Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 22, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | ARCBEST CORP /DE/ | ||
Entity Central Index Key | 894,405 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 524,395,260 | ||
Entity Common Stock, Shares Outstanding | 25,641,511 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 120,772 | $ 114,280 |
Short-term investments | 56,401 | 56,838 |
Restricted cash | 962 | |
Accounts receivable, less allowances (2017 – $7,657; 2016 – $5,437) | 279,074 | 260,643 |
Other accounts receivable, less allowances (2017 – $921; 2016 – $849) | 19,491 | 22,041 |
Prepaid expenses | 22,183 | 22,124 |
Prepaid and refundable income taxes | 12,296 | 9,909 |
Other | 12,132 | 4,300 |
TOTAL CURRENT ASSETS | 522,349 | 491,097 |
PROPERTY, PLANT AND EQUIPMENT | ||
Land and structures | 344,224 | 324,086 |
Revenue equipment | 793,523 | 743,860 |
Service, office, and other equipment | 179,950 | 154,119 |
Software | 129,589 | 120,877 |
Leasehold improvements | 8,888 | 8,758 |
TOTAL PROPERTY, PLANT AND EQUIPMENT, GROSS | 1,456,174 | 1,351,700 |
Less allowances for depreciation and amortization | 865,010 | 819,174 |
PROPERTY, PLANT AND EQUIPMENT, net | 591,164 | 532,526 |
GOODWILL | 108,320 | 108,875 |
INTANGIBLE ASSETS, net | 73,469 | 80,507 |
DEFERRED INCOME TAXES | 5,965 | 2,978 |
OTHER LONG-TERM ASSETS | 64,374 | 66,095 |
TOTAL ASSETS | 1,365,641 | 1,282,078 |
CURRENT LIABILITIES | ||
Accounts payable | 129,099 | 133,301 |
Income taxes payable | 324 | |
Accrued expenses | 211,237 | 198,731 |
Current portion of long-term debt | 61,930 | 64,143 |
TOTAL CURRENT LIABILITIES | 402,590 | 396,175 |
LONG-TERM DEBT, less current portion | 206,989 | 179,530 |
PENSION AND POSTRETIREMENT LIABILITIES | 39,827 | 35,848 |
OTHER LONG-TERM LIABILITIES | 15,616 | 16,790 |
DEFERRED INCOME TAXES | 49,157 | 54,680 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2017: 28,495,628 shares; 2016: 28,174,424 shares | 285 | 282 |
Additional paid-in capital | 319,436 | 315,318 |
Retained earnings | 438,379 | 386,917 |
Treasury stock, at cost, 2017: 2,851,578 shares; 2016: 2,565,399 shares | (86,064) | (80,045) |
Accumulated other comprehensive loss | (20,574) | (23,417) |
TOTAL STOCKHOLDERS' EQUITY | 651,462 | 599,055 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,365,641 | $ 1,282,078 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 7,657 | $ 5,437 |
Other accounts receivable, allowances (in dollars) | $ 921 | $ 849 |
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 | 28,495,628 | 28,174,424 |
Treasury stock, at cost, shares | 2,851,578 | 2,565,399 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
REVENUES | $ 710,721 | $ 744,280 | $ 720,368 | $ 651,088 | $ 688,214 | $ 713,923 | $ 676,627 | $ 621,455 | $ 2,826,457 | $ 2,700,219 | $ 2,666,905 |
OPERATING EXPENSES | 694,041 | 719,931 | 695,634 | 663,341 | 687,003 | 693,553 | 659,973 | 630,720 | 2,772,947 | 2,671,249 | 2,591,409 |
OPERATING INCOME (LOSS) | 16,680 | 24,349 | 24,734 | (12,253) | 1,211 | 20,370 | 16,654 | (9,265) | 53,510 | 28,970 | 75,496 |
OTHER INCOME (COSTS) | |||||||||||
Interest and dividend income | 1,293 | 1,523 | 1,284 | ||||||||
Interest and other related financing costs | (6,342) | (5,150) | (4,400) | ||||||||
Other, net | 3,115 | 2,944 | 354 | ||||||||
TOTAL OTHER INCOME (COSTS) | (660) | (281) | (599) | (394) | (115) | 185 | (273) | (480) | (1,934) | (683) | (2,762) |
INCOME BEFORE INCOME TAXES | 51,576 | 28,287 | 72,734 | ||||||||
INCOME TAX PROVISION (BENEFIT) | (20,548) | 9,280 | 8,358 | (5,240) | (488) | 7,615 | 6,150 | (3,642) | (8,150) | 9,635 | 27,880 |
NET INCOME (LOSS) | $ 36,568 | $ 14,788 | $ 15,777 | $ (7,407) | $ 1,584 | $ 12,940 | $ 10,231 | $ (6,103) | $ 59,726 | $ 18,652 | $ 44,854 |
EARNINGS PER COMMON SHARE | |||||||||||
Basic (in dollars per share) | $ 1.42 | $ 0.57 | $ 0.61 | $ (0.29) | $ 0.06 | $ 0.50 | $ 0.39 | $ (0.24) | $ 2.32 | $ 0.72 | $ 1.71 |
Diluted (in dollars per share) | $ 1.37 | $ 0.56 | $ 0.60 | $ (0.29) | $ 0.06 | $ 0.49 | $ 0.39 | $ (0.24) | $ 2.25 | $ 0.71 | $ 1.67 |
AVERAGE COMMON SHARES OUTSTANDING | |||||||||||
Basic (in shares) | 25,637,568 | 25,671,535 | 25,767,791 | 25,684,475 | 25,669,280 | 25,724,550 | 25,791,026 | 25,822,522 | 25,683,745 | 25,751,544 | 26,013,716 |
Diluted (in shares) | 26,540,716 | 26,393,359 | 26,291,641 | 25,684,475 | 26,272,487 | 26,211,524 | 26,246,868 | 25,822,522 | 26,424,389 | 26,256,570 | 26,530,127 |
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.32 | $ 0.32 | $ 0.26 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
NET INCOME (LOSS) | $ 59,726 | $ 18,652 | $ 44,854 |
Pension and other postretirement benefit plans: | |||
Net actuarial loss, net of tax of: (2017 – $1,682; 2016 – $805; 2015 – $4,798) | (2,640) | (1,267) | (7,535) |
Pension settlement expense, net of tax of: (2017 – $1,617; 2016 – $1,256; 2015 – $1,246) | 2,539 | 1,973 | 1,956 |
Amortization of unrecognized net periodic benefit costs, net of tax of: (2017 – $1,446; 2016 – $1,849; 2015 – $1,571) | |||
Net actuarial loss | 2,388 | 3,021 | 2,585 |
Prior service credit | (116) | (116) | (116) |
Interest rate swap and foreign currency translation: | |||
Change in unrealized income (loss) on interest rate swap, net of tax of: (2017 – $402; 2016 – $139; 2015 – $126) | 621 | 216 | (195) |
Change in foreign currency translation, net of tax of: (2017 – $33; 2016 – $149; 2015 – $451) | 51 | 252 | (712) |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 2,843 | 4,079 | (4,017) |
TOTAL COMPREHENSIVE LOSS | $ 62,569 | $ 22,731 | $ 40,837 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net actuarial loss, tax expense (benefit) | $ (1,682) | $ (805) | $ (4,798) |
Pension settlement expense, tax | 1,617 | 1,256 | 1,246 |
Amortization of unrecognized net periodic benefit costs, tax | 1,446 | 1,849 | 1,571 |
Change in unrealized income (loss) on interest rate swap, tax expense (benefit) | 402 | 139 | (126) |
Change in foreign currency translation, tax expense (benefit) | $ 33 | $ 149 | $ (451) |
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 | $ 277 | $ 303,045 | $ 338,810 | $ (57,770) | $ (23,479) | $ 560,883 |
Balances (in shares) at Dec. 31, 2014 | 27,722 | 1,678 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 44,854 | 44,854 | ||||
Other comprehensive income (loss), net of tax | (4,017) | (4,017) | ||||
Issuance of common stock under share-based compensation plans | $ 2 | (2) | ||||
Issuance of common stock under share-based compensation plans (in shares) | 216 | |||||
Tax effect of share-based compensation plans | (1,419) | (1,419) | ||||
Share-based compensation expense | 8,029 | 8,029 | ||||
Purchase of treasury stock | $ (12,765) | (12,765) | ||||
Purchase of treasury stock (in shares) | 402 | |||||
Dividends declared on common stock | (6,837) | (6,837) | ||||
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 | 18,652 | 18,652 | ||||
Other comprehensive income (loss), net of tax | 4,079 | 4,079 | ||||
Issuance of common stock under share-based compensation plans | $ 3 | (3) | ||||
Issuance of common stock under share-based compensation plans (in shares) | 236 | |||||
Tax effect of share-based compensation plans | (2,322) | (2,322) | ||||
Share-based compensation expense | 7,588 | 7,588 | ||||
Purchase of treasury stock | $ (9,510) | (9,510) | ||||
Purchase of treasury stock (in shares) | 485 | |||||
Dividends declared on common stock | (8,318) | (8,318) | ||||
Balances at Dec. 31, 2016 | $ 282 | 315,318 | 386,917 | $ (80,045) | (23,417) | 599,055 |
Balances (in shares) at Dec. 31, 2016 | 28,174 | 2,565 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Cumulative effect of change in accounting principle (see Note B) | Adjustment | ASC Topic 718, Compensation – Stock Compensation | 402 | (244) | 158 | |||
Net income | 59,726 | 59,726 | ||||
Other comprehensive income (loss), net of tax | 2,843 | 2,843 | ||||
Issuance of common stock under share-based compensation plans | $ 3 | (3) | ||||
Issuance of common stock under share-based compensation plans (in shares) | 322 | |||||
Tax effect of share-based compensation plans | (2,837) | (2,837) | ||||
Share-based compensation expense | 6,958 | 6,958 | ||||
Purchase of treasury stock | $ (6,019) | (6,019) | ||||
Purchase of treasury stock (in shares) | 287 | |||||
Dividends declared on common stock | (8,264) | (8,264) | ||||
Balances at Dec. 31, 2017 | $ 285 | $ 319,436 | $ 438,379 | $ (86,064) | $ (20,574) | $ 651,462 |
Balances (in shares) at Dec. 31, 2017 | 28,496 | 2,852 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING ACTIVITIES | |||
Net Income | $ 59,726 | $ 18,652 | $ 44,854 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 98,530 | 98,814 | 89,040 |
Amortization of intangibles | 4,538 | 4,239 | 4,002 |
Impairment of long-lived assets | 6,244 | ||
Pension settlement expense | 4,156 | 3,229 | 3,202 |
Share-based compensation expense | 6,958 | 7,588 | 8,029 |
Provision for losses on accounts receivable | 4,081 | 1,643 | 998 |
Deferred income tax provision (benefit) | (10,213) | 9,522 | 16,435 |
Gain on sale of property and equipment | (227) | (3,335) | (2,225) |
Changes in operating assets and liabilities: | |||
Receivables | (19,588) | (23,809) | 2,310 |
Prepaid expenses | (64) | (1,393) | 362 |
Other assets | (4,231) | (4,355) | 1,090 |
Income taxes | (2,144) | 6,236 | (8,918) |
Accounts payable, accrued expenses, and other liabilities | 10,393 | (11,335) | (10,048) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 151,915 | 111,940 | 149,131 |
INVESTING ACTIVITIES | |||
Purchases of property, plant and equipment, net of financings | (65,781) | (68,271) | (78,425) |
Proceeds from sale of property and equipment | 4,279 | 8,804 | 6,639 |
Purchases of short-term investments | (73,459) | (69,400) | (61,363) |
Proceeds from sale of short-term investments | 73,842 | 74,167 | 45,831 |
Business acquisitions, net of cash acquired | (24,780) | (29,813) | |
Proceeds from sale of subsidiaries | 2,490 | 2,780 | |
Capitalization of internally developed software | (9,840) | (10,472) | (8,512) |
NET CASH USED IN INVESTING ACTIVITIES | (68,469) | (87,172) | (125,643) |
FINANCING ACTIVITIES | |||
Borrowings under credit facilities | 70,000 | ||
Borrowings under accounts receivable securitization program | 10,000 | 35,000 | |
Payments on long-term debt | (68,924) | (52,202) | (100,813) |
Net change in book overdrafts | (502) | (4,171) | 3,843 |
Deferred financing costs | (937) | (875) | |
Payment of common stock dividends | (8,264) | (8,318) | (6,837) |
Purchases of treasury stock | (6,019) | (9,510) | (12,765) |
Payments for tax withheld on share-based compensation | (3,270) | (1,682) | (3,112) |
NET CASH USED IN FINANCING ACTIVITIES | (77,916) | (75,883) | (15,559) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 5,530 | (51,115) | 7,929 |
Cash and cash equivalents and restricted cash at beginning of period | 115,242 | 166,357 | 158,428 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 120,772 | 115,242 | 166,357 |
NONCASH INVESTING ACTIVITIES | |||
Equipment financed | 84,170 | 83,366 | 80,592 |
Accruals for equipment received | $ 1,734 | $ 397 | $ 748 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | 12 Months Ended |
Dec. 31, 2017 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | NOTE A – ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATIO Organization and Description of Business ArcBest Corporation ® (the “Company”) is the parent holding company of businesses providing integrated logistics solutions. The Company’s operations are conducted through its three reportable operating segments: Asset-Based, which consists of ABF Freight System, Inc. and certain other subsidiaries; ArcBest, the Company’s asset-light logistics operation; and FleetNet. References to the Company in this Annual Report on Form 10-K are primarily to the Company and its subsidiaries on a consolidated basis. The Asset-Based segment represented approximately 70% of the Company’s 2017 total revenues before other revenues and intercompany eliminations. As part of our corporate restructuring (further described in Note N), effective January 1, 2017, certain nonunion employees in the areas of sales, pricing, customer service, financial services, marketing, and capacity sourcing were transferred to our shared services (reported in “Other and eliminations”), which increased the percentage of union employees within the Asset-Based segment. As of December 2017, approximately 83% of the Asset-Based segment’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 the Asset-Based segment’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 increased approximately 2.5% on a compounded annual basis throughout the contract period, which extends through March 31, 2018. On September 2, 2016, the ArcBest segment acquired Logistics & Distribution Services, LLC (“LDS”), a private logistics and distribution company, in a transaction valued at $25.0 million, reflecting net cash consideration of $17.0 million paid at closing and an additional $8.0 million of contingent consideration to be paid over the next two years based upon the achievement of certain financial targets, of which $3.5 million was paid in January 2018. On December 1, 2015, the ArcBest segment acquired Bear Transportation Services, L.P. (“Bear”), a privately-owned truckload brokerage firm, for net cash consideration of $24.4 million. On January 2, 2015, the ArcBest segment acquired Smart Lines Transportation Group, LLC (“Smart Lines”), 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 respective acquisition dates have been included in the accompanying consolidated financial statements. On December 29, 2017, the Company divested certain subsidiaries associated with the moving services of its ArcBest segment in a transaction valued at $5.2 million, reflecting $0.5 million in net cash consideration and $4.7 million in contingent consideration. On December 30, 2016, the Company divested certain other moving services subsidiaries of its ArcBest segment valued at $4.8 million, reflecting $2.8 million in net cash consideration and $2.0 million in contingent consideration, which was received during 2017. The subsidiaries are not significant to the Company’s consolidated operating results and financial condition. Financial Statement Presentation Consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. Segment Information: The Company uses the “management approach” for determining its reportable segment information. The management approach is based on the way management organizes the reportable segments within the Company for making operating decisions and assessing performance. See Note M for further discussion of segment reporting. Use of Estimates: 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. Reclassifications : Certain reclassifications have been made to the prior years’ consolidated financial statements to conform to the current year presentation. The insurance receivable for the amount of workers’ compensation and third-party casualty claims in excess of self-insurance retention limits, which was previously offset against the reserve included in accrued expenses, has been reclassed to other accounts receivable, resulting in an $8.7 million increase in other accounts receivable and a corresponding increase in accrued expenses in the consolidated balance sheet at December 31, 2016. Amounts totaling $18.6 million related to certain service centers of the Company’s Asset-Based operations previously recorded in leasehold improvements were reclassed to land and structures in the consolidated balance sheet at December 31, 2016. These reclassifications were previously reported in the Company’s first quarter 2017 Quarterly Report on Form 10-Q. The prior period impact of the reclassification of the insurance receivable is also reflected in the consolidated statements of cash flows for the years ended December 31, 2016 and 2015. Reclassifications were also made to the consolidated financial statements to apply the provisions of accounting pronouncements adopted during the first quarter of 2017 related to deferred income taxes, share-based compensation, and cash flow classification (see Adopted Accounting Pronouncements within Note B). The Company’s deferred tax assets were reclassed, by jurisdiction, from current to long-term in the consolidated balance sheets. The net change in restricted cash previously presented in financing activities of the Company’s consolidated statements of cash flows was removed and restricted cash was included in the reconciliation of beginning- and end-of-period totals of cash and cash equivalents and restricted cash. Cash paid by the Company when directly withholding shares from an employee’s share-based compensation award for tax-withholding purposes was reclassified from an operating activity within changes in income taxes to a financing activity in the consolidated statements of cash flows. There was no impact on the Company’s consolidated revenues, operating expenses, operating income, or earnings per share as a result of the reclassifications. During the third quarter of 2017, the Company modified the presentation of segment expenses allocated from shared services. Previously, expenses allocated from company-wide functions were categorized in individual segment expense line items by type of expense. Allocated expenses are now presented on a single shared services line within the Company’s operating segment disclosures. Reclassifications have been made to the prior period operating segment expenses to conform to the current year presentation. There was no impact on each segment’s total expenses as a result of the reclassifications. |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
ACCOUNTING POLICIES | |
ACCOUNTING POLICIES | NOTE B – ACCOUNTING POLICIES Cash, Cash Equivalents, and Short‑Term Investments: Short‑term investments that have a maturity of ninety days or less when purchased are considered cash equivalents. Variable rate demand notes are classified as cash equivalents, as the investments may be redeemed on a daily basis with the original issuer. Short‑term investments consist of FDIC‑insured certificates of deposit with original maturities greater than ninety days and remaining maturities less than one year. Interest and dividends related to cash, cash equivalents, and short‑term investments are included in interest and dividend income. Restricted Cash: Cash that is pledged as collateral, primarily for the Company’s outstanding letters of credit, is classified as restricted. The Company’s letters of credit are primarily issued in support of certain workers’ compensation and third‑party casualty claims liabilities in various states in which the Company is self‑insured. The restricted cash is classified consistent with the classification of the liabilities to which it relates and in accordance with the duration of the letters of credit. Restricted cash consisted of cash deposits at December 31, 2016. Concentration of Credit Risk: The Company is potentially subject to concentrations of credit risk related to the portion of its unrestricted and restricted cash, cash equivalents, and short‑term investments which is not federally insured, as further discussed in Note C. The Company’s services are provided primarily to customers throughout the United States and, to a lesser extent, Canada, Mexico, and other international locations. On a consolidated basis, the Company had no single customer representing more than 5% of its revenues in 2017, 2016, or 2015 or more than 7% of its accounts receivable balance at December 31, 2017 and 2016. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Historically, credit losses have been within management’s expectations. Allowances: The Company maintains allowances for doubtful accounts and revenue adjustments. The Company’s allowance for doubtful accounts represents an estimate of potential accounts receivable write‑offs associated with recognized revenue based on historical trends and factors surrounding the credit risk of specific customers. Accounts receivable are written off against the allowance for doubtful accounts and revenue adjustments when accounts are turned over to a collection agency or when the accounts are determined to be uncollectible. The Company’s allowance for revenue adjustments represents an estimate of potential adjustments associated with recognized revenue based upon historical trends and current information regarding trends and business changes. Property, Plant and Equipment, Including Repairs and Maintenance: Purchases of property, plant and equipment are recorded at cost. For financial reporting purposes, property, plant and equipment is depreciated principally by the straight‑line method, using the following useful lives: structures – primarily 15 to 60 years; revenue equipment – 3 to 14 years; and other equipment – 2 to 15 years. The Company utilizes tractors and trailers in its Asset-Based operations and trailers in its ArcBest segment operations. Tractors and trailers are commonly referred to as “revenue equipment” in the transportation business. The Company periodically reviews and adjusts, as appropriate, the residual values and useful lives of revenue equipment and other equipment. For tax reporting purposes, accelerated depreciation or cost recovery methods are used. Gains and losses on asset sales are reflected in the year of disposal. Exchanges of nonmonetary assets that have commercial substance are measured based on the fair value of the assets exchanged. Tires purchased with revenue equipment are capitalized as a part of the cost of such equipment, with replacement tires being expensed when placed in service. Repair and maintenance costs associated with property, plant and equipment are expensed as incurred if the costs do not extend the useful life of the asset. If such costs do extend the useful life of the asset, the costs are capitalized and depreciated over the appropriate remaining useful life. Computer Software Developed or Obtained for Internal Use, Including Web Site Development Costs: The Company capitalizes the costs of software acquired from third parties and qualifying internal computer software costs incurred during the application development stage. Costs incurred in the preliminary project stage and postimplementation-operation stage, which includes maintenance and training costs, are expensed as incurred. For financial reporting purposes, capitalized software costs are amortized by the straight‑line method generally over 2 to 7 years. The amount of costs capitalized within any period is dependent on the nature of software development activities and projects in each period. Impairment Assessment of Long‑Lived Assets: The Company reviews its long‑lived assets, including property, plant and equipment and capitalized software, which are held and used in its operations, for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable . If such an event or change in circumstances is present, the Company will estimate the undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the undiscounted future cash flows is less than the carrying amount of the related asset, the Company will recognize an impairment loss. The Company records impairment losses in operating income. Assets to be disposed of are reclassified as assets held for sale at the lower of their carrying amount or fair value less cost to sell. Assets held for sale primarily represent Asset-Based segment nonoperating properties, older revenue equipment, and other equipment. Adjustments to write down assets to fair value less the amount of costs to sell are reported in operating income. Assets held for sale are expected to be disposed of by selling the assets within the next 12 months. Gains and losses on property and equipment are reported in operating income. Assets held for sale of $1.4 million and $1.2 million are reported within other noncurrent assets as of December 31, 2017 and 2016, respectively. At December 31, 2017 and 2016, management was not aware of any events or circumstances indicating the Company’s long‑lived assets would not be recoverable. Goodwill and Intangible Assets: Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill is not amortized, but rather is evaluated for impairment annually or more frequently if indicators of impairment exist. The Company’s measurement of goodwill impairment involves a comparison of the estimated fair value of a reporting unit to its carrying value. If the estimated fair value of the reporting unit is less than the carrying value, an estimate of the current fair values of all assets and liabilities is made to determine the amount of implied goodwill (referred to as Step 2 of the goodwill impairment test) and, consequently, the amount of any goodwill impairment. Fair value is derived using a combination of valuation methods, including earnings before interest, taxes, depreciation, and amortization (EBITDA) and revenue multiples (market approach) and the present value of discounted cash flows (income approach). The Company’s annual impairment testing is performed as of October 1. Indefinite‑lived intangible assets are also not amortized but rather are evaluated for impairment annually or more frequently if indicators of impairment exist. If the carrying amount of the intangible asset exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess. Fair values are determined based on a discounted cash flow model, similar to the goodwill analysis. The Company amortizes finite‑lived intangible assets over their respective estimated useful lives. Finite‑lived intangible assets are also evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In reviewing finite‑lived intangible assets for impairment, the carrying amount of the asset is compared to the estimated undiscounted future cash flows expected from the use of the asset and its eventual disposition. If such cash flows are not sufficient to support the recorded value, an impairment loss to reduce the carrying value of the asset to its estimated fair value shall be recognized in operating income. Income Taxes: The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on the temporary differences between the book value and the tax basis of certain assets and liabilities and the tax effect of operating loss and tax credit carryforwards. Deferred income taxes relate principally to asset and liability basis differences resulting from the timing of depreciation deductions and to temporary differences in the recognition of certain revenues and expenses. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. The Company classifies any interest and penalty amounts related to income tax matters as operating expenses. Management applies considerable judgment in determining the consolidated income tax provision, including valuation allowances on deferred tax assets. The valuation allowance for deferred tax assets is determined by evaluating whether it is more likely than not that the benefits of deferred tax assets will be realized through future reversal of existing taxable temporary differences, taxable income in carryback years in jurisdictions in which they are allowable, projected future taxable income, or tax‑planning strategies. Uncertain tax positions, which also require significant judgment, are measured to determine the amounts to be recognized in the financial statements. The income tax provision and valuation allowances are complicated by complex and frequently changing rules administered in multiple jurisdictions, including U.S. federal, state, and foreign governments. The Company’s income taxes for the year ended December 31, 2017 were impacted by the recognition of a reasonable estimate of the tax effects of the Tax Cuts and Jobs Act (the “Tax Reform Act”) that was signed into law on December 22, 2017 (see Note E). Book Overdrafts: Issued checks that have not cleared the bank as of December 31 result in book overdraft balances for accounting purposes which are classified within accounts payable in the accompanying consolidated balance sheets. Book overdrafts amounted to $17.2 million and $17.7 million for the year ended December 31, 2017 and 2016, respectively. The change in book overdrafts is reported as a component of financing activities within the statement of cash flows. Claims Liabilities : The Company is self‑insured up to certain limits for workers’ compensation, certain third‑party casualty claims, and cargo loss and damage claims. Amounts in excess of the self‑insured limits are fully insured to levels which management considers appropriate for the Company’s operations. The Company’s claims liabilities have not been discounted. Liabilities for self‑insured workers’ compensation and third‑party casualty claims are based on the case reserve amounts plus an estimate of loss development and incurred but not reported (“IBNR”) claims, which is developed from an independent actuarial analysis. The process of determining reserve requirements utilizes historical trends and involves an evaluation of claim frequency and severity, claims management, and other factors. Case reserves are evaluated as loss experience develops and new information becomes available. Adjustments to previously estimated aggregate reserves are reflected in financial results in the periods in which they are made. Aggregate reserves represent an estimate of the costs of claims incurred, and it is possible that the ultimate liability may differ significantly from such estimates. The Company develops an estimate of self‑insured cargo loss and damage claims liabilities based on historical trends and certain event‑specific information. Claims liabilities are recorded in accrued expenses and are not offset by insurance receivables which are reported in other accounts receivable. Long‑Term Debt: Long-term debt consists of borrowings outstanding under the Company’s revolving credit facility and accounts receivable securitization program, minimum principal payments due under notes payable for the financing of revenue equipment, other equipment, and software; and the present values of net minimum lease payments under capital lease obligations. The Company’s long-term debt and financing arrangements are further described in Note G. Contingent Consideration: The Company records the estimated fair value of contingent consideration at the acquisition date as part of the purchase price consideration for an acquisition. The fair value of the Company’s contingent consideration liability, which is further described in Note C, was determined by assessing Level 3 inputs with a discounted cash flow approach using various probability-weighted scenarios. The fair value of the outstanding contingent consideration is recorded in accrued expenses or other long-term liabilities, based on when expected payouts become due. Amounts held in escrow for contingent consideration are recorded in other current assets or other long-term assets, consistent with the classification of the related liability. The liability for contingent consideration is remeasured at each quarterly reporting period and any change in fair value as a result of the recurring assessments is recognized in operating income. Interest Rate Swap Derivative Instruments : The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. The Company has interest rate swap agreements designated as a cash flow hedges. The effective portion of the gain or loss on the interest rate swap instruments is reported as unrealized gain or loss as a component of accumulated other comprehensive income or loss, net of tax, in stockholders’ equity and the change in the unrealized gain or loss on the interest rate swaps is reported in other comprehensive income or loss, net of tax, in the consolidated statements of comprehensive income. The unrealized gain or loss is reclassified out of accumulated other comprehensive loss into income in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the interest rate swap instruments, if any, is recognized in current income. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. Leases: The Company leases, under capital and operating lease arrangements, certain facilities, revenue equipment, and certain other equipment used primarily in Asset-Based segment service center operations. Certain of these leases contain fluctuating or escalating payments. The related rent expense is recorded on a straight‑line basis over the lease term. The cumulative excess of rent expense over rent payments is accounted for as a deferred lease obligation. For financial reporting purposes, assets held under capital leases are depreciated over their estimated useful lives on the same basis as owned assets and leasehold improvements associated with assets utilized under capital or operating leases are amortized by the straight‑line method over the shorter of the remaining lease term or the asset’s useful life. Amortization of assets under capital leases is included in depreciation expense. Obligations under the capital lease arrangements are included in long‑term debt, net of the current portion due, which is classified in current liabilities. Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans: The Company recognizes the funded status (the difference between the fair value of plan assets and the benefit obligation) of its nonunion defined benefit pension plan, supplemental benefit plan (“SBP”), and postretirement health benefit plan in the consolidated balance sheet and recognizes changes in the funded status, net of tax, in the year in which they occur as a component of other comprehensive income or loss. Amounts recognized in other comprehensive income or loss are subsequently expensed as components of net periodic benefit cost by amortizing unrecognized net actuarial losses over the average remaining active service period of the plan participants and amortizing unrecognized prior service credits over the remaining years of service until full eligibility of the active participants at the time of the plan amendment which created the prior service credit. A corridor approach is not used for determining the amounts of net actuarial losses to be amortized. The expense and liability related to the Company’s nonunion defined benefit pension plan, SBP, and postretirement health benefit plan are measured based upon a number of assumptions and using the services of a third‑party actuary. Assumptions impacting the Company’s expense for these plans include the discount rate used to discount the plans’ obligations and, for the nonunion defined benefit pension plan, the expected rate of return applied to the fair value of plan assets. The discount rate is determined by matching projected cash distributions with appropriate high‑quality corporate bond yields in a yield curve analysis. The Company establishes the expected rate of return on plan assets by considering the historical returns for the plan’s current investment mix and the plan investment advisor’s range of expected returns for the plan’s current investment mix. Assumptions are also made regarding expected retirement age, mortality, employee turnover, and, for the postretirement health benefit plan, future increases in health care costs. In November 2017, an amendment to the nonunion defined benefit pension plan was executed to terminate the plan effective December 31, 2017 (see Note I). The plan has filed for a determination letter from the U.S. Internal Revenue Service (the “IRS”) regarding the qualification of the plan termination, and the Company expects the process of terminating the plan to commence following receipt of a favorable determination letter and the distribution of benefit election forms to plan participants. A more conservative approach has been taken to preserve asset values of the frozen nonunion defined benefit pension plan and to minimize the impact of market volatility by transferring the plan’s equity investments to short-duration debt instruments during the second half of 2017. As a result of the significant change to the plan’s asset allocation, the plan’s investment rate of return assumption was lowered for the second half of 2017 and for 2018; however, there have been no changes to the methodologies of establishing assumptions for the nonunion pension plan. The assumptions used directly impact the net periodic benefit cost for a particular year. An actuarial gain or loss results when actual experience varies from the assumptions or when there are changes in actuarial assumptions. Actuarial gains and losses are not included in net periodic benefit cost in the period when they arise but are recognized as a component of other comprehensive income or loss and subsequently amortized as a component of net periodic benefit cost. The Company uses December 31 as the measurement date for its nonunion defined benefit pension plan, SBP, and postretirement health benefit plan. Plan obligations are also remeasured upon curtailment and upon settlement. The Company records quarterly pension settlement expense related to the nonunion defined benefit pension plan when qualifying distributions determined to be settlements are expected to exceed the estimated total annual interest cost of the plan. Benefit distributions under the SBP individually exceed the annual interest cost of the plan, and the Company records the related settlement expense when the amount of the benefit to be distributed is fixed, which is generally upon an employee’s termination of employment. Pension settlement expense for the nonunion defined benefit pension and SBP plans is presented in Note I. Revenue Recognition: Asset-Based segment revenue is recognized based on relative transit time in each reporting period with expenses recognized as incurred. A bill-by-bill analysis is used to establish estimates of revenue in transit for recognition in the appropriate reporting period. ArcBest segment revenue is recognized based on the delivery of the shipment to the customer-designated location. Service fee revenue for the FleetNet segment is recognized upon response to the service event. Repair revenue and expenses for the FleetNet segment are recognized at the completion of the service by third-party vendors. Revenue, purchased transportation expense, and third‑party service expenses are reported on a gross basis for certain shipments and services where the Company utilizes a third‑party carrier for pickup, linehaul, delivery of freight, or performance of services but remains the primary obligor and assumes collection and credit risks. Comprehensive Income or Loss: Comprehensive income or loss consists of net income and other comprehensive income or loss, net of tax. Other comprehensive income or loss refers to revenues, expenses, gains, and losses that are not included in net income, but rather are recorded directly to stockholders’ equity. The Company reports the components of other comprehensive income or loss, net of tax, by their nature and discloses the tax effect allocated to each component in the consolidated statements of comprehensive income. The accumulated balance of other comprehensive income or loss is displayed separately in the consolidated statements of stockholders’ equity and the components of the balance are reported in Note J. The changes in accumulated other comprehensive income or loss, net of tax, and the significant reclassifications out of accumulated other comprehensive income or loss are disclosed, by component, in Note J. Earnings Per Share: The Company uses the two‑class method for calculating earnings per share due to certain equity awards being deemed participating securities. The two-class method is an earnings allocation method under which earnings per share is calculated for each class of common stock and participating security considering both dividends declared and participation rights in undistributed earnings as if all such earnings had been distributed during the period. The calculation uses the net income based on the two-class method and the weighted‑average number of common shares (basic earnings per share) or common equivalent shares outstanding (diluted earnings per share) during the applicable period. The dilutive effect of common stock equivalents is excluded from basic earnings per common share and included in the calculation of diluted earnings per common share. Share‑Based Compensation: The fair value of restricted stock awards is determined based upon the closing market price of the Company’s common stock on the date of grant. The restricted stock units generally vest at the end of a five‑year period following the date of grant, except for certain awards granted to non‑employee directors that typically vest at the end of a one-year period for awards granted on or after January 1, 2016 and at the end of a three‑year period for previous grants, subject to accelerated vesting due to death, disability, retirement, or change‑in‑control provisions. When restricted stock units become vested, the Company issues new shares which are subsequently distributed. Dividends or dividend equivalents are paid on certain restricted stock units during the vesting period. The Company recognizes the income tax benefits of dividends on share‑based payment awards as income tax expense or benefit in the consolidated statements of operations when awards vest or are settled. Share‑based awards are amortized to compensation expense on a straight‑line basis over the vesting period of awards or over the period to which the recipient first becomes eligible for retirement, whichever is shorter, with vesting accelerated upon death or disability. The Company recognizes forfeitures as they occur. Fair Value Measurements: The Company discloses the fair value measurements of its financial assets and liabilities. Fair value measurements for investments held in trust for the Company’s nonunion defined benefit pension plan are also disclosed. Fair value measurements are disclosed in accordance with the following hierarchy of valuation approaches 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. Environmental Matters: The Company expenses environmental costs related to existing conditions resulting from past or current operations and from which no current or future benefit is discernible. Expenditures which extend the life of the related property or mitigate or prevent future environmental contamination are capitalized. 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. The estimated liability is not reduced for possible recoveries from insurance carriers or other third parties. Exit or Disposal Activities: The Company recognizes liabilities for costs associated with exit or disposal activities when the liability is incurred. Adopted Accounting Pronouncements In the first quarter of 2017, the Company adopted guidance issued by the Financial Accounting Standards Board (the “FASB”) which amended Accounting Standards Codification (“ASC”) Topic 740 with the addition of Balance Sheet Classification of Deferred Taxes. The amendment was retrospectively adopted and resulted in reclassifications to the consolidated balance sheets to present all deferred tax assets and liabilities as noncurrent by jurisdiction. As a result of retrospectively applying the provisions of the amendment, current deferred tax assets were reduced by $39.6 million and noncurrent deferred tax assets were increased by $3.0 million, with a corresponding reduction of $36.6 million to noncurrent deferred tax liabilities at December 31, 2016. In the first quarter of 2017, the Company adopted an amendment to ASC Topic 718, Compensation – Stock Compensation, which requires the income tax effects of awards to be recognized in the statement of operations when awards vest or are settled and allows employers to make a policy election to account for forfeitures as they occur. As a result of applying the provisions of the amendment, the Company recognized a cumulative effect adjustment to the opening balances of retained earnings, additional paid-in capital, and the deferred income tax liability of $0.2 million, $0.4 million, and $0.2 million, respectively. The Company also made a policy election to account for forfeitures as they occur. The Company may experience volatility in its income tax provision as a result of recording all excess tax benefits and tax deficiencies in the income statement upon settlement of awards, which is primarily during the second quarter of each year except for 2018 which will predominantly occur in the fourth quarter. This provision of the amendment related to recognition of excess tax benefits and tax deficiencies was adopted prospectively; therefore, the prior period has not been adjusted for this provision. Cash paid by the Company to taxing authorities on the employee’s behalf for withheld shares was reclassified from an operating activity within changes in accounts payable, accrued expenses, and other liabilities to a financing activity in the consolidated statements of cash flows for all periods presented. The other provisions of the adopted amendment did not have a significant impact on the Company’s consolidated financial statements. In the first quarter of 2017, the Company also adopted amendments to ASC Topic 230, Statement of Cash Flows, which provide classification guidance for restricted cash and certain cash receipts and cash payments presented in the statement of cash flows. The retrospective adoption of the amendments resulted in reclassification to the consolidated statement of cash flows to include restricted cash in the reconciliation of beginning- and end-of-period totals of cash and cash equivalents. Proceeds from the settlement of corporate-owned life insurance policies are classified as cash provided by investing activities, and cash payments for premiums on such insurance policies are classified as cash used in operating activities in the consolidated statements of cash flows. Accounting Pronouncements Not Yet Adopted ASC Topic 606, which amends the guidance in 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 will adopt the standard on the modified retrospective basis, which requires the effects of adoption to be reflected in beginning retained earnings, and does not expect a significant impact on the consolidated financial statements; however, additional disclosures regarding disaggregated revenue, contract assets and liabilities, and performance obligations are expected, and judgement will be used in applying the disclosure requirements. Revenue recognition for the Asset-Based and FleetNet segments will not change upon adoption of the standard. However, revenues for the ArcBest segment will be recognized on a relative-transit-time basis instead of the previous recognition method at final delivery. Due to relatively short transit times of the ArcBest segment, the financial impact at any period-end is not expected to be significant. The Company expects to record an adjustment of less than $0.5 million to increase beginning retained earnings in the first quarter 2018 financial statements as a result of adopting the guidance. An amendment to ASC Topic 715, Compensation – Retirement Benefits , requires the service cost component of net periodic pension cost related to pension and other postretirement benefits accounted for under ASC Topic 715 to be included in the same line item or items as other compensation costs arising from services rendered by the related employees, and requires the other components of net periodic pension cost, including pension settlement expense, to be presented separately from the service cost component and outside of the subtotal of income from operations. These provisions of the amendment are required to be applied retrospectively and are effective for the Company beginning January 1, 2018. Other than the reclassifications described, the Company does not anticipate the amendment to have an impact on the consolidated financial statements. ASC Topic 718, Compensation-Stock Compensation , was amended to provide guidance about which changes to the terms or conditions of a share-based payment award require the application of modification accounting. The amendment is effective for the Company beginning January 1, 2018 and is not expected to have a significant impact on the consolidated financial statements. Effective Janu |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2017 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | NOTE C – 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: December 31 December 31 2017 2016 (in thousands) Cash and cash equivalents Cash deposits (1) $ 86,510 $ 92,520 Variable rate demand notes (1)(2) 19,744 16,057 Money market funds (3) 14,518 5,703 Total cash and cash equivalents $ 120,772 $ 114,280 Short-term investments Certificates of deposit (1) $ 56,401 $ 56,838 Restricted cash Cash deposits (1) $ — $ 962 (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). 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 short‑term investments primarily in FDIC‑insured certificates of deposit. However, certain cash deposits and certificates of deposit may exceed federally insured limits. At December 31, 2017 and 2016, cash and cash equivalents totaling $61.1 million and $39.9 million, respectively, were not FDIC insured. Fair Value Disclosure of Financial Instruments Fair value and carrying value disclosures of financial instruments as of December 31 are presented in the following table: December 31 December 31 2017 2016 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ 70,000 $ 70,000 $ 70,000 $ 70,000 Accounts receivable securitization borrowings (2) 45,000 45,000 35,000 35,000 Notes payable (3) 153,441 152,131 138,032 137,503 $ 268,441 $ 267,131 $ 243,032 $ 242,503 (1) The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on LIBOR, plus a margin, that 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, that is 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 a Recurring Basis The following table presents the assets and liabilities that are measured at fair value on a recurring basis: December 31, 2017 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) $ 14,518 $ 14,518 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,359 2,359 — — Interest rate swap (3) 481 — 481 — $ 17,358 $ 16,877 $ 481 $ — Liabilities: Contingent consideration (4) $ 6,970 $ — $ — $ 6,970 December 31, 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) $ 5,703 $ 5,703 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,220 2,220 — — $ 7,923 $ 7,923 $ — $ — Liabilities: Contingent consideration (4) $ 6,775 $ — $ — $ 6,775 Interest rate swap (3) 542 — 542 — $ 7,317 $ — $ 542 $ 6,775 (1) Included in 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. Included in other long‑term assets, with a corresponding liability reported within other long‑term liabilities. (3) Included in other long‑term assets or liabilities. The fair values of the interest rate swaps were 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 December 31, 2017 and December 31, 2016 and considers the interest rate swap valuations in Level 2 of the fair value hierarchy. (4) Included in accrued expenses and other long-term liabilities, based on when expected payouts become due. The estimated fair value of contingent consideration for an earn-out agreement related to the September 2016 acquisition of LDS was determined by assessing Level 3 inputs with a discounted cash flow approach using various probability-weighted scenarios. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues and gross margins to be achieved for the applicable performance periods, probability weightings assigned to the performance scenarios, and the discount rate applied, which was 12.5% and 12.3% as of December 31, 2017 and 2016, respectively. Subsequent changes to the fair value as a result of recurring assessments will be recognized in operating income. The following table provides the changes in fair value of the liabilities measured at fair value using inputs categorized in Level 3 of the fair value hierarchy: Contingent Consideration (in thousands) Balances at December 31, 2015 $ — Contingent consideration liability recorded at fair value for business acquisition 6,711 Change in fair value included in operating expenses 64 Balances at December 31, 2016 6,775 Change in fair value included in operating expenses 195 Balances at December 31, 2017 $ 6,970 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE D – 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: Total ArcBest FleetNet (in thousands) Balances December 31, 2015 $ 96,465 $ 95,835 $ 630 Goodwill acquired (1) 12,640 12,640 — Goodwill divested (2) (842) (842) — Purchase accounting adjustments 612 612 — Balances December 31, 2016 $ 108,875 $ 108,245 $ 630 Goodwill divested (2) (661) (661) — Purchase accounting adjustments 106 106 — Balances December 31, 2017 $ 108,320 $ 107,690 $ 630 (1) Goodwill related to the September 2, 2016 acquisition of LDS is expected to be fully deductible for tax purposes. (2) Goodwill divested due to the sale of certain non-strategic businesses was determined based on the relative fair value of the businesses sold to the total fair value of the reporting unit. Intangible assets consisted of the following as of December 31: 2017 2016 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 14 $ 60,431 $ 19,745 $ 40,686 $ 60,431 $ 15,350 $ 45,081 Driver network 3 3,200 3,200 — 3,200 3,200 — Other 9 1,032 549 483 1,032 406 626 13 64,663 23,494 41,169 64,663 18,956 45,707 Indefinite-lived intangible assets Trade name N/A 32,300 N/A 32,300 32,300 N/A 32,300 Other (1) N/A — N/A — 2,500 N/A 2,500 32,300 32,300 34,800 34,800 Total intangible assets N/A $ 96,963 $ 23,494 $ 73,469 $ 99,463 $ 18,956 $ 80,507 1) Other indefinite-lived intangible assets divested due to the sale of certain non-strategic businesses. The future amortization for intangible assets and acquired software as of December 31, 2017 were as follows: Intangible Acquired Total Assets Software (1) (in thousands) 2018 $ 6,641 $ 4,520 $ 2,121 2019 5,463 4,482 981 2020 4,471 4,454 17 2021 4,418 4,412 6 2022 4,385 4,385 — Thereafter 18,916 18,916 — Total amortization $ 44,294 $ 41,169 $ 3,125 (1) Acquired software is reported in property, plant and equipment. Annual impairment evaluations of goodwill and indefinite‑lived intangible assets were performed as of October 1, 2017 and 2016, and it was determined that there was no impairment of the recorded balances. In November 2016, the Company determined it would discontinue the use of certain software applications as a result of the realignment of the Company’s corporate structure and recorded a non-cash impairment charge of $6.2 million which includes the write-down of $5.5 million of acquired software in the ArcBest segment to its fair value, reflecting estimated reproduction costs less an obsolescence allowance. (See Note N for disclosure of the Company’s restructuring costs.) |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
INCOME TAXES | NOTE E – INCOME TAXES On December 22, 2017, H.R. 1/Public Law 115-97 which includes tax legislation titled Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. Effective January 1, 2018, the Tax Reform Act reduces the U.S. federal corporate tax rate from 35% to 21%. As a result of the Tax Reform Act, the Company recorded a provisional reduction of net deferred income tax liabilities of approximately $24.5 million at December 31, 2017, pursuant to the provisions of Accounting Standards Codification 740, Income Taxes , (“ASC 740”), which requires the impact of tax law changes to be recognized in the period in which the legislation is enacted. In addition to the provisional effect on net deferred tax liabilities, the Company recorded a provisional reduction in current income tax expense of approximately $1.3 million, as a result of the Tax Reform Act, to reflect the Company’s use of a fiscal year rather than a calendar year for U.S. income tax filing. Due to the fact that the Company’s current fiscal tax year includes the effective date of the rate change under the Tax Reform Act, taxes are required to be calculated by applying a blended rate to the taxable income for the current taxable year ending February 28, 2018. The blended rate is calculated based on the ratio of days in the fiscal year prior to and after the effective date of the rate change. In computing total tax expense for 2017, a 35% federal statutory rate was applied to the two months ended February 28, 2017, and a blended rate of 32.74% was applied to the ten months ended December 31, 2017. The Tax Reform Act makes many other changes in the tax law applicable to corporations, including changes in the tax treatment of foreign earnings. The foreign earnings of the Company are immaterial to the Company’s consolidated financial results, and the changes made to the treatment of foreign earnings by the Tax Reform Act are not expected to have a material impact on the Company’s consolidated financial statements. However, at this time, complete guidance is not available on the application of significant portions of the Tax Reform Act relating to foreign earnings and operations, and most state taxing authorities have not provided any guidance. Therefore, the Company has not completed its final analysis of the impact of the Tax Reform Act on its income tax accounting and expense. The Company will continue to evaluate the guidance made available on the Tax Reform Act and make adjustments, as necessary, to its income tax provision relating to state and foreign operations. If the impact of any change in estimates made as of December 31, 2017 related to income tax expense for state and foreign operations is material, appropriate disclosure will be made. At December 31, 2017, the Company has not fully completed its accounting for the tax effect of the enactment of the Tax Reform Act; however, a reasonable estimate of its effects on the Company’s income taxes has been recognized, as described within this Note. The provisional amounts recorded in the consolidated financial statements as of and for the year ended December 31, 2017 reflect a reasonable estimate of the effects of the tax law change. The application of ASC 740 will also affect 2018 income tax expense, particularly in the first quarter. In addition to the change in the tax rate, the Act makes other changes to corporate tax law which will affect the Company’s U.S. income tax expense in 2018 and subsequent years. Based on information available at this time, none of the changes, other than the tax rate change, are expected, either individually or in the aggregate, to be material to the Company’s operating results. Significant components of the provision or benefit for income taxes for the years ended December 31 were as follows: 2017 (1) 2016 2015 (in thousands) Current provision (benefit): Federal $ (1,969) $ (604) $ 9,156 State 3,701 (335) 165 Foreign 331 1,052 2,124 2,063 113 11,445 Deferred provision (benefit): Federal (9,312) 8,161 12,914 State (867) 1,354 3,589 Foreign (34) 7 (68) (10,213) 9,522 16,435 Total provision (benefit) for income taxes $ (8,150) $ 9,635 $ 27,880 1) For 2017, the income tax provision (benefit) reflects the provisional impact of the Tax Reform Act, as previously disclosed in this Note. Deferred income tax liabilities were reduced by approximately $24.5 million as a result of the decrease in the U.S. corporate statutory rate from 35% to 21%, effective January 1, 2018, and current tax expense was reduced by approximately $1.3 million as a result of the law change and the Company’s application of a blended rate due to the use of a fiscal year other than the calendar year for U.S. income tax filing purposes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Components of the deferred tax provision or benefit for the years ended December 31, were as follows: 2017 (1) 2016 (1) 2015 (1) (in thousands) Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets $ 21,876 $ 12,182 $ 21,098 Amortization of intangibles (1,030) (3,623) (3,184) Changes in reserves for workers’ compensation, third-party casualty, and cargo claims (812) 362 (674) Revenue recognition 332 1,862 7 Allowance for doubtful accounts (719) (295) 307 Foreign tax credit carryforward utilized — — 434 Nonunion pension and other retirement plans (1,977) 3,861 (234) Deferred compensation plans 226 203 541 Federal net operating loss carryforwards utilized 28 161 70 State net operating loss carryforwards utilized (generated) 229 (304) 623 State depreciation adjustments (1,244) (758) (657) Share-based compensation 352 (681) (621) Valuation allowance increase (decrease) 401 (61) 22 Leases 16 (1) (969) Other accrued expenses (852) (4,108) 1,256 Provisional impact of the Tax Reform Act (2) (24,542) — — Other (2,497) 722 (1,584) Deferred tax provision (benefit) $ (10,213) $ 9,522 $ 16,435 1) The components of the deferred tax provision above reflect the statutory U.S. income tax rate in effect for the applicable year, which is 35%. 2) For 2017, the provisional effect of the change in the U.S. corporate tax rate to 21% in accordance with the Tax Reform Act is reflected as a separate component of the deferred tax provision. Significant components of the deferred tax assets and liabilities at December 31 were as follows: 2017 (1) 2016 (1) (in thousands) Deferred tax assets: Accrued expenses $ 36,843 $ 53,366 Pension liabilities 4,413 4,869 Postretirement liabilities other than pensions 6,236 9,903 Share-based compensation 4,466 7,119 Federal and state net operating loss carryovers 1,781 2,229 Other 1,508 1,856 Total deferred tax assets 55,247 79,342 Valuation allowance (844) (293) Total deferred tax assets, net of valuation allowance 54,403 79,049 Deferred tax liabilities: Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets 73,725 95,248 Intangibles 14,573 24,715 Revenue recognition 6,172 5,679 Prepaid expenses 3,125 5,109 Total deferred tax liabilities 97,595 130,751 Net deferred tax liabilities $ (43,192) $ (51,702) 1) The amounts for deferred tax assets and liabilities reflect the applicable tax rates for each category, with the U.S. federal rate at 35% for 2016 and at 21% for a substantial portion of 2017 temporary differences in accordance with the Tax Reform Act. The amounts also include deferred taxes for states and foreign jurisdictions. Reconciliation between the effective income tax rate, as computed on income before income taxes, and the statutory federal income tax rate for the years ended December 31 is presented in the following table: 2017 (1) 2016 (1) 2015 (1) (in thousands) Income tax provision at the statutory federal rate $ 18,052 $ 9,901 $ 25,457 Federal income tax effects of: State income taxes (992) (357) (1,314) Nondeductible expenses 1,551 1,653 1,426 Life insurance proceeds and changes in cash surrender value (927) (1,001) (110) Dividends received deduction (9) (11) (3) Alternative fuel credit — (1,180) (1,141) Increase (decrease) in valuation allowances 401 (61) 22 Decrease in uncertain tax positions (2) (720) — — Adoption of ASC 718 relating to stock compensation (3) (1,129) — — Impact of the Tax Reform Act on current tax (1) (1,288) — — Impact of the Tax Reform Act on deferred tax (1) (24,542) — — Other (4) (1,678) (1,387) (2,267) Federal income tax provision (benefit) (11,281) 7,557 22,070 State income tax provision 2,834 1,019 3,754 Foreign income tax provision 297 1,059 2,056 Total provision (benefit) for income taxes $ (8,150) $ 9,635 $ 27,880 Effective tax (benefit) rate (15.8) % 34.1 % 38.3 % (1) Amounts in this reconciliation reflect the statutory U.S. income tax rate in effect for the applicable year prior to the enactment of the Tax Reform Act, which is 35%. For 2017, the effect of the change in the U.S. corporate tax rate to 21% in accordance with the Tax Reform Act is reflected in separate components of the reconciliation. (2) The statute of limitations for the federal return on which these credits were claimed expired in the fourth quarter of 2017. (3) The Company made a policy election to account for forfeitures as they occur. (4) Includes foreign income tax provision, as presented in this table. Income taxes paid, excluding income tax refunds, totaled $22.7 million, $24.3 million, and $39.0 million in 2017, 2016, and 2015, respectively. Income tax refunds totaled $18.5 million, $32.5 million, and $21.3 million in 2017, 2016, and 2015, respectively. In the first quarter of 2017, the Company adopted an amendment to ASC Topic 718, Compensation – Stock Compensation , which requires the income tax effects of awards to be recognized in the statement of operations when awards vest or are settled and allows employers to make a policy election to account for forfeitures as they occur. The Company may experience volatility in its income tax provision as a result of recording all excess tax benefits and tax deficiencies in the income statement upon settlement of awards, which occurs primarily during the second quarter of each year except for 2018 which will predominantly occur in the fourth quarter. As a result of applying the provisions of the amendment, the tax rate for 2017 reflects a benefit of 2.2%. The tax benefit of dividends on share based payment awards was less than $0.1 million each for 2017, 2016, and 2015. The 2016 and 2015 amounts were reflected in paid in capital. The Company had state net operating loss carryforwards of $19.9 million and state contribution carryforwards of $1.4 million at December 31, 2017. These state net operating loss and contribution carryforwards expire in 5 to 20 years, with the majority of states allowing a 15 or 20 years. As of December 31, 2017, the Company had a valuation allowance of $0.8 million related to state net operating loss and contribution carryforwards, due to the uncertainty of realization. As of December 31, 2016, the Company had a valuation allowance of $0.3 million related to foreign net operating loss carryforwards. This valuation allowance reversed during 2017, as the foreign net operating loss was fully utilized. Consolidated federal income tax returns filed for tax years through 2013 are closed by the applicable statute of limitations. During 2014, the IRS completed an examination of the tax returns for 2010, 2011, and 2012, resulting in an adjustment of less than $0.1 million. The Company is under examination by one state taxing authority at December 31, 2017. The Company is not under examination by foreign taxing authorities at December 31, 2017. The Company acquired Panther Expedited Services, Inc. (“Panther”) on June 15, 2012. For periods subsequent to the acquisition date, Panther has been included in consolidated federal income tax returns filed by the Company and in consolidated or combined state income tax returns in states permitting or requiring consolidated or combined income tax returns for affiliated groups such as the Company and its subsidiaries. For periods prior to the acquisition date, Panther and its subsidiaries filed a consolidated federal income tax return on a stand‑alone basis. Panther’s federal tax returns for years through 2012 are now closed by the statute of limitations. At December 31, 2017, Panther had federal net operating loss carryforwards of approximately $1.5 million from periods ending on or prior to June 15, 2012. State net operating loss carryforwards for the same periods are approximately $5.0 million. Federal net operating loss carryforwards will expire if not used within 14 years. State carryforward periods for Panther vary from 5 to 20 years. For federal tax purposes and for most states, the use of such carryforwards is limited by Section 382 of the Internal Revenue Code (“IRC”). The limitation applies by restricting the amount of net operating loss carryforwards that may be used in individual tax years subsequent to the acquisition date. However, it is not expected that the Section 382 limitation will result in the expiration of net operating loss carryforwards prior to their availability under Section 382. The Company established a reserve for uncertain tax positions of $0.3 million at December 31, 2013, and increased the reserve to $0.7 million at December 31, 2014 as a result of certain credits taken on amended federal returns. The statute of limitations for the federal return on which these credits were claimed expired in the fourth quarter of 2017, and the reserve of $0.7 million was removed at December 31, 2017. The Company established a reserve for uncertain tax positions of less than $0.1 million at December 31, 2016, and maintained the reserve at December 31, 2017, due to uncertainty of how the IRS will interpret regulations related to research and development credits claimed on the Company’s 2015 federal return. For 2017, 2016 and 2015, interest of less than $0.1 million was paid related to federal and state income taxes. Accrued interest on the foreign income tax obligations of less than $0.1 million remained at December 31, 2017. Any interest or penalties related to income taxes are charged to operating expenses. |
OPERATING LEASES AND COMMITMENT
OPERATING LEASES AND COMMITMENTS | 12 Months Ended |
Dec. 31, 2017 | |
OPERATING LEASES AND COMMITMENTS | |
OPERATING LEASES AND COMMITMENTS | NOTE F – OPERATING LEASES AND COMMITMENTS While the Company maintains ownership of most of its larger service centers and distribution centers, certain facilities and equipment are leased. Certain of the leases are renewable for additional periods with similar rent payments. Rental expense for operating leases, including rentals with initial terms of less than one year, totaled $31.7 million, $26.7 million, and $25.0 million in 2017, 2016, and 2015, respectively. The future minimum rental commitments, net of minimum rental to be received under noncancelable subleases, as of December 31, 2017 for all noncancelable operating leases were as follows: Equipment Land and and Total Structures Other (in thousands) 2018 $ 17,734 $ 16,088 $ 1,646 2019 13,945 12,874 1,071 2020 11,312 10,365 947 2021 8,018 7,706 312 2022 4,300 4,300 — Thereafter 5,231 5,231 — $ 60,540 $ 56,564 $ 3,976 |
LONG-TERM DEBT AND FINANCING AR
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | NOTE G – 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 Asset-Based segment operations), real estate, and certain other equipment as follows: December 31 2017 2016 (in thousands) Credit Facility (interest rate of 3.1% (1) at December 31, 2017) $ 70,000 $ 70,000 Accounts receivable securitization borrowings (interest rate of 2.3% at December 31, 2017) 45,000 35,000 Notes payable (weighted-average interest rate of 2.7% at December 31, 2017) 153,441 138,032 Capital lease obligations (weighted-average interest rate of 5.7% at December 31, 2017) 478 641 268,919 243,673 Less current portion 61,930 64,143 Long-term debt, less current portion $ 206,989 $ 179,530 (1) 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 3.35% based on the margin of the Credit Facility as of December 31, 2017 and 2016. Scheduled maturities of long ‑ term debt obligations as of December 31, 2017 were as follows: Accounts Receivable Credit Securitization Notes Capital Lease Total Facility (1) Program (1) Payable Obligations (2) (in thousands) 2018 $ 68,822 $ 2,329 $ 1,223 $ 65,036 $ 234 2019 42,156 2,598 1,396 37,922 240 2020 71,393 2,679 45,358 23,329 27 2021 24,343 2,696 — 21,640 7 2022 84,275 71,392 — 12,882 1 Thereafter 404 — — 404 — Total payments 291,393 81,694 47,977 161,213 509 Less amounts representing interest 22,474 11,694 2,977 7,772 31 Long-term debt $ 268,919 $ 70,000 $ 45,000 $ 153,441 $ 478 (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 at December 31 were included in property, plant and equipment as follows: 2017 2016 (in thousands) Revenue equipment $ 269,950 $ 220,566 Land and structures (service centers) 1,794 1,794 Software 486 — Service, office, and other equipment 100 7 Total assets securing notes payable or held under capital leases 272,330 222,367 Less accumulated depreciation and amortization (1) 87,691 61,643 Net assets securing notes payable or held under capital leases $ 184,639 $ 160,724 (1) Amortization of assets held under capital leases and depreciation of assets securing notes payable are included in depreciation expense. The Company’s long‑term debt obligations have a weighted‑average interest rate of 2.8% at December 31, 2017. The Company paid interest of $5.8 million, $4.5 million, and $4.0 million in 2017, 2016, and 2015, respectively, net of capitalized interest which totaled $0.9 million, $0.7 million, and $0.2 million for 2017, 2016 and 2015, respectively. Financing Arrangements Credit Facility The Company has a revolving credit facility (the “Credit Facility”) under its second amended and restated credit agreement which was amended and restated in July 2017 (the “Credit Agreement”) to increase the initial maximum credit amount of its Credit Facility from $150.0 million to $200.0 million including a swing line facility of an aggregate amount of up to $20.0 million and a letter of credit sub-facility providing for the issuance of letters of credit up to an aggregate amount of $20.0 million, and to increase the additional revolving commitments or incremental term loans the Company may request under the facility from $75.0 million to $100.0 million, subject to certain additional conditions as provided in the Credit Agreement. The maturity date of the Credit Facility was extended to July 7, 2022. As of December 31, 2017, we had available borrowing capacity of $130.0 million under our Credit Facility. 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 Credit Agreement can either be, at the Company’s election: (i) at an Alternate Base Rate (as defined in the Credit Agreement) plus a spread; or (ii) at a Eurodollar Rate (as defined in the Credit Agreement) plus a spread. The applicable spread is dependent upon the Company’s Adjusted Leverage Ratio (as defined in the Credit Agreement). The 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 Credit Agreement at December 31, 2017. Interest Rate Swaps The Company has a five-year interest rate swap agreement with a $50.0 million notional amount maturing on January 2, 2020. The Company receives floating ‑ rate interest amounts based on one-month LIBOR in exchange for fixed-rate interest payments of 1.85% over the life. 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 3.35% based on the margin of the Credit Facility as of December 31, 2017. The fair value of the interest rate swap of $0.1 million was recorded in other long-term assets and $0.5 million was recorded in other long-term liabilities in the consolidated balance sheet at December 31, 2017 and 2016, respectively. 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 December 31, 2017. In June 2017, the Company entered into a forward-starting interest rate swap agreement with a $50.0 million notional amount which will start on January 2, 2020 upon maturity of the current interest rate swap agreement, and mature on June 30, 2022. The Company will receive floating-rate interest amounts based on one-month LIBOR in exchange for fixed-rate interest payments of 1.99% over the life of the 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 3.49% based on the margin of the Credit Facility as of December 31, 2017. The fair value of the interest rate swap of $0.4 million was recorded in other long-term assets in the consolidated balance sheet at December 31, 2017. The unrealized gain or loss on the interest rate swap instruments was reported as a component of accumulated other comprehensive loss, net of tax, in stockholders’ equity at December 31, 2017 and 2016, and the change in the unrealized income (loss) on the interest rate swaps for the years ended December 31, 2017 and 2016 was reported in other comprehensive income, net of tax, in the consolidated statement of comprehensive income. The interest rate swaps are 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 agreements at December 31, 2017. Accounts Receivable Securitization Program In March 2017, the Company entered into a second amendment to extend the maturity date of its accounts receivable securitization program until April 1, 2020 and increase the amount of cash proceeds provided under the facility from $100.0 million to $125.0 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. The Company borrowed $10.0 million under the accounts receivable securitization program during the second quarter of 2017. As of December 31, 2017 and 2016, $45.0 million and $35.0 million, respectively, was borrowed under the accounts receivable securitization program. The Company was in compliance with the covenants under the accounts receivable securitization program as of December 31, 2017. 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 December 31, 2017, standby letters of credit of $17.7 million have been issued under the program, which reduced the available borrowing capacity to $62.3 million. Letter of Credit Agreements and Surety Bond Programs As of December 31, 2017 and 2016, the Company had letters of credit outstanding of $18.3 million and $19.6 million, respectively, (including $17.7 million and $18.0 million, respectively, issued under the accounts receivable securitization program) of which $1.0 million was collateralized by restricted cash as of December 31, 2016. 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 December 31, 2017 and 2016, surety bonds outstanding related to the self-insurance program totaled $60.4 million and $56.5 million, respectively. Notes Payable The Asset-Based segment has financed the purchase of certain revenue equipment, other equipment, and software through promissory note arrangements, including $84.2 million, $83.4 million, and $80.6 million for revenue equipment and software in 2017, 2016, and 2015, respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2017 | |
ACCRUED EXPENSES | |
ACCRUED EXPENSES | NOTE H – ACCRUED EXPENSES December 31 2017 2016 (in thousands) Workers’ compensation, third-party casualty, and loss and damage claims reserves (1) $ 99,969 $ 104,491 Accrued vacation pay 36,034 34,939 Accrued compensation 35,718 27,826 Taxes other than income 8,215 8,284 Other 31,301 23,191 $ 211,237 $ 198,731 1) A reclassification was made to prior year to conform to the current year presentation. The insurance receivable for the amount of workers’ compensation and third-party casualty claims in excess of self-insurance retention limits, which was previously offset against the reserve included in accrued expenses, has been reclassed to other accounts receivable, resulting in an $8.7 million increase in other accounts receivable and a corresponding increase in accrued expenses in the consolidated balance sheet at December 31, 2016. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | NOTE I – EMPLOYEE BENEFIT PLANS Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans The Company has a noncontributory defined benefit pension plan covering substantially all noncontractual employees hired before January 1, 2006. Benefits under the defined benefit pension plan are generally based on years of service and employee compensation. 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 amendment resulted in a plan curtailment and eliminated the service cost of the plan. 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 (see Defined Contribution Plans section within this Note). Since the 2013 freeze of the accrual of benefits of the nonunion defined benefit plan, the investment strategy became more focused on reducing investment, interest rate, and longevity risks in the plan. As part of this strategy, the plan purchased a $7.6 million nonparticipating annuity contract from an insurance company during the first quarter 2017 to settle the pension obligation related to the vested benefits of approximately 50 plan participants and beneficiaries receiving monthly benefit payments at the time of the contract purchase. The Company recognized pension settlement expense as a component of net periodic benefit cost related to the first quarter 2017 nonparticipating annuity contract purchase and recognized pension settlement expense in 2017, 2016, and 2015 related to lump-sum benefit distributions from the plan. The pension settlement expense amounts are presented in the tables within this Note. The remaining pre ‑ tax unrecognized net actuarial loss of $22.6 million will continue to be amortized over the average remaining future years of service of the plan participants, which is approximately eight years. The Company will continue to incur additional quarterly pension settlement expense related to lump ‑ sum distributions from the nonunion defined benefit pension plan. In October 2017, the ArcBest Board of Directors adopted a resolution authorizing the execution of an amendment to terminate the nonunion defined benefit pension plan with a termination date of December 31, 2017, and such amendment was executed in November 2017. The plan has filed for a determination letter from the IRS regarding the qualification of the plan termination. Following receipt of a favorable determination letter, benefit election forms will be provided to plan participants and they will have an election window in which they can choose any form of payment allowed by the plan for immediate commencement of payment or defer payment until a later date. Until a favorable determination letter is received and the benefit election forms are distributed to participants, the methodologies for establishing plan assumptions will continue to be consistent with those used prior to the amendment to terminate the plan. Pension settlement charges related to the plan termination, including settlements for lump sum benefit distributions and the cost to purchase an annuity contract to settle the pension obligation related to benefits for which participants elect to defer payment until a later date, are likely to occur primarily in the second half of 2018. However, the timing of recognizing these settlements in our financial statements is highly dependent on when and if we receive the favorable determination letter from the IRS. The Company also has an unfunded supplemental benefit plan (“SBP”) for the purpose of supplementing benefits under the Company’s nonunion defined benefit pension plan for executive officers designated as participants in the SBP by the Company’s Board of Directors. The Compensation Committee of the Company’s Board of Directors (“Compensation Committee”) elected to close the SBP to new entrants and to place a cap on the maximum payment per participant to existing participants in the SBP effective January 1, 2006. In place of the SBP, eligible officers of the Company appointed after 2005 participate in a long‑term cash incentive plan (see Cash Long‑Term Incentive Compensation Plan section within this Note). Effective December 31, 2009, the Compensation Committee elected to freeze the accrual of benefits for remaining participants under the SBP. With the exception of early retirement penalties that may apply in certain cases, the valuation inputs for calculating the frozen SBP benefits to be paid to participants, including final average salary and the interest rate, were frozen at December 31, 2009. As presented in the tables within this Note, pension settlement expense and a corresponding reduction in the net actuarial loss was recorded in 2016 related to lump-sum SBP benefit distributions. The SBP did not incur pension settlement expense related to lump ‑ sum distributions in 2017 or 2015. The Company sponsors an insured postretirement health benefit plan that provides supplemental medical benefits and dental and vision benefits primarily to certain officers of the Company and certain subsidiaries. Effective January 1, 2011, retirees began paying a portion of the premiums under the plan according to age and coverage levels. The amendment to the plan to implement retiree premiums resulted in an unrecognized prior service credit which was recorded in accumulated other comprehensive loss and is being amortized over approximately nine years. The following table discloses the changes in benefit obligations and plan assets of the Company’s nonunion defined benefit plans for years ended December 31, the measurement date of the plans: Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 2016 2017 2016 2017 2016 (in thousands) Change in benefit obligations Benefit obligations at beginning of year $ 152,006 $ 159,607 $ 4,794 $ 4,917 $ 25,532 $ 24,616 Service cost — — — — 489 429 Interest cost 4,514 4,572 102 130 1,060 1,017 Actuarial (gain) loss (1) 6,448 4,202 (10) (7) (2,251) 133 Benefits paid (26,491) (16,896) (989) (246) (733) (663) Settlement loss 940 521 — — — — Benefit obligations at end of year 137,417 152,006 3,897 4,794 24,097 25,532 Change in plan assets Fair value of plan assets at beginning of year 144,805 136,917 — — — — Actual return on plan assets 6,517 11,384 — — — — Employer contributions — 13,400 989 246 733 663 Benefits paid (26,491) (16,896) (989) (246) (733) (663) Fair value of plan assets at end of year 124,831 144,805 — — — — Funded status at end of year $ (12,586) $ (7,201) $ (3,897) $ (4,794) $ (24,097) $ (25,532) Accumulated benefit obligation $ 137,417 $ 152,006 $ 3,897 $ 4,794 $ 24,097 $ 25,532 (1) The actuarial loss on the nonunion defined benefit pension plan was higher for 2017, primarily due to net changes in actuarial assumptions used to measure the plan obligation at December 31, 2017 versus December 31, 2016. The net actuarial gain on the postretirement health benefit plan for 2017, versus the net actuarial loss for 2016, is primarily related to changes in the medical trend rate assumption used to measure the plan obligation at each year-end measurement date. Amounts recognized in the consolidated balance sheets at December 31 consisted of the following: Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 2016 2017 2016 2017 2016 (in thousands) Current liabilities (included in accrued expenses) $ — $ — $ — $ (989) $ (753) $ (690) Noncurrent liabilities (included in pension and postretirement liabilities) (12,586) (7,201) (3,897) (3,805) (23,344) (24,842) Liabilities recognized $ (12,586) $ (7,201) $ (3,897) $ (4,794) $ (24,097) $ (25,532) The following is a summary of the components of net periodic benefit cost for the Company’s nonunion benefit plans for the years ended December 31: Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 2016 2015 2017 2016 2015 2017 2016 2015 (in thousands) Service cost $ — $ — $ — $ — $ — $ — $ 489 $ 429 $ 406 Interest cost 4,514 4,572 5,200 102 130 123 1,060 1,017 913 Expected return on plan assets (5,712) (8,607) (9,180) — — — — — — Amortization of prior service credit — — — — — — (190) (190) (190) Pension settlement expense 4,156 3,023 3,202 — 206 — — — — Amortization of net actuarial loss (1) 3,132 4,087 3,218 82 152 159 694 705 853 Net periodic benefit cost $ 6,090 $ 3,075 $ 2,440 $ 184 $ 488 $ 282 $ 2,053 $ 1,961 $ 1,982 (1) The Company amortizes actuarial losses over the average remaining active service period of the plan participants and does not use a corridor approach. The following is a summary of the pension settlement distributions and pension settlement expense for the years ended December 31: Nonunion Defined Supplemental Benefit Pension Plan Benefit Plan 2017 (1) 2016 (2) 2015 (2) 2017 (3) 2016 2015 (4) (in thousands, except per share data) Pension settlement distributions $ 26,261 $ 16,515 $ 20,622 $ 989 $ 246 $ 1,941 Pension settlement expense, pre-tax $ 4,156 $ 3,023 $ 3,202 $ — $ 206 $ — Pension settlement expense per diluted share, net of taxes $ 0.10 $ 0.07 $ 0.07 $ — $ 0.01 $ — (1) Pension settlement distributions represent $18.7 million of lump‑sum benefit distributions and a $7.6 million nonparticipating annuity contract purchase. (2) Pension settlement distributions represent lump‑sum benefit distributions paid. (3) The 2017 SBP distribution represents the portion of a benefit related to an officer retirement that occurred in 2016 which was delayed for six months after retirement in accordance with IRC Section 409A. The pension settlement expense related to this distribution was recognized in 2016. (4) The 2015 SBP distribution represents the portion of a benefit related to an officer retirement that occurred in 2014 which was delayed for six months after retirement in accordance with IRC Section 409A. The pension settlement expense related to this distribution was recognized in 2014. Included in accumulated other comprehensive loss at December 31 were the following pre‑tax amounts that have not yet been recognized in net periodic benefit cost: Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 2016 2017 2016 2017 2016 (in thousands) Unrecognized net actuarial loss $ 22,588 $ 23,294 $ 543 $ 635 $ 2,764 $ 5,708 Unrecognized prior service credit — — — — (127) (317) Total $ 22,588 $ 23,294 $ 543 $ 635 $ 2,637 $ 5,391 The following amounts, which are reported within accumulated other comprehensive loss at December 31, 2017 are expected to be recognized as components of net periodic benefit cost in 2018 on a pre ‑ tax basis. (Amounts exclude the effect of pension settlements, which the Company will incur for the nonunion defined benefit pension plan.) Nonunion Supplemental Postretirement Defined Benefit Benefit Health Pension Plan Plan Benefit Plan (in thousands) Unrecognized net actuarial loss $ 2,881 $ 80 $ 274 Unrecognized prior service credit — — (93) Total $ 2,881 $ 80 $ 181 The discount rate is determined by matching projected cash distributions with appropriate high‑quality corporate bond yields in a yield curve analysis. Weighted‑average assumptions used to determine nonunion benefit obligations at December 31 were as follows: Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 2016 2017 2016 2017 2016 Discount rate % 3.4 % % 2.7 % % 4.0 % Weighted‑average assumptions used to determine net periodic benefit cost for the Company’s nonunion benefit plans for the years ended December 31 were as follows: Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 (1) 2016 (2) 2015 (3) 2017 2016 2015 2017 2016 2015 Discount rate 3.4 % 3.5 % 3.2 % 2.7 % 2.6 % 2.5 % 4.0 % 4.2 % 3.9 % Expected return on plan assets 6.5 % 6.5 % 6.5 % N/A N/A N/A N/A N/A N/A (1) The discount rate presented was used to determine the first quarter 2017 credit, and the interim discount rate established upon each quarterly settlement in 2017 of 3.4%, 3.2%, and 3.1% was used to calculate the expense/credit for the second, third, and fourth quarter of 2017, respectively. The expected return on plan assets presented was used to determine the pension credit for the first half of 2017, and a 2.5% expected return on plan assets was used to determine pension expense for the second half of 2017, as further discussed in the following Nonunion Defined Benefit Pension Plan Assets section within this Note. (2) The discount rate presented was used to determine the first quarter 2016 expense, and the interim discount rate established upon each quarterly settlement in 2016 of 3.0%, 2.7%, and 2.7% was used to calculate the expense/credit for the second, third, and fourth quarter of 2016, respectively. (3) The discount rate presented was used to determine the first quarter 2015 expense/credit, and the interim discount rate established upon each quarterly settlement in 2015 of 3.0%, 3.5%, and 3.4% was used to calculate the expense/credit for the second, third, and fourth quarter of 2015, respectively. The assumed health care cost trend rates for the Company’s postretirement health benefit plan at December 31 were as follows: 2017 2016 Pre-65 Post-65 Health care cost trend rate assumed for next year 8.3 % 5.5 % 8.0 % Rate to which the cost trend rate is assumed to decline 4.0 % 4.0 % 4.5 % Year that the rate reaches the cost trend assumed rate The health care cost trend rates have a significant effect on the obligations reported for health care plans. A one‑percentage‑point change in assumed health care cost trend rates would have the following effects on the Company’s postretirement health benefit plan for the year ended December 31, 2017: One Percentage Point Increase Decrease (in thousands) Effect on total of service and interest cost components $ 335 $ (262) Effect on postretirement benefit obligation $ 4,820 $ (3,845) Estimated future benefit payments from the Company’s nonunion defined benefit pension (paid from trust assets), SBP, and postretirement health benefit plans, which reflect expected future service as appropriate, as of December 31, 2017 are as follows: Nonunion Supplemental Postretirement Defined Benefit Benefit Health Pension Plan Plan Benefit Plan (in thousands) 2018 $ 22,511 $ — $ 753 2019 $ 11,244 $ 3,107 $ 827 2020 $ 12,051 $ — $ 879 2021 $ 10,843 $ — $ 952 2022 $ 11,029 $ — $ 1,013 2023-2027 $ 46,448 $ 718 $ 5,949 The Company’s contributions to the defined benefit pension plan are based upon the minimum funding levels required under provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Pension Protection Act of 2006 (the “PPA”), with the maximum contributions not to exceed deductible limits under the IRC. Based upon currently available actuarial information, which is subject to change upon completion of the 2018 actuarial valuation of the plan, and excluding the impact of funding for plan termination, the Company does not expect to have cash outlays for required minimum contributions to its nonunion defined benefit pension plan in 2018. The plan’s actuary certified the adjusted funding target attainment percentage (“AFTAP”) to be 107.8% as of the January 1, 2017 valuation date. The AFTAP is determined by measurements prescribed by the IRC, which differ from the funding measurements for financial statement reporting purposes. As previously disclosed in this Note, an amendment was executed in November 2017 to terminate the nonunion defined benefit pension plan with an effective date of December 31, 2017. We may be required to fund the plan prior to the final distribution of benefits to plan participants, the amount of which will be determined by the plan’s actuary. The final pension settlement charges and the actual amount we will be required to contribute to the plan to fund benefit distributions in excess of plan assets cannot be determined at this time, as the actual amounts are dependent on various factors, including final benefit calculations, the benefit elections made by plan participants, interest rates, the value of plan assets, and the cost to purchase an annuity contract to settle the pension obligation related to benefits for which participants elect to defer payment until a later date. Based on currently available information provided by the plan’s actuary, the Company estimates a cash contribution of approximately $10.0 million for 2018, although there can be no assurances in this regard. Although the timing is not certain, cash contributions required to fund the plan upon termination are likely to be made by the Company in the second half of 2018. Nonunion Defined Benefit Pension Plan Assets The Company establishes the expected rate of return on nonunion defined benefit pension plan assets, which are held in trust, by considering the historical returns for the current mix of investments and the range of expected returns for the current pension plan investment mix provided by the plan’s investment advisor. In consideration of plan termination, the overall objectives of the investment strategy for the Company’s nonunion defined benefit pension plan have become more focused on asset preservation, while continuing to ensure the plan will provide for required benefits under the plan in a manner that satisfies the fiduciary requirements of ERISA and limit the possibility of experiencing a substantial investment loss over a one‑year period. A more conservative approach has been taken to minimize the impact of market volatility by transferring the plan’s equity investments to short-duration debt instruments during the second half of 2017. As a result of the significant change to the plan’s asset allocation, the plan’s investment rate of return assumption was lowered for the second half of 2017, from 6.5% as of January 1, 2017 to 2.5% as of July 1, 2017. In consideration of the plan’s current investment allocation and the expected termination of the plan in the near-term, the Company’s long‑term expected rate of return utilized in determining its 2018 nonunion defined benefit pension plan expense is 1.4%, net of estimated expenses expected to be paid from plan assets in 2018. The weighted‑average target, acceptable ranges, and actual asset allocations of the Company’s nonunion defined benefit pension plan at December 31 are summarized in the following table: 2017 Target Acceptable Weighted-Average Allocation Allocation Range 2017 2016 Equity Securities Large Cap U.S. Equity % % - 20.0 % % 14.0 % Mid Cap U.S. Equity % - 11.0 % 9.4 Small Cap U.S. Equity % - 11.0 % 10.0 International Equity % - 18.0 % 14.4 Income Securities Debt Instruments 70.0 20.0 % - 100.0 % 73.6 25.0 Floating Rate Loan Fund 10.0 3.0 % - 100.0 % 13.1 10.8 Cash Equivalents Cash and Cash Equivalents 20.0 % - 100.0 % 13.3 16.4 100.0 % 100.0 % 100.0 % Investment balances and results are reviewed quarterly. Investment performance is generally compared to the three‑to‑five year performance of recognized market indices as well as analyzed for periods shorter than three years for each investment fund and over five years for the total fund. Although investment allocations which fall outside the acceptable range at the end of any quarter are usually rebalanced based on the target allocation, the Company has the discretion to maintain cash or other short‑term investments during periods of market volatility. Certain types of investments and transactions are prohibited or restricted by the Company’s written pension investment policy, including, but not limited to, borrowing of money; purchase of securities on margin; short sales; pledging, mortgaging, or hypothecating securities except loans of securities that are fully ‑ collateralized; purchase or sale of futures, options, or derivatives for speculation or leverage; purchase or sale of commodities or illiquid interests in real estate or mortgages; or purchase of illiquid securities. In addition to mutual fund investments in cash equivalents and income securities, the plan also holds investments in 1-3 year and 1-5 year actively managed portfolios of short-term debt instruments, which are designed to match the scheduled cash flows of the Plan over a short-term, forward-looking time period while maintaining principal value and optimizing total returns. In addition to the requirements of the pension investment policy, certain investment restrictions apply to the actively managed portfolios, including: guidelines for permitted investments; minimum acceptable credit quality of securities; maximum maturity of investments; limitations on the concentration of certain types of investments; and/or acceptable effective duration period ranges. The fair value of the Company’s nonunion defined benefit pension plan assets at December 31, 2017, by major asset category and fair value hierarchy level (see Fair Value Measurements accounting policy in Note B), were as follows: Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Cash and Cash Equivalents (1) $ 16,641 $ 16,641 $ — $ — Debt Instruments (2) 91,778 10,087 81,691 — Floating Rate Loans (3) 16,412 16,412 — — $ 124,831 $ 43,140 $ 81,691 $ — (1) Consists primarily of money market mutual funds. (2) Includes corporate debt instruments (80%), asset-backed instruments (16%), and mortgage-backed instruments (4%). The fair value measurements are provided by a pricing service which uses the market approach with inputs derived from observable market data. (3) Consists of a floating rate loan mutual fund. The fair value of the Company’s nonunion defined benefit pension plan assets at December 31, 2016, by major asset category and fair value hierarchy level (see Fair Value Measurements accounting policy in Note B), were as follows: Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Cash and Cash Equivalents (1) $ 23,696 $ 23,696 $ — $ — Debt Instruments (2) 36,245 — 36,245 — Floating Rate Loans (3) 15,687 15,687 — — Large Cap U.S. Equity 20,208 20,208 — — Mid Cap U.S. Equity 13,597 13,597 — — Small Cap U.S. Equity 14,561 14,561 — — International Equity 20,811 20,811 — — $ 144,805 $ 108,560 $ 36,245 $ — (1) Consists primarily of money market mutual funds. (2) Includes corporate debt instruments (81%), mortgage‑backed instruments (10%), treasury instruments (7%), municipal debt instruments (1%), and agency debt instruments (1%) which are priced using daily bid prices. The fair value measurements are provided by a pricing service which uses the market approach with inputs derived from observable market data. (3) Consists of a floating rate loan mutual fund. Deferred Compensation Plans The Company has deferred salary agreements with certain executives for which liabilities of $2.9 million and $3.4 million were recorded as of December 31, 2017 and 2016, respectively. The deferred salary agreements include a provision that immediately vests all benefits and provides for a lump‑sum payment upon a change in control of the Company that is followed by a termination of the executive. The Compensation Committee elected to close the deferred salary agreement program to new entrants effective January 1, 2006. In place of the deferred salary agreement program, officers appointed after 2005 participate in the Cash Long‑Term Incentive Plan (see Cash Long‑Term Incentive Compensation Plan section within this Note). The Company maintains a Voluntary Savings Plan (“VSP”), a nonqualified deferred compensation program for the benefit of certain executives of the Company and certain subsidiaries. Eligible employees may defer receipt of a portion of their salary and incentive compensation into the VSP by making an election prior to the beginning of the year in which the salary compensation is payable and, for incentive compensation, by making an election at least six months prior to the end of the performance period to which the incentive relates. The Company credits participants’ accounts with applicable rates of return based on a portfolio selected by the participants from the investments available in the plan. The Company match related to the VSP was suspended beginning January 1, 2010. All deferrals, Company match, and investment earnings are considered part of the general assets of the Company until paid. Accordingly, the consolidated balance sheets reflect the fair value of the aggregate participant balances, based on quoted prices of the mutual fund investments, as both an asset and a liability of the Company. As of December 31, 2017 and 2016, VSP balances of $2.4 million and $2.2 million, respectively, were included in other long‑term assets with a corresponding amount recorded in other long‑term liabilities. Defined Contribution Plans The Company and its subsidiaries have various defined contribution 401(k) plans that cover substantially all employees. The plans permit participants to defer a portion of their salary up to a maximum of 69% as determined under Section 401(k) of the IRC. For certain participating subsidiaries, the Company matches 50% of nonunion participant contributions up to the first 6% of annual compensation. The plans also allow for discretionary 401(k) Company contributions determined annually. The Company’s matching expense for the 401(k) plans totaled $5.6 million, $5.7 million, and $5.5 million for 2017, 2016, and 2015, respectively. Effective July 1, 2013, participants in the nonunion defined benefit pension plan who were active employees of the Company became eligible for the discretionary defined contribution feature of Company’s nonunion 401(k) and defined contribution plan in which all eligible noncontractual employees hired subsequent to December 31, 2005 also participate. Participants are fully vested in their benefits under the defined contribution plan after three years of service. In 2017, 2016, and 2015, the Company recognized expense of $8.3 million, $5.0 million, and $9.5 million, respectively, related to its discretionary contributions to the defined contribution plan. Cash Long‑Term Incentive Compensation Plan The Company maintains a performance-based Cash Long-Term Incentive Compensation Plan (“LTIP”) for officers of the Company or its subsidiaries who are not active participants in the deferred salary agreement program. The LTIP incentive, which is earned over three years, is based, in part, upon a proportionate weighting of return on capital employed and shareholder returns compared to a peer group, as specifically defined in the plan document. As of December 31, 2017, 2016, and 2015, $6.6 million, $3.9 million, $6.7 million, respectively, were accrued for future payments under the plans. Other Plans Other long‑term assets include $49.7 million and $47.4 million at December 31, 2017 and 2016, respectively, in the cash surrender value of life insurance policies. These policies are intended to provide funding for long‑term nonunion benefit arrangements such as the Company’s SBP and deferred compensation plans. A portion of the Company’s cash surrender value of variable life insurance policies have investments, through separate accounts, in equity and fixed income securities and, therefore, are subject to market volatility. The Company recognized gains associated with changes in the cash surrender value and proceeds from life insurance policies of $2.6 million, $2.9 million, and $0.3 million during 2017, 2016, and 2015, respectively. Multiemployer Plans ABF Freight System, Inc. and certain other subsidiaries reported in the Company’s Asset-Based operating segment (“ABF Freight”) contribute 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 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 employees who are members of the IBT. As of December 2017, approximately 83% of ABF Freight employees were covered under the ABF NMFA. Upon implementation of the ABF NMFA on November 3, 2013, contribution rate increases for the benefits under the collective bargaining agreement were applied retroactively to August 1, 2013. Under the ABF NMFA, the combined contribution rates for health, welfare, and pension benefits under the ABF NMFA were allowed to increase up to $1.00 per hour each August 1 if the plans provided evidence that an increase was actuarially necessary. The multiemployer plans to which ABF Freight segment primarily contributes are jointly ‑ trusteed (half of the trustees of each plan are selected by the participating employers, the other half by the IBT) and cover collectively-bargained employees of multiple unrelated employers. Due to the inherent nature of multiemployer plans, there are risks associated with participation in these plans that differ from single ‑ employer plans. Assets received by the plans are not segregated by employer, and contributions made by one employer can be and are used to provide benefits to current and former employees of other employers. If a participating employer in a multiemployer plan no longer contributes to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. If a participating employer in a multiemployer pension plan completely withdraws from the plan, it owes to the plan its proportionate share of the plan’s unfunded vested benefits, referred to as a withdrawal liability. A complete withdrawal generally occurs when the employer permanently ceases to have an obligation to contribute to the plan. Withdrawal liability is also owed in the event the employer withdraws from a plan in connection with a mass withdrawal, which generally occurs when all or substantially all employers withdraw from the plan pursuant to an agreement in a relatively short period of time. Were ABF Freight to completely withdraw from certain multiemployer pension plans, whether in connection with a mass withdrawal or otherwise, under current law, ABF Freight would have material liabilities for its share of the unfunded vested liabilities of each such plan. Pension Plans The 25 multiemployer pension plans to which ABF Freight contributes vary greatly in size and in funded status. Contribution obligations to these plans are generally specified in the ABF NMFA, which will remain in effect through March 31, 2018. The funding obligations to the pension plans are intended to satisfy the requirements imposed by 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. 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 ABF Freight’s contractual employees. The PPA requires that “endangered” (generally less than 80% funded and commonly called “yellow zone”) plans adopt “funding improvement plans” and that “critical” (generally less than 65% funded and commonly called “red zone”) plans adopt “rehabilitation plans” that are intended to improve the plan’s funded status over time. The Reform Act includes provisions to address the funding of multiemployer pension plans in “critical and declining” status, including certain of those in which ABF Freight parti |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE J – STOCKHOLDERS’ EQUITY Accumulated Other Comprehensive Loss Components of accumulated other comprehensive loss were as follows at December 31: 2017 2016 2015 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit costs $ (25,768) $ (29,320) $ (35,231) Interest rate swap 481 (542) (897) Foreign currency translation (1,894) (1,978) (2,379) Total $ (27,181) $ (31,840) $ (38,507) After-tax amounts: Unrecognized net periodic benefit costs $ (19,715) $ (21,886) $ (25,497) Interest rate swap 292 (329) (545) Foreign currency translation (1,151) (1,202) (1,454) Total $ (20,574) $ (23,417) $ (27,496) The following is a summary of the 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 $ (27,496) $ (25,497) $ (545) $ (1,454) Other comprehensive income (loss) before reclassifications (799) (1,267) 216 252 Amounts reclassified from accumulated other comprehensive loss 4,878 4,878 — — Net current-period other comprehensive income 4,079 3,611 216 252 Balances at December 31, 2016 $ (23,417) $ (21,886) $ (329) $ (1,202) Other comprehensive income (loss) before reclassifications (1,968) (2,640) 621 51 Amounts reclassified from accumulated other comprehensive loss 4,811 4,811 — — Net current-period other comprehensive income (loss) 2,843 2,171 621 51 Balances at December 31, 2017 $ (20,574) $ (19,715) $ 292 $ (1,151) The following is a summary of the significant reclassifications out of accumulated other comprehensive loss by component for the years ended December 31: Unrecognized Net Periodic Benefit Costs (1)(2) 2017 2016 (in thousands) Amortization of net actuarial loss $ (3,908) $ (4,944) Amortization of prior service credit 190 190 Pension settlement expense (4,156) (3,229) Total, pre-tax (7,874) (7,983) Tax benefit 3,063 3,105 Total, net of tax $ (4,811) $ (4,878) (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 I). Dividends on Common Stock The following table is a summary of dividends declared during the applicable quarter: 2017 2016 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ $ $ 0.08 $ 2,088 Second quarter $ $ $ 0.08 $ 2,087 Third quarter $ $ $ 0.08 $ 2,074 Fourth quarter $ $ $ 0.08 $ 2,069 On January 26, 2018, the Company’s Board of Directors declared a dividend of $0.08 per share payable to stockholders of record as of February 9, 2018. 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. In October 2015, the Board of Directors extended the share repurchase program, making a total of $50.0 million available for purchases of the Company’s common stock. During 2017, the Company purchased 286,179 shares for an aggregate cost of $6.0 million, leaving $31.7 million available for repurchase under the program as of December 31, 2017. Treasury shares totaled 2,851,578 and 2,565,399 as of December 31, 2017 and 2016, respectively. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE K – SHARE‑BASED COMPENSATION Stock Awards As of December 31, 2017 and 2016, 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 (“SARs”), restricted stock, or restricted stock units (“RSUs”). As of December 31, 2017, the Company had not elected to treat any exercised options as employer SARs and no employee SARs had been granted. Restricted Stock Units A summary of the Company’s restricted stock unit award program is presented below: Weighted-Average Grant Date Units Fair Value Outstanding – January 1, 2017 1,477,537 $ 23.88 Granted 504,550 $ 16.39 Vested (438,018) $ 18.27 Forfeited (1) (84,809) $ 23.88 Outstanding – December 31, 2017 1,459,260 $ 22.98 (1) Forfeitures are recognized as they occur. The Compensation Committee of the Company’s Board of Directors granted restricted stock units under the 2005 Plan during the years ended December 31, 2017, 2016, and 2015 as follows: k Weighted-Average Grant Date Units Fair Value 2017 504,550 $ 16.39 2016 536,440 $ 15.89 2015 269,660 $ 35.50 The fair value of restricted stock awards that vested in 2017, 2016, and 2015 was $11.2 million, $5.8 million, and $9.8 million, respectively. Unrecognized compensation cost related to restricted stock awards outstanding as of December 31, 2017 was $16.3 million, which is expected to be recognized over a weighted‑average period of approximately 2.75 years. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE L – EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31: 2017 2016 2015 (in thousands, except share and per share data) Basic Numerator: Net income $ 59,726 $ 18,652 $ 44,854 Effect of unvested restricted stock awards (238) (138) (450) Adjusted net income $ 59,488 $ 18,514 $ 44,404 Denominator: Weighted-average shares 25,683,745 25,751,544 26,013,716 Earnings per common share $ $ 0.72 $ 1.71 Diluted Numerator: Net income $ 59,726 $ 18,652 $ 44,854 Effect of unvested restricted stock awards (233) (137) (443) Adjusted net income $ 59,493 $ 18,515 $ 44,411 Denominator: Weighted-average shares 25,683,745 25,751,544 26,013,716 Effect of dilutive securities 740,644 505,026 516,411 Adjusted weighted-average shares and assumed conversions 26,424,389 26,256,570 26,530,127 Earnings per common share $ $ 0.71 $ 1.67 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 RSUs were modified to remove dividend rights and, therefore, the RSUs granted in 2017, 2016, and 2015 are not participating securities. For the year ended December 31, 2017, 2016, and 2015 outstanding stock awards of 0.1 million, 0.4 million, and 0.2 million, respectively, were not included in the diluted earnings per share calculations because their inclusion would have the effect of increasing the earnings per share. |
OPERATING SEGMENT DATA
OPERATING SEGMENT DATA | 12 Months Ended |
Dec. 31, 2017 | |
OPERATING SEGMENT DATA | |
OPERATING SEGMENT DATA | NOTE M – 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 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. On November 3, 2016, the Company announced its plan to implement a new corporate structure to better serve its customers. The new corporate structure unified the Company’s sales, pricing, customer service, marketing, and capacity sourcing functions effective January 1, 2017, and allows the Company to operate as one logistics provider under the ArcBest brand. As a result of implementing its new corporate structure and management’s focus on the corresponding segment results to make operating decisions, the Company’s operating segments previously reported as Premium Logistics (Panther), Transportation Management (ABF Logistics), and Household Goods Moving Services (ABF Moving) were combined into a single asset light logistics operation under the ArcBest segment beginning with the results reported for the three months and year ended December 31, 2016. As disclosed in the Company’s 2016 Annual Report on Form 10-K, the Company restated certain prior year operating segment data to conform to the restructured segment presentation. There was no impact on the Company’s consolidated revenues, operating expenses, operating income, or earnings per share as a result of the restatements. During the third quarter of 2017, the Company modified the presentation of segment expenses allocated from shared services. Previously, expenses related to company-wide functions were allocated to segment expense line items by type of expense. Allocated expenses are now presented on a single shared services line within the Company’s operating segment disclosures. Reclassifications have been made to the prior period operating segment expenses to conform to the current year presentation. There was no impact on each segment’s total expenses as a result of the reclassifications. Shared services represent costs incurred to support all segments, including sales, pricing, customer service, marketing, capacity sourcing functions, human resources, financial services, information technology, legal, and other company-wide services. Certain overhead costs are not attributable to any segment and remain unallocated in “Other and eliminations.” Included in unallocated costs are expenses related to investor relations, legal, the ArcBest Board of Directors and certain executive compensation. Shared services costs attributable to the operating segments are predominantly allocated based upon estimated and planned resource utilization-related metrics such as estimated shipment levels, number of pricing proposals, or number of personnel supported. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual incidence of cost incurred by the operating segments. Management believes the methods used to allocate expenses are reasonable. The Company’s reportable operating segments are as follows: · The Asset-Based segment includes the results of operations of ABF Freight System, Inc. and certain other subsidiaries. The operations include, national, inter-regional, and regional transportation of general commodities through standard, expedited, and guaranteed LTL services. In addition, the segment operations include freight transportation related to certain consumer household goods self-move services. · The ArcBest segment includes the results of operations of the Company’s Expedite, Truckload, and Truckload-Dedicated businesses as well as its premium logistics services; international freight transportation with air, ocean, and ground service offerings; household goods moving services to consumer and commercial customers; warehousing management and distribution services; and managed transportation solutions. · FleetNet includes the results of operations of FleetNet America, Inc. and certain other subsidiaries that provide roadside assistance and maintenance management services for commercial vehicles through a network of third-party service providers. FleetNet provides services to the Asset-Based and ArcBest segments. 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 and the Company’s shared services subsidiary 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 table reflects reportable operating segment information for the years ended December 31: 2017 2016 (1) 2015 (1) (in thousands) REVENUES Asset-Based $ 1,993,314 $ 1,916,394 $ 1,916,579 ArcBest (2) 706,698 640,734 590,436 FleetNet 156,341 162,629 174,952 Other and eliminations (29,896) (19,538) (15,062) Total consolidated revenues $ 2,826,457 $ 2,700,219 $ 2,666,905 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 1,125,186 $ 1,103,883 $ 1,063,016 Fuel, supplies, and expenses 234,006 216,263 244,772 Operating taxes and licenses 47,767 48,180 48,726 Insurance 30,761 29,178 28,591 Communications and utilities 17,373 16,181 14,158 Depreciation and amortization 82,507 80,331 71,320 Rents and purchased transportation 206,457 198,594 196,560 Shared services (1) 186,406 184,817 180,478 Gain on sale of property and equipment (695) (2,979) (1,734) Nonunion pension expense, including settlement (3) 4,799 2,313 1,832 Other 6,525 4,889 6,424 Restructuring costs (4) 344 1,173 — Total Asset-Based 1,941,436 1,882,823 1,854,143 ArcBest (2) Purchased transportation 563,497 502,159 460,172 Supplies and expenses 15,087 13,145 11,689 Depreciation and amortization 13,090 13,612 12,886 Shared services (1) 84,159 85,238 73,890 Other 11,189 11,678 11,007 Restructuring costs (4) 875 8,038 — Total ArcBest 687,897 633,870 569,644 FleetNet 153,017 160,204 171,998 Other and eliminations (9,403) (5,648) (4,376) Total consolidated operating expenses (3) $ 2,772,947 $ 2,671,249 $ 2,591,409 OPERATING INCOME Asset-Based $ 51,878 $ 33,571 $ 62,436 ArcBest (2) 18,801 6,864 20,792 FleetNet 3,324 2,425 2,954 Other and eliminations (20,493) (13,890) (10,686) Total consolidated operating income $ 53,510 $ 28,970 $ 75,496 OTHER INCOME (COSTS) Interest and dividend income $ 1,293 $ 1,523 $ 1,284 Interest and other related financing costs (6,342) (5,150) (4,400) Other, net (5) 3,115 2,944 354 Total other income (costs) (1,934) (683) (2,762) INCOME BEFORE INCOME TAXES $ 51,576 $ 28,287 $ 72,734 (1) Certain reclassifications have been made to the prior year’s operating segment data to conform to the current year presentation, reflecting the modified presentation of segment expenses allocated from shared services as previously discussed in this Note. (2) The 2016 and 2017 periods include the operations of LDS since the September 2, 2016 acquisition date and the operations of Bear, which was acquired in December 2015. (3) For the year ended December 31, 2017, 2016, and 2015, nonunion pension expense, including settlement, (pre-tax) totaled $6.1 million, $3.1 million, and $2.4 million, respectively, on a consolidated basis, of which $4.8 million, $2.3 million, and $1.8 million, respectively, was reported by the Asset-Based segment. (4) Restructuring costs relate to the realignment of the Company’s corporate structure previously discussed in this Note. (5) Includes proceeds and changes in cash surrender value of life insurance policies. The following table provides capital expenditure and depreciation and amortization information by reportable operating segment: For the year ended December 31 2017 2016 (1) 2015 (1) (in thousands) CAPITAL EXPENDITURES, GROSS Asset-Based (3) $ 112,751 $ 110,170 $ 122,542 ArcBest 9,823 6,154 24,219 FleetNet 1,089 403 1,007 Other and eliminations (2) 26,288 34,910 11,249 $ 149,951 $ 151,637 $ 159,017 For the year ended December 31 2017 2016 (1) 2015 (1) (in thousands) DEPRECIATION AND AMORTIZATION EXPENSE (2) Asset-Based $ 82,507 $ 80,331 $ 71,320 ArcBest (4) 13,090 13,612 12,886 FleetNet (5) 1,089 1,210 1,119 Other and eliminations (2) 6,382 7,900 7,717 $ 103,068 $ 103,053 $ 93,042 (1) Certain reclassifications have been made to the prior year’s operating segment data to conform to the current year presentation, reflecting the modified presentation of segment expenses allocated from shared services as previously discussed in this Note. (2) Other and eliminations includes certain assets held for the benefit of multiple segments, including information systems equipment. Depreciation and amortization associated with these assets is allocated to the reporting segments. Depreciation and amortization expense includes amortization of internally developed capitalized software which has not been included in gross capital expenditures presented in the table. (3) Includes assets acquired through notes payable and capital leases of $84.2 million in 2017, $83.4 million in 2016, and $80.6 million in 2015. (4) Includes amortization of intangibles of $4.3 million, $4.0 million, and $3.7 million in 2017, 2016, and 2015, respectively. (5) Includes amortization of intangibles which totaled $0.2 million, $0.3 million, and $0.3 million in 2017, 2016, and 2015, respectively. A table of assets by reportable operating segment has not been presented as segment assets are not included in reports regularly provided to management nor does management consider segment assets for assessing segment operating performance or allocating resources. The following table presents operating expenses by category on a consolidated basis: For the year ended December 31 2017 2016 2015 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 1,367,433 $ 1,345,672 $ 1,297,129 Rents, purchased transportation, and other costs of services 869,584 823,683 790,612 Fuel, supplies, and expenses 304,126 270,138 292,039 Depreciation and amortization (1) 103,068 103,053 93,042 Other 125,773 118,390 118,587 Restructuring (2) 2,963 10,313 — $ 2,772,947 $ 2,671,249 $ 2,591,409 (1) Includes amortization of intangible assets. (2) Restructuring costs relate to the realignment of the Company’s corporate structure previously discussed in this Note. |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 12 Months Ended |
Dec. 31, 2017 | |
RESTRUCTURING CHARGES | |
RESTRUCTURING CHARGES AND IMPAIRMENT | NOTE N – RESTRUCTURING CHARGES AND IMPAIRMENT On November 3, 2016, the Company announced its plan to implement an enhanced market approach to better serve its customers. The enhanced market approach unified the Company’s sales, pricing, customer service, marketing, and capacity sourcing functions effective January 1, 2017, and allows the Company to operate as one logistics provider under the ArcBest brand. As a result of the restructuring, the Company recorded charges during 2017 and the fourth quarter of 2016, the majority of which are non-cash, for impairment of software, contract and lease terminations, severance, and relocation expenses. The following table presents restructuring charges recorded in operating expenses for the years ended December 31: 2017 2016 (in thousands) Software impairment (1) $ — $ 6,244 Contract terminations (2) — 2,875 Severance and other (3) 2,963 1,194 Total charges $ 2,963 $ 10,313 (1) Non-cash charges related to software and other long-lived assets that were discontinued. (2) Charges associated with the termination of noncancelable lease and consulting agreements. (3) Primarily severance payments resulting from a reduction in headcount of approximately 130 positions and other employee-related costs. The Company estimates it will incur restructuring charges of approximately $1.0 million in 2018 primarily for consulting fees related to continued integration of systems and processes to further implement our enhanced market approach. |
LEGAL PROCEEDINGS, ENVIRONMENTA
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | 12 Months Ended |
Dec. 31, 2017 | |
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | |
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | NOTE O – 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 December 31, 2017 and 2016, the Company’s reserve, which was included in accrued expenses, for estimated environmental cleanup costs of properties currently or previously operated by the Company totaled $0.4 million and $0.5 million, respectively. 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. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | NOTE P – QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The tables below present unaudited quarterly financial information for 2017 and 2016. The reclassifications the Company made to certain previously reported interim operating segment data to conform to the current year presentation of segment expenses allocated from shared services (see Note M) had no impact on the quarterly consolidated financial information presented in the tables within this Note. 2017 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands, except share and per share data) Revenues $ 651,088 $ 720,368 $ 744,280 $ 710,721 Operating expenses 663,341 695,634 719,931 694,041 Operating income (loss) (12,253) 24,734 24,349 16,680 Other income (costs) (394) (599) (281) (660) Income tax provision (benefit) (1) (5,240) 8,358 9,280 (20,548) Net income (loss) (1) $ (7,407) $ 15,777 $ 14,788 $ 36,568 Earnings (loss) per common share (1)(2) Basic $ (0.29) $ 0.61 $ 0.57 $ 1.42 Diluted (1) $ (0.29) $ 0.60 $ 0.56 $ 1.37 Average common shares outstanding Basic 25,684,475 25,767,791 25,671,535 25,637,568 Diluted 25,684,475 26,291,641 26,393,359 26,540,716 2016 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands, except share and per share data) Revenues $ 621,455 $ 676,627 $ 713,923 $ 688,214 Operating expenses (3) 630,720 659,973 693,553 687,003 Operating income (loss) (3) (9,265) 16,654 20,370 1,211 Other income (costs) (480) (273) 185 (115) Income tax provision (benefit) (3,642) 6,150 7,615 (488) Net income (loss) (3) $ (6,103) $ 10,231 $ 12,940 $ 1,584 Earnings (loss) per common share (2) Basic $ (0.24) $ 0.39 $ 0.50 $ 0.06 Diluted (3) $ (0.24) $ 0.39 $ 0.49 $ 0.06 Average common shares outstanding Basic 25,822,522 25,791,026 25,724,550 25,669,280 Diluted 25,822,522 26,246,868 26,211,524 26,272,487 (1) Fourth quarter 2017 includes a provisional tax benefit of $25.8 million, or $0.97 per diluted share, as a result of recognizing a reasonable estimate of the tax effects of the Tax Cuts and Jobs Act. See Note E. (2) The Company uses the two-class method for calculating earnings per share. See Note L. (3) Fourth quarter 2016 includes restructuring charges of $10.3 million (pre-tax), or $6.3 million (after-tax) and $0.24 per diluted share. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended |
Dec. 31, 2017 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES ARCBEST CORPORATION Balances at Additions Balances at Beginning of Charged to Costs Charged to End of Description Period and Expenses Other Accounts Deductions Period (in thousands) Year Ended December 31, 2017 Deducted from asset accounts: Allowance for doubtful accounts receivable and revenue adjustments $ 5,437 $ 4,081 $ 2,416 (a) $ 4,277 (b) $ 7,657 Allowance for other accounts receivable $ 849 $ 72 (c) $ — $ — $ 921 Allowance for deferred tax assets $ 293 $ — $ — $ (551) (d) $ 844 Year Ended December 31, 2016 Deducted from asset accounts: Allowance for doubtful accounts receivable and revenue adjustments $ 4,825 $ 1,643 $ 980 (a) $ 2,011 (b) $ 5,437 Allowance for other accounts receivable $ 1,029 $ (180) (c) $ — $ — $ 849 Allowance for deferred tax assets $ 354 $ — $ — $ 61 (d) $ 293 Year Ended December 31, 2015 Deducted from asset accounts: Allowance for doubtful accounts receivable and revenue adjustments $ 5,731 $ 998 $ (144) (a) $ 1,760 (b) $ 4,825 Allowance for other accounts receivable $ 1,701 $ (672) (c) $ — $ — $ 1,029 Allowance for deferred tax assets $ 332 $ 22 $ — $ — $ 354 Note a – Change in allowance due to recoveries of amounts previously written off and adjustment of revenue. Note b – Uncollectible accounts written off. Note c – Charged / (credited) to workers’ compensation expense. Note d – Decrease (increase) in allowance due to changes in expectation of realization of certain state net operating losses and state deferred tax assets (see Note E to the Company’s consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K). |
ORGANIZATION AND DESCRIPTION 26
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
Consolidation | Consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. |
Segment Information | Segment Information: The Company uses the “management approach” for determining its reportable segment information. The management approach is based on the way management organizes the reportable segments within the Company for making operating decisions and assessing performance. See Note M for further discussion of segment reporting. |
Use of Estimates | Use of Estimates: 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. |
Reclassifications | Reclassifications : Certain reclassifications have been made to the prior years’ consolidated financial statements to conform to the current year presentation. The insurance receivable for the amount of workers’ compensation and third-party casualty claims in excess of self-insurance retention limits, which was previously offset against the reserve included in accrued expenses, has been reclassed to other accounts receivable, resulting in an $8.7 million increase in other accounts receivable and a corresponding increase in accrued expenses in the consolidated balance sheet at December 31, 2016. Amounts totaling $18.6 million related to certain service centers of the Company’s Asset-Based operations previously recorded in leasehold improvements were reclassed to land and structures in the consolidated balance sheet at December 31, 2016. These reclassifications were previously reported in the Company’s first quarter 2017 Quarterly Report on Form 10-Q. The prior period impact of the reclassification of the insurance receivable is also reflected in the consolidated statements of cash flows for the years ended December 31, 2016 and 2015. Reclassifications were also made to the consolidated financial statements to apply the provisions of accounting pronouncements adopted during the first quarter of 2017 related to deferred income taxes, share-based compensation, and cash flow classification (see Adopted Accounting Pronouncements within Note B). The Company’s deferred tax assets were reclassed, by jurisdiction, from current to long-term in the consolidated balance sheets. The net change in restricted cash previously presented in financing activities of the Company’s consolidated statements of cash flows was removed and restricted cash was included in the reconciliation of beginning- and end-of-period totals of cash and cash equivalents and restricted cash. Cash paid by the Company when directly withholding shares from an employee’s share-based compensation award for tax-withholding purposes was reclassified from an operating activity within changes in income taxes to a financing activity in the consolidated statements of cash flows. There was no impact on the Company’s consolidated revenues, operating expenses, operating income, or earnings per share as a result of the reclassifications. During the third quarter of 2017, the Company modified the presentation of segment expenses allocated from shared services. Previously, expenses allocated from company-wide functions were categorized in individual segment expense line items by type of expense. Allocated expenses are now presented on a single shared services line within the Company’s operating segment disclosures. Reclassifications have been made to the prior period operating segment expenses to conform to the current year presentation. There was no impact on each segment’s total expenses as a result of the reclassifications. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
ACCOUNTING POLICIES | |
Cash, Cash Equivalents, and Short-Term Investments | Cash, Cash Equivalents, and Short‑Term Investments: Short‑term investments that have a maturity of ninety days or less when purchased are considered cash equivalents. Variable rate demand notes are classified as cash equivalents, as the investments may be redeemed on a daily basis with the original issuer. Short‑term investments consist of FDIC‑insured certificates of deposit with original maturities greater than ninety days and remaining maturities less than one year. Interest and dividends related to cash, cash equivalents, and short‑term investments are included in interest and dividend income. |
Restricted Cash | Restricted Cash: Cash that is pledged as collateral, primarily for the Company’s outstanding letters of credit, is classified as restricted. The Company’s letters of credit are primarily issued in support of certain workers’ compensation and third‑party casualty claims liabilities in various states in which the Company is self‑insured. The restricted cash is classified consistent with the classification of the liabilities to which it relates and in accordance with the duration of the letters of credit. Restricted cash consisted of cash deposits at December 31, 2016. |
Concentration of Credit Risk | Concentration of Credit Risk: The Company is potentially subject to concentrations of credit risk related to the portion of its unrestricted and restricted cash, cash equivalents, and short‑term investments which is not federally insured, as further discussed in Note C. The Company’s services are provided primarily to customers throughout the United States and, to a lesser extent, Canada, Mexico, and other international locations. On a consolidated basis, the Company had no single customer representing more than 5% of its revenues in 2017, 2016, or 2015 or more than 7% of its accounts receivable balance at December 31, 2017 and 2016. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Historically, credit losses have been within management’s expectations. |
Allowances | Allowances: The Company maintains allowances for doubtful accounts and revenue adjustments. The Company’s allowance for doubtful accounts represents an estimate of potential accounts receivable write‑offs associated with recognized revenue based on historical trends and factors surrounding the credit risk of specific customers. Accounts receivable are written off against the allowance for doubtful accounts and revenue adjustments when accounts are turned over to a collection agency or when the accounts are determined to be uncollectible. The Company’s allowance for revenue adjustments represents an estimate of potential adjustments associated with recognized revenue based upon historical trends and current information regarding trends and business changes. |
Property, Plant and Equipment, Including Repairs and Maintenance | Property, Plant and Equipment, Including Repairs and Maintenance: Purchases of property, plant and equipment are recorded at cost. For financial reporting purposes, property, plant and equipment is depreciated principally by the straight‑line method, using the following useful lives: structures – primarily 15 to 60 years; revenue equipment – 3 to 14 years; and other equipment – 2 to 15 years. The Company utilizes tractors and trailers in its Asset-Based operations and trailers in its ArcBest segment operations. Tractors and trailers are commonly referred to as “revenue equipment” in the transportation business. The Company periodically reviews and adjusts, as appropriate, the residual values and useful lives of revenue equipment and other equipment. For tax reporting purposes, accelerated depreciation or cost recovery methods are used. Gains and losses on asset sales are reflected in the year of disposal. Exchanges of nonmonetary assets that have commercial substance are measured based on the fair value of the assets exchanged. Tires purchased with revenue equipment are capitalized as a part of the cost of such equipment, with replacement tires being expensed when placed in service. Repair and maintenance costs associated with property, plant and equipment are expensed as incurred if the costs do not extend the useful life of the asset. If such costs do extend the useful life of the asset, the costs are capitalized and depreciated over the appropriate remaining useful life. |
Computer Software Developed or Obtained for Internal Use, Including Web Site Development Costs | Computer Software Developed or Obtained for Internal Use, Including Web Site Development Costs: The Company capitalizes the costs of software acquired from third parties and qualifying internal computer software costs incurred during the application development stage. Costs incurred in the preliminary project stage and postimplementation-operation stage, which includes maintenance and training costs, are expensed as incurred. For financial reporting purposes, capitalized software costs are amortized by the straight‑line method generally over 2 to 7 years. The amount of costs capitalized within any period is dependent on the nature of software development activities and projects in each period. |
Impairment Assessment of Long-Lived Assets | Impairment Assessment of Long‑Lived Assets: The Company reviews its long‑lived assets, including property, plant and equipment and capitalized software, which are held and used in its operations, for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable . If such an event or change in circumstances is present, the Company will estimate the undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the undiscounted future cash flows is less than the carrying amount of the related asset, the Company will recognize an impairment loss. The Company records impairment losses in operating income. Assets to be disposed of are reclassified as assets held for sale at the lower of their carrying amount or fair value less cost to sell. Assets held for sale primarily represent Asset-Based segment nonoperating properties, older revenue equipment, and other equipment. Adjustments to write down assets to fair value less the amount of costs to sell are reported in operating income. Assets held for sale are expected to be disposed of by selling the assets within the next 12 months. Gains and losses on property and equipment are reported in operating income. Assets held for sale of $1.4 million and $1.2 million are reported within other noncurrent assets as of December 31, 2017 and 2016, respectively. At December 31, 2017 and 2016, management was not aware of any events or circumstances indicating the Company’s long‑lived assets would not be recoverable. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets: Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. Goodwill is not amortized, but rather is evaluated for impairment annually or more frequently if indicators of impairment exist. The Company’s measurement of goodwill impairment involves a comparison of the estimated fair value of a reporting unit to its carrying value. If the estimated fair value of the reporting unit is less than the carrying value, an estimate of the current fair values of all assets and liabilities is made to determine the amount of implied goodwill (referred to as Step 2 of the goodwill impairment test) and, consequently, the amount of any goodwill impairment. Fair value is derived using a combination of valuation methods, including earnings before interest, taxes, depreciation, and amortization (EBITDA) and revenue multiples (market approach) and the present value of discounted cash flows (income approach). The Company’s annual impairment testing is performed as of October 1. Indefinite‑lived intangible assets are also not amortized but rather are evaluated for impairment annually or more frequently if indicators of impairment exist. If the carrying amount of the intangible asset exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess. Fair values are determined based on a discounted cash flow model, similar to the goodwill analysis. The Company amortizes finite‑lived intangible assets over their respective estimated useful lives. Finite‑lived intangible assets are also evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In reviewing finite‑lived intangible assets for impairment, the carrying amount of the asset is compared to the estimated undiscounted future cash flows expected from the use of the asset and its eventual disposition. If such cash flows are not sufficient to support the recorded value, an impairment loss to reduce the carrying value of the asset to its estimated fair value shall be recognized in operating income. |
Income Taxes | Income Taxes: The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on the temporary differences between the book value and the tax basis of certain assets and liabilities and the tax effect of operating loss and tax credit carryforwards. Deferred income taxes relate principally to asset and liability basis differences resulting from the timing of depreciation deductions and to temporary differences in the recognition of certain revenues and expenses. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. The Company classifies any interest and penalty amounts related to income tax matters as operating expenses. Management applies considerable judgment in determining the consolidated income tax provision, including valuation allowances on deferred tax assets. The valuation allowance for deferred tax assets is determined by evaluating whether it is more likely than not that the benefits of deferred tax assets will be realized through future reversal of existing taxable temporary differences, taxable income in carryback years in jurisdictions in which they are allowable, projected future taxable income, or tax‑planning strategies. Uncertain tax positions, which also require significant judgment, are measured to determine the amounts to be recognized in the financial statements. The income tax provision and valuation allowances are complicated by complex and frequently changing rules administered in multiple jurisdictions, including U.S. federal, state, and foreign governments. The Company’s income taxes for the year ended December 31, 2017 were impacted by the recognition of a reasonable estimate of the tax effects of the Tax Cuts and Jobs Act (the “Tax Reform Act”) that was signed into law on December 22, 2017 (see Note E). |
Book Overdrafts | Book Overdrafts: Issued checks that have not cleared the bank as of December 31 result in book overdraft balances for accounting purposes which are classified within accounts payable in the accompanying consolidated balance sheets. Book overdrafts amounted to $17.2 million and $17.7 million for the year ended December 31, 2017 and 2016, respectively. The change in book overdrafts is reported as a component of financing activities within the statement of cash flows. |
Claims Liabilities | Claims Liabilities : The Company is self‑insured up to certain limits for workers’ compensation, certain third‑party casualty claims, and cargo loss and damage claims. Amounts in excess of the self‑insured limits are fully insured to levels which management considers appropriate for the Company’s operations. The Company’s claims liabilities have not been discounted. Liabilities for self‑insured workers’ compensation and third‑party casualty claims are based on the case reserve amounts plus an estimate of loss development and incurred but not reported (“IBNR”) claims, which is developed from an independent actuarial analysis. The process of determining reserve requirements utilizes historical trends and involves an evaluation of claim frequency and severity, claims management, and other factors. Case reserves are evaluated as loss experience develops and new information becomes available. Adjustments to previously estimated aggregate reserves are reflected in financial results in the periods in which they are made. Aggregate reserves represent an estimate of the costs of claims incurred, and it is possible that the ultimate liability may differ significantly from such estimates. The Company develops an estimate of self‑insured cargo loss and damage claims liabilities based on historical trends and certain event‑specific information. Claims liabilities are recorded in accrued expenses and are not offset by insurance receivables which are reported in other accounts receivable. |
Long-Term Debt | Long‑Term Debt: Long-term debt consists of borrowings outstanding under the Company’s revolving credit facility and accounts receivable securitization program, minimum principal payments due under notes payable for the financing of revenue equipment, other equipment, and software; and the present values of net minimum lease payments under capital lease obligations. The Company’s long-term debt and financing arrangements are further described in Note G. |
Contingent Consideration | Contingent Consideration: The Company records the estimated fair value of contingent consideration at the acquisition date as part of the purchase price consideration for an acquisition. The fair value of the Company’s contingent consideration liability, which is further described in Note C, was determined by assessing Level 3 inputs with a discounted cash flow approach using various probability-weighted scenarios. The fair value of the outstanding contingent consideration is recorded in accrued expenses or other long-term liabilities, based on when expected payouts become due. Amounts held in escrow for contingent consideration are recorded in other current assets or other long-term assets, consistent with the classification of the related liability. The liability for contingent consideration is remeasured at each quarterly reporting period and any change in fair value as a result of the recurring assessments is recognized in operating income. |
Interest Rate Swap Derivative Instruments | Interest Rate Swap Derivative Instruments : The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. The Company has interest rate swap agreements designated as a cash flow hedges. The effective portion of the gain or loss on the interest rate swap instruments is reported as unrealized gain or loss as a component of accumulated other comprehensive income or loss, net of tax, in stockholders’ equity and the change in the unrealized gain or loss on the interest rate swaps is reported in other comprehensive income or loss, net of tax, in the consolidated statements of comprehensive income. The unrealized gain or loss is reclassified out of accumulated other comprehensive loss into income in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the interest rate swap instruments, if any, is recognized in current income. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. |
Leases | Leases: The Company leases, under capital and operating lease arrangements, certain facilities, revenue equipment, and certain other equipment used primarily in Asset-Based segment service center operations. Certain of these leases contain fluctuating or escalating payments. The related rent expense is recorded on a straight‑line basis over the lease term. The cumulative excess of rent expense over rent payments is accounted for as a deferred lease obligation. For financial reporting purposes, assets held under capital leases are depreciated over their estimated useful lives on the same basis as owned assets and leasehold improvements associated with assets utilized under capital or operating leases are amortized by the straight‑line method over the shorter of the remaining lease term or the asset’s useful life. Amortization of assets under capital leases is included in depreciation expense. Obligations under the capital lease arrangements are included in long‑term debt, net of the current portion due, which is classified in current liabilities. |
Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans | Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans: The Company recognizes the funded status (the difference between the fair value of plan assets and the benefit obligation) of its nonunion defined benefit pension plan, supplemental benefit plan (“SBP”), and postretirement health benefit plan in the consolidated balance sheet and recognizes changes in the funded status, net of tax, in the year in which they occur as a component of other comprehensive income or loss. Amounts recognized in other comprehensive income or loss are subsequently expensed as components of net periodic benefit cost by amortizing unrecognized net actuarial losses over the average remaining active service period of the plan participants and amortizing unrecognized prior service credits over the remaining years of service until full eligibility of the active participants at the time of the plan amendment which created the prior service credit. A corridor approach is not used for determining the amounts of net actuarial losses to be amortized. The expense and liability related to the Company’s nonunion defined benefit pension plan, SBP, and postretirement health benefit plan are measured based upon a number of assumptions and using the services of a third‑party actuary. Assumptions impacting the Company’s expense for these plans include the discount rate used to discount the plans’ obligations and, for the nonunion defined benefit pension plan, the expected rate of return applied to the fair value of plan assets. The discount rate is determined by matching projected cash distributions with appropriate high‑quality corporate bond yields in a yield curve analysis. The Company establishes the expected rate of return on plan assets by considering the historical returns for the plan’s current investment mix and the plan investment advisor’s range of expected returns for the plan’s current investment mix. Assumptions are also made regarding expected retirement age, mortality, employee turnover, and, for the postretirement health benefit plan, future increases in health care costs. In November 2017, an amendment to the nonunion defined benefit pension plan was executed to terminate the plan effective December 31, 2017 (see Note I). The plan has filed for a determination letter from the U.S. Internal Revenue Service (the “IRS”) regarding the qualification of the plan termination, and the Company expects the process of terminating the plan to commence following receipt of a favorable determination letter and the distribution of benefit election forms to plan participants. A more conservative approach has been taken to preserve asset values of the frozen nonunion defined benefit pension plan and to minimize the impact of market volatility by transferring the plan’s equity investments to short-duration debt instruments during the second half of 2017. As a result of the significant change to the plan’s asset allocation, the plan’s investment rate of return assumption was lowered for the second half of 2017 and for 2018; however, there have been no changes to the methodologies of establishing assumptions for the nonunion pension plan. The assumptions used directly impact the net periodic benefit cost for a particular year. An actuarial gain or loss results when actual experience varies from the assumptions or when there are changes in actuarial assumptions. Actuarial gains and losses are not included in net periodic benefit cost in the period when they arise but are recognized as a component of other comprehensive income or loss and subsequently amortized as a component of net periodic benefit cost. The Company uses December 31 as the measurement date for its nonunion defined benefit pension plan, SBP, and postretirement health benefit plan. Plan obligations are also remeasured upon curtailment and upon settlement. The Company records quarterly pension settlement expense related to the nonunion defined benefit pension plan when qualifying distributions determined to be settlements are expected to exceed the estimated total annual interest cost of the plan. Benefit distributions under the SBP individually exceed the annual interest cost of the plan, and the Company records the related settlement expense when the amount of the benefit to be distributed is fixed, which is generally upon an employee’s termination of employment. Pension settlement expense for the nonunion defined benefit pension and SBP plans is presented in Note I. |
Revenue Recognition | Revenue Recognition: Asset-Based segment revenue is recognized based on relative transit time in each reporting period with expenses recognized as incurred. A bill-by-bill analysis is used to establish estimates of revenue in transit for recognition in the appropriate reporting period. ArcBest segment revenue is recognized based on the delivery of the shipment to the customer-designated location. Service fee revenue for the FleetNet segment is recognized upon response to the service event. Repair revenue and expenses for the FleetNet segment are recognized at the completion of the service by third-party vendors. Revenue, purchased transportation expense, and third‑party service expenses are reported on a gross basis for certain shipments and services where the Company utilizes a third‑party carrier for pickup, linehaul, delivery of freight, or performance of services but remains the primary obligor and assumes collection and credit risks. |
Comprehensive Income or Loss | Comprehensive Income or Loss: Comprehensive income or loss consists of net income and other comprehensive income or loss, net of tax. Other comprehensive income or loss refers to revenues, expenses, gains, and losses that are not included in net income, but rather are recorded directly to stockholders’ equity. The Company reports the components of other comprehensive income or loss, net of tax, by their nature and discloses the tax effect allocated to each component in the consolidated statements of comprehensive income. The accumulated balance of other comprehensive income or loss is displayed separately in the consolidated statements of stockholders’ equity and the components of the balance are reported in Note J. The changes in accumulated other comprehensive income or loss, net of tax, and the significant reclassifications out of accumulated other comprehensive income or loss are disclosed, by component, in Note J. |
Earnings Per Share | Earnings Per Share: The Company uses the two‑class method for calculating earnings per share due to certain equity awards being deemed participating securities. The two-class method is an earnings allocation method under which earnings per share is calculated for each class of common stock and participating security considering both dividends declared and participation rights in undistributed earnings as if all such earnings had been distributed during the period. The calculation uses the net income based on the two-class method and the weighted‑average number of common shares (basic earnings per share) or common equivalent shares outstanding (diluted earnings per share) during the applicable period. The dilutive effect of common stock equivalents is excluded from basic earnings per common share and included in the calculation of diluted earnings per common share. |
Share-Based Compensation | Share‑Based Compensation: The fair value of restricted stock awards is determined based upon the closing market price of the Company’s common stock on the date of grant. The restricted stock units generally vest at the end of a five‑year period following the date of grant, except for certain awards granted to non‑employee directors that typically vest at the end of a one-year period for awards granted on or after January 1, 2016 and at the end of a three‑year period for previous grants, subject to accelerated vesting due to death, disability, retirement, or change‑in‑control provisions. When restricted stock units become vested, the Company issues new shares which are subsequently distributed. Dividends or dividend equivalents are paid on certain restricted stock units during the vesting period. The Company recognizes the income tax benefits of dividends on share‑based payment awards as income tax expense or benefit in the consolidated statements of operations when awards vest or are settled. Share‑based awards are amortized to compensation expense on a straight‑line basis over the vesting period of awards or over the period to which the recipient first becomes eligible for retirement, whichever is shorter, with vesting accelerated upon death or disability. The Company recognizes forfeitures as they occur. |
Fair Value Measurements | Fair Value Measurements: The Company discloses the fair value measurements of its financial assets and liabilities. Fair value measurements for investments held in trust for the Company’s nonunion defined benefit pension plan are also disclosed. Fair value measurements are disclosed in accordance with the following hierarchy of valuation approaches 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. |
Environmental Matters | Environmental Matters: The Company expenses environmental costs related to existing conditions resulting from past or current operations and from which no current or future benefit is discernible. Expenditures which extend the life of the related property or mitigate or prevent future environmental contamination are capitalized. 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. The estimated liability is not reduced for possible recoveries from insurance carriers or other third parties. |
Exit or Disposal Activities | Exit or Disposal Activities: The Company recognizes liabilities for costs associated with exit or disposal activities when the liability is incurred. |
Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted | Adopted Accounting Pronouncements In the first quarter of 2017, the Company adopted guidance issued by the Financial Accounting Standards Board (the “FASB”) which amended Accounting Standards Codification (“ASC”) Topic 740 with the addition of Balance Sheet Classification of Deferred Taxes. The amendment was retrospectively adopted and resulted in reclassifications to the consolidated balance sheets to present all deferred tax assets and liabilities as noncurrent by jurisdiction. As a result of retrospectively applying the provisions of the amendment, current deferred tax assets were reduced by $39.6 million and noncurrent deferred tax assets were increased by $3.0 million, with a corresponding reduction of $36.6 million to noncurrent deferred tax liabilities at December 31, 2016. In the first quarter of 2017, the Company adopted an amendment to ASC Topic 718, Compensation – Stock Compensation, which requires the income tax effects of awards to be recognized in the statement of operations when awards vest or are settled and allows employers to make a policy election to account for forfeitures as they occur. As a result of applying the provisions of the amendment, the Company recognized a cumulative effect adjustment to the opening balances of retained earnings, additional paid-in capital, and the deferred income tax liability of $0.2 million, $0.4 million, and $0.2 million, respectively. The Company also made a policy election to account for forfeitures as they occur. The Company may experience volatility in its income tax provision as a result of recording all excess tax benefits and tax deficiencies in the income statement upon settlement of awards, which is primarily during the second quarter of each year except for 2018 which will predominantly occur in the fourth quarter. This provision of the amendment related to recognition of excess tax benefits and tax deficiencies was adopted prospectively; therefore, the prior period has not been adjusted for this provision. Cash paid by the Company to taxing authorities on the employee’s behalf for withheld shares was reclassified from an operating activity within changes in accounts payable, accrued expenses, and other liabilities to a financing activity in the consolidated statements of cash flows for all periods presented. The other provisions of the adopted amendment did not have a significant impact on the Company’s consolidated financial statements. In the first quarter of 2017, the Company also adopted amendments to ASC Topic 230, Statement of Cash Flows, which provide classification guidance for restricted cash and certain cash receipts and cash payments presented in the statement of cash flows. The retrospective adoption of the amendments resulted in reclassification to the consolidated statement of cash flows to include restricted cash in the reconciliation of beginning- and end-of-period totals of cash and cash equivalents. Proceeds from the settlement of corporate-owned life insurance policies are classified as cash provided by investing activities, and cash payments for premiums on such insurance policies are classified as cash used in operating activities in the consolidated statements of cash flows. Accounting Pronouncements Not Yet Adopted ASC Topic 606, which amends the guidance in 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 will adopt the standard on the modified retrospective basis, which requires the effects of adoption to be reflected in beginning retained earnings, and does not expect a significant impact on the consolidated financial statements; however, additional disclosures regarding disaggregated revenue, contract assets and liabilities, and performance obligations are expected, and judgement will be used in applying the disclosure requirements. Revenue recognition for the Asset-Based and FleetNet segments will not change upon adoption of the standard. However, revenues for the ArcBest segment will be recognized on a relative-transit-time basis instead of the previous recognition method at final delivery. Due to relatively short transit times of the ArcBest segment, the financial impact at any period-end is not expected to be significant. The Company expects to record an adjustment of less than $0.5 million to increase beginning retained earnings in the first quarter 2018 financial statements as a result of adopting the guidance. An amendment to ASC Topic 715, Compensation – Retirement Benefits , requires the service cost component of net periodic pension cost related to pension and other postretirement benefits accounted for under ASC Topic 715 to be included in the same line item or items as other compensation costs arising from services rendered by the related employees, and requires the other components of net periodic pension cost, including pension settlement expense, to be presented separately from the service cost component and outside of the subtotal of income from operations. These provisions of the amendment are required to be applied retrospectively and are effective for the Company beginning January 1, 2018. Other than the reclassifications described, the Company does not anticipate the amendment to have an impact on the consolidated financial statements. ASC Topic 718, Compensation-Stock Compensation , was amended to provide guidance about which changes to the terms or conditions of a share-based payment award require the application of modification accounting. The amendment is effective for the Company beginning January 1, 2018 and is not expected to have a significant impact on the consolidated financial statements. Effective January 1, 2018, the Company will early adopt an amendment to ASC Topic 350, Intangibles - Goodwill and Other, Simplifying the Test of Goodwill Impairment, which removes Step 2 of the goodwill impairment test. For annual and interim impairment tests, the Company will be required to record an impairment charge, if any, by the amount a reporting unit’s fair value is exceeded by the carrying value of the reporting unit, limited to the carrying value of goodwill included in the reporting unit. The adoption of the new standard is not expected to have an impact on the consolidated financial statements. In February 2018, the FASB issued an amendment to ASC Topic 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows a reclassification from accumulated other comprehensive income to retained earnings for the stranded tax effects resulting from the Tax Reform Act. Under this amendment, the tax effects of items within accumulated other comprehensive income will be adjusted to reflect the appropriate tax rate under the Tax Reform Act. The Company is evaluating the impact the amendment will have 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 new standard is expected to be adopted on the modified retrospective basis, which will require leases existing at or entered into after the beginning of the earliest comparative period to be valued and recorded as right-to-use liabilities and assets, and is expected to have a material impact on the Company’s consolidated balance sheet. The Company is evaluating the impact of the new standard on the consolidated statements of operations and consolidated statement of cash flows. ASC Topic 815, Derivatives and Hedging , was amended to change the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results to simplify hedge accounting treatment and better align an entity’s risk management activities and financial reporting for hedging relationships. The amendment is effective for the Company beginning January 1, 2019 and is not expected to have a significant impact on the consolidated financial statements. 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. |
FINANCIAL INSTRUMENTS AND FAI28
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
Schedule components of cash and cash equivalents, short term investments, and restricted funds | December 31 December 31 2017 2016 (in thousands) Cash and cash equivalents Cash deposits (1) $ 86,510 $ 92,520 Variable rate demand notes (1)(2) 19,744 16,057 Money market funds (3) 14,518 5,703 Total cash and cash equivalents $ 120,772 $ 114,280 Short-term investments Certificates of deposit (1) $ 56,401 $ 56,838 Restricted cash Cash deposits (1) $ — $ 962 (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). |
Schedule of fair value and carrying value disclosures of financial instruments | December 31 December 31 2017 2016 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ 70,000 $ 70,000 $ 70,000 $ 70,000 Accounts receivable securitization borrowings (2) 45,000 45,000 35,000 35,000 Notes payable (3) 153,441 152,131 138,032 137,503 $ 268,441 $ 267,131 $ 243,032 $ 242,503 (1) The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on LIBOR, plus a margin, that 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, that is 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 | December 31, 2017 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) $ 14,518 $ 14,518 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,359 2,359 — — Interest rate swap (3) 481 — 481 — $ 17,358 $ 16,877 $ 481 $ — Liabilities: Contingent consideration (4) $ 6,970 $ — $ — $ 6,970 December 31, 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) $ 5,703 $ 5,703 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,220 2,220 — — $ 7,923 $ 7,923 $ — $ — Liabilities: Contingent consideration (4) $ 6,775 $ — $ — $ 6,775 Interest rate swap (3) 542 — 542 — $ 7,317 $ — $ 542 $ 6,775 (1) Included in 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. Included in other long‑term assets, with a corresponding liability reported within other long‑term liabilities. (3) Included in other long‑term assets or liabilities. The fair values of the interest rate swaps were 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 December 31, 2017 and December 31, 2016 and considers the interest rate swap valuations in Level 2 of the fair value hierarchy. (4) Included in accrued expenses and other long-term liabilities, based on when expected payouts become due. The estimated fair value of contingent consideration for an earn-out agreement related to the September 2016 acquisition of LDS was determined by assessing Level 3 inputs with a discounted cash flow approach using various probability-weighted scenarios. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues and gross margins to be achieved for the applicable performance periods, probability weightings assigned to the performance scenarios, and the discount rate applied, which was 12.5% and 12.3% as of December 31, 2017 and 2016, respectively. Subsequent changes to the fair value as a result of recurring assessments will be recognized in operating income. |
Schedule of changes in fair value of the liabilities | Contingent Consideration (in thousands) Balances at December 31, 2015 $ — Contingent consideration liability recorded at fair value for business acquisition 6,711 Change in fair value included in operating expenses 64 Balances at December 31, 2016 6,775 Change in fair value included in operating expenses 195 Balances at December 31, 2017 $ 6,970 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of goodwill by reportable operating segment | Total ArcBest FleetNet (in thousands) Balances December 31, 2015 $ 96,465 $ 95,835 $ 630 Goodwill acquired (1) 12,640 12,640 — Goodwill divested (2) (842) (842) — Purchase accounting adjustments 612 612 — Balances December 31, 2016 $ 108,875 $ 108,245 $ 630 Goodwill divested (2) (661) (661) — Purchase accounting adjustments 106 106 — Balances December 31, 2017 $ 108,320 $ 107,690 $ 630 (1) Goodwill related to the September 2, 2016 acquisition of LDS is expected to be fully deductible for tax purposes. (2) Goodwill divested due to the sale of certain non-strategic businesses was determined based on the relative fair value of the businesses sold to the total fair value of the reporting unit. |
Schedule of intangible assets | Intangible assets consisted of the following as of December 31: 2017 2016 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 14 $ 60,431 $ 19,745 $ 40,686 $ 60,431 $ 15,350 $ 45,081 Driver network 3 3,200 3,200 — 3,200 3,200 — Other 9 1,032 549 483 1,032 406 626 13 64,663 23,494 41,169 64,663 18,956 45,707 Indefinite-lived intangible assets Trade name N/A 32,300 N/A 32,300 32,300 N/A 32,300 Other (1) N/A — N/A — 2,500 N/A 2,500 32,300 32,300 34,800 34,800 Total intangible assets N/A $ 96,963 $ 23,494 $ 73,469 $ 99,463 $ 18,956 $ 80,507 1) Other indefinite-lived intangible assets divested due to the sale of certain non-strategic businesses. |
Schedule of future amortization for intangible assets and acquired software | Intangible Acquired Total Assets Software (1) (in thousands) 2018 $ 6,641 $ 4,520 $ 2,121 2019 5,463 4,482 981 2020 4,471 4,454 17 2021 4,418 4,412 6 2022 4,385 4,385 — Thereafter 18,916 18,916 — Total amortization $ 44,294 $ 41,169 $ 3,125 (1) Acquired software is reported in property, plant and equipment. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
INCOME TAXES | |
Schedule of significant components of the provision or benefit for income taxes | Significant components of the provision or benefit for income taxes for the years ended December 31 were as follows: 2017 (1) 2016 2015 (in thousands) Current provision (benefit): Federal $ (1,969) $ (604) $ 9,156 State 3,701 (335) 165 Foreign 331 1,052 2,124 2,063 113 11,445 Deferred provision (benefit): Federal (9,312) 8,161 12,914 State (867) 1,354 3,589 Foreign (34) 7 (68) (10,213) 9,522 16,435 Total provision (benefit) for income taxes $ (8,150) $ 9,635 $ 27,880 1) For 2017, the income tax provision (benefit) reflects the provisional impact of the Tax Reform Act, as previously disclosed in this Note. Deferred income tax liabilities were reduced by approximately $24.5 million as a result of the decrease in the U.S. corporate statutory rate from 35% to 21%, effective January 1, 2018, and current tax expense was reduced by approximately $1.3 million as a result of the law change and the Company’s application of a blended rate due to the use of a fiscal year other than the calendar year for U.S. income tax filing purposes. |
Schedule of components of the deferred tax provision or benefit | Components of the deferred tax provision or benefit for the years ended December 31, were as follows: 2017 (1) 2016 (1) 2015 (1) (in thousands) Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets $ 21,876 $ 12,182 $ 21,098 Amortization of intangibles (1,030) (3,623) (3,184) Changes in reserves for workers’ compensation, third-party casualty, and cargo claims (812) 362 (674) Revenue recognition 332 1,862 7 Allowance for doubtful accounts (719) (295) 307 Foreign tax credit carryforward utilized — — 434 Nonunion pension and other retirement plans (1,977) 3,861 (234) Deferred compensation plans 226 203 541 Federal net operating loss carryforwards utilized 28 161 70 State net operating loss carryforwards utilized (generated) 229 (304) 623 State depreciation adjustments (1,244) (758) (657) Share-based compensation 352 (681) (621) Valuation allowance increase (decrease) 401 (61) 22 Leases 16 (1) (969) Other accrued expenses (852) (4,108) 1,256 Provisional impact of the Tax Reform Act (2) (24,542) — — Other (2,497) 722 (1,584) Deferred tax provision (benefit) $ (10,213) $ 9,522 $ 16,435 1) The components of the deferred tax provision above reflect the statutory U.S. income tax rate in effect for the applicable year, which is 35%. 2) For 2017, the provisional effect of the change in the U.S. corporate tax rate to 21% in accordance with the Tax Reform Act is reflected as a separate component of the deferred tax provision. |
Schedule of significant components of deferred tax assets and liabilities | Significant components of the deferred tax assets and liabilities at December 31 were as follows: 2017 (1) 2016 (1) (in thousands) Deferred tax assets: Accrued expenses $ 36,843 $ 53,366 Pension liabilities 4,413 4,869 Postretirement liabilities other than pensions 6,236 9,903 Share-based compensation 4,466 7,119 Federal and state net operating loss carryovers 1,781 2,229 Other 1,508 1,856 Total deferred tax assets 55,247 79,342 Valuation allowance (844) (293) Total deferred tax assets, net of valuation allowance 54,403 79,049 Deferred tax liabilities: Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets 73,725 95,248 Intangibles 14,573 24,715 Revenue recognition 6,172 5,679 Prepaid expenses 3,125 5,109 Total deferred tax liabilities 97,595 130,751 Net deferred tax liabilities $ (43,192) $ (51,702) 1) The amounts for deferred tax assets and liabilities reflect the applicable tax rates for each category, with the U.S. federal rate at 35% for 2016 and at 21% for a substantial portion of 2017 temporary differences in accordance with the Tax Reform Act. The amounts also include deferred taxes for states and foreign jurisdictions. |
Reconciliation between the effective income tax rate, as computed on income or loss before income taxes, and the statutory federal income tax rate | Reconciliation between the effective income tax rate, as computed on income before income taxes, and the statutory federal income tax rate for the years ended December 31 is presented in the following table: 2017 (1) 2016 (1) 2015 (1) (in thousands) Income tax provision at the statutory federal rate $ 18,052 $ 9,901 $ 25,457 Federal income tax effects of: State income taxes (992) (357) (1,314) Nondeductible expenses 1,551 1,653 1,426 Life insurance proceeds and changes in cash surrender value (927) (1,001) (110) Dividends received deduction (9) (11) (3) Alternative fuel credit — (1,180) (1,141) Increase (decrease) in valuation allowances 401 (61) 22 Decrease in uncertain tax positions (2) (720) — — Adoption of ASC 718 relating to stock compensation (3) (1,129) — — Impact of the Tax Reform Act on current tax (1) (1,288) — — Impact of the Tax Reform Act on deferred tax (1) (24,542) — — Other (4) (1,678) (1,387) (2,267) Federal income tax provision (benefit) (11,281) 7,557 22,070 State income tax provision 2,834 1,019 3,754 Foreign income tax provision 297 1,059 2,056 Total provision (benefit) for income taxes $ (8,150) $ 9,635 $ 27,880 Effective tax (benefit) rate (15.8) % 34.1 % 38.3 % (1) Amounts in this reconciliation reflect the statutory U.S. income tax rate in effect for the applicable year prior to the enactment of the Tax Reform Act, which is 35%. For 2017, the effect of the change in the U.S. corporate tax rate to 21% in accordance with the Tax Reform Act is reflected in separate components of the reconciliation. (2) The statute of limitations for the federal return on which these credits were claimed expired in the fourth quarter of 2017. (3) The Company made a policy election to account for forfeitures as they occur. (4) Includes foreign income tax provision, as presented in this table. |
OPERATING LEASES AND COMMITME31
OPERATING LEASES AND COMMITMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
OPERATING LEASES AND COMMITMENTS | |
Schedule of future minimum rental commitments for all noncancelable operating leases | The future minimum rental commitments, net of minimum rental to be received under noncancelable subleases, as of December 31, 2017 for all noncancelable operating leases were as follows: Equipment Land and and Total Structures Other (in thousands) 2018 $ 17,734 $ 16,088 $ 1,646 2019 13,945 12,874 1,071 2020 11,312 10,365 947 2021 8,018 7,706 312 2022 4,300 4,300 — Thereafter 5,231 5,231 — $ 60,540 $ 56,564 $ 3,976 |
LONG-TERM DEBT AND FINANCING 32
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
Schedule of long-term debt | December 31 2017 2016 (in thousands) Credit Facility (interest rate of 3.1% (1) at December 31, 2017) $ 70,000 $ 70,000 Accounts receivable securitization borrowings (interest rate of 2.3% at December 31, 2017) 45,000 35,000 Notes payable (weighted-average interest rate of 2.7% at December 31, 2017) 153,441 138,032 Capital lease obligations (weighted-average interest rate of 5.7% at December 31, 2017) 478 641 268,919 243,673 Less current portion 61,930 64,143 Long-term debt, less current portion $ 206,989 $ 179,530 (1) 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 3.35% based on the margin of the Credit Facility as of December 31, 2017 and 2016. |
Scheduled maturities of long-term debt obligations | Scheduled maturities of long ‑ term debt obligations as of December 31, 2017 were as follows: Accounts Receivable Credit Securitization Notes Capital Lease Total Facility (1) Program (1) Payable Obligations (2) (in thousands) 2018 $ 68,822 $ 2,329 $ 1,223 $ 65,036 $ 234 2019 42,156 2,598 1,396 37,922 240 2020 71,393 2,679 45,358 23,329 27 2021 24,343 2,696 — 21,640 7 2022 84,275 71,392 — 12,882 1 Thereafter 404 — — 404 — Total payments 291,393 81,694 47,977 161,213 509 Less amounts representing interest 22,474 11,694 2,977 7,772 31 Long-term debt $ 268,919 $ 70,000 $ 45,000 $ 153,441 $ 478 (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 | Assets securing notes payable or held under capital leases at December 31 were included in property, plant and equipment as follows: 2017 2016 (in thousands) Revenue equipment $ 269,950 $ 220,566 Land and structures (service centers) 1,794 1,794 Software 486 — Service, office, and other equipment 100 7 Total assets securing notes payable or held under capital leases 272,330 222,367 Less accumulated depreciation and amortization (1) 87,691 61,643 Net assets securing notes payable or held under capital leases $ 184,639 $ 160,724 (1) Amortization of assets held under capital leases and depreciation of assets securing notes payable are included in depreciation expense. |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
ACCRUED EXPENSES | |
Schedule of accrued expenses | December 31 2017 2016 (in thousands) Workers’ compensation, third-party casualty, and loss and damage claims reserves (1) $ 99,969 $ 104,491 Accrued vacation pay 36,034 34,939 Accrued compensation 35,718 27,826 Taxes other than income 8,215 8,284 Other 31,301 23,191 $ 211,237 $ 198,731 1) A reclassification was made to prior year to conform to the current year presentation. The insurance receivable for the amount of workers’ compensation and third-party casualty claims in excess of self-insurance retention limits, which was previously offset against the reserve included in accrued expenses, has been reclassed to other accounts receivable, resulting in an $8.7 million increase in other accounts receivable and a corresponding increase in accrued expenses in the consolidated balance sheet at December 31, 2016. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
EMPLOYEE BENEFIT PLANS | |
Schedule of changes in benefit obligations and plan assets and disclosure of funded status and accumulated benefit obligation of nonunion defined benefit plans | The following table discloses the changes in benefit obligations and plan assets of the Company’s nonunion defined benefit plans for years ended December 31, the measurement date of the plans: Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 2016 2017 2016 2017 2016 (in thousands) Change in benefit obligations Benefit obligations at beginning of year $ 152,006 $ 159,607 $ 4,794 $ 4,917 $ 25,532 $ 24,616 Service cost — — — — 489 429 Interest cost 4,514 4,572 102 130 1,060 1,017 Actuarial (gain) loss (1) 6,448 4,202 (10) (7) (2,251) 133 Benefits paid (26,491) (16,896) (989) (246) (733) (663) Settlement loss 940 521 — — — — Benefit obligations at end of year 137,417 152,006 3,897 4,794 24,097 25,532 Change in plan assets Fair value of plan assets at beginning of year 144,805 136,917 — — — — Actual return on plan assets 6,517 11,384 — — — — Employer contributions — 13,400 989 246 733 663 Benefits paid (26,491) (16,896) (989) (246) (733) (663) Fair value of plan assets at end of year 124,831 144,805 — — — — Funded status at end of year $ (12,586) $ (7,201) $ (3,897) $ (4,794) $ (24,097) $ (25,532) Accumulated benefit obligation $ 137,417 $ 152,006 $ 3,897 $ 4,794 $ 24,097 $ 25,532 (1) The actuarial loss on the nonunion defined benefit pension plan was higher for 2017, primarily due to net changes in actuarial assumptions used to measure the plan obligation at December 31, 2017 versus December 31, 2016. The net actuarial gain on the postretirement health benefit plan for 2017, versus the net actuarial loss for 2016, is primarily related to changes in the medical trend rate assumption used to measure the plan obligation at each year-end measurement date. |
Schedule of amounts recognized in the consolidated balance sheets related to nonunion defined benefit plans | Amounts recognized in the consolidated balance sheets at December 31 consisted of the following: Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 2016 2017 2016 2017 2016 (in thousands) Current liabilities (included in accrued expenses) $ — $ — $ — $ (989) $ (753) $ (690) Noncurrent liabilities (included in pension and postretirement liabilities) (12,586) (7,201) (3,897) (3,805) (23,344) (24,842) Liabilities recognized $ (12,586) $ (7,201) $ (3,897) $ (4,794) $ (24,097) $ (25,532) |
Summary of the components of net periodic benefit cost | The following is a summary of the components of net periodic benefit cost for the Company’s nonunion benefit plans for the years ended December 31: Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 2016 2015 2017 2016 2015 2017 2016 2015 (in thousands) Service cost $ — $ — $ — $ — $ — $ — $ 489 $ 429 $ 406 Interest cost 4,514 4,572 5,200 102 130 123 1,060 1,017 913 Expected return on plan assets (5,712) (8,607) (9,180) — — — — — — Amortization of prior service credit — — — — — — (190) (190) (190) Pension settlement expense 4,156 3,023 3,202 — 206 — — — — Amortization of net actuarial loss (1) 3,132 4,087 3,218 82 152 159 694 705 853 Net periodic benefit cost $ 6,090 $ 3,075 $ 2,440 $ 184 $ 488 $ 282 $ 2,053 $ 1,961 $ 1,982 (1) The Company amortizes actuarial losses over the average remaining active service period of the plan participants and does not use a corridor approach. |
Summary of pension settlement distributions and settlement expense | The following is a summary of the pension settlement distributions and pension settlement expense for the years ended December 31: Nonunion Defined Supplemental Benefit Pension Plan Benefit Plan 2017 (1) 2016 (2) 2015 (2) 2017 (3) 2016 2015 (4) (in thousands, except per share data) Pension settlement distributions $ 26,261 $ 16,515 $ 20,622 $ 989 $ 246 $ 1,941 Pension settlement expense, pre-tax $ 4,156 $ 3,023 $ 3,202 $ — $ 206 $ — Pension settlement expense per diluted share, net of taxes $ 0.10 $ 0.07 $ 0.07 $ — $ 0.01 $ — (1) Pension settlement distributions represent $18.7 million of lump‑sum benefit distributions and a $7.6 million nonparticipating annuity contract purchase. (2) Pension settlement distributions represent lump‑sum benefit distributions paid. (3) The 2017 SBP distribution represents the portion of a benefit related to an officer retirement that occurred in 2016 which was delayed for six months after retirement in accordance with IRC Section 409A. The pension settlement expense related to this distribution was recognized in 2016. (4) The 2015 SBP distribution represents the portion of a benefit related to an officer retirement that occurred in 2014 which was delayed for six months after retirement in accordance with IRC Section 409A. The pension settlement expense related to this distribution was recognized in 2014. |
Pre-tax amounts included in accumulated other comprehensive loss that have not yet been recognized in net periodic benefit cost | Included in accumulated other comprehensive loss at December 31 were the following pre‑tax amounts that have not yet been recognized in net periodic benefit cost: Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 2016 2017 2016 2017 2016 (in thousands) Unrecognized net actuarial loss $ 22,588 $ 23,294 $ 543 $ 635 $ 2,764 $ 5,708 Unrecognized prior service credit — — — — (127) (317) Total $ 22,588 $ 23,294 $ 543 $ 635 $ 2,637 $ 5,391 |
Pre-tax amounts, which are reported within accumulated other comprehensive loss, expected to be recognized as components of net periodic benefit cost in the next fiscal year | The following amounts, which are reported within accumulated other comprehensive loss at December 31, 2017 are expected to be recognized as components of net periodic benefit cost in 2018 on a pre ‑ tax basis. (Amounts exclude the effect of pension settlements, which the Company will incur for the nonunion defined benefit pension plan.) Nonunion Supplemental Postretirement Defined Benefit Benefit Health Pension Plan Plan Benefit Plan (in thousands) Unrecognized net actuarial loss $ 2,881 $ 80 $ 274 Unrecognized prior service credit — — (93) Total $ 2,881 $ 80 $ 181 |
Weighted-average assumptions used to determine benefit obligations and net periodic benefit cost for nonunion defined benefit plans | Weighted‑average assumptions used to determine nonunion benefit obligations at December 31 were as follows: Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 2016 2017 2016 2017 2016 Discount rate % 3.4 % % 2.7 % % 4.0 % Weighted‑average assumptions used to determine net periodic benefit cost for the Company’s nonunion benefit plans for the years ended December 31 were as follows: Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2017 (1) 2016 (2) 2015 (3) 2017 2016 2015 2017 2016 2015 Discount rate 3.4 % 3.5 % 3.2 % 2.7 % 2.6 % 2.5 % 4.0 % 4.2 % 3.9 % Expected return on plan assets 6.5 % 6.5 % 6.5 % N/A N/A N/A N/A N/A N/A (1) The discount rate presented was used to determine the first quarter 2017 credit, and the interim discount rate established upon each quarterly settlement in 2017 of 3.4%, 3.2%, and 3.1% was used to calculate the expense/credit for the second, third, and fourth quarter of 2017, respectively. The expected return on plan assets presented was used to determine the pension credit for the first half of 2017, and a 2.5% expected return on plan assets was used to determine pension expense for the second half of 2017, as further discussed in the following Nonunion Defined Benefit Pension Plan Assets section within this Note. (2) The discount rate presented was used to determine the first quarter 2016 expense, and the interim discount rate established upon each quarterly settlement in 2016 of 3.0%, 2.7%, and 2.7% was used to calculate the expense/credit for the second, third, and fourth quarter of 2016, respectively. (3) The discount rate presented was used to determine the first quarter 2015 expense/credit, and the interim discount rate established upon each quarterly settlement in 2015 of 3.0%, 3.5%, and 3.4% was used to calculate the expense/credit for the second, third, and fourth quarter of 2015, respectively. |
Schedule of the assumed health care cost trend rates for the postretirement health benefit plan | The assumed health care cost trend rates for the Company’s postretirement health benefit plan at December 31 were as follows: 2017 2016 Pre-65 Post-65 Health care cost trend rate assumed for next year 8.3 % 5.5 % 8.0 % Rate to which the cost trend rate is assumed to decline 4.0 % 4.0 % 4.5 % Year that the rate reaches the cost trend assumed rate |
Effects of one-percentage-point change in assumed health care cost trend rates on the postretirement health benefit plan | A one‑percentage‑point change in assumed health care cost trend rates would have the following effects on the Company’s postretirement health benefit plan for the year ended December 31, 2017: One Percentage Point Increase Decrease (in thousands) Effect on total of service and interest cost components $ 335 $ (262) Effect on postretirement benefit obligation $ 4,820 $ (3,845) |
Schedule of estimated future benefit payments for nonunion defined benefit plans | Estimated future benefit payments from the Company’s nonunion defined benefit pension (paid from trust assets), SBP, and postretirement health benefit plans, which reflect expected future service as appropriate, as of December 31, 2017 are as follows: Nonunion Supplemental Postretirement Defined Benefit Benefit Health Pension Plan Plan Benefit Plan (in thousands) 2018 $ 22,511 $ — $ 753 2019 $ 11,244 $ 3,107 $ 827 2020 $ 12,051 $ — $ 879 2021 $ 10,843 $ — $ 952 2022 $ 11,029 $ — $ 1,013 2023-2027 $ 46,448 $ 718 $ 5,949 |
Weighted-average target, acceptable ranges, and actual asset allocations of the nonunion defined benefit pension plan | The weighted‑average target, acceptable ranges, and actual asset allocations of the Company’s nonunion defined benefit pension plan at December 31 are summarized in the following table: 2017 Target Acceptable Weighted-Average Allocation Allocation Range 2017 2016 Equity Securities Large Cap U.S. Equity % % - 20.0 % % 14.0 % Mid Cap U.S. Equity % - 11.0 % 9.4 Small Cap U.S. Equity % - 11.0 % 10.0 International Equity % - 18.0 % 14.4 Income Securities Debt Instruments 70.0 20.0 % - 100.0 % 73.6 25.0 Floating Rate Loan Fund 10.0 3.0 % - 100.0 % 13.1 10.8 Cash Equivalents Cash and Cash Equivalents 20.0 % - 100.0 % 13.3 16.4 100.0 % 100.0 % 100.0 % |
Fair value of the nonunion defined benefit pension plan assets, by major asset category and fair value hierarchy level | The fair value of the Company’s nonunion defined benefit pension plan assets at December 31, 2017, by major asset category and fair value hierarchy level (see Fair Value Measurements accounting policy in Note B), were as follows: Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Cash and Cash Equivalents (1) $ 16,641 $ 16,641 $ — $ — Debt Instruments (2) 91,778 10,087 81,691 — Floating Rate Loans (3) 16,412 16,412 — — $ 124,831 $ 43,140 $ 81,691 $ — (1) Consists primarily of money market mutual funds. (2) Includes corporate debt instruments (80%), asset-backed instruments (16%), and mortgage-backed instruments (4%). The fair value measurements are provided by a pricing service which uses the market approach with inputs derived from observable market data. (3) Consists of a floating rate loan mutual fund. The fair value of the Company’s nonunion defined benefit pension plan assets at December 31, 2016, by major asset category and fair value hierarchy level (see Fair Value Measurements accounting policy in Note B), were as follows: Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Cash and Cash Equivalents (1) $ 23,696 $ 23,696 $ — $ — Debt Instruments (2) 36,245 — 36,245 — Floating Rate Loans (3) 15,687 15,687 — — Large Cap U.S. Equity 20,208 20,208 — — Mid Cap U.S. Equity 13,597 13,597 — — Small Cap U.S. Equity 14,561 14,561 — — International Equity 20,811 20,811 — — $ 144,805 $ 108,560 $ 36,245 $ — (1) Consists primarily of money market mutual funds. (2) Includes corporate debt instruments (81%), mortgage‑backed instruments (10%), treasury instruments (7%), municipal debt instruments (1%), and agency debt instruments (1%) which are priced using daily bid prices. The fair value measurements are provided by a pricing service which uses the market approach with inputs derived from observable market data. (3) Consists of a floating rate loan mutual fund. |
Schedule of multiemployer pension funds and key participation information | Pension FIP/RP Protection Act Status Contributions (d) EIN/Pension Zone Status (b) Pending/ (in thousands) Surcharge Legal Name of Plan Plan Number (a) 2017 2016 Implemented (c) 2017 2016 2015 Imposed (e) Central States, Southeast and Southwest Areas Pension Plan (1)(2) 36-6044243 Critical and Declining Critical and Declining Implemented (3) $ 78,230 $ 77,891 $ 77,491 No Western Conference of Teamsters Pension Plan (2) 91-6145047 Green Green No 26,320 25,075 24,474 No Central Pennsylvania Teamsters Defined Benefit Plan (1)(2) 23-6262789 Green Green No 13,391 13,381 13,147 No I. B. of T. Union Local No. 710 Pension Fund (5)(6) 36-2377656 Green (4) Green (4) No 10,054 9,670 10,020 No All other plans in the aggregate 30,421 28,122 26,766 Total multiemployer pension contributions paid (7) $ 158,416 $ 154,139 $ 151,898 Table Heading Definitions (a) The “EIN/Pension Plan Number” column provides the Federal Employer Identification Number (EIN) and the three‑digit plan number, if applicable. (b) Unless otherwise noted, the most recent PPA zone status available in 2017 and 2016 is for the plan’s year‑end status at December 31, 2016 and 2015, respectively. The zone status is based on information received from the plan and was certified by the plan’s actuary. Green zone funds are those that are in neither endangered, critical, or critical and declining status and generally have a funded percentage of at least 80%. (c) The “FIP/RP Status Pending/Implemented” column indicates if a funding improvement plan (FIP) or a rehabilitation plan (RP), if applicable, is pending or has been implemented. (d) Amounts reflect contributions made in the respective year and differ from amounts expensed during the year. (e) The surcharge column indicates if a surcharge was paid by ABF Freight to the plan. (1) ABF Freight System, Inc. was listed by the plan as providing more than 5% of the total contributions to the plan for the plan years ended December 31, 2016 and 2015. (2) Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500 filed for the plan years ended December 31, 2016 and 2015. (3) Adopted a rehabilitation plan effective March 25, 2008 as updated. Utilized amortization extension granted by the IRS effective December 31, 2003. (4) PPA zone status relates to plan years February 1, 2016 – January 31, 2017 and February 1, 2015 – January 31, 2016. (5) The Company was listed by the plan as providing more than 5% of the total contributions to the plan for the plan years ended January 31, 2017 and 2016. (6) Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500 filed for the plan years ended January 31, 2017 and 2016. (7) Contribution levels can be impacted by several factors such as changes in business levels and the related time worked by contractual employees, contractual rate increases for pension benefits, and the specific funding structure, which differs among funds. The pension contribution rate for contractual employees increased an average of approximately 1.7%, 0.5%, and 1.2% effective primarily on August 1, 2017, 2016, and 2015, respectively. The Supplemental Negotiating Committee for the Central States Pension Plan approved no pension contribution increase effective August 1, 2017, 2016, and 2015. The Supplemental Negotiating Committee for the Western Conference of Teamsters Pension Plan approved no pension increase effective August 1, 2017, 2016, and 2015. The year‑over‑year changes in multiemployer pension plan contributions presented above were also influenced by changes in Asset-Based business levels. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
STOCKHOLDERS' EQUITY | |
Components of accumulated other comprehensive loss | Components of accumulated other comprehensive loss were as follows at December 31: 2017 2016 2015 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit costs $ (25,768) $ (29,320) $ (35,231) Interest rate swap 481 (542) (897) Foreign currency translation (1,894) (1,978) (2,379) Total $ (27,181) $ (31,840) $ (38,507) After-tax amounts: Unrecognized net periodic benefit costs $ (19,715) $ (21,886) $ (25,497) Interest rate swap 292 (329) (545) Foreign currency translation (1,151) (1,202) (1,454) Total $ (20,574) $ (23,417) $ (27,496) |
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 $ (27,496) $ (25,497) $ (545) $ (1,454) Other comprehensive income (loss) before reclassifications (799) (1,267) 216 252 Amounts reclassified from accumulated other comprehensive loss 4,878 4,878 — — Net current-period other comprehensive income 4,079 3,611 216 252 Balances at December 31, 2016 $ (23,417) $ (21,886) $ (329) $ (1,202) Other comprehensive income (loss) before reclassifications (1,968) (2,640) 621 51 Amounts reclassified from accumulated other comprehensive loss 4,811 4,811 — — Net current-period other comprehensive income (loss) 2,843 2,171 621 51 Balances at December 31, 2017 $ (20,574) $ (19,715) $ 292 $ (1,151) |
Summary of the significant reclassifications out of accumulated other comprehensive loss by component | The following is a summary of the significant reclassifications out of accumulated other comprehensive loss by component for the years ended December 31: Unrecognized Net Periodic Benefit Costs (1)(2) 2017 2016 (in thousands) Amortization of net actuarial loss $ (3,908) $ (4,944) Amortization of prior service credit 190 190 Pension settlement expense (4,156) (3,229) Total, pre-tax (7,874) (7,983) Tax benefit 3,063 3,105 Total, net of tax $ (4,811) $ (4,878) (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 I). |
Summary of dividends declared | 2017 2016 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ $ $ 0.08 $ 2,088 Second quarter $ $ $ 0.08 $ 2,087 Third quarter $ $ $ 0.08 $ 2,074 Fourth quarter $ $ $ 0.08 $ 2,069 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
SHARE-BASED COMPENSATION | |
Summary of the Company's restricted stock unit award program | Weighted-Average Grant Date Units Fair Value Outstanding – January 1, 2017 1,477,537 $ 23.88 Granted 504,550 $ 16.39 Vested (438,018) $ 18.27 Forfeited (1) (84,809) $ 23.88 Outstanding – December 31, 2017 1,459,260 $ 22.98 (1) Forfeitures are recognized as they occur. |
Schedule of restricted stock units granted during the year | The Compensation Committee of the Company’s Board of Directors granted restricted stock units under the 2005 Plan during the years ended December 31, 2017, 2016, and 2015 as follows: k Weighted-Average Grant Date Units Fair Value 2017 504,550 $ 16.39 2016 536,440 $ 15.89 2015 269,660 $ 35.50 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earnings (loss) per share | The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31: 2017 2016 2015 (in thousands, except share and per share data) Basic Numerator: Net income $ 59,726 $ 18,652 $ 44,854 Effect of unvested restricted stock awards (238) (138) (450) Adjusted net income $ 59,488 $ 18,514 $ 44,404 Denominator: Weighted-average shares 25,683,745 25,751,544 26,013,716 Earnings per common share $ $ 0.72 $ 1.71 Diluted Numerator: Net income $ 59,726 $ 18,652 $ 44,854 Effect of unvested restricted stock awards (233) (137) (443) Adjusted net income $ 59,493 $ 18,515 $ 44,411 Denominator: Weighted-average shares 25,683,745 25,751,544 26,013,716 Effect of dilutive securities 740,644 505,026 516,411 Adjusted weighted-average shares and assumed conversions 26,424,389 26,256,570 26,530,127 Earnings per common share $ $ 0.71 $ 1.67 |
OPERATING SEGMENT DATA (Tables)
OPERATING SEGMENT DATA (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
OPERATING SEGMENT DATA | |
Schedule of reportable operating segment information | The following table reflects reportable operating segment information for the years ended December 31: 2017 2016 (1) 2015 (1) (in thousands) REVENUES Asset-Based $ 1,993,314 $ 1,916,394 $ 1,916,579 ArcBest (2) 706,698 640,734 590,436 FleetNet 156,341 162,629 174,952 Other and eliminations (29,896) (19,538) (15,062) Total consolidated revenues $ 2,826,457 $ 2,700,219 $ 2,666,905 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 1,125,186 $ 1,103,883 $ 1,063,016 Fuel, supplies, and expenses 234,006 216,263 244,772 Operating taxes and licenses 47,767 48,180 48,726 Insurance 30,761 29,178 28,591 Communications and utilities 17,373 16,181 14,158 Depreciation and amortization 82,507 80,331 71,320 Rents and purchased transportation 206,457 198,594 196,560 Shared services (1) 186,406 184,817 180,478 Gain on sale of property and equipment (695) (2,979) (1,734) Nonunion pension expense, including settlement (3) 4,799 2,313 1,832 Other 6,525 4,889 6,424 Restructuring costs (4) 344 1,173 — Total Asset-Based 1,941,436 1,882,823 1,854,143 ArcBest (2) Purchased transportation 563,497 502,159 460,172 Supplies and expenses 15,087 13,145 11,689 Depreciation and amortization 13,090 13,612 12,886 Shared services (1) 84,159 85,238 73,890 Other 11,189 11,678 11,007 Restructuring costs (4) 875 8,038 — Total ArcBest 687,897 633,870 569,644 FleetNet 153,017 160,204 171,998 Other and eliminations (9,403) (5,648) (4,376) Total consolidated operating expenses (3) $ 2,772,947 $ 2,671,249 $ 2,591,409 OPERATING INCOME Asset-Based $ 51,878 $ 33,571 $ 62,436 ArcBest (2) 18,801 6,864 20,792 FleetNet 3,324 2,425 2,954 Other and eliminations (20,493) (13,890) (10,686) Total consolidated operating income $ 53,510 $ 28,970 $ 75,496 OTHER INCOME (COSTS) Interest and dividend income $ 1,293 $ 1,523 $ 1,284 Interest and other related financing costs (6,342) (5,150) (4,400) Other, net (5) 3,115 2,944 354 Total other income (costs) (1,934) (683) (2,762) INCOME BEFORE INCOME TAXES $ 51,576 $ 28,287 $ 72,734 (1) Certain reclassifications have been made to the prior year’s operating segment data to conform to the current year presentation, reflecting the modified presentation of segment expenses allocated from shared services as previously discussed in this Note. (2) The 2016 and 2017 periods include the operations of LDS since the September 2, 2016 acquisition date and the operations of Bear, which was acquired in December 2015. (3) For the year ended December 31, 2017, 2016, and 2015, nonunion pension expense, including settlement, (pre-tax) totaled $6.1 million, $3.1 million, and $2.4 million, respectively, on a consolidated basis, of which $4.8 million, $2.3 million, and $1.8 million, respectively, was reported by the Asset-Based segment. (4) Restructuring costs relate to the realignment of the Company’s corporate structure previously discussed in this Note. (5) Includes proceeds and changes in cash surrender value of life insurance policies. The following table provides capital expenditure and depreciation and amortization information by reportable operating segment: For the year ended December 31 2017 2016 (1) 2015 (1) (in thousands) CAPITAL EXPENDITURES, GROSS Asset-Based (3) $ 112,751 $ 110,170 $ 122,542 ArcBest 9,823 6,154 24,219 FleetNet 1,089 403 1,007 Other and eliminations (2) 26,288 34,910 11,249 $ 149,951 $ 151,637 $ 159,017 For the year ended December 31 2017 2016 (1) 2015 (1) (in thousands) DEPRECIATION AND AMORTIZATION EXPENSE (2) Asset-Based $ 82,507 $ 80,331 $ 71,320 ArcBest (4) 13,090 13,612 12,886 FleetNet (5) 1,089 1,210 1,119 Other and eliminations (2) 6,382 7,900 7,717 $ 103,068 $ 103,053 $ 93,042 (1) Certain reclassifications have been made to the prior year’s operating segment data to conform to the current year presentation, reflecting the modified presentation of segment expenses allocated from shared services as previously discussed in this Note. (2) Other and eliminations includes certain assets held for the benefit of multiple segments, including information systems equipment. Depreciation and amortization associated with these assets is allocated to the reporting segments. Depreciation and amortization expense includes amortization of internally developed capitalized software which has not been included in gross capital expenditures presented in the table. (3) Includes assets acquired through notes payable and capital leases of $84.2 million in 2017, $83.4 million in 2016, and $80.6 million in 2015. (4) Includes amortization of intangibles of $4.3 million, $4.0 million, and $3.7 million in 2017, 2016, and 2015, respectively. (5) Includes amortization of intangibles which totaled $0.2 million, $0.3 million, and $0.3 million in 2017, 2016, and 2015, respectively. A table of assets by reportable operating segment has not been presented as segment assets are not included in reports regularly provided to management nor does management consider segment assets for assessing segment operating performance or allocating resources. The following table presents operating expenses by category on a consolidated basis: For the year ended December 31 2017 2016 2015 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 1,367,433 $ 1,345,672 $ 1,297,129 Rents, purchased transportation, and other costs of services 869,584 823,683 790,612 Fuel, supplies, and expenses 304,126 270,138 292,039 Depreciation and amortization (1) 103,068 103,053 93,042 Other 125,773 118,390 118,587 Restructuring (2) 2,963 10,313 — $ 2,772,947 $ 2,671,249 $ 2,591,409 (1) Includes amortization of intangible assets. (2) Restructuring costs relate to the realignment of the Company’s corporate structure previously discussed in this Note. |
RESTRUCTURING CHARGES AND IMPAI
RESTRUCTURING CHARGES AND IMPAIRMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
RESTRUCTURING CHARGES | |
Schedule of restructuring charges | 2017 2016 (in thousands) Software impairment (1) $ — $ 6,244 Contract terminations (2) — 2,875 Severance and other (3) 2,963 1,194 Total charges $ 2,963 $ 10,313 (1) Non-cash charges related to software and other long-lived assets that were discontinued. (2) Charges associated with the termination of noncancelable lease and consulting agreements. (3) Primarily severance payments resulting from a reduction in headcount of approximately 130 positions and other employee-related costs. |
QUARTERLY RESULTS OF OPERATIO40
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |
Schedule of unaudited quarterly financial information | 2017 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands, except share and per share data) Revenues $ 651,088 $ 720,368 $ 744,280 $ 710,721 Operating expenses 663,341 695,634 719,931 694,041 Operating income (loss) (12,253) 24,734 24,349 16,680 Other income (costs) (394) (599) (281) (660) Income tax provision (benefit) (1) (5,240) 8,358 9,280 (20,548) Net income (loss) (1) $ (7,407) $ 15,777 $ 14,788 $ 36,568 Earnings (loss) per common share (1)(2) Basic $ (0.29) $ 0.61 $ 0.57 $ 1.42 Diluted (1) $ (0.29) $ 0.60 $ 0.56 $ 1.37 Average common shares outstanding Basic 25,684,475 25,767,791 25,671,535 25,637,568 Diluted 25,684,475 26,291,641 26,393,359 26,540,716 2016 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands, except share and per share data) Revenues $ 621,455 $ 676,627 $ 713,923 $ 688,214 Operating expenses (3) 630,720 659,973 693,553 687,003 Operating income (loss) (3) (9,265) 16,654 20,370 1,211 Other income (costs) (480) (273) 185 (115) Income tax provision (benefit) (3,642) 6,150 7,615 (488) Net income (loss) (3) $ (6,103) $ 10,231 $ 12,940 $ 1,584 Earnings (loss) per common share (2) Basic $ (0.24) $ 0.39 $ 0.50 $ 0.06 Diluted (3) $ (0.24) $ 0.39 $ 0.49 $ 0.06 Average common shares outstanding Basic 25,822,522 25,791,026 25,724,550 25,669,280 Diluted 25,822,522 26,246,868 26,211,524 26,272,487 (1) Fourth quarter 2017 includes a provisional tax benefit of $25.8 million, or $0.97 per diluted share, as a result of recognizing a reasonable estimate of the tax effects of the Tax Cuts and Jobs Act. See Note E. (2) The Company uses the two-class method for calculating earnings per share. See Note L. (3) Fourth quarter 2016 includes restructuring charges of $10.3 million (pre-tax), or $6.3 million (after-tax) and $0.24 per diluted share. |
ORGANIZATION AND DESCRIPTION 41
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Organization) (Details) - segment | Jul. 01, 2017 | Jul. 01, 2016 | Jul. 01, 2015 | Jul. 01, 2014 | Nov. 03, 2013 | Aug. 01, 2013 | Apr. 01, 2013 | Dec. 31, 2017 |
Organization and description of business | ||||||||
Number of reportable operating segments | 3 | |||||||
Asset-Based | ||||||||
Organization and description of business | ||||||||
Percentage of the Company's revenues, before other revenues and intercompany eliminations, represented by the Asset-Based segment | 70.00% | |||||||
Wage rate reduction under collective bargaining agreement upon implementation date (as a percent) | 7.00% | |||||||
Wage rate increase for next three years of collective bargaining agreement (as a percent) | 2.00% | 2.00% | 2.00% | |||||
Wage rate increase in fifth year of collective bargaining agreement (as a percent) | 2.50% | |||||||
Reduction in compensated vacation under collective bargaining agreement | 5 days | |||||||
Approximate initial reduction in combined total contractual wage and benefit rate under collective bargaining agreement (as a percent) | 4.00% | |||||||
Estimated increase in compounded annual contractual wage and benefit contribution rates in second through fifth years (as a percent) | 2.50% | |||||||
Asset-Based | Unionized employees concentration risk | Number of employees | ||||||||
Organization and description of business | ||||||||
Percentage of Asset-Based segment employees covered under collective bargaining agreement with the IBT | 83.00% |
ORGANIZATION AND DESCRIPTION 42
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Acquisitions) (Details) - USD ($) $ in Thousands | Dec. 29, 2017 | Dec. 30, 2016 | Sep. 02, 2016 | Dec. 01, 2015 | Jan. 02, 2015 | Jan. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Acquisitions | |||||||||
Net cash consideration | $ 24,780 | $ 29,813 | |||||||
Divestitures | |||||||||
Proceeds from sale of subsidiaries | $ 2,490 | $ 2,780 | |||||||
ArcBest | |||||||||
Divestitures | |||||||||
Value of divested subsidiaries | $ 5,200 | $ 4,800 | |||||||
Proceeds from sale of subsidiaries | 500 | 2,800 | |||||||
Contingent consideration | $ 4,700 | $ 2,000 | |||||||
LDS | Subsequent Event | |||||||||
Acquisitions | |||||||||
Contingent consideration paid | $ 3,500 | ||||||||
LDS | ArcBest | |||||||||
Acquisitions | |||||||||
Total consideration | $ 25,000 | ||||||||
Cash consideration | 17,000 | ||||||||
Contingent consideration | $ 8,000 | ||||||||
Contingent consideration period | 2 years | ||||||||
Bear Transportation Services, L.P. | ArcBest | |||||||||
Acquisitions | |||||||||
Net cash consideration | $ 24,400 | ||||||||
Smart Lines Transportation Group, LLC | ArcBest | |||||||||
Acquisitions | |||||||||
Net cash consideration | $ 5,200 |
ORGANIZATION AND DESCRIPTION 43
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Reclassifications) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Reclassifications | ||
Other accounts receivable | $ 19,491 | $ 22,041 |
Accrued expenses | 211,237 | 198,731 |
Leasehold improvements | 8,888 | 8,758 |
Land and structures | $ 344,224 | 324,086 |
Adjustment | ||
Reclassifications | ||
Other accounts receivable | 8,700 | |
Accrued expenses | 8,700 | |
Leasehold improvements | (18,600) | |
Land and structures | $ 18,600 |
ACCOUNTING POLICIES (Concentrat
ACCOUNTING POLICIES (Concentration) (Details) - Minimum | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | Customer concentration risk | |||
Concentration of Credit Risk | |||
Percentage for concentration of credit risk disclosure | 5.00% | 5.00% | 5.00% |
Accounts receivable | Credit concentration risk | |||
Concentration of Credit Risk | |||
Percentage for concentration of credit risk disclosure | 7.00% | 7.00% |
ACCOUNTING POLICIES (Property)
ACCOUNTING POLICIES (Property) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Held-for-sale | Other long-term assets | ||
Property, Plant and Equipment | ||
Assets held for sale which are reported within other noncurrent assets | $ 1.4 | $ 1.2 |
Structures | Minimum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 15 years | |
Structures | Maximum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 60 years | |
Revenue equipment | Minimum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 3 years | |
Revenue equipment | Maximum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 14 years | |
Service, office, and other equipment | Minimum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 2 years | |
Service, office, and other equipment | Maximum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 15 years | |
Software | Minimum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 2 years | |
Software | Maximum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 7 years |
ACCOUNTING POLICIES (Book Overd
ACCOUNTING POLICIES (Book Overdrafts) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts Payable | ||
Book Overdrafts | ||
Amount of book overdrafts | $ 17.2 | $ 17.7 |
ACCOUNTING POLICIES (Share-Base
ACCOUNTING POLICIES (Share-Based Compensation) (Details) - Restricted Stock Units | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-Based Compensation | |||
Vesting period | 5 years | ||
Nonemployee director | |||
Share-Based Compensation | |||
Vesting period | 1 year | 1 year | 3 years |
ACCOUNTING POLICIES (Adopted Pr
ACCOUNTING POLICIES (Adopted Pronouncements) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 | Dec. 31, 2016 |
Adopted Accounting Pronouncements | |||
Noncurrent deferred tax assets | $ 5,965 | $ 2,978 | |
Noncurrent deferred tax liabilities | 49,157 | 54,680 | |
Retained earnings | 438,379 | 386,917 | |
Additional paid-in capital | $ 319,436 | 315,318 | |
ASC Topic 740, Balance Sheet Classification of Deferred Taxes | Adjustment | |||
Adopted Accounting Pronouncements | |||
Current deferred tax assets | (39,600) | ||
Noncurrent deferred tax assets | 3,000 | ||
Noncurrent deferred tax liabilities | $ (36,600) | ||
ASC Topic 718, Compensation – Stock Compensation | Adjustment | |||
Adopted Accounting Pronouncements | |||
Noncurrent deferred tax liabilities | $ (200) | ||
Retained earnings | (200) | ||
Additional paid-in capital | $ 400 |
ACCOUNTING POLICIES (Not Yet Ad
ACCOUNTING POLICIES (Not Yet Adopted Pronouncements) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
ASC Topic 606 | |||
Retained earnings | $ 438,379 | $ 386,917 | |
ASC Topic 606, Revenue Recognition | Forecast | Difference between Revenue Guidance in Effect before and after Topic 606 | Maximum | |||
ASC Topic 606 | |||
Retained earnings | $ 500 |
FINANCIAL INSTRUMENTS AND FAI50
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cash, Investments and Restricted Funds) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Fair value disclosure | ||
Cash and cash equivalents | $ 120,772 | $ 114,280 |
Short-term investments | 56,401 | 56,838 |
Restricted cash | 962 | |
Concentrations of Credit Risk of Financial Instruments | ||
Cash and cash equivalents which are not FDIC-insured | 61,100 | 39,900 |
Cash deposits | ||
Fair value disclosure | ||
Cash and cash equivalents | 86,510 | 92,520 |
Restricted cash | 962 | |
Variable rate demand notes | ||
Fair value disclosure | ||
Cash and cash equivalents | 19,744 | 16,057 |
Money market funds | ||
Fair value disclosure | ||
Cash and cash equivalents | 14,518 | 5,703 |
Certificates of deposit | ||
Fair value disclosure | ||
Short-term investments | $ 56,401 | $ 56,838 |
FINANCIAL INSTRUMENTS AND FAI51
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying Value | ||
Fair value disclosure | ||
Debt obligations | $ 268,441 | $ 243,032 |
Fair Value | ||
Fair value disclosure | ||
Debt obligations | 267,131 | 242,503 |
Level 2 | Credit Facility | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 70,000 | 70,000 |
Level 2 | Credit Facility | Fair Value | ||
Fair value disclosure | ||
Debt obligations | 70,000 | 70,000 |
Level 2 | Accounts receivable securitization program | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 45,000 | 35,000 |
Level 2 | Accounts receivable securitization program | Fair Value | ||
Fair value disclosure | ||
Debt obligations | 45,000 | 35,000 |
Level 2 | Notes payable | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 153,441 | 138,032 |
Level 2 | Notes payable | Fair Value | ||
Fair value disclosure | ||
Debt obligations | $ 152,131 | $ 137,503 |
FINANCIAL INSTRUMENTS AND FAI52
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Assets and Liabilities) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Level 3 | ||
Liabilities: | ||
Discount rate (as a percent) | 12.50% | 12.30% |
Recurring basis | ||
Assets: | ||
Assets | $ 17,358 | $ 7,923 |
Liabilities: | ||
Liabilities | 7,317 | |
Recurring basis | Cash and cash equivalents | ||
Assets: | ||
Money market funds | 14,518 | 5,703 |
Recurring basis | Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 2,359 | 2,220 |
Recurring basis | Accrued and other long term liabilities | ||
Assets: | ||
Interest rate swap | 481 | |
Liabilities: | ||
Interest rate swap | 542 | |
Recurring basis | Other long-term liabilities | ||
Liabilities: | ||
Contingent consideration | 6,970 | 6,775 |
Recurring basis | Level 1 | ||
Assets: | ||
Assets | 16,877 | 7,923 |
Recurring basis | Level 1 | Cash and cash equivalents | ||
Assets: | ||
Money market funds | 14,518 | 5,703 |
Recurring basis | Level 1 | Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 2,359 | 2,220 |
Recurring basis | Level 2 | ||
Assets: | ||
Assets | 481 | |
Liabilities: | ||
Liabilities | 542 | |
Recurring basis | Level 2 | Accrued and other long term liabilities | ||
Assets: | ||
Interest rate swap | 481 | |
Liabilities: | ||
Interest rate swap | 542 | |
Recurring basis | Level 3 | ||
Liabilities: | ||
Liabilities | 6,775 | |
Recurring basis | Level 3 | Other long-term liabilities | ||
Liabilities: | ||
Contingent consideration | $ 6,970 | $ 6,775 |
FINANCIAL INSTRUMENTS AND FAI53
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (FV - Level 3) (Details) - Contingent Consideration - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value of liabilities level 3 hierarchy | ||
Balance beginning of period | $ 6,775 | |
Contingent consideration liability recorded at fair value for business acquisition | $ 6,711 | |
Change in fair value included in operating expenses | 195 | 64 |
Balance at end of period | $ 6,970 | $ 6,775 |
GOODWILL AND INTANGIBLE ASSET54
GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill by reportable operating segment | ||
Balance at the beginning of the period | $ 108,875 | $ 96,465 |
Goodwill acquired | 12,640 | |
Goodwill divested | (661) | (842) |
Purchase accounting adjustments | 106 | 612 |
Balance at the end of the period | 108,320 | 108,875 |
ArcBest | ||
Goodwill by reportable operating segment | ||
Balance at the beginning of the period | 108,245 | 95,835 |
Goodwill acquired | 12,640 | |
Goodwill divested | (661) | (842) |
Purchase accounting adjustments | 106 | 612 |
Balance at the end of the period | 107,690 | 108,245 |
FleetNet | ||
Goodwill by reportable operating segment | ||
Balance at the beginning of the period | 630 | 630 |
Balance at the end of the period | $ 630 | $ 630 |
GOODWILL AND INTANGIBLE ASSET55
GOODWILL AND INTANGIBLE ASSETS (Intangible) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 13 years | |
Cost | $ 64,663 | $ 64,663 |
Accumulated Amortization | 23,494 | 18,956 |
Net Value | 41,169 | 45,707 |
Indefinite-lived intangible assets | ||
Net Value | 32,300 | 34,800 |
Total intangible assets | ||
Cost | 96,963 | 99,463 |
Net Value | 73,469 | 80,507 |
Trade name | ||
Indefinite-lived intangible assets | ||
Net Value | $ 32,300 | 32,300 |
Other | ||
Indefinite-lived intangible assets | ||
Net Value | 2,500 | |
Customer relationships | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 14 years | |
Cost | $ 60,431 | 60,431 |
Accumulated Amortization | 19,745 | 15,350 |
Net Value | $ 40,686 | 45,081 |
Driver network | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 3 years | |
Cost | $ 3,200 | 3,200 |
Accumulated Amortization | $ 3,200 | 3,200 |
Other | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 9 years | |
Cost | $ 1,032 | 1,032 |
Accumulated Amortization | 549 | 406 |
Net Value | $ 483 | $ 626 |
GOODWILL AND INTANGIBLE ASSET56
GOODWILL AND INTANGIBLE ASSETS (Amortization) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Future amortization for intangible assets and acquired software | ||||
2,018 | $ 6,641 | |||
2,019 | 5,463 | |||
2,020 | 4,471 | |||
2,021 | 4,418 | |||
2,022 | 4,385 | |||
Thereafter | 18,916 | |||
Total amortization | 44,294 | |||
Future amortization for intangible assets | ||||
2,018 | 4,520 | |||
2,019 | 4,482 | |||
2,020 | 4,454 | |||
2,021 | 4,412 | |||
2,022 | 4,385 | |||
Thereafter | 18,916 | |||
Net Value | $ 45,707 | 41,169 | $ 45,707 | |
Future amortization for acquired software | ||||
2,018 | 2,121 | |||
2,019 | 981 | |||
2,020 | 17 | |||
2,021 | 6 | |||
Total amortization, Acquired software | 3,125 | |||
Impairment Assessment of Long-Lived Assets | ||||
Impairment of indefinite-lived intangible assets | 0 | 0 | ||
Restructuring charges | $ 10,300 | $ 2,963 | 10,313 | |
Software impairment | ||||
Impairment Assessment of Long-Lived Assets | ||||
Restructuring charges | $ 6,200 | $ 6,244 | ||
Software impairment | Acquired Software | ||||
Impairment Assessment of Long-Lived Assets | ||||
Restructuring charges | $ 5,500 |
INCOME TAXES (Tax Reform Act) (
INCOME TAXES (Tax Reform Act) (Details) - USD ($) $ in Thousands | 2 Months Ended | 10 Months Ended | 12 Months Ended | |||
Feb. 28, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Impact of Tax Reform Act | ||||||
Statutory federal rate (as a percent) | 35.00% | 32.74% | 35.00% | 35.00% | 35.00% | |
Provisional reduction of deferred tax liabilities due to Tax Reform Act | $ 24,542 | |||||
Provisional reduction in current income tax expense due Tax Reform Act reflecting use of fiscal year rather than calendar year federal income tax filing | $ 1,300 | |||||
Forecast | ||||||
Impact of Tax Reform Act | ||||||
Statutory federal rate (as a percent) | 21.00% |
INCOME TAXES (Provision) (Detai
INCOME TAXES (Provision) (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current provision (benefit): | |||||||||||||
Federal | $ (1,969) | $ (604) | $ 9,156 | ||||||||||
State | 3,701 | (335) | 165 | ||||||||||
Foreign | 331 | 1,052 | 2,124 | ||||||||||
Current tax provision | 2,063 | 113 | 11,445 | ||||||||||
Deferred provision (benefit): | |||||||||||||
Federal | (9,312) | 8,161 | 12,914 | ||||||||||
State | (867) | 1,354 | 3,589 | ||||||||||
Foreign | (34) | 7 | (68) | ||||||||||
Deferred tax provision (benefit) | (10,213) | 9,522 | 16,435 | ||||||||||
Total provision (benefit) for income taxes | $ (20,548) | $ 9,280 | $ 8,358 | $ (5,240) | $ (488) | $ 7,615 | $ 6,150 | $ (3,642) | (8,150) | $ 9,635 | $ 27,880 | ||
Impact of Tax Reform Act | |||||||||||||
Provisional reduction of deferred tax liabilities due to Tax Reform Act | $ 24,542 | ||||||||||||
Statutory federal rate (as a percent) | 35.00% | 32.74% | 35.00% | 35.00% | 35.00% | ||||||||
Federal statutory tax rate used to calculate provisional effect of the Tax Reform Act in the period of enactment (as a percent) | 21.00% | ||||||||||||
Provisional reduction in current income tax expense due Tax Reform Act reflecting use of fiscal year rather than calendar year federal income tax filing | $ 1,300 |
INCOME TAXES (Deferred income t
INCOME TAXES (Deferred income taxes) (Details) - USD ($) $ in Thousands | 2 Months Ended | 10 Months Ended | 12 Months Ended | ||
Feb. 28, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of the deferred tax provision or benefit | |||||
Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets | $ 21,876 | $ 12,182 | $ 21,098 | ||
Amortization of intangibles | (1,030) | (3,623) | (3,184) | ||
Changes in reserves for workers’ compensation, third-party casualty, and cargo claims | (812) | 362 | (674) | ||
Revenue recognition | 332 | 1,862 | 7 | ||
Allowance for doubtful accounts | (719) | (295) | 307 | ||
Foreign tax credit carryforward utilized | 434 | ||||
Nonunion pension and other retirement plans | (1,977) | 3,861 | (234) | ||
Deferred compensation plans | 226 | 203 | 541 | ||
Federal net operating loss carryforwards utilized | 28 | 161 | 70 | ||
State net operating loss carryforwards utilized (generated) | 229 | (304) | 623 | ||
State depreciation adjustments | (1,244) | (758) | (657) | ||
Share-based compensation | 352 | (681) | (621) | ||
Valuation allowance increase (decrease) | 401 | (61) | 22 | ||
Leases | 16 | (1) | (969) | ||
Other accrued expenses | (852) | (4,108) | 1,256 | ||
Provisional impact of the Tax Reform Act | (24,542) | ||||
Other | (2,497) | 722 | (1,584) | ||
Deferred tax provision (benefit) | $ (10,213) | $ 9,522 | $ 16,435 | ||
Statutory federal rate (as a percent) | 35.00% | 32.74% | 35.00% | 35.00% | 35.00% |
Federal statutory tax rate used to calculate provisional effect of the Tax Reform Act in the period of enactment (as a percent) | 21.00% |
INCOME TAXES (Deferred) (Detail
INCOME TAXES (Deferred) (Details) - USD ($) $ in Thousands | 2 Months Ended | 10 Months Ended | 12 Months Ended | ||
Feb. 28, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred tax assets: | |||||
Accrued expenses | $ 36,843 | $ 36,843 | $ 53,366 | ||
Pension liabilities | 4,413 | 4,413 | 4,869 | ||
Postretirement liabilities other than pensions | 6,236 | 6,236 | 9,903 | ||
Share-based compensation | 4,466 | 4,466 | 7,119 | ||
Federal and state net operating loss carryforwards | 1,781 | 1,781 | 2,229 | ||
Other | 1,508 | 1,508 | 1,856 | ||
Total deferred tax assets | 55,247 | 55,247 | 79,342 | ||
Valuation allowance | (844) | (844) | (293) | ||
Total deferred tax assets, net of valuation allowance | 54,403 | 54,403 | 79,049 | ||
Deferred tax liabilities: | |||||
Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets | 73,725 | 73,725 | 95,248 | ||
Intangibles | 14,573 | 14,573 | 24,715 | ||
Revenue recognition | 6,172 | 6,172 | 5,679 | ||
Prepaid expenses | 3,125 | 3,125 | 5,109 | ||
Total deferred tax liabilities | 97,595 | 97,595 | 130,751 | ||
Net deferred tax liabilities | $ (43,192) | $ (43,192) | $ (51,702) | ||
Statutory federal rate (as a percent) | 35.00% | 32.74% | 35.00% | 35.00% | 35.00% |
Federal statutory tax rate used to calculate provisional effect of the Tax Reform Act in the period of enactment (as a percent) | 21.00% |
INCOME TAXES (RateRec) (Details
INCOME TAXES (RateRec) (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation between the effective income tax rate, as computed on income (loss) before income taxes, and the statutory federal income tax rate | |||||||||||||
Income tax provision at the statutory federal rate | $ 18,052 | $ 9,901 | $ 25,457 | ||||||||||
Federal income tax effects of: | |||||||||||||
State income taxes | (992) | (357) | (1,314) | ||||||||||
Nondeductible expenses | 1,551 | 1,653 | 1,426 | ||||||||||
Life insurance proceeds and changes in cash surrender value | (927) | (1,001) | (110) | ||||||||||
Dividends received deduction | (9) | (11) | (3) | ||||||||||
Alternative fuel tax credit | (1,180) | (1,141) | |||||||||||
Decrease in valuation allowances | 401 | (61) | 22 | ||||||||||
Increase (decrease) in uncertain tax positions | (720) | ||||||||||||
Adoption of ASC 718 relating to stock compensation | (1,129) | ||||||||||||
Impact of the Tax Reform Act on current tax | (1,288) | ||||||||||||
Impact of the Tax Reform Act on deferred tax | (24,542) | ||||||||||||
Other | (1,678) | (1,387) | (2,267) | ||||||||||
Federal income tax provision (benefit) | (11,281) | 7,557 | 22,070 | ||||||||||
State income tax provision | 2,834 | 1,019 | 3,754 | ||||||||||
Foreign income tax provision | 297 | 1,059 | 2,056 | ||||||||||
Total provision (benefit) for income taxes | $ (20,548) | $ 9,280 | $ 8,358 | $ (5,240) | $ (488) | $ 7,615 | $ 6,150 | $ (3,642) | $ (8,150) | $ 9,635 | $ 27,880 | ||
Effective tax (benefit) rate (as a percent) | (15.80%) | 34.10% | 38.30% | ||||||||||
Statutory federal rate (as a percent) | 35.00% | 32.74% | 35.00% | 35.00% | 35.00% | ||||||||
Federal statutory tax rate used to calculate provisional effect of the Tax Reform Act in the period of enactment (as a percent) | 21.00% | ||||||||||||
Income taxes paid, excluding income tax refunds | $ 22,700 | $ 24,300 | $ 39,000 | ||||||||||
Income tax refunds | $ 18,500 | $ 32,500 | $ 21,300 |
INCOME TAXES (ASC Topic 718) (D
INCOME TAXES (ASC Topic 718) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Adopted Accounting Pronouncements | |||
Effective tax benefit rate (as a percent) | 15.80% | (34.10%) | (38.30%) |
Maximum | |||
Adopted Accounting Pronouncements | |||
Tax benefit realized from dividends on share-based payment awards | $ 0.1 | $ 0.1 | $ 0.1 |
ASC Topic 718, Compensation – Stock Compensation | Adjustment | |||
Adopted Accounting Pronouncements | |||
Effective tax benefit rate (as a percent) | 2.20% |
INCOME TAXES (NOL) (Details)
INCOME TAXES (NOL) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2014USD ($) | |
Operating loss and contribution carryforwards | |||
Number of state taxing authorities for which the entity is under examination | item | 1 | ||
State | |||
Operating loss and contribution carryforwards | |||
Operating loss carryforwards | $ 19.9 | ||
Contribution carryforwards | $ 1.4 | ||
Majority of state net operating loss and contribution carryforwards, expiration period one | 15 years | ||
Majority of state net operating loss and contribution carryforwards, expiration period two | 20 years | ||
Valuation allowance related to net operating loss and contribution carryforwards | $ 0.8 | ||
State | Panther | |||
Operating loss and contribution carryforwards | |||
Operating loss carryforwards | 5 | ||
Foreign | |||
Operating loss and contribution carryforwards | |||
Valuation allowance related to net operating loss carryforwards | $ 0.3 | ||
Federal | Panther | |||
Operating loss and contribution carryforwards | |||
Operating loss carryforwards | $ 1.5 | ||
Net operating loss carryforwards expiration period | 14 years | ||
Minimum | State | |||
Operating loss and contribution carryforwards | |||
State net operating loss and contribution carryforwards expiration period | 5 years | ||
Minimum | State | Panther | |||
Operating loss and contribution carryforwards | |||
Net operating loss carryforwards expiration period | 5 years | ||
Maximum | State | |||
Operating loss and contribution carryforwards | |||
State net operating loss and contribution carryforwards expiration period | 20 years | ||
Maximum | State | Panther | |||
Operating loss and contribution carryforwards | |||
Net operating loss carryforwards expiration period | 20 years | ||
Maximum | Federal | |||
Operating loss and contribution carryforwards | |||
Adjustment for completed audit | $ 0.1 |
INCOME TAXES (Other) (Details)
INCOME TAXES (Other) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income taxes | ||||||
Reserve for uncertain tax positions | $ 0.7 | $ 0.3 | ||||
Decrease in reserve, Expiration of statute of limitations | $ 0.7 | |||||
Maximum | ||||||
Income taxes | ||||||
Reserve for uncertain tax positions | 0.1 | $ 0.1 | ||||
Increase in reserve, Current period tax positions | $ 0.1 | |||||
Federal, State, and Local Jurisdiction | Maximum | ||||||
Income taxes | ||||||
Interest paid on income tax obligations | 0.1 | $ 0.1 | $ 0.1 | |||
Foreign | Maximum | ||||||
Income taxes | ||||||
Income tax accrued interest | $ 0.1 | $ 0.1 |
OPERATING LEASES AND COMMITME65
OPERATING LEASES AND COMMITMENTS (Future minimum commitments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Leases and Commitments | |||
Rental expense | $ 31,700 | $ 26,700 | $ 25,000 |
Future minimum rental commitments for all noncancelable operating leases | |||
2,018 | 17,734 | ||
2,019 | 13,945 | ||
2,020 | 11,312 | ||
2,021 | 8,018 | ||
2,022 | 4,300 | ||
Thereafter | 5,231 | ||
Total | 60,540 | ||
Land and structures (service centers) | |||
Future minimum rental commitments for all noncancelable operating leases | |||
2,018 | 16,088 | ||
2,019 | 12,874 | ||
2,020 | 10,365 | ||
2,021 | 7,706 | ||
2,022 | 4,300 | ||
Thereafter | 5,231 | ||
Total | 56,564 | ||
Equipment and other | |||
Future minimum rental commitments for all noncancelable operating leases | |||
2,018 | 1,646 | ||
2,019 | 1,071 | ||
2,020 | 947 | ||
2,021 | 312 | ||
Total | $ 3,976 |
LONG-TERM DEBT AND FINANCING 66
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Summary) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Long-term debt obligations | ||
Long-term debt | $ 268,919 | $ 243,673 |
Less current portion | 61,930 | 64,143 |
Long-term debt, less current portion | $ 206,989 | 179,530 |
Weighted-average interest rate (as a percent) | 2.80% | |
Payments under long-term debt obligations | ||
2,018 | $ 68,822 | |
2,019 | 42,156 | |
2,020 | 71,393 | |
2,021 | 24,343 | |
2,022 | 84,275 | |
Thereafter | 404 | |
Total payments | 291,393 | |
Less amounts representing interest | 22,474 | |
Long-term debt | 268,919 | 243,673 |
Credit Facility | ||
Long-term debt obligations | ||
Long-term debt | $ 70,000 | 70,000 |
Interest rate (as a percent) | 3.10% | |
Payments under long-term debt obligations | ||
2,018 | $ 2,329 | |
2,019 | 2,598 | |
2,020 | 2,679 | |
2,021 | 2,696 | |
2,022 | 71,392 | |
Total payments | 81,694 | |
Less amounts representing interest | 11,694 | |
Long-term debt | 70,000 | 70,000 |
Credit Facility | Interest rate swap agreement | ||
Long-term debt obligations | ||
Amount of borrowings covered by the interest rate swap | $ 50,000 | $ 50,000 |
Effective fixed interest rate on hedged borrowings (as a percent) | 3.35% | 3.35% |
Accounts receivable securitization program | ||
Long-term debt obligations | ||
Long-term debt | $ 45,000 | $ 35,000 |
Interest rate (as a percent) | 2.30% | |
Payments under long-term debt obligations | ||
2,018 | $ 1,223 | |
2,019 | 1,396 | |
2,020 | 45,358 | |
Total payments | 47,977 | |
Less amounts representing interest | 2,977 | |
Long-term debt | 45,000 | 35,000 |
Notes payable | ||
Long-term debt obligations | ||
Long-term debt | $ 153,441 | 138,032 |
Weighted-average interest rate (as a percent) | 2.70% | |
Payments under long-term debt obligations | ||
2,018 | $ 65,036 | |
2,019 | 37,922 | |
2,020 | 23,329 | |
2,021 | 21,640 | |
2,022 | 12,882 | |
Thereafter | 404 | |
Total payments | 161,213 | |
Less amounts representing interest | 7,772 | |
Long-term debt | 153,441 | 138,032 |
Capital lease obligations | ||
Long-term debt obligations | ||
Long-term debt | $ 478 | 641 |
Weighted-average interest rate (as a percent) | 5.70% | |
Payments under long-term debt obligations | ||
2,018 | $ 234 | |
2,019 | 240 | |
2,020 | 27 | |
2,021 | 7 | |
2,022 | 1 | |
Total payments | 509 | |
Less amounts representing interest | 31 | |
Long-term debt | $ 478 | $ 641 |
LONG-TERM DEBT AND FINANCING 67
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Assets Sec) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Financing Arrangements | |||
Total assets securing notes payable or held under capital leases | $ 272,330 | $ 222,367 | |
Less accumulated depreciation and amortization | 87,691 | 61,643 | |
Net assets securing notes payable or held under capital leases | $ 184,639 | 160,724 | |
Weighted-average interest rate (as a percent) | 2.80% | ||
Interest paid, net of capitalized interest | $ 5,800 | 4,500 | $ 4,000 |
Capitalized interest | 900 | 700 | $ 200 |
Revenue equipment | |||
Financing Arrangements | |||
Total assets securing notes payable or held under capital leases | 269,950 | 220,566 | |
Land and structures (service centers) | |||
Financing Arrangements | |||
Total assets securing notes payable or held under capital leases | 1,794 | 1,794 | |
Software | |||
Financing Arrangements | |||
Total assets securing notes payable or held under capital leases | 486 | ||
Service, office, and other equipment | |||
Financing Arrangements | |||
Total assets securing notes payable or held under capital leases | $ 100 | $ 7 |
LONG-TERM DEBT AND FINANCING 68
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Credit Facility) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Jul. 31, 2017 | Jun. 30, 2017 |
Credit Facility | |||
Financing Arrangements | |||
Maximum borrowing capacity | $ 200 | $ 150 | |
Additional borrowing capacity that may be requested | 100 | $ 75 | |
Remaining borrowing capacity | $ 130 | ||
Swing Line Facility | |||
Financing Arrangements | |||
Maximum borrowing capacity | 20 | ||
Letters of Credit, Sub-Facility | |||
Financing Arrangements | |||
Maximum borrowing capacity | $ 20 |
LONG-TERM DEBT AND FINANCING 69
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Interest rate swap) (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Nov. 30, 2014 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Interest rate swap agreement | ||||
Financing Arrangements | ||||
Term of swap agreement | 5 years | |||
Notional amount | $ 50 | |||
Fixed interest rate payments (as a percent) | 1.85% | |||
Interest rate swap agreement | Other long-term liabilities | ||||
Financing Arrangements | ||||
Fair value, liability | $ 0.1 | $ 0.5 | ||
Interest rate swap agreement | Credit Facility | ||||
Financing Arrangements | ||||
Amount of borrowings covered by the interest rate swap | $ 50 | $ 50 | ||
Effective fixed interest rate on hedged borrowings (as a percent) | 3.35% | 3.35% | ||
Forward-starting interest rate swap agreement | ||||
Financing Arrangements | ||||
Notional amount | $ 50 | |||
Fixed interest rate payments (as a percent) | 1.99% | |||
Forward-starting interest rate swap agreement | Other long-term assets | ||||
Financing Arrangements | ||||
Fair value, asset | $ 0.4 | |||
Forward-starting interest rate swap agreement | Credit Facility | ||||
Financing Arrangements | ||||
Amount of borrowings covered by the interest rate swap | $ 50 | |||
Effective fixed interest rate on hedged borrowings (as a percent) | 3.49% |
LONG-TERM DEBT AND FINANCING 70
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Securitization program) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2015 | Mar. 31, 2017 | Feb. 28, 2017 | Dec. 31, 2016 | |
Financing Arrangements | ||||||
Borrowings under accounts receivable securitization program | $ 10,000 | $ 35,000 | ||||
Accounts receivable securitization program | ||||||
Financing Arrangements | ||||||
Maximum borrowing capacity | $ 125,000 | $ 100,000 | ||||
Additional borrowing capacity that may be requested | $ 25,000 | |||||
Borrowings under accounts receivable securitization program | $ 10,000 | |||||
Amount outstanding | 45,000 | $ 35,000 | ||||
Outstanding letters of credit | 17,700 | $ 18,000 | ||||
Remaining borrowing capacity | $ 62,300 |
LONG-TERM DEBT AND FINANCING 71
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Leterrs of credit & Surety bonds (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Arrangements | ||
Amounts collateralized by restricted funds | $ 962 | |
Accounts receivable securitization program | ||
Financing Arrangements | ||
Outstanding letters of credit | $ 17,700 | 18,000 |
Letter of Credit Agreements | ||
Financing Arrangements | ||
Outstanding letters of credit | 18,300 | 19,600 |
Amounts collateralized by restricted funds | 1,000 | |
Surety bonds | ||
Financing Arrangements | ||
Outstanding surety bonds under uncollateralized bond programs | $ 60,400 | $ 56,500 |
LONG-TERM DEBT AND FINANCING 72
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Notes payable & Capital leases) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Asset-Based | Revenue equipment | Notes payable | |||
Financing Arrangements | |||
Equipment financed during the period under notes payable | $ 84.2 | $ 83.4 | $ 80.6 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
ACCRUED EXPENSES | ||
Workers' compensation, third-party casualty, and loss and damage claims reserves | $ 99,969 | $ 104,491 |
Accrued vacation pay | 36,034 | 34,939 |
Accrued compensation | 35,718 | 27,826 |
Taxes other than income | 8,215 | 8,284 |
Other | 31,301 | 23,191 |
Total accrued expenses | $ 211,237 | $ 198,731 |
ACCRUED EXPENSES (Reclassificat
ACCRUED EXPENSES (Reclassifications) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Reclassifications | ||
Other accounts receivable | $ 19,491 | $ 22,041 |
Accrued expenses | $ 211,237 | 198,731 |
Adjustment | ||
Reclassifications | ||
Other accounts receivable | 8,700 | |
Accrued expenses | $ 8,700 |
EMPLOYEE BENEFIT PLANS (Plans)
EMPLOYEE BENEFIT PLANS (Plans) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017USD ($)person | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Nonunion Defined Benefit Pension Plan | |||
Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans | |||
Premium paid to purchase nonparticipating annuity contract | $ 7,600 | $ 7,600 | |
Number of plan participants for which vested pension benefits were settled | person | 50 | ||
Unrecognized net actuarial loss | $ 22,588 | $ 23,294 | |
Amortization period for unrecognized net actuarial loss | 8 years | ||
Lump-sum distributions | $ 18,700 | ||
Postretirement Health Benefit Plan | |||
Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans | |||
Unrecognized net actuarial loss | $ 2,764 | $ 5,708 | |
Unrecognized prior service credit, amortization period | 9 years |
EMPLOYEE BENEFIT PLANS (Funded
EMPLOYEE BENEFIT PLANS (Funded status) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Nonunion Defined Benefit Pension Plan | |||
Change in benefit obligations | |||
Benefit obligations at beginning of period | $ 152,006 | $ 159,607 | |
Interest cost | 4,514 | 4,572 | $ 5,200 |
Actuarial (gain) loss | 6,448 | 4,202 | |
Benefits paid | (26,491) | (16,896) | |
Settlement loss | 940 | 521 | |
Benefit obligations at end of period | 137,417 | 152,006 | 159,607 |
Change in plan assets | |||
Fair value of plan assets at beginning of period | 144,805 | 136,917 | |
Actual return on plan assets | 6,517 | 11,384 | |
Employer contributions | 13,400 | ||
Benefits paid | (26,491) | (16,896) | |
Fair value of plan assets at end of period | 124,831 | 144,805 | 136,917 |
Funded status | (12,586) | (7,201) | |
Accumulated benefit obligation | 137,417 | 152,006 | |
Supplemental Benefit Plan | |||
Change in benefit obligations | |||
Benefit obligations at beginning of period | 4,794 | 4,917 | |
Interest cost | 102 | 130 | 123 |
Actuarial (gain) loss | (10) | (7) | |
Benefits paid | (989) | (246) | |
Benefit obligations at end of period | 3,897 | 4,794 | 4,917 |
Change in plan assets | |||
Employer contributions | 989 | 246 | |
Benefits paid | (989) | (246) | |
Funded status | (3,897) | (4,794) | |
Accumulated benefit obligation | 3,897 | 4,794 | |
Postretirement Health Benefit Plan | |||
Change in benefit obligations | |||
Benefit obligations at beginning of period | 25,532 | 24,616 | |
Service cost | 489 | 429 | 406 |
Interest cost | 1,060 | 1,017 | 913 |
Actuarial (gain) loss | (2,251) | 133 | |
Benefits paid | (733) | (663) | |
Benefit obligations at end of period | 24,097 | 25,532 | $ 24,616 |
Change in plan assets | |||
Employer contributions | 733 | 663 | |
Benefits paid | (733) | (663) | |
Funded status | (24,097) | (25,532) | |
Accumulated benefit obligation | $ 24,097 | $ 25,532 |
EMPLOYEE BENEFIT PLANS (Recogni
EMPLOYEE BENEFIT PLANS (Recognized in Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Amounts recognized in the consolidated balance sheets | ||
Noncurrent liabilities (included in pension and postretirement liabilities) | $ (39,827) | $ (35,848) |
Nonunion Defined Benefit Pension Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Noncurrent liabilities (included in pension and postretirement liabilities) | (12,586) | (7,201) |
Liabilities recognized | (12,586) | (7,201) |
Supplemental Benefit Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Current liabilities (included in accrued expenses) | (989) | |
Noncurrent liabilities (included in pension and postretirement liabilities) | (3,897) | (3,805) |
Liabilities recognized | (3,897) | (4,794) |
Postretirement Health Benefit Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Current liabilities (included in accrued expenses) | (753) | (690) |
Noncurrent liabilities (included in pension and postretirement liabilities) | (23,344) | (24,842) |
Liabilities recognized | $ (24,097) | $ (25,532) |
EMPLOYEE BENEFIT PLANS (Compone
EMPLOYEE BENEFIT PLANS (Components of cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of net periodic benefit cost | |||
Pension settlement expense | $ 4,156 | $ 3,229 | $ 3,202 |
Nonunion Defined Benefit Pension Plan | |||
Components of net periodic benefit cost | |||
Interest cost | 4,514 | 4,572 | 5,200 |
Expected return on plan assets | (5,712) | (8,607) | (9,180) |
Pension settlement expense | 4,156 | 3,023 | 3,202 |
Amortization of net actuarial loss | 3,132 | 4,087 | 3,218 |
Net periodic benefit cost | 6,090 | 3,075 | 2,440 |
Supplemental Benefit Plan | |||
Components of net periodic benefit cost | |||
Interest cost | 102 | 130 | 123 |
Pension settlement expense | 206 | ||
Amortization of net actuarial loss | 82 | 152 | 159 |
Net periodic benefit cost | 184 | 488 | 282 |
Postretirement Health Benefit Plan | |||
Components of net periodic benefit cost | |||
Service cost | 489 | 429 | 406 |
Interest cost | 1,060 | 1,017 | 913 |
Amortization of prior service credit | (190) | (190) | (190) |
Amortization of net actuarial loss | 694 | 705 | 853 |
Net periodic benefit cost | $ 2,053 | $ 1,961 | $ 1,982 |
EMPLOYEE BENEFIT PLANS (Settlem
EMPLOYEE BENEFIT PLANS (Settlement distributions and expense) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Distributions and pension settlement expense | |||||
Pension settlement expense, pre-tax | $ 4,156 | $ 3,229 | $ 3,202 | ||
Nonunion Defined Benefit Pension Plan | |||||
Distributions and pension settlement expense | |||||
Pension settlement distributions | 26,261 | 16,515 | 20,622 | ||
Pension settlement expense, pre-tax | $ 4,156 | $ 3,023 | $ 3,202 | ||
Pension settlement expense per diluted share, net of taxes | $ 0.10 | $ 0.07 | $ 0.07 | ||
Lump-sum distributions | $ 18,700 | ||||
Premium paid to purchase nonparticipating annuity contract | $ 7,600 | 7,600 | |||
Supplemental Benefit Plan | |||||
Distributions and pension settlement expense | |||||
Pension settlement distributions | $ 989 | $ 246 | $ 1,941 | ||
Pension settlement expense, pre-tax | $ 206 | ||||
Pension settlement expense per diluted share, net of taxes | $ 0.01 | ||||
Period of delay for pension settlement distribution to key employees | 6 months | 6 months |
EMPLOYEE BENEFIT PLANS (Include
EMPLOYEE BENEFIT PLANS (Included in AOCI) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Nonunion Defined Benefit Pension Plan | ||
Pre-tax amounts included in accumulated other comprehensive loss that have not yet been recognized in net periodic benefit cost | ||
Unrecognized net actuarial loss | $ 22,588 | $ 23,294 |
Total | 22,588 | 23,294 |
Pre-tax amounts, which are reported within accumulated other comprehensive loss, expected to be recognized as components of net periodic benefit cost in next fiscal year | ||
Unrecognized net actuarial loss | 2,881 | |
Total | 2,881 | |
Supplemental Benefit Plan | ||
Pre-tax amounts included in accumulated other comprehensive loss that have not yet been recognized in net periodic benefit cost | ||
Unrecognized net actuarial loss | 543 | 635 |
Total | 543 | 635 |
Pre-tax amounts, which are reported within accumulated other comprehensive loss, expected to be recognized as components of net periodic benefit cost in next fiscal year | ||
Unrecognized net actuarial loss | 80 | |
Total | 80 | |
Postretirement Health Benefit Plan | ||
Pre-tax amounts included in accumulated other comprehensive loss that have not yet been recognized in net periodic benefit cost | ||
Unrecognized net actuarial loss | 2,764 | 5,708 |
Unrecognized prior service credit | (127) | (317) |
Total | 2,637 | $ 5,391 |
Pre-tax amounts, which are reported within accumulated other comprehensive loss, expected to be recognized as components of net periodic benefit cost in next fiscal year | ||
Unrecognized net actuarial loss | 274 | |
Unrecognized prior service credit | (93) | |
Total | $ 181 |
EMPLOYEE BENEFIT PLANS (Discoun
EMPLOYEE BENEFIT PLANS (Discount rate and assumptions) (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Nonunion Defined Benefit Pension Plan | |||||||||||||||
Weighted-average assumptions used to determine nonunion benefit obligations | |||||||||||||||
Discount rate (as a percent) | 3.10% | 3.40% | 3.10% | 3.10% | 3.40% | ||||||||||
Weighted-average assumptions used to determine net periodic benefit cost | |||||||||||||||
Discount rate (as a percent) | 3.10% | 3.20% | 3.40% | 2.70% | 2.70% | 3.00% | 3.40% | 3.50% | 3.00% | 3.40% | 3.50% | 3.20% | |||
Expected return on plan assets, net of estimated expenses (as a percent) | 2.50% | 6.50% | 6.50% | 6.50% | |||||||||||
Nonunion Defined Benefit Pension Plan | Forecast | |||||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost | |||||||||||||||
Expected return on plan assets, net of estimated expenses (as a percent) | 1.40% | ||||||||||||||
Supplemental Benefit Plan | |||||||||||||||
Weighted-average assumptions used to determine nonunion benefit obligations | |||||||||||||||
Discount rate (as a percent) | 2.80% | 2.70% | 2.80% | 2.80% | 2.70% | ||||||||||
Weighted-average assumptions used to determine net periodic benefit cost | |||||||||||||||
Discount rate (as a percent) | 2.70% | 2.60% | 2.50% | ||||||||||||
Postretirement Health Benefit Plan | |||||||||||||||
Weighted-average assumptions used to determine nonunion benefit obligations | |||||||||||||||
Discount rate (as a percent) | 3.50% | 4.00% | 3.50% | 3.50% | 4.00% | ||||||||||
Weighted-average assumptions used to determine net periodic benefit cost | |||||||||||||||
Discount rate (as a percent) | 4.00% | 4.20% | 3.90% |
EMPLOYEE BENEFIT PLANS (Health
EMPLOYEE BENEFIT PLANS (Health care trend rates) (Details) - Postretirement Health Benefit Plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Assumed health care cost trend rates | ||
Health care cost trend rate assumed for next year (as a percent) | 8.00% | |
Rate to which the cost trend rate is assumed to decline (as a percent) | 4.50% | |
Year that the rate reaches the cost trend assumed rate | 2,031 | |
Effects of one-percentage-point change in assumed health care cost trend rates | ||
Effect of one-percentage-point increase on total of service and interest cost components | $ 335 | |
Effect of one-percentage-point decrease on total of service and interest cost components | (262) | |
Effect of one-percentage-point increase on postretirement benefit obligation | 4,820 | |
Effect of one-percentage-point decrease on postretirement benefit obligation | $ (3,845) | |
Pre65 | ||
Assumed health care cost trend rates | ||
Health care cost trend rate assumed for next year (as a percent) | 8.30% | |
Rate to which the cost trend rate is assumed to decline (as a percent) | 4.00% | |
Year that the rate reaches the cost trend assumed rate | 2,035 | |
Post65 | ||
Assumed health care cost trend rates | ||
Health care cost trend rate assumed for next year (as a percent) | 5.50% | |
Rate to which the cost trend rate is assumed to decline (as a percent) | 4.00% | |
Year that the rate reaches the cost trend assumed rate | 2,024 |
EMPLOYEE BENEFIT PLANS (Future
EMPLOYEE BENEFIT PLANS (Future benefit payments) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Jan. 01, 2017 |
Nonunion Defined Benefit Pension Plan | ||
Estimated future benefit payments | ||
2,018 | $ 22,511 | |
2,019 | 11,244 | |
2,020 | 12,051 | |
2,021 | 10,843 | |
2,022 | 11,029 | |
2023-2027 | 46,448 | |
Required minimum contributions | ||
Adjusted funding target attainment percentage | 107.80% | |
Estimated cash contribution for 2018 | 10,000 | |
Supplemental Benefit Plan | ||
Estimated future benefit payments | ||
2,019 | 3,107 | |
2023-2027 | 718 | |
Postretirement Health Benefit Plan | ||
Estimated future benefit payments | ||
2,018 | 753 | |
2,019 | 827 | |
2,020 | 879 | |
2,021 | 952 | |
2,022 | 1,013 | |
2023-2027 | $ 5,949 |
EMPLOYEE BENEFIT PLANS (Nonunio
EMPLOYEE BENEFIT PLANS (Nonunion Plan Assets) (Details) - Nonunion Defined Benefit Pension Plan | 6 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans | ||||||
Period over which the possibility of experiencing a substantial loss is limited by adequate diversification under the long-term asset allocation policy | 1 year | |||||
Expected return on plan assets (as a percent) | 2.50% | 6.50% | 6.50% | 6.50% | ||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 100.00% | 100.00% | ||||
Weighted-Average Allocation (as a percent) | 100.00% | 100.00% | 100.00% | |||
Maximum performance period of investment fund used to compare investment performance | 3 years | |||||
Minimum performance period of total fund used to compare investment performance | 5 years | |||||
Forecast | ||||||
Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans | ||||||
Expected return on plan assets (as a percent) | 1.40% | |||||
Minimum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Performance period of recognized market indices used to compare investment performance | 3 years | |||||
Maximum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Performance period of recognized market indices used to compare investment performance | 5 years | |||||
Large Cap U.S. Equity | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 0.00% | 0.00% | ||||
Weighted-Average Allocation (as a percent) | 0.00% | 0.00% | 14.00% | |||
Large Cap U.S. Equity | Minimum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 0.00% | 0.00% | ||||
Large Cap U.S. Equity | Maximum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 20.00% | 20.00% | ||||
Mid Cap U.S. Equity | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 0.00% | 0.00% | ||||
Weighted-Average Allocation (as a percent) | 0.00% | 0.00% | 9.40% | |||
Mid Cap U.S. Equity | Minimum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 0.00% | 0.00% | ||||
Mid Cap U.S. Equity | Maximum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 11.00% | 11.00% | ||||
Small Cap U.S. Equity | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 0.00% | 0.00% | ||||
Weighted-Average Allocation (as a percent) | 0.00% | 0.00% | 10.00% | |||
Small Cap U.S. Equity | Minimum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 0.00% | 0.00% | ||||
Small Cap U.S. Equity | Maximum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 11.00% | 11.00% | ||||
International Equity | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 0.00% | 0.00% | ||||
Weighted-Average Allocation (as a percent) | 0.00% | 0.00% | 14.40% | |||
International Equity | Minimum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 0.00% | 0.00% | ||||
International Equity | Maximum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 18.00% | 18.00% | ||||
Debt Instruments | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 70.00% | 70.00% | ||||
Weighted-Average Allocation (as a percent) | 73.60% | 73.60% | 25.00% | |||
Debt Instruments | Minimum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 20.00% | 20.00% | ||||
Debt Instruments | Maximum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 100.00% | 100.00% | ||||
Actively managed portfolio of short-term debt instruments | Minimum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Maturity period of investments | 1 year | |||||
Actively managed portfolio of short-term debt instruments | Maximum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Maturity period of investments | 5 years | |||||
Actively managed portfolio of short-duration debt instruments | Minimum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Maturity period of investments | 1 year | |||||
Actively managed portfolio of short-duration debt instruments | Maximum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Maturity period of investments | 3 years | |||||
Floating Rate Loan Fund | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 10.00% | 10.00% | ||||
Weighted-Average Allocation (as a percent) | 13.10% | 13.10% | 10.80% | |||
Floating Rate Loan Fund | Minimum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 3.00% | 3.00% | ||||
Floating Rate Loan Fund | Maximum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 100.00% | 100.00% | ||||
Cash and Cash Equivalents | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 20.00% | 20.00% | ||||
Weighted-Average Allocation (as a percent) | 13.30% | 13.30% | 16.40% | |||
Cash and Cash Equivalents | Minimum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 0.00% | 0.00% | ||||
Cash and Cash Equivalents | Maximum | ||||||
Target allocations, acceptable ranges, and actual asset allocations | ||||||
Target allocation (as a percent) | 100.00% | 100.00% |
EMPLOYEE BENEFIT PLANS (Nonun85
EMPLOYEE BENEFIT PLANS (Nonunion Plan Assets - FV) (Details) - Nonunion Defined Benefit Pension Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension and other postretirement benefit plans | |||
Fair value of plan assets | $ 124,831 | $ 144,805 | $ 136,917 |
Cash and Cash Equivalents | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 16,641 | 23,696 | |
Debt Instruments | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 91,778 | 36,245 | |
Floating Rate Loan Fund | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 16,412 | 15,687 | |
Large Cap U.S. Equity | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 20,208 | ||
Mid Cap U.S. Equity | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 13,597 | ||
Small Cap U.S. Equity | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 14,561 | ||
International Equity | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 20,811 | ||
Level 1 | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 43,140 | 108,560 | |
Level 1 | Cash and Cash Equivalents | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 16,641 | 23,696 | |
Level 1 | Debt Instruments | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 10,087 | ||
Level 1 | Floating Rate Loan Fund | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 16,412 | 15,687 | |
Level 1 | Large Cap U.S. Equity | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 20,208 | ||
Level 1 | Mid Cap U.S. Equity | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 13,597 | ||
Level 1 | Small Cap U.S. Equity | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 14,561 | ||
Level 1 | International Equity | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 20,811 | ||
Level 2 | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 81,691 | 36,245 | |
Level 2 | Debt Instruments | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | $ 81,691 | $ 36,245 | |
Level 2 | Corporate debt securities | |||
Pension and other postretirement benefit plans | |||
Percentage of investments in debt instruments | 80.00% | 81.00% | |
Level 2 | Mortgage-backed instruments | |||
Pension and other postretirement benefit plans | |||
Percentage of investments in debt instruments | 4.00% | 10.00% | |
Level 2 | Treasury instruments | |||
Pension and other postretirement benefit plans | |||
Percentage of investments in debt instruments | 7.00% | ||
Level 2 | Municipal debt securities | |||
Pension and other postretirement benefit plans | |||
Percentage of investments in debt instruments | 1.00% | ||
Level 2 | Asset-backed securities | |||
Pension and other postretirement benefit plans | |||
Percentage of investments in debt instruments | 16.00% | ||
Level 2 | Agency securities | |||
Pension and other postretirement benefit plans | |||
Percentage of investments in debt instruments | 1.00% |
EMPLOYEE BENEFIT PLANS (Deferre
EMPLOYEE BENEFIT PLANS (Deferred Comp Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred salary agreements | ||
Deferred Compensation Plans | ||
Recorded liabilities | $ 2.9 | $ 3.4 |
Voluntary Savings Plan - mutual funds held in trust | ||
Deferred Compensation Plans | ||
Minimum period for election to defer receipt of a portion of salary and incentive compensation | 6 months | |
Voluntary Savings Plan - mutual funds held in trust | Other long-term assets | ||
Deferred Compensation Plans | ||
VSP assets | $ 2.4 | 2.2 |
Voluntary Savings Plan - mutual funds held in trust | Other long-term liabilities | ||
Deferred Compensation Plans | ||
VSP liabilities | $ 2.4 | $ 2.2 |
EMPLOYEE BENEFIT PLANS (Defined
EMPLOYEE BENEFIT PLANS (Defined Contribution Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Long-Term Incentive Compensation Plan | |||
Earning period of Long-term cash incentive plan | 3 years | ||
Incentive payments accrued for Long-Term Cash Incentive Plan | $ 6.6 | $ 3.9 | $ 6.7 |
Other Plans | |||
Cash surrender value of life insurance policies | 49.7 | 47.4 | |
Recognized gains associated with changes in the cash surrender value and proceeds from life insurance policies | $ 2.6 | 2.9 | 0.3 |
401(k) Plan | |||
Defined Contribution Plans | |||
Maximum percentage of salary permitted to be deferred by plan participants | 69.00% | ||
Rate of employer match on participant contributions | 50.00% | ||
Maximum percentage of participants compensation that is eligible for 50% matching contribution | 6.00% | ||
Expense for employer contribution to defined contribution plan | $ 5.6 | 5.7 | 5.5 |
DC Retirement Plan | |||
Defined Contribution Plans | |||
Expense for employer contribution to defined contribution plan | $ 8.3 | $ 5 | $ 9.5 |
Period of service for participants' full vesting in the employer's contributions | 3 years |
EMPLOYEE BENEFIT PLANS (Multiem
EMPLOYEE BENEFIT PLANS (Multiemployer Plans) (Details) $ in Thousands | Aug. 01, 2017 | Jan. 31, 2017 | Aug. 01, 2016 | Feb. 01, 2016 | Jan. 31, 2016 | Aug. 01, 2015 | Feb. 01, 2015 | Dec. 31, 2017USD ($)$ / hplan | Jan. 31, 2017 | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jan. 01, 2017 | Jan. 01, 2016 | Jan. 01, 2015 |
Multiemployer pension plans | Central States Pension Plan | ||||||||||||||
Multiemployer Plans | ||||||||||||||
Percentage of contributions to multiemployer pension plan | 50.00% | 50.00% | 50.00% | |||||||||||
Asset-Based | ||||||||||||||
Multiemployer Plans | ||||||||||||||
Maximum increase in combined contribution rates for health, welfare, and pension benefits each August 1 | $ / h | 1 | |||||||||||||
Minimum funded percentage of plans in green zone | 80.00% | |||||||||||||
Asset-Based | Multiemployer pension plans | ||||||||||||||
Multiemployer Plans | ||||||||||||||
Number of multiemployer plans to which ABF Freight currently contributes | plan | 25 | |||||||||||||
Maximum funded percentage of plans in yellow zone | 80.00% | |||||||||||||
Maximum funded percentage of plans in red zone | 65.00% | |||||||||||||
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% | |||||||||||||
Percentage of contributions to the multiemployer pension plans that are in critical and declining status | 60.00% | |||||||||||||
Percentage of contributions to the multiemployer pension plans that are in critical status | 1.00% | |||||||||||||
Percentage of contributions to the multiemployer pension plans that are in endangered status | 6.00% | |||||||||||||
Total contributions to multiemployer plans | $ 158,416 | $ 154,139 | $ 151,898 | |||||||||||
Percentage increase in contribution rate for time worked related to benefit costs | 1.70% | 0.50% | 1.20% | |||||||||||
Maximum projected time to insolvency without legislative action | 10 years | |||||||||||||
Asset-Based | Multiemployer pension plans | Central States Pension Plan | ||||||||||||||
Multiemployer Plans | ||||||||||||||
Total contributions to multiemployer plans | $ 78,230 | $ 77,891 | $ 77,491 | |||||||||||
Threshold percentage of the entity's contributions relative to total fund contributions, which was exceeded during the period | 5.00% | 5.00% | ||||||||||||
Approved increase in contribution (as a percent) | 0 | 0 | 0 | |||||||||||
Actuarially certified projected funded percentage of multiemployer pension plan | 37.80% | 42.10% | 47.90% | |||||||||||
Asset-Based | Multiemployer pension plans | Western Conference of Teamsters Pension Plan | ||||||||||||||
Multiemployer Plans | ||||||||||||||
Total contributions to multiemployer plans | 26,320 | $ 25,075 | $ 24,474 | |||||||||||
Approved increase in contribution (as a percent) | 0 | 0 | 0 | |||||||||||
Asset-Based | Multiemployer pension plans | Central Pennsylvania Teamsters Pension Plan | ||||||||||||||
Multiemployer Plans | ||||||||||||||
Total contributions to multiemployer plans | 13,391 | 13,381 | 13,147 | |||||||||||
Asset-Based | Multiemployer pension plans | Local 710 Pension Fund | ||||||||||||||
Multiemployer Plans | ||||||||||||||
Total contributions to multiemployer plans | 10,054 | 9,670 | 10,020 | |||||||||||
Threshold percentage of the entity's contributions relative to total fund contributions, which was exceeded during the period | 5.00% | 5.00% | 5.00% | 5.00% | 5.00% | |||||||||
Asset-Based | Multiemployer pension plans | All Other Pension Plans in Aggregate | ||||||||||||||
Multiemployer Plans | ||||||||||||||
Total contributions to multiemployer plans | $ 30,421 | 28,122 | 26,766 | |||||||||||
Asset-Based | Multiemployer pension plans | 707 Pension Fund | ||||||||||||||
Multiemployer Plans | ||||||||||||||
Percentage of contributions to multiemployer pension plan | 1.00% | |||||||||||||
Asset-Based | Multiemployer pension plans | New York State Pension Fund | ||||||||||||||
Multiemployer Plans | ||||||||||||||
Percentage of contributions to multiemployer pension plan | 2.00% | |||||||||||||
Asset-Based | Multiemployer health and welfare plans | ||||||||||||||
Multiemployer Plans | ||||||||||||||
Number of multiemployer plans to which ABF Freight currently contributes | plan | 42 | |||||||||||||
Total contributions to multiemployer plans | $ 162,200 | $ 153,300 | $ 144,700 | |||||||||||
Percentage increase in contribution rate for time worked related to benefit costs | 3.90% | 3.60% | 5.80% | |||||||||||
Asset-Based | Unionized employees concentration risk | Number of employees | ||||||||||||||
Multiemployer Plans | ||||||||||||||
Percentage of Asset-Based segment employees covered under collective bargaining agreement with the IBT | 83.00% |
STOCKHOLDERS' EQUITY (AOCI) (De
STOCKHOLDERS' EQUITY (AOCI) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Loss | ||||
Total after-tax amount | $ 651,462 | $ 599,055 | $ 588,728 | $ 560,883 |
Impact on unrecognized net actuarial loss | ||||
Change in the unrecognized net actuarial loss, after tax | (2,640) | (1,267) | (7,535) | |
Accumulated Other Comprehensive Loss | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | (27,181) | (31,840) | (38,507) | |
Total after-tax amount | (20,574) | (23,417) | (27,496) | $ (23,479) |
Unrecognized Net Periodic Benefit Costs | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | (25,768) | (29,320) | (35,231) | |
Total after-tax amount | (19,715) | (21,886) | (25,497) | |
Interest Rate Swap | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | 481 | (542) | (897) | |
Total after-tax amount | 292 | (329) | (545) | |
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | (1,894) | (1,978) | (2,379) | |
Total after-tax amount | $ (1,151) | $ (1,202) | $ (1,454) |
STOCKHOLDERS' EQUITY (AOCI comp
STOCKHOLDERS' EQUITY (AOCI comp) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | $ 599,055 | $ 588,728 | $ 560,883 |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 2,843 | 4,079 | (4,017) |
Balances | 651,462 | 599,055 | 588,728 |
Accumulated Other Comprehensive Loss | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | (23,417) | (27,496) | (23,479) |
Other comprehensive income (loss) before reclassifications | (1,968) | (799) | |
Amounts reclassified from accumulated other comprehensive loss | 4,811 | 4,878 | |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 2,843 | 4,079 | (4,017) |
Balances | (20,574) | (23,417) | (27,496) |
Unrecognized Net Periodic Benefit Costs | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | (21,886) | (25,497) | |
Other comprehensive income (loss) before reclassifications | (2,640) | (1,267) | |
Amounts reclassified from accumulated other comprehensive loss | 4,811 | 4,878 | |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 2,171 | 3,611 | |
Balances | (19,715) | (21,886) | (25,497) |
Interest Rate Swap | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | (329) | (545) | |
Other comprehensive income (loss) before reclassifications | 621 | 216 | |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 621 | 216 | |
Balances | 292 | (329) | (545) |
Foreign Currency Translation | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | (1,202) | (1,454) | |
Other comprehensive income (loss) before reclassifications | 51 | 252 | |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | 51 | 252 | |
Balances | $ (1,151) | $ (1,202) | $ (1,454) |
STOCKHOLDERS' EQUITY (Reclass)
STOCKHOLDERS' EQUITY (Reclass) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Unrecognized Net Periodic Benefit Costs | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ (7,874) | $ (7,983) |
Tax benefit | 3,063 | 3,105 |
Total, net of tax | (4,811) | (4,878) |
Amortization of net actuarial loss | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (3,908) | (4,944) |
Amortization of prior service credit | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | 190 | 190 |
Pension settlement expense | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ (4,156) | $ (3,229) |
STOCKHOLDERS' EQUITY (Dividends
STOCKHOLDERS' EQUITY (Dividends) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 26, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Dividends on Common Stock | ||||||||||||
Dividends declared (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.32 | $ 0.32 | $ 0.26 | |
Dividend Amount | $ 2,057 | $ 2,063 | $ 2,078 | $ 2,066 | $ 2,069 | $ 2,074 | $ 2,087 | $ 2,088 | $ 8,264 | $ 8,318 | $ 6,837 | |
Subsequent Event | ||||||||||||
Dividends on Common Stock | ||||||||||||
Dividends declared (in dollars per share) | $ 0.08 |
STOCKHOLDERS' EQUITY (Treasury
STOCKHOLDERS' EQUITY (Treasury Stock) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2015 | |
Treasury Stock | ||||
Aggregate cost of shares repurchased during the period | $ 6,019 | $ 9,510 | $ 12,765 | |
Treasury stock (in shares) | 2,851,578 | 2,565,399 | ||
Stock Repurchase Program | ||||
Treasury Stock | ||||
Amount of stock repurchases authorized | $ 50,000 | |||
Number of shares repurchased during the period | 286,179 | |||
Aggregate cost of shares repurchased during the period | $ 6,000 | |||
Amount available for repurchase | $ 31,700 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based compensation | |||
Number of shares authorized | 3,100,000 | ||
Restricted Stock Units | |||
Award activity | |||
Outstanding at the beginning of the period (in shares) | 1,477,537 | ||
Granted (in shares) | 504,550 | 536,440 | 269,660 |
Vested (in shares) | (438,018) | ||
Forfeited (in shares) | (84,809) | ||
Outstanding at the end of the period (in shares) | 1,459,260 | 1,477,537 | |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 23.88 | ||
Granted (in dollars per share) | 16.39 | $ 15.89 | $ 35.50 |
Vested (in dollars per share) | 18.27 | ||
Forfeited (in dollars per share) | 23.88 | ||
Outstanding at the end of the period (in dollars per share) | $ 22.98 | $ 23.88 | |
Other disclosure | |||
Fair value of restricted stock awards vested | $ 11.2 | $ 5.8 | $ 9.8 |
Unrecognized compensation cost | $ 16.3 | ||
Weighted-average period of recognition of unrecognized compensation cost | 2 years 9 months | ||
SARs | |||
Share-based compensation | |||
Granted to date (in shares) | 0 |
EARNINGS PER SHARE (Basic and D
EARNINGS PER SHARE (Basic and Diluted) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Basic, numerator: | |||||||||||
Net income | $ 36,568 | $ 14,788 | $ 15,777 | $ (7,407) | $ 1,584 | $ 12,940 | $ 10,231 | $ (6,103) | $ 59,726 | $ 18,652 | $ 44,854 |
Effect of unvested restricted stock unit awards | (238) | (138) | (450) | ||||||||
Adjusted net income | $ 59,488 | $ 18,514 | $ 44,404 | ||||||||
Basic, denominator: | |||||||||||
Weighted-average shares | 25,637,568 | 25,671,535 | 25,767,791 | 25,684,475 | 25,669,280 | 25,724,550 | 25,791,026 | 25,822,522 | 25,683,745 | 25,751,544 | 26,013,716 |
Earnings per common share (in dollars per share) | $ 1.42 | $ 0.57 | $ 0.61 | $ (0.29) | $ 0.06 | $ 0.50 | $ 0.39 | $ (0.24) | $ 2.32 | $ 0.72 | $ 1.71 |
Diluted, numerator: | |||||||||||
Net income | $ 36,568 | $ 14,788 | $ 15,777 | $ (7,407) | $ 1,584 | $ 12,940 | $ 10,231 | $ (6,103) | $ 59,726 | $ 18,652 | $ 44,854 |
Effect of unvested restricted stock unit awards | (233) | (137) | (443) | ||||||||
Adjusted net income | $ 59,493 | $ 18,515 | $ 44,411 | ||||||||
Diluted, denominator: | |||||||||||
Weighted-average shares | 25,637,568 | 25,671,535 | 25,767,791 | 25,684,475 | 25,669,280 | 25,724,550 | 25,791,026 | 25,822,522 | 25,683,745 | 25,751,544 | 26,013,716 |
Effect of dilutive securities | 740,644 | 505,026 | 516,411 | ||||||||
Adjusted weighted-average shares and assumed conversions | 26,540,716 | 26,393,359 | 26,291,641 | 25,684,475 | 26,272,487 | 26,211,524 | 26,246,868 | 25,822,522 | 26,424,389 | 26,256,570 | 26,530,127 |
Earnings per common share (in dollars per share) | $ 1.37 | $ 0.56 | $ 0.60 | $ (0.29) | $ 0.06 | $ 0.49 | $ 0.39 | $ (0.24) | $ 2.25 | $ 0.71 | $ 1.67 |
EARNINGS PER SHARE (AntiDil) (D
EARNINGS PER SHARE (AntiDil) (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock awards | |||
Antidilutive securities | |||
Outstanding stock awards not included in calculation of diluted earnings (loss) per share (in shares) | 0.1 | 0.4 | 0.2 |
OPERATING SEGMENT DATA - (Rev a
OPERATING SEGMENT DATA - (Rev and Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
REVENUES | |||||||||||
Revenues | $ 710,721 | $ 744,280 | $ 720,368 | $ 651,088 | $ 688,214 | $ 713,923 | $ 676,627 | $ 621,455 | $ 2,826,457 | $ 2,700,219 | $ 2,666,905 |
OPERATING EXPENSES | |||||||||||
Salaries, wages, and benefits | 1,367,433 | 1,345,672 | 1,297,129 | ||||||||
Fuel, supplies, and expenses | 304,126 | 270,138 | 292,039 | ||||||||
Depreciation and amortization | 103,068 | 103,053 | 93,042 | ||||||||
Gain on sale of property and equipment | (227) | (3,335) | (2,225) | ||||||||
Other | 125,773 | 118,390 | 118,587 | ||||||||
Restructuring costs | 10,300 | 2,963 | 10,313 | ||||||||
Total consolidated operating expenses | 694,041 | 719,931 | 695,634 | 663,341 | 687,003 | 693,553 | 659,973 | 630,720 | 2,772,947 | 2,671,249 | 2,591,409 |
OPERATING INCOME | |||||||||||
OPERATING INCOME (LOSS) | 16,680 | 24,349 | 24,734 | (12,253) | 1,211 | 20,370 | 16,654 | (9,265) | 53,510 | 28,970 | 75,496 |
OTHER INCOME (COSTS) | |||||||||||
Interest and dividend income | 1,293 | 1,523 | 1,284 | ||||||||
Interest and other related financing costs | (6,342) | (5,150) | (4,400) | ||||||||
Other, net | 3,115 | 2,944 | 354 | ||||||||
TOTAL OTHER INCOME (COSTS) | $ (660) | $ (281) | $ (599) | $ (394) | $ (115) | $ 185 | $ (273) | $ (480) | (1,934) | (683) | (2,762) |
INCOME BEFORE INCOME TAXES | 51,576 | 28,287 | 72,734 | ||||||||
Operating Segments | Asset-Based | |||||||||||
REVENUES | |||||||||||
Revenues | 1,993,314 | 1,916,394 | 1,916,579 | ||||||||
OPERATING EXPENSES | |||||||||||
Salaries, wages, and benefits | 1,125,186 | 1,103,883 | 1,063,016 | ||||||||
Fuel, supplies, and expenses | 234,006 | 216,263 | 244,772 | ||||||||
Operating taxes and licenses | 47,767 | 48,180 | 48,726 | ||||||||
Insurance | 30,761 | 29,178 | 28,591 | ||||||||
Communications and utilities | 17,373 | 16,181 | 14,158 | ||||||||
Depreciation and amortization | 82,507 | 80,331 | 71,320 | ||||||||
Rents and purchased transportation | 206,457 | 198,594 | 196,560 | ||||||||
Shared services | 186,406 | 184,817 | 180,478 | ||||||||
Gain on sale of property and equipment | (695) | (2,979) | (1,734) | ||||||||
Other | 6,525 | 4,889 | 6,424 | ||||||||
Restructuring costs | 344 | 1,173 | |||||||||
Total consolidated operating expenses | 1,941,436 | 1,882,823 | 1,854,143 | ||||||||
OPERATING INCOME | |||||||||||
OPERATING INCOME (LOSS) | 51,878 | 33,571 | 62,436 | ||||||||
Operating Segments | ArcBest | |||||||||||
REVENUES | |||||||||||
Revenues | 706,698 | 640,734 | 590,436 | ||||||||
OPERATING EXPENSES | |||||||||||
Purchased transportation | 563,497 | 502,159 | 460,172 | ||||||||
Supplies and expenses | 15,087 | 13,145 | 11,689 | ||||||||
Depreciation and amortization | 13,090 | 13,612 | 12,886 | ||||||||
Shared services | 84,159 | 85,238 | 73,890 | ||||||||
Other | 11,189 | 11,678 | 11,007 | ||||||||
Restructuring costs | 875 | 8,038 | |||||||||
Total consolidated operating expenses | 687,897 | 633,870 | 569,644 | ||||||||
OPERATING INCOME | |||||||||||
OPERATING INCOME (LOSS) | 18,801 | 6,864 | 20,792 | ||||||||
Operating Segments | FleetNet | |||||||||||
REVENUES | |||||||||||
Revenues | 156,341 | 162,629 | 174,952 | ||||||||
OPERATING EXPENSES | |||||||||||
Depreciation and amortization | 1,089 | 1,210 | 1,119 | ||||||||
Total consolidated operating expenses | 153,017 | 160,204 | 171,998 | ||||||||
OPERATING INCOME | |||||||||||
OPERATING INCOME (LOSS) | 3,324 | 2,425 | 2,954 | ||||||||
Other and eliminations | |||||||||||
REVENUES | |||||||||||
Revenues | (29,896) | (19,538) | (15,062) | ||||||||
OPERATING EXPENSES | |||||||||||
Depreciation and amortization | 6,382 | 7,900 | 7,717 | ||||||||
Total consolidated operating expenses | (9,403) | (5,648) | (4,376) | ||||||||
OPERATING INCOME | |||||||||||
OPERATING INCOME (LOSS) | (20,493) | (13,890) | (10,686) | ||||||||
Nonunion Defined Benefit Pension Plan | |||||||||||
OPERATING EXPENSES | |||||||||||
Nonunion pension expense, including settlement | 6,090 | 3,075 | 2,440 | ||||||||
Nonunion Defined Benefit Pension Plan | Operating Segments | Asset-Based | |||||||||||
OPERATING EXPENSES | |||||||||||
Nonunion pension expense, including settlement | $ 4,799 | $ 2,313 | $ 1,832 |
OPERATING SEGMENT DATA (Assets)
OPERATING SEGMENT DATA (Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | $ 149,951 | $ 151,637 | $ 159,017 |
DEPRECIATION AND AMORTIZATION EXPENSE | 103,068 | 103,053 | 93,042 |
Amortization of intangibles | 4,538 | 4,239 | 4,002 |
Operating Segments | Asset-Based | |||
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | 112,751 | 110,170 | 122,542 |
DEPRECIATION AND AMORTIZATION EXPENSE | 82,507 | 80,331 | 71,320 |
Assets acquired through notes payable and capital leases | 84,200 | 83,400 | 80,600 |
Operating Segments | ArcBest | |||
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | 9,823 | 6,154 | 24,219 |
DEPRECIATION AND AMORTIZATION EXPENSE | 13,090 | 13,612 | 12,886 |
Amortization of intangibles | 4,300 | 4,000 | 3,700 |
Operating Segments | FleetNet | |||
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | 1,089 | 403 | 1,007 |
DEPRECIATION AND AMORTIZATION EXPENSE | 1,089 | 1,210 | 1,119 |
Amortization of intangibles | 200 | 300 | 300 |
Other and eliminations | |||
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | 26,288 | 34,910 | 11,249 |
DEPRECIATION AND AMORTIZATION EXPENSE | $ 6,382 | $ 7,900 | $ 7,717 |
OPERATING SEGMENT DATA - (Opera
OPERATING SEGMENT DATA - (Operating Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
OPERATING EXPENSES | |||||||||||
Salaries, wages, and benefits | $ 1,367,433 | $ 1,345,672 | $ 1,297,129 | ||||||||
Rents, purchased transportation, and other costs of services | 869,584 | 823,683 | 790,612 | ||||||||
Fuel, supplies, and expenses | 304,126 | 270,138 | 292,039 | ||||||||
Depreciation and amortization | 103,068 | 103,053 | 93,042 | ||||||||
Other | 125,773 | 118,390 | 118,587 | ||||||||
Restructuring costs | $ 10,300 | 2,963 | 10,313 | ||||||||
Total consolidated operating expenses | $ 694,041 | $ 719,931 | $ 695,634 | $ 663,341 | $ 687,003 | $ 693,553 | $ 659,973 | $ 630,720 | $ 2,772,947 | $ 2,671,249 | $ 2,591,409 |
RESTRUCTURING CHARGES AND IM100
RESTRUCTURING CHARGES AND IMPAIRMENT (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)employee | |
Restructuring Charges and Impairment | ||||
Restructuring charges | $ 10,300 | $ 2,963 | $ 10,313 | |
Expected restructuring charges in 2018 | 1,000 | |||
Software impairment | ||||
Restructuring Charges and Impairment | ||||
Restructuring charges | $ 6,200 | 6,244 | ||
Contract terminations | ||||
Restructuring Charges and Impairment | ||||
Restructuring charges | 2,875 | |||
Severance and other | ||||
Restructuring Charges and Impairment | ||||
Restructuring charges | $ 2,963 | $ 1,194 | ||
Number of positions in headcount reduction | employee | 130 |
LEGAL PROCEEDINGS, ENVIRONME101
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS (Environmental Matters) (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)tankstate | Dec. 31, 2016USD ($) | |
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 | ||
Environmental Matters | ||
Reserve for environmental contingencies | $ | $ 0.4 | $ 0.5 |
QUARTERLY RESULTS OF OPERATI102
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2016USD ($)$ / sharesshares | Mar. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |||||||||||
Revenues | $ 710,721 | $ 744,280 | $ 720,368 | $ 651,088 | $ 688,214 | $ 713,923 | $ 676,627 | $ 621,455 | $ 2,826,457 | $ 2,700,219 | $ 2,666,905 |
Operating expenses | 694,041 | 719,931 | 695,634 | 663,341 | 687,003 | 693,553 | 659,973 | 630,720 | 2,772,947 | 2,671,249 | 2,591,409 |
OPERATING INCOME (LOSS) | 16,680 | 24,349 | 24,734 | (12,253) | 1,211 | 20,370 | 16,654 | (9,265) | 53,510 | 28,970 | 75,496 |
Other income (costs) | (660) | (281) | (599) | (394) | (115) | 185 | (273) | (480) | (1,934) | (683) | (2,762) |
Income tax provision (benefit) | (20,548) | 9,280 | 8,358 | (5,240) | (488) | 7,615 | 6,150 | (3,642) | (8,150) | 9,635 | 27,880 |
NET INCOME (LOSS) | $ 36,568 | $ 14,788 | $ 15,777 | $ (7,407) | $ 1,584 | $ 12,940 | $ 10,231 | $ (6,103) | $ 59,726 | $ 18,652 | $ 44,854 |
Earnings (loss) per common share | |||||||||||
Basic (in dollars per share) | $ / shares | $ 1.42 | $ 0.57 | $ 0.61 | $ (0.29) | $ 0.06 | $ 0.50 | $ 0.39 | $ (0.24) | $ 2.32 | $ 0.72 | $ 1.71 |
Diluted (in dollars per share) | $ / shares | $ 1.37 | $ 0.56 | $ 0.60 | $ (0.29) | $ 0.06 | $ 0.49 | $ 0.39 | $ (0.24) | $ 2.25 | $ 0.71 | $ 1.67 |
AVERAGE COMMON SHARES OUTSTANDING | |||||||||||
Basic (in shares) | shares | 25,637,568 | 25,671,535 | 25,767,791 | 25,684,475 | 25,669,280 | 25,724,550 | 25,791,026 | 25,822,522 | 25,683,745 | 25,751,544 | 26,013,716 |
Diluted (in shares) | shares | 26,540,716 | 26,393,359 | 26,291,641 | 25,684,475 | 26,272,487 | 26,211,524 | 26,246,868 | 25,822,522 | 26,424,389 | 26,256,570 | 26,530,127 |
Impact of Tax Reform Act | |||||||||||
Provisional tax benefit due to Tax Reform Act | $ 25,800 | ||||||||||
Earnings per diluted share of the tax effects of the Tax Cuts and Jobs Act | $ / shares | $ 0.97 | ||||||||||
Restructuring charges | |||||||||||
Restructuring charges | $ 10,300 | $ 2,963 | $ 10,313 | ||||||||
Restructuring charges, after-tax | $ 6,300 | ||||||||||
Impact of restructuring charges on earnings per share (in dollars per share) | $ / shares | (0.24) |
SCHEDULE II - VALUATION AND 103
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for doubtful accounts receivable and revenue adjustments | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | $ 5,437 | $ 4,825 | $ 5,731 |
Additions, Charged to Costs and Expenses | 4,081 | 1,643 | 998 |
Additions, Charged to Other Accounts | 2,416 | 980 | (144) |
Deductions | 4,277 | 2,011 | 1,760 |
Balance at End of Period | 7,657 | 5,437 | 4,825 |
Allowance for other accounts receivable | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | 849 | 1,029 | 1,701 |
Additions, Charged to Costs and Expenses | 72 | (180) | (672) |
Balance at End of Period | 921 | 849 | 1,029 |
Allowance for deferred tax assets | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | 293 | 354 | 332 |
Additions, Charged to Costs and Expenses | 22 | ||
Deductions | (551) | 61 | |
Balance at End of Period | $ 844 | $ 293 | $ 354 |