread. The applicable spread is dependent upon the Company’s adjusted leverage ratio (as defined in the Amended and Restated Credit Agreement). The Amended and Restated Credit Agreement contains conditions, representations and warranties, events of default, and indemnification provisions that are customary for financings of this type, including, but not limited to, a minimum interest coverage ratio, a maximum adjusted leverage ratio, and limitations on incurrence of debt, investments, liens on assets, certain sale and leaseback transactions, transactions with affiliates, mergers, consolidations, purchases and sales of assets, and certain restricted payments. The Company was in compliance with the covenants under the Amended and Restated Credit Agreement at June 30, 2016. Interest Rate Swap In November 2014, in contemplation of the Credit Facility, the Company entered into a five -year forward-starting interest rate swap agreement with a $50.0 million notional amount maturing on January 2, 2020. Effective January 2, 2015, the Company began receiving floating-rate interest amounts based on one -month LIBOR in exchange for fixed-rate interest payments of 1.85% over the life of the interest rate swap agreement. The interest rate swap mitigates interest rate risk by effectively converting $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 3.10% based on the margin of the Credit Facility as of June 30, 2016. The fair value of the interest rate swap of $2.0 million and $0.9 million was recorded in other long-term liabilities in the consolidated balance sheet at June 30, 2016 and December 31, 2015, respectively. At June 30, 2016, the unrealized loss on the interest rate swap instrument was reported as a component of accumulated other comprehensive loss, net of tax, in stockholders’ equity, and the change in the unrealized loss on the interest rate swap for the three and six months ended June 30, 2016 was reported in other comprehensive loss, net of tax, in the consolidated statement of comprehensive income. The interest rate swap is subject to certain customary provisions that could allow the counterparty to request immediate payment of the fair value liability upon violation of any or all of the provisions. The Company was in compliance with all provisions of the interest rate swap agreement at June 30, 2016. Accounts Receivable Securitization Program On January 2, 2015, the Company entered into an amendment to extend the maturity date of its accounts receivable securitization program until January 2, 2018. On February 1, 2015, the Company amended and restated the accounts receivable securitization program to increase the amount of cash proceeds provided under the facility from $75.0 million to $100.0 million, with an accordion feature allowing the Company to request additional borrowings up to $25.0 million, subject to certain conditions. Under this program, certain subsidiaries of the Company continuously sell a designated pool of trade accounts receivables to a wholly owned subsidiary which, in turn, may borrow funds on a revolving basis. This wholly owned consolidated subsidiary is a separate bankruptcy-remote entity, and its assets would be available only to satisfy the claims related to the lender’s interest in the trade accounts receivables. Borrowings under the accounts receivable securitization program bear interest based upon LIBOR, plus a margin, and an annual facility fee. The securitization agreement contains representations and warranties, affirmative and negative covenants, and events of default that are customary for financings of this type, including a maximum adjusted leverage ratio covenant. As of June 30, 2016, $35.0 million was borrowed under the accounts receivable securitization program. The Company was in compliance with the covenants under the accounts receivable securitization program as of June 30, 2016. The accounts receivable securitization program includes a provision under which the Company may request and the letter of credit issuer may issue standby letters of credit, primarily in support of workers’ compensation and third-party casualty claims liabilities in various states in which the Company is self-insured. The outstanding standby letters of credit reduce the availability of borrowings under the program. As of June 30, 2016, standby letters of credit of $19.3 million have been issued under the program, which reduced the available borrowing capacity to $45.7 million. Letter of Credit Agreements and Surety Bond Programs As of June 30, 2016, the Company had letters of credit outstanding of $20.9 million (including $19.3 million issued under the accounts receivable securitization program), of which $1.0 million were collateralized by restricted cash. The Company has programs in place with multiple surety companies for the issuance of surety bonds in support of its self-insurance program. As of June 30, 2016, surety bonds outstanding related to the self-insurance program totaled $56.4 million. Notes Payable and Capital Leases ABF Freight has financed the purchase of certain revenue equipment through promissory note arrangements, including $33.9 million and $35.8 million of revenue equipment during the three and six months ended June 30, 2016, respectively. The Company has previously financed revenue equipment, real estate, and certain other equipment through capital lease agreements; however, it did not enter into such agreements during the six months ended June 30, 2016. ABF Freight financed the purchase of an additional $11.2 million of revenue equipment through promissory note arrangements as of August 1, 2016. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2016 | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | NOTE F – PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans The following is a summary of the components of net periodic benefit cost: Three Months Ended June 30 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2016 2015 2016 2015 2016 2015 (in thousands) Service cost $ — $ — $ — $ — $ $ Interest cost Expected return on plan assets — — — — Amortization of prior service credit — — — — Pension settlement expense — — — — Amortization of net actuarial loss (1) Net periodic benefit cost $ $ $ $ $ $ Six Months Ended June 30 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2016 2015 2016 2015 2016 2015 (in thousands) Service cost $ — $ — $ — $ — $ $ Interest cost Expected return on plan assets — — — — Amortization of prior service credit — — — — Pension settlement expense — — — — Amortization of net actuarial loss (1) Net periodic benefit cost $ $ $ $ $ $ (1) The Company amortizes actuarial losses over the average remaining active service period of the plan participants and does not use a corridor approach. Nonunion Defined Benefit Pension Plan The Company’s nonunion defined benefit pension plan covers substantially all noncontractual employees hired before January 1, 2006. In June 2013, the Company amended the nonunion defined benefit pension plan to freeze the participants’ final average compensation and years of credited service as of July 1, 2013. The plan amendment did not impact the vested benefits of retirees or former employees whose benefits have not yet been paid from the plan. Effective July 1, 2013, participants of the nonunion defined benefit pension plan who were active employees of the Company became eligible for the discretionary defined contribution feature of the Company’s nonunion 401(k) and defined contribution plan in which all eligible noncontractual employees hired subsequent to December 31, 2005 also participate. The Company recognized pension settlement expense as a component of net periodic benefit cost for the three and six months ended June 30, 2016 of $0.6 million (pre-tax), or $0.3 million (after-tax), and $1.5 million (pre-tax), or $0.9 million (after-tax), respectively, related to lump-sum distributions which amounted to $2.7 million and $7.2 million for the three and six months ended June 30, 2016, respectively. Upon recognition of pension settlement expense, a corresponding reduction in the unrecognized net actuarial loss of the plan is recorded. The remaining pre-tax unrecognized net actuarial loss will continue to be amortized over the average remaining future years of service of the active plan participants. The Company will incur additional quarterly settlement expense related to lump-sum distributions from the nonunion defined benefit pension plan during the remainder of 2016. The Company recognized pension settlement expense as a component of net periodic benefit cost for the three and six months ended June 30, 2015 of $0.6 million (pre-tax), or $0.4 million (after-tax), and $1.7 million (pre-tax), or $1.0 million (after-tax), respectively, related to the lump-sum distributions which amounted to $4.8 million and $12.4 million for the three and six months ended June 30, 2015, respectively. The following table discloses the changes in the projected benefit obligation (the “PBO”) and plan assets of the nonunion defined benefit pension plan for the six months ended June 30, 2016: Nonunion Defined Benefit Pension Plan (in thousands) Change in benefit obligations Benefit obligations at December 31, 2015 $ Interest cost Actuarial loss (1) Benefits paid Benefit obligations at June 30, 2016 Change in plan assets Fair value of plan assets at December 31, 2015 Actual return on plan assets Employer contributions Benefits paid Fair value of plan assets at June 30, 2016 Funded status at June 30, 2016 (2) $ Accumulated benefit obligation $ (1) Actuarial loss from remeasurement upon settlement was primarily impacted by the change in the discount rate since the previous remeasurement date. The discount rates used to remeasure the PBO upon settlement were 2.7% , 3.0% , and 3.5% at the June 30, 2016, March 31, 2016, and December 31, 2015 measurement date, respectively. (2) Noncurrent liability recognized within pension and postretirement liabilities in the accompanying consolidated balance sheet at June 30, 2016. Based upon current actuarial information, the Company does not have a minimum cash contribution requirement to its nonunion defined benefit pension plan for 2016. However, the Company made a voluntary contribution to the plan during the second quarter of 2016. The contribution reduced the unfunded vested benefits of the plan and eliminated the variable-rate premiums which would have otherwise been due to the Pension Benefit Guaranty Corporation (the “PBGC”). The contribution and the lower PBGC premiums resulted in a decrease in net periodic benefit cost for the second quarter and the estimated expense to be recorded for the remainder of 2016. Following the contribution, the plan’s actuary certified the adjusted funding target attainment percentage (“AFTAP”) to be 109.2% as of the January 1, 2016 valuation date. The AFTAP is determined by measurements prescribed by the Internal Revenue Code, which differ from the funding measurements for financial statement reporting purposes. Multiemployer Plans ABF Freight contributes to multiemployer pension and health and welfare plans, which have been established pursuant to the Taft-Hartley Act, to provide benefits for its contractual employees. ABF Freight’s contributions generally are based on the time worked by its contractual employees, in accordance with the ABF NMFA and other related supplemental agreements. ABF Freight recognizes as expense the contractually required contributions for each period and recognizes as a liability any contributions due and unpaid. The 25 multiemployer pension plans to which ABF Freight contributes vary greatly in size and in funded status. ABF Freight’s contribution obligations to these plans are specified in the ABF NMFA, which was implemented on November 3, 2013 and will remain in effect through March 31, 2018. The funding obligations to the pension plans are intended to satisfy the requirements imposed by the Pension Protection Act of 2006 (the “PPA”), which was permanently extended by the Multiemployer Pension Reform Act (the “Reform Act”) included in the Consolidated and Further Continuing Appropriations Act of 2015. Provisions of the Reform Act include, among others, providing qualifying plans the ability to self-correct funding issues, subject to various requirements and restrictions, including applying to the U.S. Department of the Treasury (the “Treasury”) for the reduction of certain accrued benefits. Any actions taken by trustees of multiemployer pension plans under the Reform Act to improve funding will not reduce benefit rates ABF Freight is obligated to pay under the ABF NMFA. Through the term of its current collective bargaining agreement, ABF Freight’s contribution obligations generally will be satisfied by making the specified contributions when due. However, the Company cannot determine with any certainty the contributions that will be required under future collective bargaining agreements for its contractual employees. If ABF Freight was to completely withdraw from certain multiemployer pension plans, under current law, the Company would have material liabilities for its share of the unfunded vested liabilities of each such plan. Approximately one half of ABF Freight’s total contributions to multiemployer pension plans are made to the Central States, Southeast and Southwest Areas Pension Plan (the “Central States Pension Plan”). ABF Freight received an Actuarial Certification of Plan Status for the Central States Pension Plan dated March 30, 2016, in which the plan’s actuary certified that, as of January 1, 2016, the plan is in critical and declining status, as defined by the Reform Act, with the funded percentage projected to be 46.9% as of the January 1, 2016 valuation date. Critical and declining status is applicable to critical status plans that are projected to become insolvent anytime in the current plan year or during the next 14 plan years, or if the plan is projected to become insolvent within the next 19 plan years and either the plan’s ratio of inactive participants to active participants exceeds two to one or the plan’s funded percentage is less than 80% . In September 2015, the Central States Pension Plan filed an application with the Treasury seeking approval under the Reform Act for a pension rescue plan, which included benefit reductions for participants of the Central States Pension Plan in an attempt to avoid the insolvency of the plan that otherwise is projected by the plan to occur. In May 2016, the Treasury denied the Central States Pension Plan’s proposed rescue plan. The trustees of the Central States Pension Plan subsequently announced that a new rescue plan would not be submitted and stated that it is not possible to develop and implement a new rescue plan that complies with the final Reform Act regulations issued by the Treasury on April 26, 2016. Although the future of the Central States Pension Plan is impacted by a number of factors, without legislative action, the plan is currently projected to become insolvent within 10 years or less . ABF Freight’s current collective bargaining agreement with the IBT provides for contributions to the Central States Pension Plan through March 31, 2018, and it is ABF Freight’s understanding that its contribution rate is not expected to increase during this period. ABF Freight’s contribution rates are made in accordance with its collective bargaining agreements with the IBT and other related supplemental agreements. In consideration of high multiemployer contribution rates, several of the plans in addition to the Central States Pension Plan have frozen contribution rates at current levels under ABF Freight’s current collective bargaining agreement. Future contribution rates will be determined through the negotiation process for contract periods following the term of the current collective bargaining agreement. ABF Freight pays some of the highest benefit contribution rates in the industry and continues to address the effect of ABF Freight’s wage and benefit cost structure on its operating results in discussions with the IBT. As previously disclosed in the Company’s 2015 Form 10-K, ABF Freight received a Notice of Insolvency from the Road Carriers Local 707 Pension Fund (the “707 Pension Fund”) for the plan year beginning February 1, 2016. During the second quarter of 2016, the 707 Pension Fund received notice that the Treasury denied its proposal to reduce participant benefits in an effort to remain solvent. Approximately 1% of ABF Freight’s total multiemployer pension contributions are made to the 707 Pension Fund. Based on currently available information, it is the Company’s understanding that if the 707 Pension Fund becomes insolvent, ABF Freight’s benefit contribution rates under the ABF NMFA will be frozen and ABF Freight will be required to continue making contributions at the frozen rate throughout and after the current ABF NMFA contract period, which extends to March 31, 2018; however, there can be no assurance in this regard. The multiemployer plan administrators have provided to the Company no other significant changes in information related to multiemployer plans from the information disclosed in the Company’s 2015 Annual Report on Form 10-K. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2016 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE G – STOCKHOLDERS’ EQUITY Accumulated Other Comprehensive Loss June 30 December 31 2016 2015 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit costs $ $ Interest rate swap Foreign currency translation Total $ $ After-tax amounts: Unrecognized net periodic benefit costs $ $ Interest rate swap Foreign currency translation Total $ $ The following is a summary of the changes in accumulated other comprehensive loss, net of tax, by component for the six months ended June 30, 2016 and 2015: Unrecognized Interest Foreign Net Periodic Rate Currency Total Benefit Costs Swap Translation (in thousands) Balances at December 31, 2015 $ $ $ $ Other comprehensive loss before reclassifications Amounts reclassified from accumulated other comprehensive loss — — Net current-period other comprehensive income (loss) Balances at June 30, 2016 $ $ $ $ Balances at December 31, 2014 $ $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss — — Net current-period other comprehensive income (loss) Balances at June 30, 2015 $ $ $ $ The following is a summary of the significant reclassifications out of accumulated other comprehensive loss by component: Unrecognized Net Periodic Benefit Costs (1)(2) Six Months Ended June 30 2016 2015 (in thousands) Amortization of net actuarial loss $ $ Amortization of prior service credit Pension settlement expense Total, pre-tax Tax benefit Total, net of tax $ $ (1) Amounts in parentheses indicate increases in expense or loss. (2) These components of accumulated other comprehensive loss are included in the computation of net periodic benefit cost (see Note F). Dividends on Common Stock The following table is a summary of dividends declared during the applicable quarter: 2016 2015 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ $ $ $ Second quarter $ $ $ $ On July 28, 2016, the Company’s Board of Directors declared a dividend of $0.08 per share to stockholders of record as of August 11, 2016, payable on August 25, 2016. Treasury Stock The Company has a program to repurchase its common stock in the open market or in privately negotiated transactions. The program has no expiration date but may be terminated at any time at the Board of Directors’ discretion. Repurchases may be made using the Company’s cash reserves or other available sources. As of December 31, 2015, the Company had $47.2 million remaining under the program for repurchases of its common stock. During the six months ended June 30, 2016, the Company purchased 283,346 shares for an aggregate cost of $5.1 million, leaving $42.1 million available for repurchase of common stock under the program. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2016 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE H – SHARE-BASED COMPENSATION Stock Awards As of June 30, 2016 and December 31, 2015, the Company had outstanding restricted stock units granted under the 2005 Ownership Incentive Plan (“the 2005 Plan”). The 2005 Plan, as amended, provides for the granting of 3.1 million shares, which may be awarded as incentive and nonqualified stock options, stock appreciation rights, restricted stock, or restricted stock units (“RSUs”). Restricted Stock Units A summary of the Company’s restricted stock unit award program is presented below: Units Outstanding – January 1, 2016 Granted Vested Forfeited Outstanding – June 30, 2016 The RSUs granted during the period had a weighted-average grant date fair value of $15.71 per share. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2016 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE I – EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Six Months Ended June 30 June 30 2016 2015 2016 2015 (in thousands, except share and per share data) Basic Numerator: Net income $ $ $ $ Effect of unvested restricted stock awards Adjusted net income $ $ $ $ Denominator: Weighted-average shares Earnings per common share $ $ $ $ Diluted Numerator: Net income $ $ $ $ Effect of unvested restricted stock awards Adjusted net income $ $ $ $ Denominator: Weighted-average shares Effect of dilutive securities Adjusted weighted-average shares and assumed conversions Earnings per common share $ $ $ $ Under the two-class method of calculating earnings per share, dividends paid and a portion of undistributed net income, but not losses, are allocated to unvested RSUs that receive dividends, which are considered participating securities. Beginning with 2015 grants, the RSU agreements were modified to remove dividend rights; therefore, the RSUs granted in 2015 and 2016 are not participating securities. For the three and six months ended June 30, 2016 and 2015, outstanding stock awards of 0.4 million for the 2016 periods and 0.2 million for the 2015 periods were not included in the diluted earnings per share calculation because their inclusion would have the effect of increasing earnings per share. |
OPERATING SEGMENT DATA
OPERATING SEGMENT DATA | 6 Months Ended |
Jun. 30, 2016 | |
OPERATING SEGMENT DATA | |
OPERATING SEGMENT DATA | NOTE J – OPERATING SEGMENT DATA The Company uses the “management approach” to determine its reportable operating segments, as well as to determine the basis of reporting the operating segment information. The management approach focuses on financial information that the Company’s management uses to make operating decisions. Management uses revenues, operating expense categories, operating ratios, operating income, and key operating statistics to evaluate performance and allocate resources to the Company’s operations. The Company’s reportable operating segments are impacted by seasonal fluctuations, as described below; therefore, operating results for the interim periods presented may not necessarily be indicative of the results for the fiscal year. The Company’s reportable operating segments are as follows: · Freight Transportation (ABF Freight), the Company’s principal operating segment, includes the results of operations of ABF Freight System, Inc. and certain other subsidiaries. The operations of ABF Freight include national, inter-regional, and regional transportation of general commodities through standard, expedited, and guaranteed LTL services. Revenue and expense for freight transportation related to consumer household goods self-move services provided by ABF Freight are reported in the ABF Freight segment and certain support costs related to these services are allocated to ABF Freight from the ABF Moving segment. ABF Freight is impacted by seasonal fluctuations which affect tonnage, shipment levels, and demand for its services, and, consequently, revenues and operating results of the segment. Freight shipments and operating costs of ABF Freight are adversely affected by inclement weather conditions. The second and third calendar quarters of each year usually have the highest tonnage levels while the first quarter generally has the lowest, although other factors, including the state of the U.S. and global economies, may influence quarterly freight tonnage levels. · Premium Logistics (Panther) provides expedited freight transportation services to commercial and government customers and offers premium logistics services that involve the rapid deployment of highly specialized equipment to meet extremely specific linehaul requirements, such as temperature control, hazardous materials, geofencing, specialized government cargo, security services, and life sciences. Through its premium logistics and global freight forwarding businesses, Panther offers domestic and international freight transportation with air, ocean, and ground service offerings. The segment provides services to the ABF Freight and ABF Logistics segments. Panther’s operations are influenced by seasonal fluctuations that impact customers’ supply chains and the resulting demand for expedited services. Expedited shipments may decline during winter months because of post-holiday slowdowns but can be subject to short-term increases, depending on the impact of weather disruptions to customers’ supply chains. Plant shutdowns during summer months may affect shipments for Panther’s automotive and manufacturing customers, but severe weather events can result in higher demand for expedited services. · Transportation Management (ABF Logistics) includes the results of operations of the Company’s businesses which provide freight brokerage and intermodal transportation services, worldwide ocean shipping solutions, and transportation and warehouse management services. The industries and markets served by ABF Logistics are impacted by seasonal fluctuations which affect tonnage and shipment levels and, consequently, revenues and operating results of the segment. The second and third calendar quarters of each year usually have the highest tonnage levels while the first quarter generally has the lowest, although other factors, including the state of the U.S. and global economies, may impact quarterly business levels. However, seasonal fluctuations are less apparent in the operating results of ABF Logistics than in the industry as a whole because of business growth in the segment, including acquisitions. · Emergency & Preventative Maintenance (FleetNet) includes the results of operations of FleetNet America, Inc., the subsidiary of the Company that provides roadside assistance and maintenance-related services for commercial vehicles through a network of third-party service providers. FleetNet provides services to the ABF Freight and Panther segments. Emergency roadside service events of the FleetNet segment are favorably impacted by adverse weather conditions that affect commercial vehicle operations and the segment’s results of operations will be influenced by seasonal variations in service event volume. · Household Goods Moving Services (ABF Moving) includes the results of operations of the Company’s subsidiaries that provide transportation, warehousing, and delivery services to the consumer, corporate, and military household goods moving markets. ABF Freight provides transportation services to ABF Moving. Certain costs incurred by ABF Moving in support of consumer self-move services provided by ABF Freight are allocated to the ABF Freight segment. Operating results for ABF Moving are impacted by the state of the national economy, including housing, unemployment, and mobility of U.S. residents, as well as decisions made by the U.S. military which affect personnel moves. Operations of the segment are also impacted by seasonal fluctuations, generally resulting in higher business levels in the second and third quarters as the demand for moving services is typically stronger in the summer months. The Company’s other business activities and operating segments that are not reportable include ArcBest Corporation and certain other subsidiaries. Certain costs incurred by the parent holding company are allocated to the reporting segments. The Company eliminates intercompany transactions in consolidation. However, the information used by the Company’s management with respect to its reportable segments is before intersegment eliminations of revenues and expenses. Further classifications of operations or revenues by geographic location are impracticable and, therefore, are not provided. The Company’s foreign operations are not significant. The following tables reflect reportable operating segment information: Three Months Ended Six Months Ended June 30 June 30 2016 2015 2016 2015 (in thousands) REVENUES Freight Transportation (ABF Freight) $ $ $ $ Premium Logistics (Panther) Transportation Management (ABF Logistics) Emergency & Preventative Maintenance (FleetNet) Household Goods Moving Services (ABF Moving) Other and eliminations Total consolidated revenues $ $ $ $ OPERATING EXPENSES Freight Transportation (ABF Freight) Salaries, wages, and benefits $ $ $ $ Fuel, supplies, and expenses Operating taxes and licenses Insurance Communications and utilities Depreciation and amortization Rents and purchased transportation Gain on sale of property and equipment Pension settlement expense (1) Other Total Freight Transportation (ABF Freight) Premium Logistics (Panther) Purchased transportation Depreciation and amortization Salaries, benefits, insurance, and other Total Premium Logistics (Panther) Transportation Management (ABF Logistics) Emergency & Preventative Maintenance (FleetNet) Household Goods Moving Services (ABF Moving) Other and eliminations (1) Total consolidated operating expenses (1) $ $ $ $ (1) Pre-tax pension settlement expense totaled $0.6 million on a consolidated basis for the three months ended June 30, 2016 and 2015, of which $0.4 million was reported by ABF Freight, $0.1 million was reported in Other and eliminations, and less than $0.1 million was reported by the asset-light logistics operating segments. For the six months ended June 30, 2016 and 2015, pre-tax pension settlement expense totaled $1.5 million and $1.7 million, respectively, of which $1.1 million and $1.3 million, respectively, was reported by ABF Freight, $0.3 million was reported in Other and eliminations, and $0.1 million was reported by the asset-light logistics operating segments. Three Months Ended Six Months Ended June 30 June 30 2016 2015 2016 2015 (in thousands) OPERATING INCOME Freight Transportation (ABF Freight) $ $ $ $ Premium Logistics (Panther) Transportation Management (ABF Logistics) Emergency & Preventative Maintenance (FleetNet) Household Goods Moving Services (ABF Moving) Other and eliminations Total consolidated operating income $ $ $ $ OTHER INCOME (COSTS) Interest and dividend income $ $ $ $ Interest and other related financing costs Other, net (2) Total other costs INCOME BEFORE INCOME TAXES $ $ $ $ (2) Includes changes in cash surrender value of life insurance policies. The following table presents operating expenses by category on a consolidated basis: Three Months Ended Six Months Ended June 30 June 30 2016 2015 2016 2015 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ $ $ $ Rents, purchased transportation, and other costs of services Fuel, supplies, and expenses Depreciation and amortization (1) Other $ $ $ $ (1) Includes amortization of intangible assets. |
LEGAL PROCEEDINGS, ENVIRONMENTA
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | 6 Months Ended |
Jun. 30, 2016 | |
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | |
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | NOTE K – LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS The Company is involved in various legal actions arising in the ordinary course of business. The Company maintains liability insurance against certain risks arising out of the normal course of its business, subject to certain self-insured retention limits. The Company routinely establishes and reviews the adequacy of reserves for estimated legal, environmental, and self-insurance exposures. While management believes that amounts accrued in the consolidated financial statements are adequate, estimates of these liabilities may change as circumstances develop. Considering amounts recorded, routine legal matters are not expected to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Environmental Matters The Company’s subsidiaries store fuel for use in tractors and trucks in 62 underground tanks located in 18 states. Maintenance of such tanks is regulated at the federal and, in most cases, state levels. The Company believes it is in substantial compliance with all such regulations. The Company’s underground storage tanks are required to have leak detection systems. The Company is not aware of any leaks from such tanks that could reasonably be expected to have a material adverse effect on the Company. The Company has received notices from the Environmental Protection Agency and others that it has been identified as a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act, or other federal or state environmental statutes, at several hazardous waste sites. After investigating the Company’s involvement in waste disposal or waste generation at such sites, the Company has either agreed to de minimis settlements or determined that its obligations, other than those specifically accrued with respect to such sites, would involve immaterial monetary liability, although there can be no assurances in this regard. At June 30, 2016 and December 31, 2015, the Company’s reserve, which was reported in accrued expenses, for estimated environmental cleanup costs of properties currently or previously operated by the Company totaled $0.8 million. Amounts accrued reflect management’s best estimate of the future undiscounted exposure related to identified properties based on current environmental regulations, management’s experience with similar environmental matters, and testing performed at certain sites. |
ORGANIZATION AND DESCRIPTION 20
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted | Adopted Accounting Pronouncements In the first quarter of 2016, the Company adopted guidance issued by the Financial Accounting Standards Board (the “FASB”) which amended Accounting Standards Codification (“ASC”) Topic 835, Interest – Imputation of Interest, and addresses the presentation of debt issuance costs in the balance sheet. The Company’s debt issuance costs related to its revolving credit agreements continue to be presented as an asset, as permitted, and amortized over the term of the agreements within interest expense. The new guidance did not result in retrospective adjustments to the consolidated financial statements or disclosures. During the first quarter 2016, the Company adopted amended ASC Topic 805, Business Combinations , issued by the FASB. The amendment eliminated the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively and instead recognize measurement-period adjustments during the period in which it determines the amount of the adjustments, including the effect on earnings of any amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date. The amendment was prospectively adopted and did not result in significant adjustments to financial statements or disclosure presentation. Accounting Pronouncements Not Yet Adopted ASC Topic 740 was amended with the addition of Balance Sheet Classification of Deferred Taxes . The amendment is effective for the Company beginning January 1, 2017. The update will result in all deferred tax assets and liabilities being classified as noncurrent in the consolidated balance sheets. An amendment to ASC Topic 718, Compensation – Stock Compensation , was issued to simplify the accounting for share-based compensation, which will require the income tax effects of awards to be recognized in the statement of operations when awards vest or are settled and will allow employers to make a policy election to account for forfeitures as they occur. The amendment is effective for the Company beginning January 1, 2017. The Company is currently assessing the impact this update will have on the consolidated financial statements or disclosures. ASC Topic 606, which amends the guidance in former ASC Topic 605, Revenue Recognition , provides a single comprehensive revenue recognition model for all contracts with customers and contains principles to apply to determine the measurement of revenue and timing of when it is recognized. The standard is effective for the Company on January 1, 2018. The Company is evaluating the impact of the new standard on the consolidated financial statements. ASC Topic 842, Leases , which is effective for the Company beginning January 1, 2019, will require leases with a term greater than twelve months to be reflected as liabilities with associated right-of-use assets in the Company’s consolidated balance sheet. The Company is evaluating the impact of the new standard on the consolidated financial statements. An amendment to ASC Topic 326, Measurement of Credit Losses on Financial Instruments , which changes the impairment model for most financial assets and certain other instruments, is effective for the Company beginning January 1, 2020. The Company is currently assessing the impact this update will have on the Company’s financial statements or disclosures. Management believes that there is no other new accounting guidance issued but not yet effective that is relevant to the Company’s current financial statements. However, there are new proposals under development by the standard setting bodies which, if and when enacted, may have a significant impact on the Company’s financial statement disclosures, including changes in disclosure requirements for defined benefit plans. |
FINANCIAL INSTRUMENTS AND FAI21
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
Schedule of financial instruments and the methods and assumptions used in estimating fair value disclosures | June 30 December 31 2016 2015 (in thousands) Cash and cash equivalents Cash deposits (1) $ $ Variable rate demand notes (1)(2) Money market funds (3) Total cash and cash equivalents $ $ Short-term investments Certificates of deposit (1) $ $ Restricted cash (4) Cash deposits (1) $ $ (1) Recorded at cost plus accrued interest, which approximates fair value. (2) Amounts may be redeemed on a daily basis with the original issuer. (3) Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note). (4) Amounts restricted for use are subject to change based on the requirements of the Company’s collateralized facilities (see Note E). |
Schedule of fair value and carrying value disclosures of financial instruments | June 30 December 31 2016 2015 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ $ $ $ Accounts receivable securitization borrowings (2) Notes payable (3) $ $ $ $ (1) The revolving credit facility (the “Credit Facility”) under the Company’s Amended and Restated Credit Agreement carries a variable interest rate based on LIBOR, plus a margin. The Credit Facility is considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (2) Borrowings under the Company’s accounts receivable securitization program carry a variable interest rate based on LIBOR, plus a margin. The borrowings are considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (3) Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy). |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | June 30, 2016 Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Assets: Money market funds (1)(3) $ $ $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2)(3) — — $ $ $ — $ — Liabilities: Interest rate swap (4) $ $ — $ $ — December 31, 2015 Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Assets: Money market funds (1)(3) $ $ $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2)(3) — — $ $ $ — $ — Liabilities: Interest rate swap (4) $ $ — $ $ — (1) Included in cash and cash equivalents. (2) Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third-party brokerage firm. Quoted market prices are used to determine fair values of the investments which are included in other long-term assets, with a corresponding liability reported in other long-term liabilities. (3) Fair value measured using quoted prices of identical assets in active markets. (4) Included in other long-term liabilities. The interest rate swap fair value was determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are considered to be in Level 3 of the fair value hierarchy. The Company assessed Level 3 inputs as insignificant to the valuation at June 30, 2016 and December 31, 2015 and considers the interest rate swap valuation in Level 2 of the fair value hierarchy. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of goodwill by reportable operating segment | ABF ABF Total Panther Logistics FleetNet Moving (in thousands) Balances at December 31, 2015 $ $ $ $ $ Purchase accounting adjustments — — — Balances at June 30, 2016 $ $ $ $ $ |
Schedule of intangible assets | June 30, 2016 December 31, 2015 Weighted-Average Accumulated Net Accumulated Net Amortization Period Cost Amortization Value Cost Amortization Value (in years) (in thousands) (in thousands) Finite-lived intangible assets Customer relationships $ $ $ $ $ $ Driver network — — Other Indefinite-lived intangible assets Trade name N/A N/A N/A Other N/A N/A N/A Total intangible assets N/A $ $ $ $ $ $ |
LONG-TERM DEBT AND FINANCING 23
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
Schedule of long-term debt | June 30 December 31 2016 2015 (in thousands) Credit Facility (interest rate of 1.7% at June 30, 2016) $ $ Accounts receivable securitization borrowings (interest rate of 1.3% at June 30, 2016) Notes payable (weighted-average interest rate of 2.0% at June 30, 2016) Capital lease obligations (weighted-average interest rate of 5.8% at June 30, 2016) Less current portion Long-term debt, less current portion $ $ |
Scheduled maturities of long-term debt obligations | Accounts Receivable Credit Securitization Notes Capital Lease Total Facility (1) Program (1) Payable Obligations (2) (in thousands) Due in one year or less $ $ $ $ $ Due after one year through two years Due after two years through three years — Due after three years through four years — Due after four years through five years — — — Due after five years — — — Total payments Less amounts representing interest Long-term debt $ $ $ $ $ (1) The future interest payments included in the scheduled maturities due are calculated using variable interest rates based on the LIBOR swap curve, plus the anticipated applicable margin. (2) Minimum payments of capital lease obligations include maximum amounts due under rental adjustment clauses contained in the capital lease agreements. |
Schedule of assets securing notes payable or held under capital leases | June 30 December 31 2016 2015 (in thousands) Revenue equipment $ $ Land and structures (terminals) Total assets securing notes payable or held under capital leases Less accumulated depreciation and amortization (1) Net assets securing notes payable or held under capital leases $ $ (1) Amortization of assets under capital leases and depreciation of assets securing notes payable are included in depreciation expense. |
PENSION AND OTHER POSTRETIREM24
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | |
Summary of the components of net periodic benefit cost | Three Months Ended June 30 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2016 2015 2016 2015 2016 2015 (in thousands) Service cost $ — $ — $ — $ — $ $ Interest cost Expected return on plan assets — — — — Amortization of prior service credit — — — — Pension settlement expense — — — — Amortization of net actuarial loss (1) Net periodic benefit cost $ $ $ $ $ $ Six Months Ended June 30 Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2016 2015 2016 2015 2016 2015 (in thousands) Service cost $ — $ — $ — $ — $ $ Interest cost Expected return on plan assets — — — — Amortization of prior service credit — — — — Pension settlement expense — — — — Amortization of net actuarial loss (1) Net periodic benefit cost $ $ $ $ $ $ (1) The Company amortizes actuarial losses over the average remaining active service period of the plan participants and does not use a corridor approach. |
Schedule of changes in the projected benefit obligation and plan assets of the nonunion defined benefit pension plan | Nonunion Defined Benefit Pension Plan (in thousands) Change in benefit obligations Benefit obligations at December 31, 2015 $ Interest cost Actuarial loss (1) Benefits paid Benefit obligations at June 30, 2016 Change in plan assets Fair value of plan assets at December 31, 2015 Actual return on plan assets Employer contributions Benefits paid Fair value of plan assets at June 30, 2016 Funded status at June 30, 2016 (2) $ Accumulated benefit obligation $ (1) Actuarial loss from remeasurement upon settlement was primarily impacted by the change in the discount rate since the previous remeasurement date. The discount rates used to remeasure the PBO upon settlement were 2.7% , 3.0% , and 3.5% at the June 30, 2016, March 31, 2016, and December 31, 2015 measurement date, respectively. (2) Noncurrent liability recognized within pension and postretirement liabilities in the accompanying consolidated balance sheet at June 30, 2016. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
STOCKHOLDERS' EQUITY | |
Components of accumulated other comprehensive loss | June 30 December 31 2016 2015 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit costs $ $ Interest rate swap Foreign currency translation Total $ $ After-tax amounts: Unrecognized net periodic benefit costs $ $ Interest rate swap Foreign currency translation Total $ $ |
Summary of changes in accumulated other comprehensive loss, net of tax, by component | Unrecognized Interest Foreign Net Periodic Rate Currency Total Benefit Costs Swap Translation (in thousands) Balances at December 31, 2015 $ $ $ $ Other comprehensive loss before reclassifications Amounts reclassified from accumulated other comprehensive loss — — Net current-period other comprehensive income (loss) Balances at June 30, 2016 $ $ $ $ Balances at December 31, 2014 $ $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss — — Net current-period other comprehensive income (loss) Balances at June 30, 2015 $ $ $ $ |
Summary of the significant reclassifications out of accumulated other comprehensive loss by component | Unrecognized Net Periodic Benefit Costs (1)(2) Six Months Ended June 30 2016 2015 (in thousands) Amortization of net actuarial loss $ $ Amortization of prior service credit Pension settlement expense Total, pre-tax Tax benefit Total, net of tax $ $ (1) Amounts in parentheses indicate increases in expense or loss. (2) These components of accumulated other comprehensive loss are included in the computation of net periodic benefit cost (see Note F). |
Summary of dividends declared | 2016 2015 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ $ $ $ Second quarter $ $ $ $ |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
SHARE-BASED COMPENSATION | |
Summary of the Company's restricted stock unit award program | Units Outstanding – January 1, 2016 Granted Vested Forfeited Outstanding – June 30, 2016 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earnings (loss) per share | Three Months Ended Six Months Ended June 30 June 30 2016 2015 2016 2015 (in thousands, except share and per share data) Basic Numerator: Net income $ $ $ $ Effect of unvested restricted stock awards Adjusted net income $ $ $ $ Denominator: Weighted-average shares Earnings per common share $ $ $ $ Diluted Numerator: Net income $ $ $ $ Effect of unvested restricted stock awards Adjusted net income $ $ $ $ Denominator: Weighted-average shares Effect of dilutive securities Adjusted weighted-average shares and assumed conversions Earnings per common share $ $ $ $ |
OPERATING SEGMENT DATA (Tables)
OPERATING SEGMENT DATA (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
OPERATING SEGMENT DATA | |
Schedule of reportable operating segment information | Three Months Ended Six Months Ended June 30 June 30 2016 2015 2016 2015 (in thousands) REVENUES Freight Transportation (ABF Freight) $ $ $ $ Premium Logistics (Panther) Transportation Management (ABF Logistics) Emergency & Preventative Maintenance (FleetNet) Household Goods Moving Services (ABF Moving) Other and eliminations Total consolidated revenues $ $ $ $ OPERATING EXPENSES Freight Transportation (ABF Freight) Salaries, wages, and benefits $ $ $ $ Fuel, supplies, and expenses Operating taxes and licenses Insurance Communications and utilities Depreciation and amortization Rents and purchased transportation Gain on sale of property and equipment Pension settlement expense (1) Other Total Freight Transportation (ABF Freight) Premium Logistics (Panther) Purchased transportation Depreciation and amortization Salaries, benefits, insurance, and other Total Premium Logistics (Panther) Transportation Management (ABF Logistics) Emergency & Preventative Maintenance (FleetNet) Household Goods Moving Services (ABF Moving) Other and eliminations (1) Total consolidated operating expenses (1) $ $ $ $ (1) Pre-tax pension settlement expense totaled $0.6 million on a consolidated basis for the three months ended June 30, 2016 and 2015, of which $0.4 million was reported by ABF Freight, $0.1 million was reported in Other and eliminations, and less than $0.1 million was reported by the asset-light logistics operating segments. For the six months ended June 30, 2016 and 2015, pre-tax pension settlement expense totaled $1.5 million and $1.7 million, respectively, of which $1.1 million and $1.3 million, respectively, was reported by ABF Freight, $0.3 million was reported in Other and eliminations, and $0.1 million was reported by the asset-light logistics operating segments. Three Months Ended Six Months Ended June 30 June 30 2016 2015 2016 2015 (in thousands) OPERATING INCOME Freight Transportation (ABF Freight) $ $ $ $ Premium Logistics (Panther) Transportation Management (ABF Logistics) Emergency & Preventative Maintenance (FleetNet) Household Goods Moving Services (ABF Moving) Other and eliminations Total consolidated operating income $ $ $ $ OTHER INCOME (COSTS) Interest and dividend income $ $ $ $ Interest and other related financing costs Other, net (2) Total other costs INCOME BEFORE INCOME TAXES $ $ $ $ (2) Includes changes in cash surrender value of life insurance policies. The following table presents operating expenses by category on a consolidated basis: Three Months Ended Six Months Ended June 30 June 30 2016 2015 2016 2015 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ $ $ $ Rents, purchased transportation, and other costs of services Fuel, supplies, and expenses Depreciation and amortization (1) Other $ $ $ $ (1) Includes amortization of intangible assets. |
ORGANIZATION AND DESCRIPTION 29
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Organization) (Details) - Freight Transportation (ABF Freight) | Nov. 03, 2013 | Jun. 30, 2016 |
Organization and description of business | ||
Percentage of the Company's revenues, before other revenues and intercompany eliminations, represented by ABF Freight | 70.00% | |
Wage rate reduction under collective bargaining agreement upon implementation date (as a percent) | 7.00% | |
Wage rate increase for next three years of collective bargaining agreement (as a percent) | 2.00% | |
Wage rate increase in fifth year of collective bargaining agreement (as a percent) | 2.50% | |
Reduction in compensated vacation under collective bargaining agreement | 5 days | |
Approximate initial reduction in combined total contractual wage and benefit rate under collective bargaining agreement (as a percent) | 4.00% | |
Estimated increase in compounded annual contractual wage and benefit contribution rates in second through fifth years (as a percent) | 2.50% | |
Unionized employees concentration risk | Number of employees | ||
Organization and description of business | ||
Percentage of ABF Freight's employees covered under collective bargaining agreement with the IBT | 77.00% |
ORGANIZATION AND DESCRIPTION 30
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Acquisitions) (Details) - USD ($) $ in Thousands | Dec. 01, 2015 | Jan. 02, 2015 | Jun. 30, 2016 | Jun. 30, 2015 |
Acquisitions | ||||
Net cash consideration | $ (197) | $ 5,219 | ||
Bear Transportation Services, L.P. | Transportation Management (ABF Logistics) | ||||
Acquisitions | ||||
Net cash consideration | $ 24,400 | |||
Smart Lines Transportation Group, LLC | Transportation Management (ABF Logistics) | ||||
Acquisitions | ||||
Net cash consideration | $ 5,200 |
FINANCIAL INSTRUMENTS AND FAI31
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cash, Investments and Restricted Funds) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Fair value disclosure | ||||
Cash and cash equivalents | $ 152,236 | $ 164,973 | $ 192,016 | $ 157,042 |
Short-term investments | 64,081 | 61,597 | ||
Restricted cash | 961 | 1,384 | ||
Concentrations of Credit Risk of Financial Instruments | ||||
Cash and cash equivalents which are not FDIC-insured | 71,100 | 69,900 | ||
Cash deposits | ||||
Fair value disclosure | ||||
Cash and cash equivalents | 92,503 | 110,279 | ||
Restricted cash | 961 | 1,384 | ||
Variable rate demand notes | ||||
Fair value disclosure | ||||
Cash and cash equivalents | 19,928 | 29,790 | ||
Money market funds | ||||
Fair value disclosure | ||||
Cash and cash equivalents | 39,805 | 24,904 | ||
Certificates of deposit | ||||
Fair value disclosure | ||||
Short-term investments | $ 64,081 | $ 61,597 |
FINANCIAL INSTRUMENTS AND FAI32
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Debt) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Carrying Value | ||
Fair value disclosure | ||
Debt obligations | $ 224,723 | $ 211,703 |
Fair Value | ||
Fair value disclosure | ||
Debt obligations | 224,822 | 211,495 |
Credit Facility | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 70,000 | 70,000 |
Credit Facility | Fair Value | ||
Fair value disclosure | ||
Debt obligations | 70,000 | 70,000 |
Accounts receivable securitization program | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 35,000 | 35,000 |
Accounts receivable securitization program | Fair Value | ||
Fair value disclosure | ||
Debt obligations | 35,000 | 35,000 |
Notes payable | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 119,723 | 106,703 |
Notes payable | Fair Value | ||
Fair value disclosure | ||
Debt obligations | $ 119,822 | $ 106,495 |
FINANCIAL INSTRUMENTS AND FAI33
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (FV) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Interest rate swap agreement | Other long-term liabilities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Liabilities | $ 2,000 | $ 900 |
Recurring basis | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Assets | 41,725 | 27,031 |
Recurring basis | Interest rate swap agreement | Other long-term liabilities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Liabilities | 2,035 | 897 |
Recurring basis | Money market funds | Cash and cash equivalents | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Assets | 39,805 | 24,904 |
Recurring basis | Voluntary Savings Plan - mutual funds held in trust | Other long-term assets | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Assets | 1,920 | 2,127 |
Recurring basis | Level 1 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Assets | 41,725 | 27,031 |
Recurring basis | Level 1 | Money market funds | Cash and cash equivalents | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Assets | 39,805 | 24,904 |
Recurring basis | Level 1 | Voluntary Savings Plan - mutual funds held in trust | Other long-term assets | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Assets | 1,920 | 2,127 |
Recurring basis | Level 2 | Interest rate swap agreement | Other long-term liabilities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Liabilities | $ 2,035 | $ 897 |
GOODWILL AND INTANGIBLE ASSET34
GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | $ 96,465 |
Purchase accounting adjustments | 107 |
Balance at the end of the period | 96,572 |
Premium Logistics (Panther) | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | 71,096 |
Balance at the end of the period | 71,096 |
Transportation Management (ABF Logistics) | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | 19,387 |
Purchase accounting adjustments | 107 |
Balance at the end of the period | 19,494 |
Emergency & Preventative Maintenance (FleetNet) | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | 630 |
Balance at the end of the period | 630 |
Household Goods Moving Services (ABF Moving) | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | 5,352 |
Balance at the end of the period | $ 5,352 |
GOODWILL AND INTANGIBLE ASSET35
GOODWILL AND INTANGIBLE ASSETS (Intangible) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Finite-lived intangible assets | |||||
Weighted Average Amortization Period | 13 years | ||||
Cost | $ 56,953 | $ 56,953 | $ 56,453 | ||
Accumulated Amortization | 16,775 | 16,775 | 14,788 | ||
Net Value | 40,178 | 40,178 | 41,665 | ||
Indefinite-lived intangible assets | |||||
Net Value | 35,122 | 35,122 | 35,122 | ||
Total intangible assets | |||||
Cost | 92,075 | 92,075 | 91,575 | ||
Net Value | 75,300 | 75,300 | 76,787 | ||
Amortization expense on intangible assets | |||||
Intangible amortization expense | 1,000 | $ 1,100 | 1,986 | $ 2,218 | |
Approximate annual amortization expense on intangible assets expected for years 2016 - 2020 | 4,000 | ||||
Trade name | |||||
Indefinite-lived intangible assets | |||||
Net Value | 32,300 | 32,300 | 32,300 | ||
Other | |||||
Indefinite-lived intangible assets | |||||
Net Value | 2,822 | $ 2,822 | 2,822 | ||
Customer relationships | |||||
Finite-lived intangible assets | |||||
Weighted Average Amortization Period | 14 years | ||||
Cost | 52,721 | $ 52,721 | 52,221 | ||
Accumulated Amortization | 13,242 | 13,242 | 11,331 | ||
Net Value | 39,479 | $ 39,479 | 40,890 | ||
Driver network | |||||
Finite-lived intangible assets | |||||
Weighted Average Amortization Period | 3 years | ||||
Cost | 3,200 | $ 3,200 | 3,200 | ||
Accumulated Amortization | 3,200 | $ 3,200 | 3,200 | ||
Other | |||||
Finite-lived intangible assets | |||||
Weighted Average Amortization Period | 8 years | ||||
Cost | 1,032 | $ 1,032 | 1,032 | ||
Accumulated Amortization | 333 | 333 | 257 | ||
Net Value | $ 699 | $ 699 | $ 775 |
INCOME TAXES (Condensed) (Detai
INCOME TAXES (Condensed) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
INCOME TAXES | ||||
Statutory federal tax rate (as a percent) | 35.00% | |||
State tax, low end of range of rate (as a percent) | 6.00% | |||
State tax, high end of range of rate (as a percent) | 6.50% | |||
Effective tax rate (as a percent) | 37.50% | 39.30% | 37.80% | 38.80% |
Income taxes paid (in dollars) | $ 2.2 | $ 2.9 | ||
Income tax refunds received (in dollars) | $ 10.8 | $ 0.1 |
LONG-TERM DEBT AND FINANCING 37
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Summary) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Long-term debt obligations | ||
Long-term debt | $ 225,450 | $ 212,509 |
Less current portion | 55,406 | 44,910 |
Long-term debt, less current portion | 170,044 | 167,599 |
Payments under long-term debt obligations | ||
Due in one year or less | 59,069 | |
Due after one year through two years | 78,996 | |
Due after two years through three years | 20,453 | |
Due after three years through four years | 73,407 | |
Due after four years through five years | 2,350 | |
Due after five years | 80 | |
Total payments | 234,355 | |
Less amounts representing interest | 8,905 | |
Long-term debt | 225,450 | 212,509 |
Credit Facility | ||
Long-term debt obligations | ||
Long-term debt | $ 70,000 | 70,000 |
Interest rate (as a percent) | 1.70% | |
Payments under long-term debt obligations | ||
Due in one year or less | $ 1,233 | |
Due after one year through two years | 1,338 | |
Due after two years through three years | 1,464 | |
Due after three years through four years | 70,796 | |
Total payments | 74,831 | |
Less amounts representing interest | 4,831 | |
Long-term debt | 70,000 | 70,000 |
Accounts receivable securitization program | ||
Long-term debt obligations | ||
Long-term debt | $ 35,000 | 35,000 |
Interest rate (as a percent) | 1.30% | |
Payments under long-term debt obligations | ||
Due in one year or less | $ 466 | |
Due after one year through two years | 35,254 | |
Total payments | 35,720 | |
Less amounts representing interest | 720 | |
Long-term debt | 35,000 | 35,000 |
Notes payable | ||
Long-term debt obligations | ||
Long-term debt | $ 119,723 | 106,703 |
Weighted-average interest rate (as a percent) | 2.00% | |
Payments under long-term debt obligations | ||
Due in one year or less | $ 57,151 | |
Due after one year through two years | 42,180 | |
Due after two years through three years | 18,759 | |
Due after three years through four years | 2,475 | |
Due after four years through five years | 2,350 | |
Due after five years | 80 | |
Total payments | 122,995 | |
Less amounts representing interest | 3,272 | |
Long-term debt | 119,723 | 106,703 |
Capital lease obligations | ||
Long-term debt obligations | ||
Long-term debt | $ 727 | 806 |
Weighted-average interest rate (as a percent) | 5.80% | |
Payments under long-term debt obligations | ||
Due in one year or less | $ 219 | |
Due after one year through two years | 224 | |
Due after two years through three years | 230 | |
Due after three years through four years | 136 | |
Total payments | 809 | |
Less amounts representing interest | 82 | |
Long-term debt | $ 727 | $ 806 |
LONG-TERM DEBT AND FINANCING 38
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Assets Sec) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Financing Arrangements | ||
Total assets securing notes payable or held under capital leases | $ 174,241 | $ 138,492 |
Less accumulated depreciation and amortization | 41,002 | 25,120 |
Net assets securing notes payable or held under capital leases | 133,239 | 113,372 |
Revenue equipment | ||
Financing Arrangements | ||
Total assets securing notes payable or held under capital leases | 172,447 | 136,698 |
Land and structures (terminals) | ||
Financing Arrangements | ||
Total assets securing notes payable or held under capital leases | $ 1,794 | $ 1,794 |
LONG-TERM DEBT AND FINANCING 39
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Condensed) (Details) - USD ($) $ in Thousands | Aug. 01, 2016 | Jan. 02, 2015 | Nov. 30, 2014 | Jun. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Jan. 31, 2015 |
Financing Arrangements | |||||||
Amounts collateralized by restricted funds | $ 961 | $ 961 | $ 1,384 | ||||
Interest rate swap agreement | |||||||
Financing Arrangements | |||||||
Term of swap agreement | 5 years | ||||||
Notional amount | $ 50,000 | $ 50,000 | |||||
Fixed interest rate payments (as a percent) | 1.85% | 1.85% | |||||
Interest rate swap agreement | Other long-term liabilities | |||||||
Financing Arrangements | |||||||
Fair value | $ 2,000 | $ 2,000 | $ 900 | ||||
Credit Facility | |||||||
Financing Arrangements | |||||||
Term loan balance refinanced with revolving credit facility | $ 70,000 | ||||||
Maximum borrowing capacity | 150,000 | 150,000 | |||||
Additional borrowing capacity that may be requested | 75,000 | 75,000 | |||||
Credit Facility | Interest rate swap agreement | |||||||
Financing Arrangements | |||||||
Amount of borrowings covered by the interest rate swap | $ 50,000 | $ 50,000 | |||||
Effective fixed interest rate on hedged borrowings (as a percent) | 3.10% | 3.10% | |||||
Letters of Credit, Sub-Facility | |||||||
Financing Arrangements | |||||||
Maximum borrowing capacity | $ 20,000 | $ 20,000 | |||||
Accounts receivable securitization program | |||||||
Financing Arrangements | |||||||
Maximum borrowing capacity | 100,000 | 100,000 | $ 75,000 | ||||
Additional borrowing capacity that may be requested | 25,000 | 25,000 | |||||
Amount outstanding | 35,000 | 35,000 | |||||
Outstanding letters of credit | 19,300 | 19,300 | |||||
Remaining borrowing capacity | 45,700 | 45,700 | |||||
Letter of Credit Agreements | |||||||
Financing Arrangements | |||||||
Outstanding letters of credit | 20,900 | 20,900 | |||||
Amounts collateralized by restricted funds | 1,000 | 1,000 | |||||
Surety bonds | |||||||
Financing Arrangements | |||||||
Outstanding surety bonds under uncollateralized bond programs | 56,400 | 56,400 | |||||
Revenue equipment | Freight Transportation (ABF Freight) | Notes payable | |||||||
Financing Arrangements | |||||||
Equipment financed during the period under notes payable | $ 33,900 | $ 35,800 | |||||
Revenue equipment | Freight Transportation (ABF Freight) | Notes payable | Subsequent Event | |||||||
Financing Arrangements | |||||||
Equipment financed during the period under notes payable | $ 11,200 |
PENSION AND OTHER POSTRETIREM40
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)plan | Jun. 30, 2015USD ($) | Mar. 31, 2016 | Jan. 01, 2016 | Dec. 31, 2015 | |
Components of net periodic benefit cost | |||||||
Pension settlement expense | $ 600 | $ 600 | $ 1,464 | $ 1,716 | |||
Pension settlement expense, net of tax | 345 | 364 | 895 | 1,048 | |||
Freight Transportation (ABF Freight) | |||||||
Components of net periodic benefit cost | |||||||
Pension settlement expense | 400 | 400 | $ 1,100 | 1,300 | |||
Multiemployer pension plans | Freight Transportation (ABF Freight) | |||||||
Multiemployer Plans | |||||||
Number of multiemployer plans to which ABF Freight currently contributes | plan | 25 | ||||||
Maximum projected time to insolvency for plans in "critical and declining" status | 14 years | ||||||
Maximum projected time to insolvency for plans in "critical and declining" status if additional criteria apply | 19 years | ||||||
Threshold ratio of inactive to active participants for greater insolvency period to determine "critical and declining" status | 2 | ||||||
Threshold funded percentage for greater insolvency period to determine "critical and declining" status | 80.00% | ||||||
Multiemployer pension plans | Central States Pension Plan | |||||||
Multiemployer Plans | |||||||
Maximum projected time to insolvency without legislative action | 10 years | ||||||
Multiemployer pension plans | Central States Pension Plan | Freight Transportation (ABF Freight) | |||||||
Multiemployer Plans | |||||||
Approximate proportion of multiemployer pension plan contributions (as a percent) | 50.00% | ||||||
Actuarially certified funded percentage of multiemployer pension plan | 46.90% | ||||||
Multiemployer pension plans | 707 Pension Fund | Freight Transportation (ABF Freight) | |||||||
Multiemployer Plans | |||||||
Approximate proportion of multiemployer pension plan contributions (as a percent) | 1.00% | ||||||
Nonunion Defined Benefit Pension Plan | |||||||
Components of net periodic benefit cost | |||||||
Interest cost | 1,158 | 1,223 | $ 2,463 | 2,543 | |||
Expected return on plan assets | (2,158) | (2,359) | (4,104) | (4,761) | |||
Pension settlement expense | 564 | 597 | 1,464 | 1,716 | |||
Amortization of net actuarial loss | 1,061 | 815 | 2,017 | 1,636 | |||
Net periodic benefit cost | 625 | 276 | 1,840 | 1,134 | |||
Pension settlement expense, net of tax | 300 | 400 | 900 | 1,000 | |||
Lump-sum distributions | 2,700 | 4,800 | 7,200 | 12,400 | |||
Change in projected benefit obligation | |||||||
Benefit obligations at beginning of period | 159,607 | ||||||
Interest cost | 1,158 | 1,223 | 2,463 | 2,543 | |||
Actuarial loss | 9,377 | ||||||
Benefits paid | (7,420) | ||||||
Benefit obligations at end of period | 164,027 | 164,027 | |||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of period | 136,917 | ||||||
Actual return on plan assets | 4,587 | ||||||
Employer contributions | 13,400 | ||||||
Benefits paid | (7,420) | ||||||
Fair value of plan assets at end of period | 147,484 | 147,484 | |||||
Funded status | (16,543) | (16,543) | |||||
Accumulated benefit obligation | $ 164,027 | $ 164,027 | |||||
Discount rate (as a percent) | 2.70% | 2.70% | 3.00% | 3.50% | |||
Adjusted funding target attainment percentage | 109.20% | ||||||
Supplemental Benefit Plan | |||||||
Components of net periodic benefit cost | |||||||
Interest cost | $ 33 | 30 | $ 65 | 61 | |||
Amortization of net actuarial loss | 38 | 40 | 76 | 80 | |||
Net periodic benefit cost | 71 | 70 | 141 | 141 | |||
Change in projected benefit obligation | |||||||
Interest cost | 33 | 30 | 65 | 61 | |||
Postretirement Health Benefit Plan | |||||||
Components of net periodic benefit cost | |||||||
Service cost | 107 | 102 | 214 | 203 | |||
Interest cost | 255 | 229 | 509 | 457 | |||
Amortization of prior service credit | (48) | (48) | (95) | (95) | |||
Amortization of net actuarial loss | 176 | 213 | 352 | 426 | |||
Net periodic benefit cost | 490 | 496 | 980 | 991 | |||
Change in projected benefit obligation | |||||||
Interest cost | $ 255 | $ 229 | $ 509 | $ 457 |
STOCKHOLDERS' EQUITY (AOCI) (De
STOCKHOLDERS' EQUITY (AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Loss | ||||||
Total after-tax amount | $ 582,491 | $ 582,491 | $ 588,728 | |||
Impact on unrecognized net actuarial loss | ||||||
Change in the unrecognized net actuarial loss, after tax | (1,931) | $ 2,379 | (5,435) | $ 548 | ||
Accumulated Other Comprehensive Loss | ||||||
Accumulated Other Comprehensive Loss | ||||||
Total pre-tax amount | (43,991) | (43,991) | (38,507) | |||
Total after-tax amount | (30,843) | (20,950) | (30,843) | (20,950) | (27,496) | $ (23,479) |
Unrecognized Net Periodic Benefit Costs | ||||||
Accumulated Other Comprehensive Loss | ||||||
Total pre-tax amount | (40,311) | (40,311) | (35,231) | |||
Total after-tax amount | (28,601) | (19,540) | (28,601) | (19,540) | (25,497) | (22,387) |
Interest Rate Swap | ||||||
Accumulated Other Comprehensive Loss | ||||||
Total pre-tax amount | (2,035) | (2,035) | (897) | |||
Total after-tax amount | (1,237) | (470) | (1,237) | (470) | (545) | (350) |
Foreign Currency Translation | ||||||
Accumulated Other Comprehensive Loss | ||||||
Total pre-tax amount | (1,645) | (1,645) | (2,379) | |||
Total after-tax amount | $ (1,005) | $ (940) | $ (1,005) | $ (940) | $ (1,454) | $ (742) |
STOCKHOLDERS' EQUITY (AOCI comp
STOCKHOLDERS' EQUITY (AOCI comp) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Changes in accumulated other comprehensive loss, net of tax, by component | ||||
Balances | $ 588,728 | |||
Amounts reclassified from accumulated other comprehensive loss | 2,331 | $ 2,299 | ||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | $ (1,116) | $ 3,708 | (3,347) | 2,529 |
Balances | 582,491 | 582,491 | ||
Accumulated Other Comprehensive Loss | ||||
Changes in accumulated other comprehensive loss, net of tax, by component | ||||
Balances | (27,496) | (23,479) | ||
Other comprehensive income (loss) before reclassifications | (5,678) | 230 | ||
Amounts reclassified from accumulated other comprehensive loss | 2,331 | 2,299 | ||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (3,347) | 2,529 | ||
Balances | (30,843) | (20,950) | (30,843) | (20,950) |
Unrecognized Net Periodic Benefit Costs | ||||
Changes in accumulated other comprehensive loss, net of tax, by component | ||||
Balances | (25,497) | (22,387) | ||
Other comprehensive income (loss) before reclassifications | (5,435) | 548 | ||
Amounts reclassified from accumulated other comprehensive loss | 2,331 | 2,299 | ||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (3,104) | 2,847 | ||
Balances | (28,601) | (19,540) | (28,601) | (19,540) |
Interest Rate Swap | ||||
Changes in accumulated other comprehensive loss, net of tax, by component | ||||
Balances | (545) | (350) | ||
Other comprehensive income (loss) before reclassifications | (692) | (120) | ||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (692) | (120) | ||
Balances | (1,237) | (470) | (1,237) | (470) |
Foreign Currency Translation | ||||
Changes in accumulated other comprehensive loss, net of tax, by component | ||||
Balances | (1,454) | (742) | ||
Other comprehensive income (loss) before reclassifications | 449 | (198) | ||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 449 | (198) | ||
Balances | $ (1,005) | $ (940) | $ (1,005) | $ (940) |
STOCKHOLDERS' EQUITY (Reclass)
STOCKHOLDERS' EQUITY (Reclass) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ (3,814) | $ (3,763) |
Tax benefit | 1,483 | 1,464 |
Total, net of tax | (2,331) | (2,299) |
Unrecognized Net Periodic Benefit Costs | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, net of tax | (2,331) | (2,299) |
Amortization of net actuarial loss | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (2,445) | (2,142) |
Amortization of prior service credit | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | 95 | 95 |
Pension settlement expense | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ (1,464) | $ (1,716) |
STOCKHOLDERS' EQUITY (Div and T
STOCKHOLDERS' EQUITY (Div and Treas) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 28, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Dividends on Common Stock | ||||||||
Dividends declared (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.06 | $ 0.06 | $ 0.16 | $ 0.12 | ||
Dividend Amount | $ 2,087 | $ 2,088 | $ 1,578 | $ 1,584 | $ 4,175 | |||
Treasury Stock | ||||||||
Aggregate cost of shares repurchased during the period | 5,116 | $ 5,982 | ||||||
Stock Repurchase Program | ||||||||
Treasury Stock | ||||||||
Amount available for repurchase | $ 42,100 | $ 42,100 | $ 47,200 | |||||
Number of shares repurchased during the period | 283,346 | |||||||
Aggregate cost of shares repurchased during the period | $ 5,100 | |||||||
Subsequent Event | ||||||||
Dividends on Common Stock | ||||||||
Dividends declared (in dollars per share) | $ 0.08 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Share-based compensation | |
Number of shares authorized | 3,100,000 |
Restricted Stock Units | |
Award activity | |
Outstanding at the beginning of the period (in shares) | 1,313,550 |
Granted (in shares) | 526,940 |
Vested (in shares) | (243,950) |
Forfeited (in shares) | (2,000) |
Outstanding at the end of the period (in shares) | 1,594,540 |
Weighted-Average Grant Date Fair Value | |
Granted (in dollars per share) | $ / shares | $ 15.71 |
EARNINGS PER SHARE (Basic and D
EARNINGS PER SHARE (Basic and Diluted) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Basic, numerator: | ||||
Net income | $ 10,231 | $ 19,967 | $ 4,128 | $ 20,712 |
Effect of unvested restricted stock unit awards | (81) | (207) | (38) | (231) |
Adjusted net income | $ 10,150 | $ 19,760 | $ 4,090 | $ 20,481 |
Basic, denominator: | ||||
Weighted-average shares | 25,791,026 | 26,021,874 | 25,806,774 | 26,036,375 |
Earnings per common share (in dollars per share) | $ 0.39 | $ 0.76 | $ 0.16 | $ 0.79 |
Diluted, numerator: | ||||
Net income | $ 10,231 | $ 19,967 | $ 4,128 | $ 20,712 |
Effect of unvested restricted stock unit awards | (80) | (203) | (38) | (227) |
Adjusted net income | $ 10,151 | $ 19,764 | $ 4,090 | $ 20,485 |
Diluted, denominator: | ||||
Weighted-average shares | 25,791,026 | 26,021,874 | 25,806,774 | 26,036,375 |
Effect of dilutive securities | 455,842 | 571,577 | 488,909 | 556,240 |
Adjusted weighted-average shares and assumed conversions | 26,246,868 | 26,593,451 | 26,295,683 | 26,592,615 |
Earnings per common share (in dollars per share) | $ 0.39 | $ 0.74 | $ 0.16 | $ 0.77 |
EARNINGS PER SHARE (AntiDil) (D
EARNINGS PER SHARE (AntiDil) (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Stock awards | ||||
Antidilutive securities | ||||
Outstanding stock awards not included in calculation of diluted earnings (loss) per share (in shares) | 0.4 | 0.2 | 0.4 | 0.2 |
OPERATING SEGMENT DATA (Details
OPERATING SEGMENT DATA (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
REVENUES | ||||
Revenues | $ 676,627 | $ 696,115 | $ 1,298,082 | $ 1,309,391 |
OPERATING EXPENSES | ||||
Salaries, wages, and benefits | 335,094 | 332,510 | 664,563 | 639,426 |
Rents, purchased transportation, and other costs of services | 199,352 | 200,619 | 382,440 | 378,585 |
Fuel, supplies, and expenses | 70,406 | 78,127 | 134,626 | 154,029 |
Depreciation and amortization | 25,748 | 22,616 | 50,899 | 44,848 |
Gain on sale of property and equipment | (2,486) | (1,049) | ||
Pension settlement expense | 600 | 600 | 1,464 | 1,716 |
Other | 29,373 | 28,777 | 58,165 | 57,757 |
Total consolidated operating expenses | 659,973 | 662,649 | 1,290,693 | 1,274,645 |
OPERATING INCOME | ||||
OPERATING INCOME | 16,654 | 33,466 | 7,389 | 34,746 |
OTHER INCOME (COSTS) | ||||
Interest and dividend income | 387 | 271 | 788 | 505 |
Interest and other related financing costs | (1,231) | (1,025) | (2,478) | (2,027) |
Other, net | 571 | 197 | 937 | 597 |
TOTAL OTHER INCOME (COSTS) | (273) | (557) | (753) | (925) |
INCOME BEFORE INCOME TAXES | 16,381 | 32,909 | 6,636 | 33,821 |
Freight Transportation (ABF Freight) | ||||
OPERATING EXPENSES | ||||
Pension settlement expense | 400 | 400 | 1,100 | 1,300 |
Operating Segments | Freight Transportation (ABF Freight) | ||||
REVENUES | ||||
Revenues | 486,731 | 504,371 | 926,239 | 945,578 |
OPERATING EXPENSES | ||||
Salaries, wages, and benefits | 303,693 | 301,639 | 600,300 | 580,010 |
Fuel, supplies, and expenses | 72,279 | 79,647 | 138,968 | 158,673 |
Operating taxes and licenses | 12,154 | 12,322 | 24,134 | 24,318 |
Insurance | 7,660 | 6,267 | 14,126 | 12,052 |
Communications and utilities | 4,279 | 3,766 | 8,651 | 7,751 |
Depreciation and amortization | 20,911 | 18,286 | 41,303 | 35,686 |
Rents and purchased transportation | 47,800 | 52,380 | 87,496 | 94,224 |
Gain on sale of property and equipment | (2,197) | (594) | (2,369) | (838) |
Pension settlement expense | 424 | 448 | 1,101 | 1,288 |
Other | 2,356 | 2,118 | 4,156 | 4,279 |
Total consolidated operating expenses | 469,359 | 476,279 | 917,866 | 917,443 |
OPERATING INCOME | ||||
OPERATING INCOME | 17,372 | 28,092 | 8,373 | 28,135 |
Operating Segments | Premium Logistics (Panther) | ||||
REVENUES | ||||
Revenues | 69,705 | 80,271 | 135,783 | 155,563 |
OPERATING EXPENSES | ||||
Purchased transportation | 52,007 | 58,510 | 100,858 | 114,554 |
Depreciation and amortization | 2,868 | 2,939 | 5,705 | 5,863 |
Salaries, benefits, insurance, and other | 13,728 | 13,984 | 27,862 | 29,113 |
Total consolidated operating expenses | 68,603 | 75,433 | 134,425 | 149,530 |
OPERATING INCOME | ||||
OPERATING INCOME | 1,102 | 4,838 | 1,358 | 6,033 |
Operating Segments | Transportation Management (ABF Logistics) | ||||
REVENUES | ||||
Revenues | 67,955 | 50,419 | 134,902 | 97,791 |
OPERATING EXPENSES | ||||
Total consolidated operating expenses | 67,459 | 48,611 | 133,740 | 95,208 |
OPERATING INCOME | ||||
OPERATING INCOME | 496 | 1,808 | 1,162 | 2,583 |
Operating Segments | Emergency & Preventative Maintenance (FleetNet) | ||||
REVENUES | ||||
Revenues | 41,780 | 42,015 | 85,344 | 84,504 |
OPERATING EXPENSES | ||||
Total consolidated operating expenses | 41,184 | 40,998 | 83,764 | 82,317 |
OPERATING INCOME | ||||
OPERATING INCOME | 596 | 1,017 | 1,580 | 2,187 |
Operating Segments | Household Goods Moving Services (ABF Moving) | ||||
REVENUES | ||||
Revenues | 25,742 | 32,225 | 43,886 | 50,793 |
OPERATING EXPENSES | ||||
Total consolidated operating expenses | 24,872 | 30,228 | 43,765 | 49,159 |
OPERATING INCOME | ||||
OPERATING INCOME | 870 | 1,997 | 121 | 1,634 |
Operating Segments | Asset-Light Logistics Segments | Maximum | ||||
OPERATING EXPENSES | ||||
Pension settlement expense | 100 | 100 | 100 | 100 |
Other and eliminations | ||||
REVENUES | ||||
Revenues | (15,286) | (13,186) | (28,072) | (24,838) |
OPERATING EXPENSES | ||||
Pension settlement expense | 100 | 100 | 300 | 300 |
Total consolidated operating expenses | (11,504) | (8,900) | (22,867) | (19,012) |
OPERATING INCOME | ||||
OPERATING INCOME | $ (3,782) | $ (4,286) | $ (5,205) | $ (5,826) |
LEGAL PROCEEDINGS, ENVIRONMEN49
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS (Environmental Matters) (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2016USD ($)tankstate | Dec. 31, 2015USD ($) | |
Underground fuel storage tanks | ||
Environmental Matters | ||
Number of underground tanks where the company's subsidiaries store fuel for use in tractors and trucks | tank | 62 | |
Number of states in which underground tanks are located | state | 18 | |
Environmental cleanup costs | Accrued expenses | ||
Environmental Matters | ||
Reserve for environmental contingencies | $ | $ 0.8 | $ 0.8 |