Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 22, 2019 | Jun. 30, 2018 | |
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, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 25,570,294 | ||
Entity Public Float | $ 1,165,189,894 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 190,186 | $ 120,772 |
Short-term investments | 106,806 | 56,401 |
Accounts receivable, less allowances (2018 – $7,380; 2017 – $7,657) | 297,051 | 279,074 |
Other accounts receivable, less allowances (2018 – $806; 2017 – $921) | 19,146 | 19,491 |
Prepaid expenses | 25,304 | 22,183 |
Prepaid and refundable income taxes | 1,726 | 12,296 |
Other | 9,007 | 12,132 |
TOTAL CURRENT ASSETS | 649,226 | 522,349 |
PROPERTY, PLANT AND EQUIPMENT | ||
Land and structures | 339,640 | 344,224 |
Revenue equipment | 858,251 | 793,523 |
Service, office, and other equipment | 199,230 | 179,950 |
Software | 138,517 | 129,589 |
Leasehold improvements | 9,365 | 8,888 |
TOTAL PROPERTY, PLANT AND EQUIPMENT, GROSS | 1,545,003 | 1,456,174 |
Less allowances for depreciation and amortization | 913,815 | 865,010 |
PROPERTY, PLANT AND EQUIPMENT, net | 631,188 | 591,164 |
Balance at the beginning of the period | 108,320 | 108,320 |
INTANGIBLE ASSETS, net | 68,949 | 73,469 |
DEFERRED INCOME TAXES | 7,468 | 5,965 |
OTHER LONG-TERM ASSETS | 74,080 | 64,374 |
TOTAL ASSETS | 1,539,231 | 1,365,641 |
CURRENT LIABILITIES | ||
Accounts payable | 143,785 | 129,099 |
Income taxes payable | 1,688 | 324 |
Accrued expenses | 243,111 | 210,484 |
Current portion of long-term debt | 54,075 | 61,930 |
Current portion of pension and postretirement liabilities | 8,659 | 753 |
TOTAL CURRENT LIABILITIES | 451,318 | 402,590 |
LONG-TERM DEBT, less current portion | 237,600 | 206,989 |
PENSION AND POSTRETIREMENT LIABILITIES, less current portion | 31,504 | 39,827 |
OTHER LONG-TERM LIABILITIES | 44,686 | 15,616 |
DEFERRED INCOME TAXES | 56,441 | 49,157 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2018: 28,684,779 shares, 2017: 28,495,628 shares | 287 | 285 |
Additional paid-in capital | 325,712 | 319,436 |
Retained earnings | 501,389 | 438,379 |
Treasury stock, at cost, 2018: 3,097,634 shares; 2017: 2,851,578 shares | (95,468) | (86,064) |
Accumulated other comprehensive loss | (14,238) | (20,574) |
TOTAL STOCKHOLDERS' EQUITY | 717,682 | 651,462 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,539,231 | $ 1,365,641 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 7,380 | $ 7,657 |
Other accounts receivable, allowances (in dollars) | $ 806 | $ 921 |
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 | 28,684,779 | 28,495,628 |
Treasury stock, at cost, shares | 3,097,634 | 2,851,578 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
REVENUES | $ 774,279 | $ 826,158 | $ 793,350 | $ 700,001 | $ 710,721 | $ 744,280 | $ 720,368 | $ 651,088 | $ 3,093,788 | $ 2,826,457 | $ 2,700,219 | |||
OPERATING EXPENSES | 737,117 | 770,103 | 790,194 | 687,276 | 691,982 | 717,538 | 694,601 | 660,988 | 2,984,690 | 2,765,109 | 2,666,154 | |||
OPERATING INCOME | 37,162 | 56,055 | 3,156 | 12,725 | 18,739 | 26,742 | 25,767 | (9,900) | 109,098 | 61,348 | 34,065 | |||
OTHER INCOME (COSTS) | ||||||||||||||
Interest and dividend income | 3,914 | 1,293 | 1,523 | |||||||||||
Interest and other related financing costs | (9,468) | (6,342) | (5,150) | |||||||||||
Other, net | (19,158) | (4,723) | (2,151) | |||||||||||
TOTAL OTHER INCOME (COSTS) | (16,492) | (2,064) | (2,422) | (3,734) | (2,719) | (2,674) | (1,632) | (2,747) | (24,712) | (9,772) | (5,778) | |||
INCOME BEFORE INCOME TAXES | 84,386 | 51,576 | 28,287 | |||||||||||
INCOME TAX PROVISION (BENEFIT) | 5,371 | 13,215 | (499) | (963) | (20,548) | 9,280 | 8,358 | (5,240) | 17,124 | (8,150) | 9,635 | |||
NET INCOME | $ 15,299 | $ 40,776 | $ 1,233 | $ 9,954 | $ 36,568 | $ 14,788 | $ 15,777 | $ (7,407) | $ 67,262 | $ 59,726 | $ 18,652 | |||
EARNINGS PER COMMON SHARE | ||||||||||||||
Basic (in dollars per share) | $ 0.59 | $ 1.58 | $ 0.05 | $ 0.39 | $ 1.42 | $ 0.57 | $ 0.61 | $ (0.29) | $ 2.61 | [1] | $ 2.32 | [1] | $ 0.72 | [1] |
Diluted (in dollars per share) | $ 0.57 | $ 1.52 | $ 0.05 | $ 0.37 | $ 1.37 | $ 0.56 | $ 0.60 | $ (0.29) | $ 2.51 | $ 2.25 | $ 0.71 | |||
AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||
Basic (in shares) | 25,707,335 | 25,697,509 | 25,670,325 | 25,642,871 | 25,637,568 | 25,671,535 | 25,767,791 | 25,684,475 | 25,679,736 | 25,683,745 | 25,751,544 | |||
Diluted (in shares) | 26,682,262 | 26,795,659 | 26,699,549 | 26,596,376 | 26,540,716 | 26,393,359 | 26,291,641 | 25,684,475 | 26,698,831 | 26,424,389 | 26,256,570 | |||
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 | $ 0.32 | |||
[1] | The Company uses the twoclass method for calculating earnings per share. See Note L. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
NET INCOME | $ 67,262 | $ 59,726 | $ 18,652 |
Pension and other postretirement benefit plans: | |||
Net actuarial loss, net of tax of: (2018 – $477; 2017 – $1,682; 2016 – $805) | (1,376) | (2,640) | (1,267) |
Pension settlement expense, net of tax of: (2018 – $3,327; 2017 – $1,617; 2016 –$1,256) | 9,598 | 2,539 | 1,973 |
Amortization of unrecognized net periodic benefit costs, net of tax of: (2018 – $740; 2017 – $1,446; 2016 – $1,849) | |||
Net actuarial loss | 2,204 | 2,388 | 3,021 |
Prior service credit | (69) | (116) | (116) |
Interest rate swap and foreign currency translation: | |||
Change in unrealized income (loss) on interest rate swap, net of tax of: (2018 – $84; 2017 – $402; 2016 – $139) | 236 | 621 | 216 |
Change in foreign currency translation, net of tax of: (2018 – $241; 2017 – $33; 2016 – $149) | (681) | 51 | 252 |
OTHER COMPREHENSIVE INCOME, net of tax | 9,912 | 2,843 | 4,079 |
TOTAL COMPREHENSIVE INCOME | $ 77,174 | $ 62,569 | $ 22,731 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net actuarial loss, tax expense (benefit) | $ (477) | $ (1,682) | $ (805) |
Pension settlement expense, tax | 3,327 | 1,617 | 1,256 |
Amortization of unrecognized net periodic benefit costs, tax | 740 | 1,446 | 1,849 |
Change in unrealized income (loss) on interest rate swap, tax expense (benefit) | 84 | 402 | 139 |
Change in foreign currency translation, tax expense (benefit) | $ (241) | $ 33 | $ 149 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In CapitalAdjustment | Additional Paid-In Capital | Retained EarningsAdjustment | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Adjustment | Total |
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, 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 | |||||||||
Adjustments to beginning retained earnings for adoption of accounting standards | ASC Topic 718, Compensation – Stock Compensation | $ 402 | $ (244) | $ 158 | ||||||
Net income | 59,726 | 59,726 | |||||||
Other comprehensive income, 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 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Adjustments to beginning retained earnings for adoption of accounting standards | ASC Topic 606 and ASC Topic 220 | 3,992 | (3,576) | 416 | ||||||
Adjusted Balances | $ 285 | 319,436 | 442,371 | $ (86,064) | (24,150) | 651,878 | |||
Net income | 67,262 | 67,262 | |||||||
Other comprehensive income, net of tax | 9,912 | 9,912 | |||||||
Issuance of common stock under share-based compensation plans | $ 2 | (2) | |||||||
Issuance of common stock under share-based compensation plans (in shares) | 189 | ||||||||
Tax effect of share-based compensation plans | (2,135) | (2,135) | |||||||
Share-based compensation expense | 8,413 | 8,413 | |||||||
Purchase of treasury stock | $ (9,404) | (9,404) | |||||||
Purchase of treasury stock (in shares) | 246 | ||||||||
Dividends declared on common stock | (8,244) | (8,244) | |||||||
Balances at Dec. 31, 2018 | $ 287 | $ 325,712 | $ 501,389 | $ (95,468) | $ (14,238) | $ 717,682 | |||
Balances (in shares) at Dec. 31, 2018 | 28,685 | 3,098 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING ACTIVITIES | |||
Net income | $ 67,262 | $ 59,726 | $ 18,652 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 104,114 | 98,530 | 98,814 |
Amortization of intangibles | 4,521 | 4,538 | 4,239 |
Impairment of long-lived assets | 6,244 | ||
Pension settlement expense | 12,925 | 4,156 | 3,229 |
Share-based compensation expense | 8,413 | 6,958 | 7,588 |
Provision for losses on accounts receivable | 2,336 | 4,081 | 1,643 |
Deferred income tax provision (benefit) | 1,872 | (10,213) | 9,522 |
Gain on sale of property and equipment | (59) | (75) | (3,335) |
Gain on sale of subsidiaries | (1,945) | (152) | |
Changes in operating assets and liabilities: | |||
Receivables | (23,554) | (19,588) | (23,809) |
Prepaid expenses | (2,988) | (64) | (1,393) |
Other assets | (4,341) | (4,231) | (4,355) |
Income taxes | 12,169 | (2,144) | 6,236 |
Multiemployer pension fund withdrawal liability | 22,602 | ||
Accounts payable, accrued expenses, and other liabilities | 52,020 | 10,393 | (11,335) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 255,347 | 151,915 | 111,940 |
INVESTING ACTIVITIES | |||
Purchases of property, plant and equipment, net of financings | (43,992) | (65,781) | (68,271) |
Proceeds from sale of property and equipment | 4,256 | 4,279 | 8,804 |
Proceeds from sale of subsidiaries | 4,680 | 2,490 | 2,780 |
Purchases of short-term investments | (108,495) | (73,459) | (69,400) |
Proceeds from sale of short-term investments | 58,698 | 73,842 | 74,167 |
Business acquisitions, net of cash acquired | (24,780) | ||
Capitalization of internally developed software | (10,097) | (9,840) | (10,472) |
NET CASH USED IN INVESTING ACTIVITIES | (94,950) | (68,469) | (87,172) |
FINANCING ACTIVITIES | |||
Borrowings under accounts receivable securitization program | 10,000 | ||
Payments on long-term debt | (71,260) | (68,924) | (52,202) |
Net change in book overdrafts | 262 | (502) | (4,171) |
Deferred financing costs | (202) | (937) | |
Payment of common stock dividends | (8,244) | (8,264) | (8,318) |
Purchases of treasury stock | (9,404) | (6,019) | (9,510) |
Payments for tax withheld on share-based compensation | (2,135) | (3,270) | (1,682) |
NET CASH USED IN FINANCING ACTIVITIES | (90,983) | (77,916) | (75,883) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 69,414 | 5,530 | (51,115) |
Cash and cash equivalents and restricted cash at beginning of period | 120,772 | 115,242 | 166,357 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 190,186 | 120,772 | 115,242 |
NONCASH INVESTING ACTIVITIES | |||
Equipment financed | 94,016 | 84,170 | 83,366 |
Accruals for equipment received | $ 2,807 | $ 1,734 | $ 397 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | 12 Months Ended |
Dec. 31, 2018 | |
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 69% of the Company’s 2018 total revenues before other revenues and intercompany eliminations. As of December 2018, approximately 82% of the Asset-Based segment’s employees were covered under a collective bargaining agreement, the ABF National Master Freight Agreement (the “2018 ABF NMFA”), with the International Brotherhood of Teamsters (the “IBT”) which was ratified on May 10, 2018 by a majority of ABF’s IBT member employees who voted. A majority of the supplements to the 2018 ABF NMFA also passed. Following ratification of the remaining supplements, the 2018 ABF NMFA was implemented on July 29, 2018, effective retroactive to April 1, 2018, and will remain in effect through June 30, 2023. The major economic provisions of the 2018 ABF NMFA include restoration of one week of vacation that was previously reduced in the prior collective bargaining agreement, which begins accruing on anniversary dates on or after April 1, 2018, with the new vacation eligibility schedule being the same as the applicable 2008 to 2013 supplemental agreements; wage rate increases in each year of the contract, beginning July 1, 2018; ratification bonuses for qualifying employees; profit-sharing bonuses upon the Asset-Based segment’s achievement of certain annual operating ratios for any full calendar year under the contract; and changes to purchased transportation provisions with certain protections for road drivers as specified in the contract. The 2018 ABF NMFA and the related supplemental agreements provide for contributions to multiemployer pension plans frozen at the current rates for each fund, continuation of existing health coverage, and annual contribution rate increases to multiemployer health and welfare plans maintained for the benefit of ABF's employees who are members of the IBT. 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. The remaining $4.5 million of contingent consideration was paid from escrow in January 2019. As the acquired business is not significant to the Company’s consolidated operating results and financial condition, pro forma financial information and the purchase price allocation of acquired assets and liabilities has not been presented. The results of the acquired operations subsequent to the acquisition date 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, which was received during 2018. 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. These moving services subsidiaries were 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 period operating expenses, segment operating expenses, operating income, and other income (costs) in our consolidated financial statements to conform to the current year presentation of components of net periodic benefit cost in accordance with the amendment to Accounting Standards Codification (“ASC”) Topic 715, Compensation – Retirement Benefits , which was effective for the Company on January 1, 2018 (see the Adopted Accounting Pronouncements within Note B). There was no change to consolidated net income or earnings per share as a result of the change in presentation under the new standard. |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
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 and U.S. Treasury securities 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. Certificates of deposit are valued at cost plus accrued interest, which approximates fair value. Held-to-maturity U.S. Treasury securities are recorded at amortized cost with interest and amortization of premiums and discounts included in interest income. Quarterly, the Company evaluates held-to-maturity securities for any other-than-temporary impairments related to any intention to sell or requirement to sell before its amortized costs are recovered. If a security is considered to be other-than-temporarily impaired, the difference between amortized cost and the amount that is determined to be recoverable is recorded in earnings. Restricted Cash: Restricted cash consisted of cash deposits at December 31, 2016. Cash that was pledged as collateral, primarily for the Company’s outstanding letters of credit, was classified as restricted. The Company’s letters of credit were 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 was classified consistent with the classification of the liabilities to which it related and in accordance with the duration of the letters of credit. Concentration of Credit Risk: The Company is potentially subject to concentrations of credit risk related to the portion of its 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 2018, 2017, or 2016 or more than 6% of its accounts receivable balance at December 31, 2018 and 2017. 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 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 $0.7 million and $1.4 million are reported within other noncurrent assets as of December 31, 2018 and 2017, respectively. At December 31, 2018 and 2017, 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. 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). For annual and interim impairment tests, the Company is 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 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, which are recorded as noncurrent by jurisdiction, 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 years ended December 31, 2018 and 2017 were impacted by the recognition of the 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 $17.5 million and $17.2 million for the year ended December 31, 2018 and 2017, respectively. The change in book overdrafts is reported as a component of financing activities within the statement of cash flows. Insurance Reserves : 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 service cost component of net periodic benefit cost for the postretirement health benefit plan is included in operating expenses. The components of net periodic benefit cost other than service cost, including pension settlement expense, for the nonunion defined benefit pension plan, the SBP, and the postretirement health benefit plan are recorded within the other, net line item of other income (costs). 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. The discount rates used to discount the plans’ obligations, and the expected rate of return applied to the fair value of plan assets for the nonunion defined benefit pension plan, impact the Company’s expense for these plans. For ongoing plans, the discount rate is determined by matching projected cash distributions with appropriate high‑quality corporate bond yields in a yield curve analysis. For the nonunion defined benefit pension plan, the Company establishes the expected rate of return on plan assets by considering the historical and 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. 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. In November 2017, an amendment was executed to terminate the nonunion defined benefit pension plan with a termination date of December 31, 2017. In September 2018, the plan received a favorable determination letter from the U.S. Internal Revenue Service (the “IRS”) regarding qualification of the plan termination. Following receipt of the determination letter, the plan’s actuarial assumptions were updated to remeasure the benefit obligation on a plan termination basis as of September 30, 2018 in connection with recognition of the quarterly pension settlement charge. The Company made assumptions for participant benefit elections, rate of return, and discount rates, including the annuity contract interest rate. These assumptions were updated as of December 31, 2018. For plan termination assumptions, the Company utilized a short-term discount rate which represents the Company’s current borrowing rate and an annuity contract interest rate based on current published rates. The nonunion defined benefit pension plan began making lump sum distributions related to the plan termination in fourth quarter 2018. In first quarter 2019, the plan will settle remaining obligations for deferred benefits with the purchase of nonparticipating annuity contracts from insurance companies, and the Company will make a cash contribution to the plan for the amount required to fund benefit distributions and annuity contract purchases in excess of plan assets. Revenue Recognition: Revenues are recognized when or as control of the promised services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Asset-Based Segment Asset-Based segment revenues consist primarily of less-than-truckload freight delivery. Performance obligations are satisfied upon final delivery of the freight to the specified destination. Revenue is recognized based on the 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 period. Because the bill-by-bill methodology utilizes the approximate location of the shipment in the delivery process to determine the revenue to recognize, management believes it to be a reliable method. Certain contracts may provide for volume-based or other discounts which are accounted for as variable consideration. The Company estimates these amounts based on a historical expectation of discounts to be earned by customers, and revenue is recognized based on the estimates. Revenue adjustments may also occur due to rating or other billing adjustments. The Company estimates revenue adjustments based on historical information and revenue is recognized accordingly at the time of shipment. Management believes that actual amounts will not vary significantly from estimates of variable consideration. 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 primarily responsible for fulfilling delivery to the customer and maintains discretion in setting the price for the services. ArcBest Segment ArcBest segment revenues consist primarily of asset-light logistics services using third-party vendors to provide transportation services. ArcBest segment revenue is generally recognized based on the relative transit time in each reporting period using estimated standard delivery times for freight in transit at the end of the reporting period. Purchased transportation expense is recognized as incurred consistent with the recognition of revenue. Prior to the adoption of ASC Topic 606, Revenue from Contracts with Customers , on January 1, 2018, as further discussed in Adopted Accounting Pronouncements within this Note, ArcBest segment revenue was recognized based on the delivery of the shipment to the customer-designated location. Revenue and purchased transportation expense are reported on a gross basis for shipments and services where the Company utilizes a third-party carrier for pickup and delivery but remains primarily responsible to the customer for delivery and maintains discretion in setting the price for the service. FleetNet Segment FleetNet segment revenues consist of service fee revenue, roadside repair revenue and routine maintenance services revenue. Service fee revenue for the FleetNet segment is recognized upon response to the service event. Repair and routine maintenance service revenue for the FleetNet segment is recognized upon completion of the service by third-party vendors. Revenue and expense from repair and maintenance services performed by third-party vendors are reported on a gross basis as FleetNet controls the services prior to transfer to the customer and remains primarily responsible to the customer for completion of the services. Other Recognition and Disclosure The Company records deferred revenue when cash payments are received or due in advance of performance under the contract. Deferred revenues totaled $0.5 million and $0.6 million at December 31, 2018 and 2017, respectively, and are recorded in accrued expenses in the consolidated balance sheets. Payment terms with customers may vary depending on the service provided, location or specific agreement with the customer. The term between invoicing and when payment is due is not significant. For certain services, payment is required before the services are provided to the customer. The Company expenses sales commissions when incurred because the amortization period is one year or less. The Company has elected to apply the practical expedient to not disclose the value of unsatisfied performance obligations for contracts with an original length of one year or less or contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed. 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. The Company elected to reclassify the stranded income tax effects resulting from the Tax Reform Act from accumulated other comprehensive loss to retained earnings as of January 1, 2018 (see Adopted Accounting Pronouncements within this Note). 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 for restricted stock units awarded prior to 2018 and at the end of a four-year period following the date of grant for subsequent grants. Awards granted to non‑employee directors 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. As a result of applying the provisions of 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, the Company recognized a cumulative effect adjustment to the December 31, 2016 opening balances of retained earnings, additional paid-in capital, and deferred income tax liability of $0.2 million, and $0.4 million, and $0.2 million, respectively. 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 ASC Topic 606, Re |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
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 and short‑term investments: December 31 December 31 2018 2017 (in thousands) Cash and cash equivalents Cash deposits (1) $ 124,938 $ 86,510 Variable rate demand notes (1)(2) 19,786 19,744 Money market funds (3) 42,470 14,518 U.S. Treasury securities (4) 2,992 — Total cash and cash equivalents $ 190,186 $ 120,772 Short-term investments Certificates of deposit (1) $ 82,949 $ 56,401 U.S. Treasury securities (4) 23,857 — Total short-term investments $ 106,806 $ 56,401 (1) Recorded at cost plus accrued interest, which approximates fair value. (2) Amounts may be redeemed on a daily basis with the original issuer. (3) Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note). (4) Recorded at amortized cost plus accrued interest, which approximates fair value at December 31, 2018. U.S. Treasury securities with a maturity date within 90 days of the purchase date are classified as cash equivalents. U.S. Treasury securities included in short-term investments are held-to-maturity investments with maturity dates of less than one year. 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, 2018 and 2017, cash, cash equivalents, and short-term investments totaling $94.7 million and $61.1 million, respectively, were not either FDIC insured or direct obligations of the U.S. government. 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: 2018 2017 (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) 40,000 40,000 45,000 45,000 Notes payable (3) 181,409 181,560 153,441 152,131 $ 291,409 $ 291,560 $ 268,441 $ 267,131 (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, 2018 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) $ 42,470 $ 42,470 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,342 2,342 — — Interest rate swaps (3) 801 — 801 — $ 45,613 $ 44,812 $ 801 $ — Liabilities: Contingent consideration (4) $ 4,472 $ — $ — $ 4,472 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 swaps (3) 481 — 481 — $ 17,358 $ 16,877 $ 481 $ — Liabilities: Contingent consideration (4) $ 6,970 $ — $ — $ 6,970 (1) Included in cash and cash equivalents. (2) Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third‑party brokerage firm. Included in other long‑term assets, with a corresponding liability reported within other long‑term liabilities. (3) Included in other long‑term assets. 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, 2018 and 2017 and considers the interest rate swap valuations in Level 2 of the fair value hierarchy. (4) Included in accrued expenses. At December 31, 2018, the fair value of the contingent consideration for an earn-out agreement related to the September 2016 acquisition of LDS represents the final accrued payment and was based on calculations performed for the earn-out period which ended August 31, 2018. Prior to the end of the earn-out period, the estimated fair value of contingent consideration was determined by assessing Level 3 inputs with a discounted cash flow approach using various probability-weighted scenarios. As of December 31, 2017, the Level 3 assessments utilized 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 of 12.5%. 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, 2016 $ 6,775 Contingent consideration liability recorded at fair value for business acquisition — Change in fair value included in operating expenses 195 Balances at December 31, 2017 $ 6,970 Payments (1) (3,528) Change in fair value included in operating expenses 1,030 Balances at December 31, 2018 $ 4,472 (1) Payments released from escrow account that is reported in other current assets in the consolidated balance sheets. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
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, 2016 $ 108,875 $ 108,245 $ 630 Goodwill divested (1) (661) (661) — Purchase accounting adjustments 106 106 — Balances December 31, 2018 and 2017 (2) $ 108,320 $ 107,690 $ 630 (1) 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. (2) Goodwill was not adjusted during the year ended December 31, 2018. Intangible assets consisted of the following as of December 31: 2018 2017 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 $ 24,130 $ 36,301 $ 60,431 $ 19,745 $ 40,686 Other 9 1,032 684 348 1,032 549 483 13 61,463 24,814 36,649 61,463 20,294 41,169 Indefinite-lived intangible assets Trade name N/A 32,300 N/A 32,300 32,300 N/A 32,300 Total intangible assets N/A $ 93,763 $ 24,814 $ 68,949 $ 93,763 $ 20,294 $ 73,469 The future amortization for intangible assets and software acquired through business acquisitions as of December 31, 2018 were as follows: Intangible Acquired Total Assets Software (1) (in thousands) 2019 $ 5,463 $ 4,482 $ 981 2020 4,471 4,454 17 2021 4,418 4,412 6 2022 4,385 4,385 — 2023 4,287 4,287 — Thereafter 14,629 14,629 — Total amortization $ 37,653 $ 36,649 $ 1,004 (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, 2018 and 2017, and it was determined that there was no impairment of the recorded balances. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
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 reduced 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 $24.5 million at December 31, 2017, pursuant to the provisions of ASC Topic 740, Income Taxes , which requires the impact of tax law changes to be recognized in the period in which the legislation is enacted. An additional reduction of net deferred income tax liabilities of $3.8 million was recognized in 2018 related to the reversal of temporary differences through the Company’s fiscal tax year end of February 28, 2018. As of December 31, 2018, the accounting for the income tax effect of the Tax Reform Act has been completed, and all amounts recorded are considered final. In addition to the effect on net deferred tax liabilities, the Company recorded a reduction in current income tax expense of $0.1 million and $1.3 million at December 31, 2018 and 2017, respectively, as a result of the Tax Reform Act, to reflect the Company’s application of a blended rate due to the use of a fiscal year rather than a calendar year for U.S. income tax filing. Due to the fact that the Company’s fiscal tax year included 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 the twelve months ended December 31, 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. In computing total tax expense for the twelve months ended December 31, 2018, a federal blended rate of 32.74% was applied to the two months ended February 28, 2018, and a 21% federal statutory rate was applied to the ten months ended December 31, 2018. The Tax Reform Act made many other changes in the tax law applicable to corporations, including the one-time transition tax on earnings of foreign subsidiaries, the tax on global intangible low-taxed income, and the tax on base erosion payments. At December 31, 2018, the Company has determined these provisions of the Tax Reform Act will not have a significant impact on the Company’s consolidated financial statements. Significant components of the provision or benefit for income taxes for the years ended December 31 were as follows: 2018 (1) 2017 (1) 2016 (in thousands, except percentages) Current provision (benefit): Federal $ 9,750 $ (1,969) $ (604) State 3,264 3,701 (335) Foreign 2,238 331 1,052 15,252 2,063 113 Deferred provision (benefit): Federal 1,157 (9,312) 8,161 State 737 (867) 1,354 Foreign (22) (34) 7 1,872 (10,213) 9,522 Total provision (benefit) for income taxes $ 17,124 $ (8,150) $ 9,635 (1) For 2018 and 2017, the income tax provision (benefit) reflects the impact of the Tax Reform Act, as previously disclosed in this Note. Deferred income tax liabilities were reduced by $3.8 million and $24.5 million for 2018 and 2017, respectively, as a result of the decrease in the U.S. corporate statutory tax rate from 35% to 21% effective January 1, 2018. Current tax expense was reduced by $0.1 million and $1.3 million for 2018 and 2017, respectively, as a result of the tax 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: 2018 (2) 2017 (1)(2) 2016 (1) (in thousands) Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets $ 23,153 $ 21,876 $ 12,182 Amortization of intangibles (763) (1,030) (3,623) Changes in reserves for workers’ compensation, third-party casualty, and cargo claims 469 (812) 362 Revenue recognition (2,524) 332 1,862 Allowance for doubtful accounts (115) (719) (295) Nonunion pension and other retirement plans (2,810) (1,977) 3,861 Multiemployer pension fund withdrawal (3) (5,818) — — Federal net operating loss carryforwards utilized 125 28 161 State net operating loss carryforwards utilized (generated) 621 229 (304) State depreciation adjustments (1,761) (1,244) (758) Share-based compensation (529) 352 (681) Valuation allowance increase (decrease) (744) 401 (61) Other accrued expenses (4,881) (852) (4,108) Impact of the Tax Reform Act (2) (3,772) (24,542) — Other 1,221 (2,255) 924 Deferred tax provision (benefit) $ 1,872 $ (10,213) $ 9,522 (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% for 2017 and 2016. (2) For 2018 and 2017, the effect of the change in the U.S. corporate tax rate from 35% to 21% in accordance with the Tax Reform Act is reflected as a separate component of the deferred tax provision. (3) ABF Freight recorded a multiemployer pension fund withdrawal liability in 2018 resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund (see Note I). Significant components of the deferred tax assets and liabilities at December 31 were as follows: 2018 2017 (1) (in thousands) Deferred tax assets: Accrued expenses $ 39,885 $ 36,843 Pension liabilities 2,754 4,413 Multiemployer pension fund withdrawal (2) 5,710 — Postretirement liabilities other than pensions 7,660 6,236 Share-based compensation 4,893 4,466 Federal and state net operating loss carryovers 1,152 1,781 Other 1,355 1,508 Total deferred tax assets 63,409 55,247 Valuation allowance (53) (844) Total deferred tax assets, net of valuation allowance 63,356 54,403 Deferred tax liabilities: Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets 93,525 73,725 Intangibles 14,066 14,573 Revenue recognition 1,513 6,172 Prepaid expenses 3,225 3,125 Total deferred tax liabilities 112,329 97,595 Net deferred tax liabilities $ (48,973) $ (43,192) (1) The amounts for deferred tax assets and liabilities reflect the applicable tax rates for each category, with the U.S. federal rate 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. (2) ABF Freight recorded a multiemployer pension fund withdrawal liability in 2018 resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund (see Note I). 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: 2018 (1) 2017 (2) 2016 (2) (in thousands, except percentages) Income tax provision at the statutory federal rate $ 17,721 $ 18,052 $ 9,901 Federal income tax effects of: State income taxes (840) (992) (357) Nondeductible expenses 946 1,551 1,653 Life insurance proceeds and changes in cash surrender value 7 (927) (1,001) Alternative fuel credit (1,203) — (1,180) Increase (decrease) in valuation allowances (891) 401 (61) Increase (decrease) in uncertain tax positions 933 (720) — Settlement of share-based compensation (649) (1,129) — Impact of the Tax Reform Act on current tax (2) (52) (1,288) — Impact of the Tax Reform Act on deferred tax (2) (3,772) (24,542) — Other (3) (1,293) (1,687) (1,398) Federal income tax provision (benefit) 10,907 (11,281) 7,557 State income tax provision 4,001 2,834 1,019 Foreign income tax provision 2,216 297 1,059 Total provision (benefit) for income taxes $ 17,124 $ (8,150) $ 9,635 Effective tax (benefit) rate 20.3 % (15.8) % 34.1 % (1) Amounts in this reconciliation reflect the statutory U.S. income tax rate in effect for the applicable year after the enactment of the Tax Reform Act, which is 21%. The effect of applying a blended rate of 32.74% for the two months ended February 28, 2018, in accordance with the Tax Reform Act, is reflected in separate components of the reconciliation. (2) 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. (3) Includes foreign income tax provision, as presented in this table. Income taxes paid, excluding income tax refunds, totaled $21.8 million, $22.7 million, and $24.3 million in 2018, 2017, and 2016, respectively. Income tax refunds totaled $18.5 million, $18.5 million, and $32.5 million in 2018, 2017, and 2016, 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 when it predominantly occurred in the fourth quarter. As a result of applying the provisions of the amendment, the tax rates for 2018 and 2017 reflects a benefit of 0.8% and 2.2%, respectively. The tax benefit of dividends on share based payment awards was less than $0.1 million each for 2018, 2017, and 2016. The 2016 amount was reflected in paid in capital. The Company had state net operating loss carryforwards of $7.9 million and state contribution carryforwards of $1.1 million at December 31, 2018. These state net operating loss and contribution carryforwards expire in 5 to 20 years, with the majority of states allowing 15 or 20 years. At December 31, 2018 and 2017, the Company had a valuation allowance of $0.1 million related to state contribution carryforwards, due to the uncertainty of realization. At December 31, 2017, the Company established a valuation allowance of $0.7 million related to certain state net operating loss carryforwards set to expire in 5 years. Due to tax-planning strategies that included decreased state tax depreciation, state taxable income was generated for 2018, and a portion of the state net operating loss carryforwards for which the valuation allowance was established were utilized. In addition, management concluded, based on available evidence, that it was more likely than not that remaining net operating losses would be utilized, and the remaining valuation allowance of $0.7 million was reversed. 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 2014 are closed by the applicable statute of limitations. The Company is under examination by three state taxing authorities at December 31, 2018. The Company is not under examination by foreign taxing authorities at December 31, 2018. 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. At December 31, 2018, Panther had federal net operating loss carryforwards of approximately $1.3 million from periods ending on or prior to June 15, 2012. State net operating loss carryforwards for the same periods are approximately $5.3 million. Federal net operating loss carryforwards will expire if not used within 13 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. At December 31, 2018, 2017, and 2016, the Company had reserves for uncertain tax positions totaling of $1.0 million, less than $0.1 million, and $0.7 million, respectively. A $0.7 million reserve for uncertain tax positions as of December 31, 2016 was related to 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 was removed at December 31, 2017. The Company also had a reserve for uncertain tax positions of less than $0.1 million at December 31, 2016, and maintained the reserve at December 31, 2018, due to uncertainty of how the IRS will interpret regulations related to research and development credits claimed on the 2015 federal return. A reserve for uncertain tax positions of $0.9 million was established at December 31, 2018 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 expires in the first quarter of 2020. For 2018, 2017 and 2016, interest of less than $0.1 million was paid related to federal, foreign and state income taxes. Accrued interest on the foreign income tax obligations of less than $0.1 million remained at December 31, 2018. 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, 2018 | |
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 $27.3 million, $31.7 million, and $26.7 million in 2018, 2017, and 2016, respectively. The future minimum rental commitments, net of minimum rentals to be received under noncancelable subleases, as of December 31, 2018 for all noncancelable operating leases were as follows: Equipment Land and and Total Structures (1) Other (in thousands) 2019 $ 19,130 $ 18,067 $ 1,063 2020 14,620 13,676 944 2021 10,972 10,716 256 2022 7,125 7,125 — 2023 4,477 4,477 — Thereafter 5,850 5,850 — $ 62,174 $ 59,911 $ 2,263 (1) Excludes future minimum payments for leases which were executed but had not yet commenced as of December 31, 2018 of approximately $21.0 million which will be paid over 10 years. |
LONG-TERM DEBT AND FINANCING AR
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2018 | |
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 2018 2017 (in thousands) Credit Facility (interest rate of 3.8% (1) at December 31, 2018) $ 70,000 $ 70,000 Accounts receivable securitization borrowings (interest rate of 3.2% at December 31, 2018) 40,000 45,000 Notes payable (weighted-average interest rate of 3.4% at December 31, 2018) 181,409 153,441 Capital lease obligations (weighted-average interest rate of 5.6% at December 31, 2018) 266 478 291,675 268,919 Less current portion 54,075 61,930 Long-term debt, less current portion $ 237,600 $ 206,989 (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 3.10% and 3.35% based on the margin of the Credit Facility as of December 31, 2018 and 2017, respectively. Scheduled maturities of long ‑ term debt obligations as of December 31, 2018 were as follows: Accounts Receivable Credit Securitization Notes Capital Lease Total Facility (1) Program (1) Payable Obligations (2) (in thousands) 2019 $ 63,608 $ 2,691 $ 1,396 $ 59,281 $ 240 2020 47,540 2,603 1,345 43,565 27 2021 85,514 2,540 41,091 41,876 7 2022 104,449 71,318 — 33,130 1 2023 17,124 — — 17,124 — Thereafter 59 — — 59 — Total payments 318,294 79,152 43,832 195,035 275 Less amounts representing interest 26,619 9,152 3,832 13,626 9 Long-term debt $ 291,675 $ 70,000 $ 40,000 $ 181,409 $ 266 (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: 2018 2017 (in thousands) Revenue equipment $ 264,396 $ 269,950 Land and structures (service centers) 1,794 1,794 Software 1,484 486 Service, office, and other equipment 5,941 100 Total assets securing notes payable or held under capital leases 273,615 272,330 Less accumulated depreciation and amortization (1) 79,961 87,691 Net assets securing notes payable or held under capital leases $ 193,654 $ 184,639 (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 3.4% at December 31, 2018. The Company paid interest of $8.7 million, $5.8 million, and $4.5 million in 2018, 2017, and 2016, respectively, net of capitalized interest which totaled $0.2 million, $0.9 million, and $0.7 million for 2018, 2017 and 2016, respectively. Financing Arrangements Credit Facility The Company has a revolving credit facility (the “Credit Facility”) under its Second Amended and Restated Credit Agreement (the “Credit Agreement”) with an initial maximum credit amount of $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. The Company may request additional revolving commitments or incremental term loans thereunder up to an aggregate amount of $100.0 million, subject to certain additional conditions as provided in the Credit Agreement. As of December 31, 2018, the Company had available borrowing capacity of $130.0 million under the Credit Facility. Principal payments under the Credit Facility are due upon maturity of the facility on July 7, 2022; 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, 2018. 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 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 3.10% based on the margin of the Credit Facility as of December 31, 2018. The fair value of the interest rate swap of $0.3 million and $0.1 million was recorded in other long-term assets in the consolidated balance sheet at December 31, 2018 and 2017, respectively. 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 3.24% based on the margin of the Credit Facility as of December 31, 2018. The fair value of the interest rate swap of $0.5 million and $0.4 million was recorded in other long-term assets in the consolidated balance sheet at December 31, 2018 and 2017, respectively. 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, 2018 and 2017, and the change in the unrealized income on the interest rate swaps for the years ended December 31, 2018 and 2017 was reported in other comprehensive income, net of tax, in the consolidated statements of comprehensive income. The interest rate swaps are subject to certain customary provisions that could allow the counterparty to request immediate settlement of the fair value liability or asset 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, 2018. Accounts Receivable Securitization Program The Company’s accounts receivable securitization program was amended and extended in August 2018 to modify certain covenants and conditions and extend the maturity date of the program to October 1, 2021. The program allows for cash proceeds up to $125.0 million to be provided under the program and has 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 repaid $5.0 million of its borrowed amount under the accounts receivable securitization program during the fourth quarter of 2018. As of December 31, 2018 and 2017, $40.0 million and $45.0 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, 2018. 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, 2018, standby letters of credit of $16.6 million have been issued under the program, which reduced the available borrowing capacity to $68.4 million. Letter of Credit Agreements and Surety Bond Programs As of December 31, 2018 and 2017, the Company had letters of credit outstanding of $17.2 million and $18.3 million, respectively, (including $16.6 million and $17.7 million, respectively, issued under the accounts receivable securitization program). 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, 2018 and 2017, surety bonds outstanding related to the self-insurance program totaled $49.1 million and $60.4 million, respectively. Notes Payable The Company has financed the purchase of certain revenue equipment, other equipment, and software through promissory note arrangements, including $94.0 million, $84.2 million, and $83.4 million for revenue equipment and software in 2018, 2017, and 2016, respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
ACCRUED EXPENSES | |
ACCRUED EXPENSES | NOTE H – ACCRUED EXPENSES December 31 2018 2017 (in thousands) Workers’ compensation, third-party casualty, and loss and damage claims reserves $ 103,015 $ 99,969 Accrued vacation pay 41,474 36,034 Accrued compensation (1) 52,626 35,718 Taxes other than income 8,457 8,215 Other (1)(2) 37,539 30,548 Total accrued expenses (2) $ 243,111 $ 210,484 (1) Increases primarily due to accrued expenses related to incentive plans. (2) For the year ended December 31, 2017, $0.8 million related to the postretirement health benefit plan was reclassified from accrued expenses to current portion of pension and postretirement liabilities in the consolidated financial statements to conform to the current year presentation. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2018 | |
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 had 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). In November 2017, an amendment was executed to terminate the nonunion defined benefit pension plan with a termination date of December 31, 2017. In September 2018, the plan received a favorable determination letter from the IRS regarding qualification of the plan termination. Following receipt of the determination letter, the plan’s actuarial assumptions were updated to remeasure the benefit obligation on a plan termination basis as of September 30, 2018 in connection with recognition of the quarterly pension settlement charge. The Company made assumptions for participant benefit elections, rate of return, and discount rates, including the annuity contract interest rate. Benefit election forms were provided to plan participants and they had an election window during the fourth quarter of 2018 in which they could choose any form of payment allowed by the plan for immediate commencement of payment or defer payment until a later date. The plan began distributing immediate lump sum benefit payments in the fourth quarter of 2018. The plan will settle the remaining obligation for deferred benefits with the purchase of nonparticipating annuity contracts from insurance companies in first quarter 2019. The Company will make a cash contribution to the plan for the amount, if any, required to fund benefit distributions and annuity contract purchases in excess of plan assets. As part of the strategy to become more focused on reducing investment, interest rate, and longevity risks in the nonunion defined benefit pension plan, the plan purchased a $7.6 million nonparticipating annuity contract from an insurance company during the first quarter of 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 nonparticipating annuity contract purchase in 2017 and recognized pension settlement expense in 2018, 2017, and 2016 related to lump-sum benefit distributions from the plan. The pension settlement expense amounts are presented in the tables within this Note. Pension settlement charges related to the plan termination, including settlements for lump sum benefit distributions and annuity contract purchases, will occur in first quarter 2019. Based on estimates as of December 31, 2018 using available actuarial information, first quarter 2019 nonunion pension settlement expense is estimated to be approximately $4.0 million, or approximately $3.0 million after-tax, and cash funding could total approximately $7.0 million, although there can be no assurances in this regard. The final pension settlement charges and the actual amount the Company 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 the value of plan assets, the amount of lump-sum benefit distributions paid to participants, and the cost of the nonparticipating annuity contracts. Liquidation of plan assets and settlement of plan obligations is expected to be complete in first quarter 2019. 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. The SBP did not incur pension settlement expense related to lump ‑ sum distributions in 2018 or 2017. 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 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 2018 2017 2018 2017 2018 2017 (in thousands) Change in benefit obligations Benefit obligations at beginning of year $ 137,417 $ 152,006 $ 3,897 $ 4,794 $ 24,097 $ 25,532 Service cost — — — — 366 489 Interest cost 4,269 4,514 108 102 837 1,060 Actuarial (gain) loss (1) (3,685) 6,448 (57) (10) 4,957 (2,251) Benefits paid (105,522) (26,491) — (989) (769) (733) Settlement loss 894 940 — — — — Benefit obligations at end of year 33,373 137,417 3,948 3,897 29,488 24,097 Change in plan assets Fair value of plan assets at beginning of year 124,831 144,805 — — — — Actual return on plan assets 1,837 6,517 — — — — Employer contributions 5,500 — — 989 769 733 Benefits paid (105,522) (26,491) — (989) (769) (733) Fair value of plan assets at end of year 26,646 124,831 — — — — Funded status at period end $ (6,727) $ (12,586) $ (3,948) $ (3,897) $ (29,488) $ (24,097) Accumulated benefit obligation $ 33,373 $ 137,417 $ 3,948 $ 3,897 $ 29,488 $ 24,097 (1) The actuarial gain on the nonunion defined benefit pension plan for 2018, compared to the actuarial loss for 2017, was primarily due to an increase in the discount rate used to remeasure the plan obligation at December 31, 2018 versus December 31, 2017. The actuarial loss on the postretirement health benefit plan for 2018, versus the actuarial gain for 2017, was 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 2018 2017 2018 2017 2018 2017 (in thousands) Current liabilities (included in current portion of pension and postretirement liabilities) $ (6,727) $ — $ (937) $ — $ (995) $ (753) Noncurrent liabilities (included in pension and postretirement liabilities) — (12,586) (3,011) (3,897) (28,493) (23,344) Liabilities recognized $ (6,727) $ (12,586) $ (3,948) $ (3,897) $ (29,488) $ (24,097) 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 2018 2017 2016 2018 2017 2016 2018 2017 2016 (in thousands) Service cost $ — $ — $ — $ — $ — $ — $ 366 $ 489 $ 429 Interest cost 4,269 4,514 4,572 108 102 130 837 1,060 1,017 Expected return on plan assets (1,582) (5,712) (8,607) — — — — — — Amortization of prior service credit — — — — — — (93) (190) (190) Pension settlement expense 12,925 4,156 3,023 — — 206 — — — Amortization of net actuarial loss (1) 2,583 3,132 4,087 81 82 152 304 694 705 Net periodic benefit cost $ 18,195 $ 6,090 $ 3,075 $ 189 $ 184 $ 488 $ 1,414 $ 2,053 $ 1,961 (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 2018 (1) 2017 (2) 2016 (1) 2018 2017 (3) 2016 (in thousands, except per share data) Pension settlement distributions $ 105,279 $ 26,261 $ 16,515 $ — $ 989 $ 246 Pension settlement expense, pre-tax $ 12,925 $ 4,156 $ 3,023 $ — $ — $ 206 Pension settlement expense per diluted share, net of taxes $ 0.36 $ 0.10 $ 0.07 $ — $ — $ 0.01 (1) Pension settlement distributions represent lump‑sum benefit distributions, including participant-elected distributions associated with the plan’s termination for 2018. (2) Pension settlement distributions represent $18.7 million of lump‑sum benefit distributions and a $7.6 million nonparticipating annuity contract purchase. (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. 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 2018 2017 2018 2017 2018 2017 (in thousands) Unrecognized net actuarial loss $ 4,034 $ 22,588 $ 405 $ 543 $ 7,416 $ 2,764 Unrecognized prior service credit — — — — (34) (127) Total $ 4,034 $ 22,588 $ 405 $ 543 $ 7,382 $ 2,637 For ongoing plans, the discount rate is determined by matching projected cash distributions with appropriate high‑quality corporate bond yields in a yield curve analysis. Upon updating actuarial assumptions for the nonunion defined benefit pension plan on a termination basis (as presented for 2018 in the table below), a short-term discount rate which represents the Company’s current borrowing rate was utilized. 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 2018 2017 2018 2017 2018 2017 Discount rate % 3.1 % % 2.8 % % 3.5 % 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 2018 (1) 2017 (2) 2016 (3) 2018 2017 2016 2018 2017 2016 Discount rate 3.1 % 3.4 % 3.5 % 2.8 % 2.7 % 2.6 % 3.5 % 4.0 % 4.2 % Expected return on plan assets 1.4 % 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 2018 credit, and the interim discount rate established upon each quarterly settlement in 2018 of 3.6%, 3.8%, and 3.6% was used to calculate the expense for the second, third, and fourth quarter of 2018, respectively. (2) 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. (3) 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. The assumed health care cost trend rates for the Company’s postretirement health benefit plan at December 31 were as follows: 2018 2017 Pre-65 Post-65 Health care cost trend rate assumed for next year 8.0 % 8.3 % 5.5 % Rate to which the cost trend rate is assumed to decline 5.0 % 4.0 % 4.0 % Year that the rate reaches the cost trend assumed rate 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, 2018 are as follows: Nonunion Supplemental Postretirement Defined Benefit Benefit Health Pension Plan (1) Plan Benefit Plan (in thousands) 2019 $ 33,373 $ 938 $ 995 2020 $ — $ 2,169 $ 1,046 2021 $ — $ — $ 1,092 2022 $ — $ — $ 1,177 2023 $ — $ — $ 1,316 2024-2028 $ — $ 1,142 $ 7,031 (1) Estimated payments for 2019 represent the accumulated benefit obligation of the plan at December 31, 2018. The future benefit payments of the plan will depend on the amount of lump sum distributions and the cost to purchase nonparticipating annuity contracts to settle the remaining obligation for deferred benefits. The settlement of plan obligations is expected to be complete in first quarter 2019. Prior to liquidation of the nonunion defined benefit pension plan, the Company’s contributions to the 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. The Company did not have a required minimum cash contribution to the plan in 2018. However, in anticipation of funding the nonunion pension plan for termination, the Company made a $5.5 million voluntary tax-deductible contribution to the plan in September 2018. The plan’s actuary certified the adjusted funding target attainment percentage (“AFTAP”) to be 109.3% as of the January 1, 2018 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 discussed in this Note, the Company will be required to make a contribution to the plan to fund benefit distributions in excess of plan assets in first quarter 2019. 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 and expected returns for the plan’s current mix of investments. In consideration of plan termination in recent years, the overall objectives of the investment strategy for the Company’s nonunion defined benefit pension plan became more focused on asset preservation, while continuing to ensure the plan would 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. During the second half of 2017, a more conservative approach was taken to minimize the impact of market volatility by transferring the plan’s equity investments to short-duration debt instruments. The plan began liquidating its fixed income securities held in trust during fourth quarter 2018 to fund lump sum benefit distributions related to plan termination benefit elections of participants and in anticipation of distributing the remainder of nonunion defined benefit pension plan assets in first quarter 2019. As a result of the changes 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. The Company’s long‑term expected rate of return utilized in determining its 2018 nonunion defined benefit pension plan expense was 1.4%, net of estimated expenses expected to be paid from plan assets in 2018, and this rate was maintained as the short-term rate of return assumption under plan termination assumptions for the fourth quarter of 2018 and the first quarter of 2019. 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: 2018 Target Acceptable Weighted-Average Allocation Allocation Range 2018 2017 Income Securities Debt Instruments 70.0 % 20.0 % - 100.0 % — % 73.6 % Floating Rate Loan Fund 10.0 3.0 % - 100.0 % 25.5 13.1 Cash Equivalents Cash and Cash Equivalents 20.0 % - 100.0 % 74.5 13.3 100.0 % 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 or for other appropriate purposes. As previously discussed, the plan began liquidating its income securities in the fourth quarter of 2018 and is holding its investments primarily in cash equivalents as of December 31, 2018 as the plan advances towards plan termination. 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. The fair value of the Company’s nonunion defined benefit pension plan assets at December 31, 2018, 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) $ 19,856 $ 19,856 $ — $ — Debt Instruments (2) 10 — 10 — Floating Rate Loans (3) 6,780 6,780 — — $ 26,646 $ 26,636 $ 10 $ — (1) Consists primarily of money market mutual funds. (2) Includes a debt income security which was liquidated subsequent to December 31, 2018. The sale price of the security was used to determine the fair value at December 31, 2018.. (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, 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%), 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. Deferred Compensation Plans The Company has deferred salary agreements with certain executives for which liabilities of $2.5 million and $2.9 million were recorded as of December 31, 2018 and 2017, 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, 2018 and 2017, VSP balances of $2.3 million and $2.4 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 $6.1 million, $5.6 million, and $5.7 million for 2018, 2017, and 2016, 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 2018, 2017, and 2016, the Company recognized expense of $11.6 million, $8.3 million, and $5.0 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, 2018, 2017, and 2016, $18.3 million, $6.6 million, $3.9 million, respectively, were accrued for future payments under the plans. Other Plans Other long‑term assets include $49.3 million and $49.7 million at December 31, 2018 and 2017, 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 a loss of less than $0.1 million during 2018 associated with changes in the cash surrender value and proceeds from life insurance policies and gains of $2.6 million, and $2.9 million during 2017, and 2016, 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 2018 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 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 2018 ABF NMFA, which will remain in effect through June 30, 2023. 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 participates. Critical and declining status is applicable to critical status plans that are projected to become insolvent anytime within the next 14 plan years, or if the plan is projected to become insolvent within the next 19 plan years and either the plan’s ratio of inactive participants to active participants exceeds two to one or the plan’s funded percentage is less than 80%. Provisions of the Reform Act include, among others, providing qualifying plans the ability to self ‑ correct funding issues, subject to various requirements and restrictions, including applying to the U.S. Department of Treasury (the “Treasury Department”) for the reduction of certain accrued benefits. Based on the most recent annual funding notices the Company has received, most of which are for plan years ended December 31, 2017, approximately 62% of the Asset-Based contributions to multiemployer pension plans were made to plans that are in “critical and declining” status, including the Central States, Southeast and Southwest Areas Pension Plan (the “Central States Pension Plan”) discussed below, approximately 2% were made to plans that are in “critical status” but not “critical and declining” status, and approximately 4% were made to plans that are in “endangered status,” each as defined by the PPA. The Asset-Based segment’s participation in multiemployer pension plans is summarized in the table below. The multiemployer pension plans listed separately in the table represent plans that are individually significant to the Asset-Based segment based on the amount of plan contributions. The severity of a plan’s underfunded status was also considered in the analysis of individually significant funds to be separately disclosed. Significant multiemployer pension funds and key participation information were as follows: Pension FIP/RP Protection Act Status Contributions (d) EIN/Pension Zone Status (b) Pending/ (in thousands) Surcharge Legal Name of Plan Plan Number (a) 2018 2017 Implemented (c) 2018 2017 2016 Imposed (e) Central States, Southeast and Southwest Areas Pension Plan (1)(2) 36-6044243 Critical and Declining Critical and Declining Implemented (3) $ 74,177 $ 78,230 $ 77,891 No Western Conference of Teamsters Pension Plan (2) 91-6145047 Green Green No 25,268 26,320 25,075 No New England Teamsters Pension Fund (7)(8) 04-6372430 Critical and Declining (9) Critical and Declining (9) No 20,090 5,026 4,404 No Central Pennsylvania Teamsters Defined Benefit Plan (1)(2) 23-6262789 Green Green No 13,393 13,391 13,381 No I. B. of T. Union Local No. 710 Pension Fund (5)(6) 36-2377656 Green (4) Green (4) No 9,929 10,054 9,670 No Al |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE J – STOCKHOLDERS’ EQUITY Accumulated Other Comprehensive Loss Components of accumulated other comprehensive loss were as follows at December 31: 2018 2017 2016 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit costs $ (11,821) $ (25,768) $ (29,320) Interest rate swap 801 481 (542) Foreign currency translation (2,816) (1,894) (1,978) Total $ (13,836) $ (27,181) $ (31,840) After-tax amounts: Unrecognized net periodic benefit costs (1) $ (12,749) $ (19,715) $ (21,886) Interest rate swap 591 292 (329) Foreign currency translation (2,080) (1,151) (1,202) Total $ (14,238) $ (20,574) $ (23,417) (1) Includes $4.0 million related to a previous valuation allowance on deferred tax assets for nonunion defined benefit pension liabilities which will be reversed to retained earnings upon extinguishment of the nonunion defined benefit pension plan, which is expected to occur in first quarter 2019. The reclassification of stranded income tax effects related to this item is not permitted by the amendment to ASC Topic 220 which the Company adopted as of January 1, 2018 (see Note B). 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, 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 2,843 2,171 621 51 Balances at December 31, 2017 $ (20,574) $ (19,715) $ 292 $ (1,151) Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard (1) (3,576) (3,391) 63 (248) Balances at January 1, 2018 (24,150) (23,106) 355 (1,399) Other comprehensive income (loss) before reclassifications (1,821) (1,376) 236 (681) Amounts reclassified from accumulated other comprehensive loss 11,733 11,733 — — Net current-period other comprehensive income (loss) 9,912 10,357 236 (681) Balances at December 31, 2018 $ (14,238) $ (12,749) $ 591 $ (2,080) (1) The Company elected to reclassify the stranded income tax effects in accumulated other comprehensive loss to retained earnings as of January 1, 2018 as a result of adopting an amendment to ASC Topic 220 (see Note B). 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) 2018 2017 (in thousands) Amortization of net actuarial loss $ (2,968) $ (3,908) Amortization of prior service credit 93 190 Pension settlement expense (12,925) (4,156) Total, pre-tax (15,800) (7,874) Tax benefit 4,067 3,063 Total, net of tax $ (11,733) $ (4,811) (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: 2018 2017 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ $ $ 0.08 $ 2,066 Second quarter $ $ $ 0.08 $ 2,078 Third quarter $ $ $ 0.08 $ 2,063 Fourth quarter $ $ $ 0.08 $ 2,057 On January 25, 2019, the Company’s Board of Directors declared a dividend of $0.08 per share payable to stockholders of record as of February 8, 2019. 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 2018, the Company purchased 246,056 shares for an aggregate cost of $9.4 million, leaving $22.3 million available for repurchase under the program as of December 31, 2018. Treasury shares totaled 3,097,634 and 2,851,578 as of December 31, 2018 and 2017, respectively. As of February 22, 2019, the Company had purchased an additional 29,385 shares of its common stock for an aggregate cost of $1.1 million, leaving $21.2 million available for repurchase under the current buyback program. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE K – SHARE‑BASED COMPENSATION Stock Awards As of December 31, 2018 and 2017, 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 3.4 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, 2018, 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, 2018 1,459,260 $ 22.98 Granted 231,510 $ 44.50 Vested (246,789) $ 26.60 Forfeited (1) (6,998) $ 24.72 Outstanding – December 31, 2018 1,436,983 $ 25.81 (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, 2018, 2017, and 2016 as follows: k Weighted-Average Grant Date Units Fair Value 2018 231,510 $ 44.50 2017 504,550 $ 16.39 2016 536,440 $ 15.89 The fair value of restricted stock awards that vested in 2018, 2017, and 2016 was $9.6 million, $11.2 million, and $5.8 million, respectively. Unrecognized compensation cost related to restricted stock awards outstanding as of December 31, 2018 was $17.9 million, which is expected to be recognized over a weighted‑average period of approximately 2.45 years. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
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: 2018 2017 2016 (in thousands, except share and per share data) Basic Numerator: Net income $ 67,262 $ 59,726 $ 18,652 Effect of unvested restricted stock awards (150) (238) (138) Adjusted net income $ 67,112 $ 59,488 $ 18,514 Denominator: Weighted-average shares 25,679,736 25,683,745 25,751,544 Earnings per common share $ $ 2.32 $ 0.72 Diluted Numerator: Net income $ 67,262 $ 59,726 $ 18,652 Effect of unvested restricted stock awards (145) (233) (137) Adjusted net income $ 67,117 $ 59,493 $ 18,515 Denominator: Weighted-average shares 25,679,736 25,683,745 25,751,544 Effect of dilutive securities 1,019,095 740,644 505,026 Adjusted weighted-average shares and assumed conversions 26,698,831 26,424,389 26,256,570 Earnings per common share $ $ 2.25 $ 0.71 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 2018, 2017, and 2016 are not participating securities. For the year ended December 31, 2018, 2017, and 2016 outstanding stock awards of 0.1 million, 0.1 million, and 0.4 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, 2018 | |
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 the Company’s management uses to make operating decisions. Management uses revenues, operating expense categories, operating ratios, operating income, and key operating statistics to evaluate performance and allocate resources to the Company’s operations. 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. As disclosed in the Company’s 2017 Annual Report on Form 10-K, reclassifications were made to the prior period operating segment expenses to conform to the presentation for the year ended December 31, 2017. 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. Effective January 1, 2018, the Company retrospectively adopted an amendment to ASC Topic 715 which requires changes to the financial statement presentation of certain components of net periodic benefit cost related to pension and other postretirement benefits accounted for under ASC Topic 715. As a result of adopting this amendment, the service cost component of net periodic benefit cost continues to be included in operating expenses in the consolidated financial statements, but the other components of net periodic benefit cost, including pension settlement expense, are presented in other income (costs) for the years ended December 31, 2018, 2017, and 2016. Reclassifications have been made to the prior period operating segment expenses to conform to the current year presentation of components of net periodic benefit cost in other income (costs) in our consolidated financial statements in accordance with the amendment to ASC Topic 715. The adoption of this accounting policy is further discussed in Note B and the detail of net periodic benefit costs is presented in Note I. 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 (“ABF Freight”). 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 service offerings in ground expedite, truckload, truckload-dedicated, intermodal, household goods moving, managed transportation, warehousing and distribution, and international freight transportation for air, ocean, and ground. Under the Company’s enhanced marketing approach to offer customers a single source of end-to-end logistics, the service offerings of the ArcBest segment continue to become more integrated. As such, management’s operating decisions have become more focused on the segment’s combined operations, rather than on individual service offerings within the segment’s operations. · 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: 2018 2017 2016 (in thousands) REVENUES Asset-Based $ 2,175,585 $ 1,993,314 $ 1,916,394 ArcBest (1) 781,123 706,698 640,734 FleetNet 195,126 156,341 162,629 Other and eliminations (58,046) (29,896) (19,538) Total consolidated revenues $ 3,093,788 $ 2,826,457 $ 2,700,219 OPERATING EXPENSES (2) Asset-Based Salaries, wages, and benefits $ 1,128,030 $ 1,125,131 $ 1,102,895 Fuel, supplies, and expenses 256,472 234,006 216,263 Operating taxes and licenses 48,792 47,767 48,180 Insurance 32,887 30,761 29,178 Communications and utilities 16,983 17,373 16,181 Depreciation and amortization 85,951 82,507 80,331 Rents and purchased transportation 242,252 206,457 198,594 Shared services 218,290 185,257 184,256 Multiemployer pension fund withdrawal liability charge (3) 37,922 — — Gain on sale of property and equipment (410) (695) (2,979) Other 4,554 6,525 4,889 Restructuring costs (4) — 344 1,173 Total Asset-Based 2,071,723 1,935,433 1,878,961 ArcBest (1) Purchased transportation 631,501 563,497 502,159 Supplies and expenses 13,329 15,087 13,145 Depreciation and amortization 13,750 13,090 13,612 Shared services 91,266 83,660 85,068 Other 9,143 11,116 11,678 Restructuring costs (4) 491 875 8,038 Gain on sale of subsidiaries (5) (1,945) (152) — Total ArcBest 757,535 687,173 633,700 FleetNet 190,741 152,864 160,132 Other and eliminations (35,309) (10,361) (6,639) Total consolidated operating expenses $ 2,984,690 $ 2,765,109 $ 2,666,154 OPERATING INCOME (2) Asset-Based $ 103,862 $ 57,881 $ 37,433 ArcBest (1) 23,588 19,525 7,034 FleetNet 4,385 3,477 2,497 Other and eliminations (22,737) (19,535) (12,899) Total consolidated operating income $ 109,098 $ 61,348 $ 34,065 OTHER INCOME (COSTS) Interest and dividend income $ 3,914 $ 1,293 $ 1,523 Interest and other related financing costs (9,468) (6,342) (5,150) Other, net (2)(6) (19,158) (4,723) (2,151) Total other income (costs) (24,712) (9,772) (5,778) INCOME BEFORE INCOME TAXES $ 84,386 $ 51,576 $ 28,287 (1) Includes the operations of LDS since the September 2, 2016 acquisition date for all years presented. (2) The Company retrospectively adopted an amendment to ASC Topic 715, effective January 1, 2018, which requires the components of net periodic benefit cost other than service cost to be presented within other income (costs) in the consolidated financial statements and, therefore, these costs are no longer classified within operating expenses within this table (see Note B). Certain reclassifications have been made to the prior year’s operating segment data to conform to the current year presentation of components of net periodic benefit cost in other income (costs). Net periodic benefit costs are presented in Note I. (3) ABF Freight recorded a one-time charge in 2018 for the multiemployer pension fund withdrawal liability resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund (see Note I). (4) Restructuring costs relate to the realignment of the Company’s corporate structure (see Note N). (5) Gains recognized in 2018 and 2017 relate to the sale of the ArcBest segment’s military moving businesses in December 2017 and 2016, respectively (see Note A). (6) 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 2018 2017 2016 (in thousands) CAPITAL EXPENDITURES, GROSS Asset-Based (1) $ 116,505 $ 112,751 $ 110,170 ArcBest 5,174 9,823 6,154 FleetNet 1,365 1,089 403 Other and eliminations (2)(3) 14,631 26,288 34,910 $ 137,675 $ 149,951 $ 151,637 For the year ended December 31 2018 2017 2016 (in thousands) DEPRECIATION AND AMORTIZATION EXPENSE (2) Asset-Based $ 85,951 $ 82,507 $ 80,331 ArcBest (4) 13,750 13,090 13,612 FleetNet (5) 1,140 1,089 1,210 Other and eliminations (2) 7,794 6,382 7,900 $ 108,635 $ 103,068 $ 103,053 (1) Includes assets acquired through notes payable and capital leases of $86.8 million in 2018, $84.2 million in 2017, and $83.4 million in 2016. (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 of $6.9 million in 2018. (4) Includes amortization of intangibles of $4.3 million in 2018 and 2017, and $4.0 million in 2016. (5) Includes amortization of intangibles which totaled $0.2 million in 2018, 2017, and 2016. 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 2018 2017 2016 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 1,398,348 $ 1,361,224 $ 1,340,577 Rents, purchased transportation, and other costs of services 989,006 869,584 823,683 Fuel, supplies, and expenses 325,126 304,126 270,138 Depreciation and amortization (1) 108,635 103,068 103,053 Other 123,998 124,144 118,390 Multiemployer pension fund withdrawal liability charge (2) 37,922 — — Restructuring costs (3) 1,655 2,963 10,313 $ 2,984,690 $ 2,765,109 $ 2,666,154 (1) Includes amortization of intangible assets. (2) ABF Freight recorded a one-time charge in 2018 for the multiemployer pension fund withdrawal liability resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund (see Note I). (3) 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 | 12 Months Ended |
Dec. 31, 2018 | |
RESTRUCTURING CHARGES AND IMPAIRMENT | |
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 2018, 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: 2018 2017 2016 (in thousands) Software impairment (1) $ — $ — $ 6,244 Contract terminations (2) 427 — 2,875 Severance and other (3) 1,228 2,963 1,194 Total charges $ 1,655 $ 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. |
LEGAL PROCEEDINGS, ENVIRONMENTA
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017, 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 $0.6 million and $0.4 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, 2018 | |
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 2018 and 2017. 2018 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands, except share and per share data) Revenues $ 700,001 $ 793,350 $ 826,158 $ 774,279 Operating expenses (1)(2) 687,276 790,194 770,103 737,117 Operating income (1)(2) 12,725 3,156 56,055 37,162 Other income (costs) (1)(3) (3,734) (2,422) (2,064) (16,492) Income tax provision (benefit) (963) (499) 13,215 5,371 Net income (2)(3) $ 9,954 $ 1,233 $ 40,776 $ 15,299 Earnings per common share (4) Basic $ 0.39 $ 0.05 $ 1.58 $ 0.59 Diluted (2)(3) $ 0.37 $ 0.05 $ 1.52 $ 0.57 Average common shares outstanding Basic 25,642,871 25,670,325 25,697,509 25,707,335 Diluted 26,596,376 26,699,549 26,795,659 26,682,262 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 (1) 660,988 694,601 717,538 691,982 Operating income (loss) (1) (9,900) 25,767 26,742 18,739 Other income (costs) (1) (2,747) (1,632) (2,674) (2,719) Income tax provision (benefit) (5) (5,240) 8,358 9,280 (20,548) Net income (loss) (5) $ (7,407) $ 15,777 $ 14,788 $ 36,568 Earnings (loss) per common share (4) Basic $ (0.29) $ 0.61 $ 0.57 $ 1.42 Diluted (5) $ (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 (1) As a result of retrospectively adopting an amendment to ASC Topic 715 effective January 1, 2018, the service cost component of net periodic benefit cost continues to be included in Operating Expenses, but the other components of net periodic benefit cost, including pension settlement expense, are presented in Other Income (Costs). See Adopted Accounting Pronouncements within Note B. (2) Second quarter 2018 includes a multiemployer pension fund withdrawal liability charge of $37.9 million (pre-tax), or $28.2 million (after-tax) and $1.05 per diluted share. See Multiemployer Plans within Note I. (3) Includes nonunion pension expense, including settlement. Pension settlements related to termination of the nonunion defined benefit pension plan began in fourth quarter 2018. Nonunion pension expense, including settlement, totaled $12.6 million (pre-tax), or $9.4 million (after-tax) and $0.35 per diluted share, in fourth quarter 2018. See Note I. (4) The Company uses the two-class method for calculating earnings per share. See Note L. (5) 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. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 Deducted from asset accounts: Allowance for doubtful accounts receivable and revenue adjustments $ 7,657 $ 2,336 $ 863 (a) $ 3,476 (b) $ 7,380 Allowance for other accounts receivable $ 921 $ (115) (c) $ — $ — $ 806 Allowance for deferred tax assets $ 844 $ — $ — $ 791 (d) $ 53 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 $ 293 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 _2
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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 period operating expenses, segment operating expenses, operating income, and other income (costs) in our consolidated financial statements to conform to the current year presentation of components of net periodic benefit cost in accordance with the amendment to Accounting Standards Codification (“ASC”) Topic 715, Compensation – Retirement Benefits , which was effective for the Company on January 1, 2018 (see the Adopted Accounting Pronouncements within Note B). There was no change to consolidated net income or earnings per share as a result of the change in presentation under the new standard. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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 and U.S. Treasury securities 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. Certificates of deposit are valued at cost plus accrued interest, which approximates fair value. Held-to-maturity U.S. Treasury securities are recorded at amortized cost with interest and amortization of premiums and discounts included in interest income. Quarterly, the Company evaluates held-to-maturity securities for any other-than-temporary impairments related to any intention to sell or requirement to sell before its amortized costs are recovered. If a security is considered to be other-than-temporarily impaired, the difference between amortized cost and the amount that is determined to be recoverable is recorded in earnings. |
Restricted Cash | Restricted Cash: Restricted cash consisted of cash deposits at December 31, 2016. Cash that was pledged as collateral, primarily for the Company’s outstanding letters of credit, was classified as restricted. The Company’s letters of credit were 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 was classified consistent with the classification of the liabilities to which it related and in accordance with the duration of the letters of credit. |
Concentration of Credit Risk | Concentration of Credit Risk: The Company is potentially subject to concentrations of credit risk related to the portion of its 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 2018, 2017, or 2016 or more than 6% of its accounts receivable balance at December 31, 2018 and 2017. 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 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 $0.7 million and $1.4 million are reported within other noncurrent assets as of December 31, 2018 and 2017, respectively. At December 31, 2018 and 2017, 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. 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). For annual and interim impairment tests, the Company is 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 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, which are recorded as noncurrent by jurisdiction, 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 years ended December 31, 2018 and 2017 were impacted by the recognition of the 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 $17.5 million and $17.2 million for the year ended December 31, 2018 and 2017, respectively. The change in book overdrafts is reported as a component of financing activities within the statement of cash flows. |
Insurance Reserves | Insurance Reserves : 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 service cost component of net periodic benefit cost for the postretirement health benefit plan is included in operating expenses. The components of net periodic benefit cost other than service cost, including pension settlement expense, for the nonunion defined benefit pension plan, the SBP, and the postretirement health benefit plan are recorded within the other, net line item of other income (costs). 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. The discount rates used to discount the plans’ obligations, and the expected rate of return applied to the fair value of plan assets for the nonunion defined benefit pension plan, impact the Company’s expense for these plans. For ongoing plans, the discount rate is determined by matching projected cash distributions with appropriate high‑quality corporate bond yields in a yield curve analysis. For the nonunion defined benefit pension plan, the Company establishes the expected rate of return on plan assets by considering the historical and 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. 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. In November 2017, an amendment was executed to terminate the nonunion defined benefit pension plan with a termination date of December 31, 2017. In September 2018, the plan received a favorable determination letter from the U.S. Internal Revenue Service (the “IRS”) regarding qualification of the plan termination. Following receipt of the determination letter, the plan’s actuarial assumptions were updated to remeasure the benefit obligation on a plan termination basis as of September 30, 2018 in connection with recognition of the quarterly pension settlement charge. The Company made assumptions for participant benefit elections, rate of return, and discount rates, including the annuity contract interest rate. These assumptions were updated as of December 31, 2018. For plan termination assumptions, the Company utilized a short-term discount rate which represents the Company’s current borrowing rate and an annuity contract interest rate based on current published rates. The nonunion defined benefit pension plan began making lump sum distributions related to the plan termination in fourth quarter 2018. In first quarter 2019, the plan will settle remaining obligations for deferred benefits with the purchase of nonparticipating annuity contracts from insurance companies, and the Company will make a cash contribution to the plan for the amount required to fund benefit distributions and annuity contract purchases in excess of plan assets. |
Revenue Recognition | Revenue Recognition: Revenues are recognized when or as control of the promised services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Asset-Based Segment Asset-Based segment revenues consist primarily of less-than-truckload freight delivery. Performance obligations are satisfied upon final delivery of the freight to the specified destination. Revenue is recognized based on the 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 period. Because the bill-by-bill methodology utilizes the approximate location of the shipment in the delivery process to determine the revenue to recognize, management believes it to be a reliable method. Certain contracts may provide for volume-based or other discounts which are accounted for as variable consideration. The Company estimates these amounts based on a historical expectation of discounts to be earned by customers, and revenue is recognized based on the estimates. Revenue adjustments may also occur due to rating or other billing adjustments. The Company estimates revenue adjustments based on historical information and revenue is recognized accordingly at the time of shipment. Management believes that actual amounts will not vary significantly from estimates of variable consideration. 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 primarily responsible for fulfilling delivery to the customer and maintains discretion in setting the price for the services. ArcBest Segment ArcBest segment revenues consist primarily of asset-light logistics services using third-party vendors to provide transportation services. ArcBest segment revenue is generally recognized based on the relative transit time in each reporting period using estimated standard delivery times for freight in transit at the end of the reporting period. Purchased transportation expense is recognized as incurred consistent with the recognition of revenue. Prior to the adoption of ASC Topic 606, Revenue from Contracts with Customers , on January 1, 2018, as further discussed in Adopted Accounting Pronouncements within this Note, ArcBest segment revenue was recognized based on the delivery of the shipment to the customer-designated location. Revenue and purchased transportation expense are reported on a gross basis for shipments and services where the Company utilizes a third-party carrier for pickup and delivery but remains primarily responsible to the customer for delivery and maintains discretion in setting the price for the service. FleetNet Segment FleetNet segment revenues consist of service fee revenue, roadside repair revenue and routine maintenance services revenue. Service fee revenue for the FleetNet segment is recognized upon response to the service event. Repair and routine maintenance service revenue for the FleetNet segment is recognized upon completion of the service by third-party vendors. Revenue and expense from repair and maintenance services performed by third-party vendors are reported on a gross basis as FleetNet controls the services prior to transfer to the customer and remains primarily responsible to the customer for completion of the services. Other Recognition and Disclosure The Company records deferred revenue when cash payments are received or due in advance of performance under the contract. Deferred revenues totaled $0.5 million and $0.6 million at December 31, 2018 and 2017, respectively, and are recorded in accrued expenses in the consolidated balance sheets. Payment terms with customers may vary depending on the service provided, location or specific agreement with the customer. The term between invoicing and when payment is due is not significant. For certain services, payment is required before the services are provided to the customer. The Company expenses sales commissions when incurred because the amortization period is one year or less. The Company has elected to apply the practical expedient to not disclose the value of unsatisfied performance obligations for contracts with an original length of one year or less or contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed. |
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. The Company elected to reclassify the stranded income tax effects resulting from the Tax Reform Act from accumulated other comprehensive loss to retained earnings as of January 1, 2018 (see Adopted Accounting Pronouncements within this Note). |
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 for restricted stock units awarded prior to 2018 and at the end of a four-year period following the date of grant for subsequent grants. Awards granted to non‑employee directors 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. As a result of applying the provisions of 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, the Company recognized a cumulative effect adjustment to the December 31, 2016 opening balances of retained earnings, additional paid-in capital, and deferred income tax liability of $0.2 million, and $0.4 million, and $0.2 million, respectively. |
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 ASC Topic 606, Revenue from Contracts with Customers , (“ASC Topic 606”) provides a single comprehensive revenue recognition model for all contracts with customers and contains principles to apply to determine the measurement of revenue and the timing of when it is recognized. On January 1, 2018, the Company adopted ASC Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic method of accounting under ASC Topic 605, Revenue Recognition , (“ASC Topic 605”). The Company’s major service lines for presentation of disaggregated revenues from contracts with customers are consistent with the Company’s reportable operating segments as presented in Note M. The primary impact of adopting ASC Topic 606 was to recognize ArcBest segment revenue over time instead of at final delivery of the shipment. As a result, revenue will generally be recorded earlier under ASC Topic 606 compared to ASC Topic 605. Asset-Based and FleetNet segment revenues were not impacted. The Company recorded a net increase to opening retained earnings of $0.4 million as of January 1, 2018 due to the cumulative impact of adopting ASC Topic 606. The impact to revenues for year ended December 31, 2018 was an increase of $0.7 million and the impact to purchased transportation expense was an increase of $0.7 million, as a result of applying ASC Topic 606. Effective January 1, 2018, the Company adopted an amendment to ASC Topic 715, Compensation – Retirement Benefits , (“ASC Topic 715”) which requires changes to the financial statement presentation of certain components of net periodic benefit cost related to pension and other postretirement benefits accounted for under ASC Topic 715. The amendment requires the service cost component of net periodic benefit cost to continue to be included in the same line item as other compensation costs arising from services rendered by the related employees, but requires the other components of net periodic benefit cost, including pension settlement expense, to be presented separately from the service cost component and outside of the subtotal of income from operations. The provisions of the amendment are required to be applied retrospectively and were effective for the Company beginning January 1, 2018. The Company has not incurred service cost under its nonunion defined benefit pension plan or its supplemental benefit plan (“SBP”) since the accrual of benefits under the plans was frozen on July 1, 2013 and December 31, 2009, respectively; however, the Company incurs service cost under its postretirement health benefit plan which will continue to be reported within operating expenses in the consolidated statements of operations. The other components of net periodic benefit cost (including pension settlement charges) of the nonunion defined benefit pension plan, the SBP, and the postretirement health benefit plan are reported within the other line item of other income (costs). As a result of retrospectively applying the provisions of the amendment to ASC Topic 715, $7.8 million and $5.1 million was reclassified from operating expenses to other income (costs) for the year ended December 31, 2017 and 2016, respectively. There was no change to consolidated net income or earnings per share as a result of the change in presentation under the new standard. In February 2018, the Financial Accounting Standards Board (the “FASB”) issued an amendment to ASC Topic 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , (“ASC Topic 220”) which allows a reclassification from accumulated other comprehensive income to retained earnings for the stranded tax effects resulting from the Tax Reform Act. The Company early adopted this amendment for first quarter 2018 and adjusted the tax effect of items within accumulated other comprehensive income to reflect the appropriate tax rate under the Tax Reform Act in the period of adoption. As a result of applying the provisions of the amendment, the Company elected to reclassify $3.6 million of stranded income tax effects from accumulated other comprehensive loss to retained earnings as of January 1, 2018. Effective January 1, 2018, the Company early adopted 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 is 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 amendment did not have an impact on the consolidated financial statements for the year ended December 31, 2018. The U.S. Securities and Exchange Commission issued Final Rule 33-10532, Disclosure Update and Simplification , in August 2018. The Company adopted the annual disclosure requirements of the final rule for this Annual Report on Form 10‑K for the year ended December 31, 2018 and will modify its consolidated statement of stockholders’ equity for interim periods, beginning with its first quarter 2019 Quarterly Form on 10-Q, to include changes in stockholders’ equity for each current and comparative quarterly period presented. The final rule did not have a significant impact on the Company’s financial statement disclosures. ASC Subtopic 715-20, Compensation – Retirement Benefits – Defined Benefit Plans , was amended to eliminate certain disclosure requirements related to defined benefit plans. The Company early adopted these amendments for this Annual Report on Form 10‑K for the year ended December 31, 2018. The changes did not have a significant impact on the Company’s financial statement disclosures. Accounting Pronouncements Not Yet Adopted ASC Topic 842, Leases , (“ASC Topic 842”) which is effective for the Company beginning January 1, 2019, requires lessees to recognize right-of-use assets and lease liabilities for operating leases with terms greater than 12 months on the balance sheet. The standard also requires additional qualitative and quantitative disclosures designed to assess the amount, timing, and uncertainty of cash flows arising from leases. In July 2018, the FASB issued an amendment to ASC Topic 842 which provides an optional transition method that will give companies the option to use the effective date as the date of initial application upon transition. The Company will elect this transition method and, as a result, will not adjust comparative period financial information or make the new required lease disclosures for periods before the effective date. The Company will exclude short-term leases from accounting under ASC Topic 842 and will elect the package of practical expedients upon transition that will retain lease classification and other accounting conclusions made in the assessment of existing lease contracts. Management expects the adoption of the new standard to result in a consolidated right-of-use asset and lease liability balance of approximately $60 million. This estimate does not include significant lease contracts that have been executed but not yet commenced as of January 1, 2019, which are projected to have a right-of-use asset and lease liability balance of approximately $17 million upon commencement. The impact on the consolidated statements of operations is expected to be minimal, if any. As the impact of this standard is non-cash in nature, no impact is expected on the Company’s consolidated statements of cash flows. Any impact on the effective income tax rate will be immaterial. 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. ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement , (“ASC 350-40”) was amended by the FASB in August 2018 and is effective for the Company beginning January 1, 2020. The amendments to ASC 350-40 clarify the accounting treatment for implementation costs incurred by the customer in a cloud computing software arrangement. The amendments allow implementation costs of cloud computing arrangements to be capitalized using the same method prescribed by Subtopic 350-40, Internal-Use Software . The amendments to ASC 350-40 are not expected to have a significant impact on the Company’s consolidated financial statements. The Company plans to early adopt the amendments effective January 1, 2019. ASC Topic 820, Fair Value Measurement , was amended to modify the disclosure requirements of fair value measurements, primarily impacting the disclosures for Level 3 fair value measurements. The amendment is effective for the Company beginning January 1, 2020 and is not expected to have a significant impact on the Company’s financial statement disclosures. Management believes 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 FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
Schedule components of cash and cash equivalents, short term investments, and restricted funds | December 31 December 31 2018 2017 (in thousands) Cash and cash equivalents Cash deposits (1) $ 124,938 $ 86,510 Variable rate demand notes (1)(2) 19,786 19,744 Money market funds (3) 42,470 14,518 U.S. Treasury securities (4) 2,992 — Total cash and cash equivalents $ 190,186 $ 120,772 Short-term investments Certificates of deposit (1) $ 82,949 $ 56,401 U.S. Treasury securities (4) 23,857 — Total short-term investments $ 106,806 $ 56,401 (1) Recorded at cost plus accrued interest, which approximates fair value. (2) Amounts may be redeemed on a daily basis with the original issuer. (3) Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note). (4) Recorded at amortized cost plus accrued interest, which approximates fair value at December 31, 2018. U.S. Treasury securities with a maturity date within 90 days of the purchase date are classified as cash equivalents. U.S. Treasury securities included in short-term investments are held-to-maturity investments with maturity dates of less than one year. |
Schedule of fair value and carrying value disclosures of financial instruments | 2018 2017 (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) 40,000 40,000 45,000 45,000 Notes payable (3) 181,409 181,560 153,441 152,131 $ 291,409 $ 291,560 $ 268,441 $ 267,131 (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, 2018 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) $ 42,470 $ 42,470 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,342 2,342 — — Interest rate swaps (3) 801 — 801 — $ 45,613 $ 44,812 $ 801 $ — Liabilities: Contingent consideration (4) $ 4,472 $ — $ — $ 4,472 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 swaps (3) 481 — 481 — $ 17,358 $ 16,877 $ 481 $ — Liabilities: Contingent consideration (4) $ 6,970 $ — $ — $ 6,970 (1) Included in cash and cash equivalents. (2) Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third‑party brokerage firm. Included in other long‑term assets, with a corresponding liability reported within other long‑term liabilities. (3) Included in other long‑term assets. 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, 2018 and 2017 and considers the interest rate swap valuations in Level 2 of the fair value hierarchy. (4) Included in accrued expenses. At December 31, 2018, the fair value of the contingent consideration for an earn-out agreement related to the September 2016 acquisition of LDS represents the final accrued payment and was based on calculations performed for the earn-out period which ended August 31, 2018. Prior to the end of the earn-out period, the estimated fair value of contingent consideration was determined by assessing Level 3 inputs with a discounted cash flow approach using various probability-weighted scenarios. As of December 31, 2017, the Level 3 assessments utilized 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 of 12.5%. |
Schedule of changes in fair value of the liabilities | Contingent Consideration (in thousands) Balances at December 31, 2016 $ 6,775 Contingent consideration liability recorded at fair value for business acquisition — Change in fair value included in operating expenses 195 Balances at December 31, 2017 $ 6,970 Payments (1) (3,528) Change in fair value included in operating expenses 1,030 Balances at December 31, 2018 $ 4,472 (1) Payments released from escrow account that is reported in other current assets in the consolidated balance sheets. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of goodwill by reportable operating segment | Total ArcBest FleetNet (in thousands) Balances December 31, 2016 $ 108,875 $ 108,245 $ 630 Goodwill divested (1) (661) (661) — Purchase accounting adjustments 106 106 — Balances December 31, 2018 and 2017 (2) $ 108,320 $ 107,690 $ 630 (1) 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. (2) Goodwill was not adjusted during the year ended December 31, 2018. |
Schedule of intangible assets | Intangible assets consisted of the following as of December 31: 2018 2017 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 $ 24,130 $ 36,301 $ 60,431 $ 19,745 $ 40,686 Other 9 1,032 684 348 1,032 549 483 13 61,463 24,814 36,649 61,463 20,294 41,169 Indefinite-lived intangible assets Trade name N/A 32,300 N/A 32,300 32,300 N/A 32,300 Total intangible assets N/A $ 93,763 $ 24,814 $ 68,949 $ 93,763 $ 20,294 $ 73,469 |
Schedule of future amortization for intangible assets and acquired software | Intangible Acquired Total Assets Software (1) (in thousands) 2019 $ 5,463 $ 4,482 $ 981 2020 4,471 4,454 17 2021 4,418 4,412 6 2022 4,385 4,385 — 2023 4,287 4,287 — Thereafter 14,629 14,629 — Total amortization $ 37,653 $ 36,649 $ 1,004 (1) Acquired software is reported in property, plant and equipment. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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: 2018 (1) 2017 (1) 2016 (in thousands, except percentages) Current provision (benefit): Federal $ 9,750 $ (1,969) $ (604) State 3,264 3,701 (335) Foreign 2,238 331 1,052 15,252 2,063 113 Deferred provision (benefit): Federal 1,157 (9,312) 8,161 State 737 (867) 1,354 Foreign (22) (34) 7 1,872 (10,213) 9,522 Total provision (benefit) for income taxes $ 17,124 $ (8,150) $ 9,635 (1) For 2018 and 2017, the income tax provision (benefit) reflects the impact of the Tax Reform Act, as previously disclosed in this Note. Deferred income tax liabilities were reduced by $3.8 million and $24.5 million for 2018 and 2017, respectively, as a result of the decrease in the U.S. corporate statutory tax rate from 35% to 21% effective January 1, 2018. Current tax expense was reduced by $0.1 million and $1.3 million for 2018 and 2017, respectively, as a result of the tax 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: 2018 (2) 2017 (1)(2) 2016 (1) (in thousands) Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets $ 23,153 $ 21,876 $ 12,182 Amortization of intangibles (763) (1,030) (3,623) Changes in reserves for workers’ compensation, third-party casualty, and cargo claims 469 (812) 362 Revenue recognition (2,524) 332 1,862 Allowance for doubtful accounts (115) (719) (295) Nonunion pension and other retirement plans (2,810) (1,977) 3,861 Multiemployer pension fund withdrawal (3) (5,818) — — Federal net operating loss carryforwards utilized 125 28 161 State net operating loss carryforwards utilized (generated) 621 229 (304) State depreciation adjustments (1,761) (1,244) (758) Share-based compensation (529) 352 (681) Valuation allowance increase (decrease) (744) 401 (61) Other accrued expenses (4,881) (852) (4,108) Impact of the Tax Reform Act (2) (3,772) (24,542) — Other 1,221 (2,255) 924 Deferred tax provision (benefit) $ 1,872 $ (10,213) $ 9,522 (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% for 2017 and 2016. (2) For 2018 and 2017, the effect of the change in the U.S. corporate tax rate from 35% to 21% in accordance with the Tax Reform Act is reflected as a separate component of the deferred tax provision. (3) ABF Freight recorded a multiemployer pension fund withdrawal liability in 2018 resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund (see Note I). |
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: 2018 2017 (1) (in thousands) Deferred tax assets: Accrued expenses $ 39,885 $ 36,843 Pension liabilities 2,754 4,413 Multiemployer pension fund withdrawal (2) 5,710 — Postretirement liabilities other than pensions 7,660 6,236 Share-based compensation 4,893 4,466 Federal and state net operating loss carryovers 1,152 1,781 Other 1,355 1,508 Total deferred tax assets 63,409 55,247 Valuation allowance (53) (844) Total deferred tax assets, net of valuation allowance 63,356 54,403 Deferred tax liabilities: Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets 93,525 73,725 Intangibles 14,066 14,573 Revenue recognition 1,513 6,172 Prepaid expenses 3,225 3,125 Total deferred tax liabilities 112,329 97,595 Net deferred tax liabilities $ (48,973) $ (43,192) (1) The amounts for deferred tax assets and liabilities reflect the applicable tax rates for each category, with the U.S. federal rate 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. (2) ABF Freight recorded a multiemployer pension fund withdrawal liability in 2018 resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund (see Note I). |
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: 2018 (1) 2017 (2) 2016 (2) (in thousands, except percentages) Income tax provision at the statutory federal rate $ 17,721 $ 18,052 $ 9,901 Federal income tax effects of: State income taxes (840) (992) (357) Nondeductible expenses 946 1,551 1,653 Life insurance proceeds and changes in cash surrender value 7 (927) (1,001) Alternative fuel credit (1,203) — (1,180) Increase (decrease) in valuation allowances (891) 401 (61) Increase (decrease) in uncertain tax positions 933 (720) — Settlement of share-based compensation (649) (1,129) — Impact of the Tax Reform Act on current tax (2) (52) (1,288) — Impact of the Tax Reform Act on deferred tax (2) (3,772) (24,542) — Other (3) (1,293) (1,687) (1,398) Federal income tax provision (benefit) 10,907 (11,281) 7,557 State income tax provision 4,001 2,834 1,019 Foreign income tax provision 2,216 297 1,059 Total provision (benefit) for income taxes $ 17,124 $ (8,150) $ 9,635 Effective tax (benefit) rate 20.3 % (15.8) % 34.1 % (1) Amounts in this reconciliation reflect the statutory U.S. income tax rate in effect for the applicable year after the enactment of the Tax Reform Act, which is 21%. The effect of applying a blended rate of 32.74% for the two months ended February 28, 2018, in accordance with the Tax Reform Act, is reflected in separate components of the reconciliation. (2) 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. (3) Includes foreign income tax provision, as presented in this table. |
OPERATING LEASES AND COMMITME_2
OPERATING LEASES AND COMMITMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
OPERATING LEASES AND COMMITMENTS | |
Schedule of future minimum rental commitments for all noncancelable operating leases | The future minimum rental commitments, net of minimum rentals to be received under noncancelable subleases, as of December 31, 2018 for all noncancelable operating leases were as follows: Equipment Land and and Total Structures (1) Other (in thousands) 2019 $ 19,130 $ 18,067 $ 1,063 2020 14,620 13,676 944 2021 10,972 10,716 256 2022 7,125 7,125 — 2023 4,477 4,477 — Thereafter 5,850 5,850 — $ 62,174 $ 59,911 $ 2,263 (1) Excludes future minimum payments for leases which were executed but had not yet commenced as of December 31, 2018 of approximately $21.0 million which will be paid over 10 years. |
LONG-TERM DEBT AND FINANCING _2
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
Schedule of long-term debt | December 31 2018 2017 (in thousands) Credit Facility (interest rate of 3.8% (1) at December 31, 2018) $ 70,000 $ 70,000 Accounts receivable securitization borrowings (interest rate of 3.2% at December 31, 2018) 40,000 45,000 Notes payable (weighted-average interest rate of 3.4% at December 31, 2018) 181,409 153,441 Capital lease obligations (weighted-average interest rate of 5.6% at December 31, 2018) 266 478 291,675 268,919 Less current portion 54,075 61,930 Long-term debt, less current portion $ 237,600 $ 206,989 (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 3.10% and 3.35% based on the margin of the Credit Facility as of December 31, 2018 and 2017, respectively. |
Scheduled maturities of long-term debt obligations | Scheduled maturities of long ‑ term debt obligations as of December 31, 2018 were as follows: Accounts Receivable Credit Securitization Notes Capital Lease Total Facility (1) Program (1) Payable Obligations (2) (in thousands) 2019 $ 63,608 $ 2,691 $ 1,396 $ 59,281 $ 240 2020 47,540 2,603 1,345 43,565 27 2021 85,514 2,540 41,091 41,876 7 2022 104,449 71,318 — 33,130 1 2023 17,124 — — 17,124 — Thereafter 59 — — 59 — Total payments 318,294 79,152 43,832 195,035 275 Less amounts representing interest 26,619 9,152 3,832 13,626 9 Long-term debt $ 291,675 $ 70,000 $ 40,000 $ 181,409 $ 266 (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: 2018 2017 (in thousands) Revenue equipment $ 264,396 $ 269,950 Land and structures (service centers) 1,794 1,794 Software 1,484 486 Service, office, and other equipment 5,941 100 Total assets securing notes payable or held under capital leases 273,615 272,330 Less accumulated depreciation and amortization (1) 79,961 87,691 Net assets securing notes payable or held under capital leases $ 193,654 $ 184,639 (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, 2018 | |
ACCRUED EXPENSES | |
Schedule of accrued expenses | December 31 2018 2017 (in thousands) Workers’ compensation, third-party casualty, and loss and damage claims reserves $ 103,015 $ 99,969 Accrued vacation pay 41,474 36,034 Accrued compensation (1) 52,626 35,718 Taxes other than income 8,457 8,215 Other (1)(2) 37,539 30,548 Total accrued expenses (2) $ 243,111 $ 210,484 (1) Increases primarily due to accrued expenses related to incentive plans. (2) For the year ended December 31, 2017, $0.8 million related to the postretirement health benefit plan was reclassified from accrued expenses to current portion of pension and postretirement liabilities in the consolidated financial statements to conform to the current year presentation. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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 2018 2017 2018 2017 2018 2017 (in thousands) Change in benefit obligations Benefit obligations at beginning of year $ 137,417 $ 152,006 $ 3,897 $ 4,794 $ 24,097 $ 25,532 Service cost — — — — 366 489 Interest cost 4,269 4,514 108 102 837 1,060 Actuarial (gain) loss (1) (3,685) 6,448 (57) (10) 4,957 (2,251) Benefits paid (105,522) (26,491) — (989) (769) (733) Settlement loss 894 940 — — — — Benefit obligations at end of year 33,373 137,417 3,948 3,897 29,488 24,097 Change in plan assets Fair value of plan assets at beginning of year 124,831 144,805 — — — — Actual return on plan assets 1,837 6,517 — — — — Employer contributions 5,500 — — 989 769 733 Benefits paid (105,522) (26,491) — (989) (769) (733) Fair value of plan assets at end of year 26,646 124,831 — — — — Funded status at period end $ (6,727) $ (12,586) $ (3,948) $ (3,897) $ (29,488) $ (24,097) Accumulated benefit obligation $ 33,373 $ 137,417 $ 3,948 $ 3,897 $ 29,488 $ 24,097 (1) The actuarial gain on the nonunion defined benefit pension plan for 2018, compared to the actuarial loss for 2017, was primarily due to an increase in the discount rate used to remeasure the plan obligation at December 31, 2018 versus December 31, 2017. The actuarial loss on the postretirement health benefit plan for 2018, versus the actuarial gain for 2017, was 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 2018 2017 2018 2017 2018 2017 (in thousands) Current liabilities (included in current portion of pension and postretirement liabilities) $ (6,727) $ — $ (937) $ — $ (995) $ (753) Noncurrent liabilities (included in pension and postretirement liabilities) — (12,586) (3,011) (3,897) (28,493) (23,344) Liabilities recognized $ (6,727) $ (12,586) $ (3,948) $ (3,897) $ (29,488) $ (24,097) |
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 2018 2017 2016 2018 2017 2016 2018 2017 2016 (in thousands) Service cost $ — $ — $ — $ — $ — $ — $ 366 $ 489 $ 429 Interest cost 4,269 4,514 4,572 108 102 130 837 1,060 1,017 Expected return on plan assets (1,582) (5,712) (8,607) — — — — — — Amortization of prior service credit — — — — — — (93) (190) (190) Pension settlement expense 12,925 4,156 3,023 — — 206 — — — Amortization of net actuarial loss (1) 2,583 3,132 4,087 81 82 152 304 694 705 Net periodic benefit cost $ 18,195 $ 6,090 $ 3,075 $ 189 $ 184 $ 488 $ 1,414 $ 2,053 $ 1,961 (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 2018 (1) 2017 (2) 2016 (1) 2018 2017 (3) 2016 (in thousands, except per share data) Pension settlement distributions $ 105,279 $ 26,261 $ 16,515 $ — $ 989 $ 246 Pension settlement expense, pre-tax $ 12,925 $ 4,156 $ 3,023 $ — $ — $ 206 Pension settlement expense per diluted share, net of taxes $ 0.36 $ 0.10 $ 0.07 $ — $ — $ 0.01 (1) Pension settlement distributions represent lump‑sum benefit distributions, including participant-elected distributions associated with the plan’s termination for 2018. (2) Pension settlement distributions represent $18.7 million of lump‑sum benefit distributions and a $7.6 million nonparticipating annuity contract purchase. (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. |
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 2018 2017 2018 2017 2018 2017 (in thousands) Unrecognized net actuarial loss $ 4,034 $ 22,588 $ 405 $ 543 $ 7,416 $ 2,764 Unrecognized prior service credit — — — — (34) (127) Total $ 4,034 $ 22,588 $ 405 $ 543 $ 7,382 $ 2,637 |
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 2018 2017 2018 2017 2018 2017 Discount rate % 3.1 % % 2.8 % % 3.5 % 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 2018 (1) 2017 (2) 2016 (3) 2018 2017 2016 2018 2017 2016 Discount rate 3.1 % 3.4 % 3.5 % 2.8 % 2.7 % 2.6 % 3.5 % 4.0 % 4.2 % Expected return on plan assets 1.4 % 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 2018 credit, and the interim discount rate established upon each quarterly settlement in 2018 of 3.6%, 3.8%, and 3.6% was used to calculate the expense for the second, third, and fourth quarter of 2018, respectively. (2) 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. (3) 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. |
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: 2018 2017 Pre-65 Post-65 Health care cost trend rate assumed for next year 8.0 % 8.3 % 5.5 % Rate to which the cost trend rate is assumed to decline 5.0 % 4.0 % 4.0 % Year that the rate reaches the cost trend assumed rate |
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, 2018 are as follows: Nonunion Supplemental Postretirement Defined Benefit Benefit Health Pension Plan (1) Plan Benefit Plan (in thousands) 2019 $ 33,373 $ 938 $ 995 2020 $ — $ 2,169 $ 1,046 2021 $ — $ — $ 1,092 2022 $ — $ — $ 1,177 2023 $ — $ — $ 1,316 2024-2028 $ — $ 1,142 $ 7,031 (1) Estimated payments for 2019 represent the accumulated benefit obligation of the plan at December 31, 2018. The future benefit payments of the plan will depend on the amount of lump sum distributions and the cost to purchase nonparticipating annuity contracts to settle the remaining obligation for deferred benefits. The settlement of plan obligations is expected to be complete in first quarter 2019. |
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: 2018 Target Acceptable Weighted-Average Allocation Allocation Range 2018 2017 Income Securities Debt Instruments 70.0 % 20.0 % - 100.0 % — % 73.6 % Floating Rate Loan Fund 10.0 3.0 % - 100.0 % 25.5 13.1 Cash Equivalents Cash and Cash Equivalents 20.0 % - 100.0 % 74.5 13.3 100.0 % 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, 2018, 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) $ 19,856 $ 19,856 $ — $ — Debt Instruments (2) 10 — 10 — Floating Rate Loans (3) 6,780 6,780 — — $ 26,646 $ 26,636 $ 10 $ — (1) Consists primarily of money market mutual funds. (2) Includes a debt income security which was liquidated subsequent to December 31, 2018. The sale price of the security was used to determine the fair value at December 31, 2018.. (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, 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%), 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. |
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) 2018 2017 Implemented (c) 2018 2017 2016 Imposed (e) Central States, Southeast and Southwest Areas Pension Plan (1)(2) 36-6044243 Critical and Declining Critical and Declining Implemented (3) $ 74,177 $ 78,230 $ 77,891 No Western Conference of Teamsters Pension Plan (2) 91-6145047 Green Green No 25,268 26,320 25,075 No New England Teamsters Pension Fund (7)(8) 04-6372430 Critical and Declining (9) Critical and Declining (9) No 20,090 5,026 4,404 No Central Pennsylvania Teamsters Defined Benefit Plan (1)(2) 23-6262789 Green Green No 13,393 13,391 13,381 No I. B. of T. Union Local No. 710 Pension Fund (5)(6) 36-2377656 Green (4) Green (4) No 9,929 10,054 9,670 No All other plans in the aggregate 24,392 25,395 23,718 Total multiemployer pension contributions paid (10) $ 167,249 $ 158,416 $ 154,139 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 2018 and 2017 is for the plan’s year‑end status at December 31, 2017 and 2016, 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, 2017 and 2016. (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, 2017 and 2016. (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, 2017 – January 31, 2018 and February 1, 2016 – January 31, 2017. (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, 2018 and 2017. (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, 2018 and 2017. (7) Contributions for 2018 include $15.7 million related to the multiemployer pension fund withdrawal liability which is further discussed in this Note. (8) 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 September 30, 2017 and 2016. (9) PPA zone status relates to plan years October 1, 2017 – September 30, 2018 and October 1, 2016 – September 30, 2017. (10) 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 2018 ABF NMFA and the related supplemental agreements provided for contributions to multiemployer pension plans to be frozen at the current rates for each fund. The pension contribution rate for contractual employees increased an average of approximately 1.3% and 0.3% effective primarily on August 1, 2017 and 2016, respectively. The Supplemental Negotiating Committees for the Central States Pension Plan and the Western Conference of Teamsters Pension Plan approved no pension increase effective August 1, 2017 and 2016. The year‑over‑year changes in multiemployer pension plan contributions presented above were also influenced by the previously mentioned payments related to the New England Pension Fund and changes in Asset-Based business levels. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
STOCKHOLDERS' EQUITY | |
Components of accumulated other comprehensive loss | Components of accumulated other comprehensive loss were as follows at December 31: 2018 2017 2016 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit costs $ (11,821) $ (25,768) $ (29,320) Interest rate swap 801 481 (542) Foreign currency translation (2,816) (1,894) (1,978) Total $ (13,836) $ (27,181) $ (31,840) After-tax amounts: Unrecognized net periodic benefit costs (1) $ (12,749) $ (19,715) $ (21,886) Interest rate swap 591 292 (329) Foreign currency translation (2,080) (1,151) (1,202) Total $ (14,238) $ (20,574) $ (23,417) (1) Includes $4.0 million related to a previous valuation allowance on deferred tax assets for nonunion defined benefit pension liabilities which will be reversed to retained earnings upon extinguishment of the nonunion defined benefit pension plan, which is expected to occur in first quarter 2019. The reclassification of stranded income tax effects related to this item is not permitted by the amendment to ASC Topic 220 which the Company adopted as of January 1, 2018 (see Note B). |
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, 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 2,843 2,171 621 51 Balances at December 31, 2017 $ (20,574) $ (19,715) $ 292 $ (1,151) Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard (1) (3,576) (3,391) 63 (248) Balances at January 1, 2018 (24,150) (23,106) 355 (1,399) Other comprehensive income (loss) before reclassifications (1,821) (1,376) 236 (681) Amounts reclassified from accumulated other comprehensive loss 11,733 11,733 — — Net current-period other comprehensive income (loss) 9,912 10,357 236 (681) Balances at December 31, 2018 $ (14,238) $ (12,749) $ 591 $ (2,080) (1) The Company elected to reclassify the stranded income tax effects in accumulated other comprehensive loss to retained earnings as of January 1, 2018 as a result of adopting an amendment to ASC Topic 220 (see Note B). |
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) 2018 2017 (in thousands) Amortization of net actuarial loss $ (2,968) $ (3,908) Amortization of prior service credit 93 190 Pension settlement expense (12,925) (4,156) Total, pre-tax (15,800) (7,874) Tax benefit 4,067 3,063 Total, net of tax $ (11,733) $ (4,811) (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 | 2018 2017 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ $ $ 0.08 $ 2,066 Second quarter $ $ $ 0.08 $ 2,078 Third quarter $ $ $ 0.08 $ 2,063 Fourth quarter $ $ $ 0.08 $ 2,057 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
SHARE-BASED COMPENSATION | |
Summary of the Company's restricted stock unit award program | Weighted-Average Grant Date Units Fair Value Outstanding – January 1, 2018 1,459,260 $ 22.98 Granted 231,510 $ 44.50 Vested (246,789) $ 26.60 Forfeited (1) (6,998) $ 24.72 Outstanding – December 31, 2018 1,436,983 $ 25.81 (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, 2018, 2017, and 2016 as follows: k Weighted-Average Grant Date Units Fair Value 2018 231,510 $ 44.50 2017 504,550 $ 16.39 2016 536,440 $ 15.89 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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: 2018 2017 2016 (in thousands, except share and per share data) Basic Numerator: Net income $ 67,262 $ 59,726 $ 18,652 Effect of unvested restricted stock awards (150) (238) (138) Adjusted net income $ 67,112 $ 59,488 $ 18,514 Denominator: Weighted-average shares 25,679,736 25,683,745 25,751,544 Earnings per common share $ $ 2.32 $ 0.72 Diluted Numerator: Net income $ 67,262 $ 59,726 $ 18,652 Effect of unvested restricted stock awards (145) (233) (137) Adjusted net income $ 67,117 $ 59,493 $ 18,515 Denominator: Weighted-average shares 25,679,736 25,683,745 25,751,544 Effect of dilutive securities 1,019,095 740,644 505,026 Adjusted weighted-average shares and assumed conversions 26,698,831 26,424,389 26,256,570 Earnings per common share $ $ 2.25 $ 0.71 |
OPERATING SEGMENT DATA (Tables)
OPERATING SEGMENT DATA (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
OPERATING SEGMENT DATA | |
Schedule of reportable operating segment information | 2018 2017 2016 (in thousands) REVENUES Asset-Based $ 2,175,585 $ 1,993,314 $ 1,916,394 ArcBest (1) 781,123 706,698 640,734 FleetNet 195,126 156,341 162,629 Other and eliminations (58,046) (29,896) (19,538) Total consolidated revenues $ 3,093,788 $ 2,826,457 $ 2,700,219 OPERATING EXPENSES (2) Asset-Based Salaries, wages, and benefits $ 1,128,030 $ 1,125,131 $ 1,102,895 Fuel, supplies, and expenses 256,472 234,006 216,263 Operating taxes and licenses 48,792 47,767 48,180 Insurance 32,887 30,761 29,178 Communications and utilities 16,983 17,373 16,181 Depreciation and amortization 85,951 82,507 80,331 Rents and purchased transportation 242,252 206,457 198,594 Shared services 218,290 185,257 184,256 Multiemployer pension fund withdrawal liability charge (3) 37,922 — — Gain on sale of property and equipment (410) (695) (2,979) Other 4,554 6,525 4,889 Restructuring costs (4) — 344 1,173 Total Asset-Based 2,071,723 1,935,433 1,878,961 ArcBest (1) Purchased transportation 631,501 563,497 502,159 Supplies and expenses 13,329 15,087 13,145 Depreciation and amortization 13,750 13,090 13,612 Shared services 91,266 83,660 85,068 Other 9,143 11,116 11,678 Restructuring costs (4) 491 875 8,038 Gain on sale of subsidiaries (5) (1,945) (152) — Total ArcBest 757,535 687,173 633,700 FleetNet 190,741 152,864 160,132 Other and eliminations (35,309) (10,361) (6,639) Total consolidated operating expenses $ 2,984,690 $ 2,765,109 $ 2,666,154 OPERATING INCOME (2) Asset-Based $ 103,862 $ 57,881 $ 37,433 ArcBest (1) 23,588 19,525 7,034 FleetNet 4,385 3,477 2,497 Other and eliminations (22,737) (19,535) (12,899) Total consolidated operating income $ 109,098 $ 61,348 $ 34,065 OTHER INCOME (COSTS) Interest and dividend income $ 3,914 $ 1,293 $ 1,523 Interest and other related financing costs (9,468) (6,342) (5,150) Other, net (2)(6) (19,158) (4,723) (2,151) Total other income (costs) (24,712) (9,772) (5,778) INCOME BEFORE INCOME TAXES $ 84,386 $ 51,576 $ 28,287 (1) Includes the operations of LDS since the September 2, 2016 acquisition date for all years presented. (2) The Company retrospectively adopted an amendment to ASC Topic 715, effective January 1, 2018, which requires the components of net periodic benefit cost other than service cost to be presented within other income (costs) in the consolidated financial statements and, therefore, these costs are no longer classified within operating expenses within this table (see Note B). Certain reclassifications have been made to the prior year’s operating segment data to conform to the current year presentation of components of net periodic benefit cost in other income (costs). Net periodic benefit costs are presented in Note I. (3) ABF Freight recorded a one-time charge in 2018 for the multiemployer pension fund withdrawal liability resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund (see Note I). (4) Restructuring costs relate to the realignment of the Company’s corporate structure (see Note N). (5) Gains recognized in 2018 and 2017 relate to the sale of the ArcBest segment’s military moving businesses in December 2017 and 2016, respectively (see Note A). (6) 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 2018 2017 2016 (in thousands) CAPITAL EXPENDITURES, GROSS Asset-Based (1) $ 116,505 $ 112,751 $ 110,170 ArcBest 5,174 9,823 6,154 FleetNet 1,365 1,089 403 Other and eliminations (2)(3) 14,631 26,288 34,910 $ 137,675 $ 149,951 $ 151,637 For the year ended December 31 2018 2017 2016 (in thousands) DEPRECIATION AND AMORTIZATION EXPENSE (2) Asset-Based $ 85,951 $ 82,507 $ 80,331 ArcBest (4) 13,750 13,090 13,612 FleetNet (5) 1,140 1,089 1,210 Other and eliminations (2) 7,794 6,382 7,900 $ 108,635 $ 103,068 $ 103,053 (1) Includes assets acquired through notes payable and capital leases of $86.8 million in 2018, $84.2 million in 2017, and $83.4 million in 2016. (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 of $6.9 million in 2018. (4) Includes amortization of intangibles of $4.3 million in 2018 and 2017, and $4.0 million in 2016. (5) Includes amortization of intangibles which totaled $0.2 million in 2018, 2017, and 2016. 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 2018 2017 2016 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 1,398,348 $ 1,361,224 $ 1,340,577 Rents, purchased transportation, and other costs of services 989,006 869,584 823,683 Fuel, supplies, and expenses 325,126 304,126 270,138 Depreciation and amortization (1) 108,635 103,068 103,053 Other 123,998 124,144 118,390 Multiemployer pension fund withdrawal liability charge (2) 37,922 — — Restructuring costs (3) 1,655 2,963 10,313 $ 2,984,690 $ 2,765,109 $ 2,666,154 (1) Includes amortization of intangible assets. (2) ABF Freight recorded a one-time charge in 2018 for the multiemployer pension fund withdrawal liability resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund (see Note I). (3) Restructuring costs relate to the realignment of the Company’s corporate structure previously discussed in this Note. |
RESTRUCTURING CHARGES AND IMP_2
RESTRUCTURING CHARGES AND IMPAIRMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
RESTRUCTURING CHARGES AND IMPAIRMENT | |
Schedule of restructuring charges | 2018 2017 2016 (in thousands) Software impairment (1) $ — $ — $ 6,244 Contract terminations (2) 427 — 2,875 Severance and other (3) 1,228 2,963 1,194 Total charges $ 1,655 $ 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 OPERATIO_2
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |
Schedule of unaudited quarterly financial information | 2018 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands, except share and per share data) Revenues $ 700,001 $ 793,350 $ 826,158 $ 774,279 Operating expenses (1)(2) 687,276 790,194 770,103 737,117 Operating income (1)(2) 12,725 3,156 56,055 37,162 Other income (costs) (1)(3) (3,734) (2,422) (2,064) (16,492) Income tax provision (benefit) (963) (499) 13,215 5,371 Net income (2)(3) $ 9,954 $ 1,233 $ 40,776 $ 15,299 Earnings per common share (4) Basic $ 0.39 $ 0.05 $ 1.58 $ 0.59 Diluted (2)(3) $ 0.37 $ 0.05 $ 1.52 $ 0.57 Average common shares outstanding Basic 25,642,871 25,670,325 25,697,509 25,707,335 Diluted 26,596,376 26,699,549 26,795,659 26,682,262 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 (1) 660,988 694,601 717,538 691,982 Operating income (loss) (1) (9,900) 25,767 26,742 18,739 Other income (costs) (1) (2,747) (1,632) (2,674) (2,719) Income tax provision (benefit) (5) (5,240) 8,358 9,280 (20,548) Net income (loss) (5) $ (7,407) $ 15,777 $ 14,788 $ 36,568 Earnings (loss) per common share (4) Basic $ (0.29) $ 0.61 $ 0.57 $ 1.42 Diluted (5) $ (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 (1) As a result of retrospectively adopting an amendment to ASC Topic 715 effective January 1, 2018, the service cost component of net periodic benefit cost continues to be included in Operating Expenses, but the other components of net periodic benefit cost, including pension settlement expense, are presented in Other Income (Costs). See Adopted Accounting Pronouncements within Note B. (2) Second quarter 2018 includes a multiemployer pension fund withdrawal liability charge of $37.9 million (pre-tax), or $28.2 million (after-tax) and $1.05 per diluted share. See Multiemployer Plans within Note I. (3) Includes nonunion pension expense, including settlement. Pension settlements related to termination of the nonunion defined benefit pension plan began in fourth quarter 2018. Nonunion pension expense, including settlement, totaled $12.6 million (pre-tax), or $9.4 million (after-tax) and $0.35 per diluted share, in fourth quarter 2018. See Note I. (4) The Company uses the two-class method for calculating earnings per share. See Note L. (5) Fourth quarter 2017 includes a provisional tax benefit of $25.8 million, or $0.97 per diluted share, as a result of recognizing a reasonable estimate of the tax effects of the Tax Cuts and Jobs Act. See Note E. |
ORGANIZATION AND DESCRIPTION _3
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Organization) (Details) - segment | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2018 | |
Organization and description of business | ||
Number of reportable operating segments | 3 | |
Asset-Based | ||
Organization and description of business | ||
Percentage of the Company's revenues, before other revenues and intercompany eliminations, represented by the Asset-Based segment | 69.00% | |
Vacation accrual period | 5 days | |
Asset-Based | Unionized employees concentration risk | Number of employees | ||
Organization and description of business | ||
Percentage of Asset-Based segment employees covered under collective bargaining agreement with the IBT | 82.00% |
ORGANIZATION AND DESCRIPTION _4
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Acquisitions) (Details) - USD ($) $ in Thousands | Dec. 29, 2017 | Dec. 30, 2016 | Sep. 02, 2016 | Jan. 31, 2019 | Jan. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Acquisitions | ||||||||
Net cash consideration | $ 24,780 | |||||||
Divestitures | ||||||||
Proceeds from sale of subsidiaries | $ 4,680 | $ 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 | ||||||||
Acquisitions | ||||||||
Paid from escrow | $ 3,500 | |||||||
LDS | Subsequent Event | ||||||||
Acquisitions | ||||||||
Paid from escrow | $ 4,500 | |||||||
LDS | ArcBest | ||||||||
Acquisitions | ||||||||
Total consideration | $ 25,000 | |||||||
Cash consideration | 17,000 | |||||||
Contingent consideration | $ 8,000 | |||||||
Contingent consideration period | 2 years |
ACCOUNTING POLICIES (Concentrat
ACCOUNTING POLICIES (Concentration) (Details) - Minimum | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
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 | 6.00% | 6.00% |
ACCOUNTING POLICIES (Property)
ACCOUNTING POLICIES (Property) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Held-for-sale | Other long-term assets | ||
Property, Plant and Equipment | ||
Assets held for sale which are reported within other noncurrent assets | $ 0.7 | $ 1.4 |
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, 2018 | Dec. 31, 2017 |
Accounts Payable | ||
Book Overdrafts | ||
Amount of book overdrafts | $ 17.5 | $ 17.2 |
ACCOUNTING POLICIES (Other Reco
ACCOUNTING POLICIES (Other Recognition and Disclosure) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Other Recognition and Disclosure | ||
Deferred revenue | $ 0.5 | $ 0.6 |
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract | true | |
Revenue, Practical Expedient, Remaining Performance Obligation | true |
ACCOUNTING POLICIES (Share-Base
ACCOUNTING POLICIES (Share-Based Compensation) (Details) - Restricted Stock Units | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employees | ||||
Share-Based Compensation | ||||
Vesting period | 4 years | 5 years | ||
Nonemployee directors | ||||
Share-Based Compensation | ||||
Vesting period | 1 year | 1 year | 1 year | 3 years |
ACCOUNTING POLICIES (Share-Ba_2
ACCOUNTING POLICIES (Share-Based Compensation - ASC Topic 718) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2017 |
Adopted Accounting Pronouncements | |||
Retained earnings | $ 501,389 | $ 438,379 | |
Additional paid-in capital | 325,712 | 319,436 | |
Noncurrent deferred tax liabilities | $ 56,441 | $ 49,157 | |
ASC Topic 718, Compensation – Stock Compensation | Adjustment | |||
Adopted Accounting Pronouncements | |||
Retained earnings | $ (200) | ||
Additional paid-in capital | 400 | ||
Noncurrent deferred tax liabilities | $ (200) |
ACCOUNTING POLICIES (Adopted Ac
ACCOUNTING POLICIES (Adopted Accounting Pronouncements) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Adopted Accounting Pronouncements | ||||||||||||
Retained earnings | $ 501,389 | $ 438,379 | $ 501,389 | $ 438,379 | ||||||||
Revenues | 774,279 | $ 826,158 | $ 793,350 | $ 700,001 | 710,721 | $ 744,280 | $ 720,368 | $ 651,088 | 3,093,788 | 2,826,457 | $ 2,700,219 | |
Operating expenses | 737,117 | 770,103 | 790,194 | 687,276 | 691,982 | 717,538 | 694,601 | 660,988 | 2,984,690 | 2,765,109 | 2,666,154 | |
Increase in other cost | 19,158 | 4,723 | 2,151 | |||||||||
Net income | 15,299 | $ 40,776 | $ 1,233 | $ 9,954 | 36,568 | $ 14,788 | $ 15,777 | $ (7,407) | 67,262 | 59,726 | 18,652 | |
Additional paid-in capital | 325,712 | 319,436 | 325,712 | 319,436 | ||||||||
Noncurrent deferred tax liabilities | $ 56,441 | $ 49,157 | 56,441 | 49,157 | ||||||||
Retained Earnings | ||||||||||||
Adopted Accounting Pronouncements | ||||||||||||
Net income | 67,262 | 59,726 | 18,652 | |||||||||
ASC Topic 715, Compensation – Retirement Benefits | Adjustment | ||||||||||||
Adopted Accounting Pronouncements | ||||||||||||
Operating expenses | (7,800) | (5,100) | ||||||||||
Increase in other cost | $ 7,800 | $ 5,100 | ||||||||||
Net income | $ 0 | |||||||||||
EPS (in dollars per share) | $ 0 | |||||||||||
ASC Topic 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Loss | ||||||||||||
Adopted Accounting Pronouncements | ||||||||||||
Reclassification from AOCI to Retained earnings tax effect | $ (3,600) | |||||||||||
ASC Topic 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | Retained Earnings | ||||||||||||
Adopted Accounting Pronouncements | ||||||||||||
Reclassification from AOCI to Retained earnings tax effect | 3,600 | |||||||||||
Difference between Revenue Guidance in Effect before and after Topic 606 | ASC Topic 606, Revenue from Contracts with Customers | ||||||||||||
Adopted Accounting Pronouncements | ||||||||||||
Retained earnings | $ 400 | |||||||||||
Revenues | $ 700 | |||||||||||
Purchased transportation | $ 700 |
ACCOUNTING POLICIES (Accounting
ACCOUNTING POLICIES (Accounting Pronouncements Not Yet Adopted) (Details) - Subsequent Event $ in Millions | Jan. 01, 2019USD ($) |
Assets and liabilities | |
Consolidated right-of-use asset under operating lease contracts that have been executed but not yet commenced | $ 17 |
Lease liability from operating lease contracts that have been executed but not yet commenced | 17 |
ASC Topic 842, Leases | Adjustment | |
Assets and liabilities | |
Consolidated right-of-use asset | 60 |
Lease liability | $ 60 |
FINANCIAL INSTRUMENTS AND FAI_3
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Cash and Cash Equivalents and Short-term Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair value disclosure | ||
Cash and cash equivalents | $ 190,186 | $ 120,772 |
Short-term investments | 106,806 | 56,401 |
Concentrations of Credit Risk of Financial Instruments | ||
Cash, cash equivalents and short-term deposits not FDIC-insured | 94,700 | 61,100 |
Cash deposits | ||
Fair value disclosure | ||
Cash and cash equivalents | 124,938 | 86,510 |
Variable rate demand notes | ||
Fair value disclosure | ||
Cash and cash equivalents | 19,786 | 19,744 |
Money market funds | ||
Fair value disclosure | ||
Cash and cash equivalents | 42,470 | 14,518 |
Certificates of deposit | ||
Fair value disclosure | ||
Short-term investments | 82,949 | $ 56,401 |
U.S. Treasury securities | ||
Fair value disclosure | ||
Cash and cash equivalents | 2,992 | |
Short-term investments | $ 23,857 |
FINANCIAL INSTRUMENTS AND FAI_4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Financial Instruments) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Carrying Value | ||
Fair value disclosure | ||
Debt obligations | $ 291,409 | $ 268,441 |
Fair Value | ||
Fair value disclosure | ||
Debt obligations | 291,560 | 267,131 |
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 borrowings | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 40,000 | 45,000 |
Level 2 | Accounts receivable securitization borrowings | Fair Value | ||
Fair value disclosure | ||
Debt obligations | 40,000 | 45,000 |
Level 2 | Notes payable | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 181,409 | 153,441 |
Level 2 | Notes payable | Fair Value | ||
Fair value disclosure | ||
Debt obligations | $ 181,560 | $ 152,131 |
FINANCIAL INSTRUMENTS AND FAI_5
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Assets and Liabilities) (Details) $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)item |
Level 3 | Discount Rate | ||
Liabilities: | ||
Measurement input | item | 0.125 | |
Recurring basis | ||
Assets: | ||
Assets | $ 45,613 | $ 17,358 |
Recurring basis | Cash and cash equivalents | ||
Assets: | ||
Money market funds | 42,470 | 14,518 |
Recurring basis | Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 2,342 | 2,359 |
Interest rate swaps | 801 | 481 |
Recurring basis | Accrued and other long term liabilities | ||
Liabilities: | ||
Contingent consideration | 4,472 | 6,970 |
Recurring basis | Level 1 | ||
Assets: | ||
Assets | 44,812 | 16,877 |
Recurring basis | Level 1 | Cash and cash equivalents | ||
Assets: | ||
Money market funds | 42,470 | 14,518 |
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 | 2,342 | 2,359 |
Recurring basis | Level 2 | ||
Assets: | ||
Assets | 801 | 481 |
Recurring basis | Level 2 | Other long-term assets | ||
Assets: | ||
Interest rate swaps | 801 | 481 |
Recurring basis | Level 3 | Accrued and other long term liabilities | ||
Liabilities: | ||
Contingent consideration | $ 4,472 | $ 6,970 |
FINANCIAL INSTRUMENTS AND FAI_6
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (FV - Level 3) (Details) - Contingent Consideration - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value of liabilities level 3 hierarchy | ||
Balance beginning of period | $ 6,970 | $ 6,775 |
Payments | (3,528) | |
Change in fair value included in operating expenses | 1,030 | 195 |
Balance at end of period | $ 4,472 | $ 6,970 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill by reportable operating segment | ||
Balance at the beginning of the period | $ 108,320 | $ 108,875 |
Goodwill divested | (661) | |
Purchase accounting adjustments | 106 | |
Balance at the end of the period | 108,320 | 108,320 |
ArcBest | ||
Goodwill by reportable operating segment | ||
Balance at the beginning of the period | 107,690 | 108,245 |
Goodwill divested | (661) | |
Purchase accounting adjustments | 106 | |
Balance at the end of the period | 107,690 | 107,690 |
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 ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Intangible) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 13 years | |
Cost | $ 61,463 | $ 61,463 |
Accumulated Amortization | 24,814 | 20,294 |
Net Value | 36,649 | 41,169 |
Total intangible assets | ||
Cost | 93,763 | 93,763 |
Net Value | 68,949 | 73,469 |
Trade name | ||
Indefinite-lived intangible assets | ||
Net Value | $ 32,300 | 32,300 |
Customer relationships | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 14 years | |
Cost | $ 60,431 | 60,431 |
Accumulated Amortization | 24,130 | 19,745 |
Net Value | $ 36,301 | 40,686 |
Other intangible assets | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 9 years | |
Cost | $ 1,032 | 1,032 |
Accumulated Amortization | 684 | 549 |
Net Value | $ 348 | $ 483 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Amortization) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Future amortization for intangible assets and acquired software | ||
2,019 | $ 5,463 | |
2,020 | 4,471 | |
2,021 | 4,418 | |
2,022 | 4,385 | |
2,023 | 4,287 | |
Thereafter | 14,629 | |
Total amortization | 37,653 | |
Future amortization for intangible assets | ||
2,019 | 4,482 | |
2,020 | 4,454 | |
2,021 | 4,412 | |
2,022 | 4,385 | |
2,023 | 4,287 | |
Thereafter | 14,629 | |
Net Value | 36,649 | $ 41,169 |
Future amortization for acquired software | ||
2,019 | 981 | |
2,020 | 17 | |
2,021 | 6 | |
Total amortization, Acquired software | 1,004 | |
Impairment Assessment of Long-Lived Assets | ||
Impairment of indefinite-lived intangible assets | $ 0 | $ 0 |
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, 2018 | Feb. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Impact of Tax Reform Act | |||||||
Statutory federal rate (as a percent) | 32.74% | 35.00% | 21.00% | 32.74% | 21.00% | 35.00% | 35.00% |
Reduction of deferred tax liabilities due to Tax Reform Act | $ 3,772 | $ 24,542 | |||||
Reduction in current income tax expense due to Tax Reform Act reflecting use of fiscal year rather than calendar year federal income tax filing | $ (100) | $ (1,300) |
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, 2018 | Feb. 28, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current provision (benefit): | |||||||||||||||
Federal | $ 9,750 | $ (1,969) | $ (604) | ||||||||||||
State | 3,264 | 3,701 | (335) | ||||||||||||
Foreign | 2,238 | 331 | 1,052 | ||||||||||||
Current tax provision | 15,252 | 2,063 | 113 | ||||||||||||
Deferred provision (benefit): | |||||||||||||||
Federal | 1,157 | (9,312) | 8,161 | ||||||||||||
State | 737 | (867) | 1,354 | ||||||||||||
Foreign | (22) | (34) | 7 | ||||||||||||
Deferred tax provision (benefit) | 1,872 | (10,213) | 9,522 | ||||||||||||
Total provision (benefit) for income taxes | $ 5,371 | $ 13,215 | $ (499) | $ (963) | $ (20,548) | $ 9,280 | $ 8,358 | $ (5,240) | 17,124 | (8,150) | $ 9,635 | ||||
Impact of Tax Reform Act | |||||||||||||||
Reduction of deferred tax liabilities due to Tax Reform Act | $ 3,772 | $ 24,542 | |||||||||||||
Statutory federal rate (as a percent) | 32.74% | 35.00% | 21.00% | 32.74% | 21.00% | 35.00% | 35.00% | ||||||||
Reduction in current income tax expense due to Tax Reform Act reflecting use of fiscal year rather than calendar year federal income tax filing | $ (100) | $ (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, 2018 | Feb. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of the deferred tax provision or benefit | |||||||
Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets | $ 23,153 | $ 21,876 | $ 12,182 | ||||
Amortization of intangibles | (763) | (1,030) | (3,623) | ||||
Changes in reserves for workers’ compensation, third-party casualty, and cargo claims | 469 | (812) | 362 | ||||
Revenue recognition | (2,524) | 332 | 1,862 | ||||
Allowance for doubtful accounts | (115) | (719) | (295) | ||||
Nonunion pension and other retirement plans | (2,810) | (1,977) | 3,861 | ||||
Multiemployer pension fund withdrawal | (5,818) | ||||||
Federal net operating loss carryforwards utilized | 125 | 28 | 161 | ||||
State net operating loss carryforwards utilized (generated) | 621 | 229 | (304) | ||||
State depreciation adjustments | (1,761) | (1,244) | (758) | ||||
Share-based compensation | (529) | 352 | (681) | ||||
Valuation allowance increase (decrease) | (744) | 401 | (61) | ||||
Other accrued expenses | (4,881) | (852) | (4,108) | ||||
Impact of the Tax Reform Act | (3,772) | (24,542) | |||||
Other | 1,221 | (2,255) | 924 | ||||
Deferred tax provision (benefit) | $ 1,872 | $ (10,213) | $ 9,522 | ||||
Statutory federal rate (as a percent) | 32.74% | 35.00% | 21.00% | 32.74% | 21.00% | 35.00% | 35.00% |
INCOME TAXES (Deferred) (Detail
INCOME TAXES (Deferred) (Details) - USD ($) $ in Thousands | 2 Months Ended | 10 Months Ended | 12 Months Ended | ||||
Feb. 28, 2018 | Feb. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred tax assets: | |||||||
Accrued expenses | $ 39,885 | $ 36,843 | $ 39,885 | $ 36,843 | |||
Pension liabilities | 2,754 | 4,413 | 2,754 | 4,413 | |||
Multiemployer pension fund withdrawal | 5,710 | 5,710 | |||||
Postretirement liabilities other than pensions | 7,660 | 6,236 | 7,660 | 6,236 | |||
Share-based compensation | 4,893 | 4,466 | 4,893 | 4,466 | |||
Federal and state net operating loss carryforwards | 1,152 | 1,781 | 1,152 | 1,781 | |||
Other | 1,355 | 1,508 | 1,355 | 1,508 | |||
Total deferred tax assets | 63,409 | 55,247 | 63,409 | 55,247 | |||
Valuation allowance | (53) | (844) | (53) | (844) | |||
Total deferred tax assets, net of valuation allowance | 63,356 | 54,403 | 63,356 | 54,403 | |||
Deferred tax liabilities: | |||||||
Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets | 93,525 | 73,725 | 93,525 | 73,725 | |||
Intangibles | 14,066 | 14,573 | 14,066 | 14,573 | |||
Revenue recognition | 1,513 | 6,172 | 1,513 | 6,172 | |||
Prepaid expenses | 3,225 | 3,125 | 3,225 | 3,125 | |||
Total deferred tax liabilities | 112,329 | 97,595 | 112,329 | 97,595 | |||
Net deferred tax liabilities | $ (48,973) | $ (43,192) | $ (48,973) | $ (43,192) | |||
Statutory federal rate (as a percent) | 32.74% | 35.00% | 21.00% | 32.74% | 21.00% | 35.00% | 35.00% |
INCOME TAXES (Rate Reconciliati
INCOME TAXES (Rate Reconciliation) (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||||
Feb. 28, 2018 | Feb. 28, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
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 | $ 17,721 | $ 18,052 | $ 9,901 | ||||||||||||
Federal income tax effects of: | |||||||||||||||
State income taxes | (840) | (992) | (357) | ||||||||||||
Nondeductible expenses | 946 | 1,551 | 1,653 | ||||||||||||
Life insurance proceeds and changes in cash surrender value | 7 | (927) | (1,001) | ||||||||||||
Alternative fuel tax credit | (1,203) | (1,180) | |||||||||||||
Increase (decrease) in valuation allowances | (891) | 401 | (61) | ||||||||||||
Increase (decrease) in uncertain tax positions | 933 | (720) | |||||||||||||
Settlement of share-based compensation | (649) | (1,129) | |||||||||||||
Impact of the Tax Reform Act on current tax | (52) | (1,288) | |||||||||||||
Impact of the Tax Reform Act on deferred tax | (3,772) | (24,542) | |||||||||||||
Other | (1,293) | (1,687) | (1,398) | ||||||||||||
Federal income tax provision (benefit) | 10,907 | (11,281) | 7,557 | ||||||||||||
State income tax provision | 4,001 | 2,834 | 1,019 | ||||||||||||
Foreign income tax provision | 2,216 | 297 | 1,059 | ||||||||||||
Total provision (benefit) for income taxes | $ 5,371 | $ 13,215 | $ (499) | $ (963) | $ (20,548) | $ 9,280 | $ 8,358 | $ (5,240) | $ 17,124 | $ (8,150) | $ 9,635 | ||||
Effective tax (benefit) rate (as a percent) | 20.30% | (15.80%) | 34.10% | ||||||||||||
Statutory federal rate (as a percent) | 32.74% | 35.00% | 21.00% | 32.74% | 21.00% | 35.00% | 35.00% | ||||||||
Income taxes paid, excluding income tax refunds | $ 21,800 | $ 22,700 | $ 24,300 | ||||||||||||
Income tax refunds | $ 18,500 | $ 18,500 | $ 32,500 |
INCOME TAXES (ASC Topic 718) (D
INCOME TAXES (ASC Topic 718) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Adopted Accounting Pronouncements | |||
Effective tax (benefit) rate (as a percent) | 20.30% | (15.80%) | 34.10% |
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 | |||
Adopted Accounting Pronouncements | |||
Effective tax (benefit) rate (as a percent) | (0.80%) | (2.20%) |
INCOME TAXES (NOL) (Details)
INCOME TAXES (NOL) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Operating loss and contribution carryforwards | |||
Reversal of valuation allowance | $ 0.7 | ||
Number of state taxing authorities for which the entity is under examination | item | 3 | ||
State | |||
Operating loss and contribution carryforwards | |||
Operating loss carryforwards | $ 7.9 | ||
Contribution carryforwards | $ 1.1 | ||
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 | $ 0.1 | $ 0.1 | |
Valuation allowance related to net operating loss carryforwards | $ 0.7 | ||
Net operating loss carryforwards expiration period | 5 years | ||
State | Panther | |||
Operating loss and contribution carryforwards | |||
Operating loss carryforwards | $ 5.3 | ||
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 | $ 1.3 | ||
Net operating loss carryforwards expiration period | 13 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 |
INCOME TAXES (Uncertain Tax Pos
INCOME TAXES (Uncertain Tax Positions) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income taxes | ||||
Reserve for uncertain tax positions | $ 1 | $ 0.7 | ||
Maximum | ||||
Income taxes | ||||
Reserve for uncertain tax positions | $ 0.1 | $ 0.1 | ||
Federal, Foreign, and State Jurisdictions | 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 | |||
Federal | ||||
Income taxes | ||||
Reserve for uncertain tax positions | 0.7 | |||
Decrease in reserve, Expiration of statute of limitations | 0.7 | |||
Increase in reserve, Prior period tax positions | 0.9 | |||
Federal | 2015 tax year | Maximum | ||||
Income taxes | ||||
Reserve for uncertain tax positions | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
OPERATING LEASES AND COMMITME_3
OPERATING LEASES AND COMMITMENTS (Future minimum commitments) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Leases and Commitments | |||
Rental expense | $ 27,300 | $ 31,700 | $ 26,700 |
Future minimum rental commitments for all noncancelable operating leases | |||
2,019 | 19,130 | ||
2,020 | 14,620 | ||
2,021 | 10,972 | ||
2,022 | 7,125 | ||
2,023 | 4,477 | ||
Thereafter | 5,850 | ||
Total | 62,174 | ||
Land and structures (service centers) | |||
Future minimum rental commitments for all noncancelable operating leases | |||
2,019 | 18,067 | ||
2,020 | 13,676 | ||
2,021 | 10,716 | ||
2,022 | 7,125 | ||
2,023 | 4,477 | ||
Thereafter | 5,850 | ||
Total | 59,911 | ||
Future minimum payments for leases not yet commenced | 21,000 | ||
Equipment and other | |||
Future minimum rental commitments for all noncancelable operating leases | |||
2,019 | 1,063 | ||
2,020 | 944 | ||
2,021 | 256 | ||
Total | $ 2,263 |
LONG-TERM DEBT AND FINANCING _3
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Summary) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Long-term debt obligations | ||
Long-term debt | $ 291,675 | $ 268,919 |
Less current portion | 54,075 | 61,930 |
Long-term debt, less current portion | $ 237,600 | 206,989 |
Weighted-average interest rate (as a percent) | 3.40% | |
Payments under long-term debt obligations | ||
2,019 | $ 63,608 | |
2,020 | 47,540 | |
2,021 | 85,514 | |
2,022 | 104,449 | |
2,023 | 17,124 | |
Thereafter | 59 | |
Total payments | 318,294 | |
Less amounts representing interest | 26,619 | |
Long-term debt | 291,675 | 268,919 |
Credit Facility | ||
Long-term debt obligations | ||
Long-term debt | $ 70,000 | 70,000 |
Interest rate (as a percent) | 3.80% | |
Payments under long-term debt obligations | ||
2,019 | $ 2,691 | |
2,020 | 2,603 | |
2,021 | 2,540 | |
2,022 | 71,318 | |
Total payments | 79,152 | |
Less amounts representing interest | 9,152 | |
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) | 3.10% | 3.35% |
Accounts receivable securitization borrowings | ||
Long-term debt obligations | ||
Long-term debt | $ 40,000 | $ 45,000 |
Interest rate (as a percent) | 3.20% | |
Payments under long-term debt obligations | ||
2,019 | $ 1,396 | |
2,020 | 1,345 | |
2,021 | 41,091 | |
Total payments | 43,832 | |
Less amounts representing interest | 3,832 | |
Long-term debt | 40,000 | 45,000 |
Notes payable | ||
Long-term debt obligations | ||
Long-term debt | $ 181,409 | 153,441 |
Weighted-average interest rate (as a percent) | 3.40% | |
Payments under long-term debt obligations | ||
2,019 | $ 59,281 | |
2,020 | 43,565 | |
2,021 | 41,876 | |
2,022 | 33,130 | |
2,023 | 17,124 | |
Thereafter | 59 | |
Total payments | 195,035 | |
Less amounts representing interest | 13,626 | |
Long-term debt | 181,409 | 153,441 |
Capital lease obligations | ||
Long-term debt obligations | ||
Long-term debt | $ 266 | 478 |
Weighted-average interest rate (as a percent) | 5.60% | |
Payments under long-term debt obligations | ||
2,019 | $ 240 | |
2,020 | 27 | |
2,021 | 7 | |
2,022 | 1 | |
Total payments | 275 | |
Less amounts representing interest | 9 | |
Long-term debt | $ 266 | $ 478 |
LONG-TERM DEBT AND FINANCING _4
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Assets Sec) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Arrangements | |||
Total assets securing notes payable or held under capital leases | $ 273,615 | $ 272,330 | |
Less accumulated depreciation and amortization | 79,961 | 87,691 | |
Net assets securing notes payable or held under capital leases | $ 193,654 | 184,639 | |
Weighted-average interest rate (as a percent) | 3.40% | ||
Interest paid, net of capitalized interest | $ 8,700 | 5,800 | $ 4,500 |
Capitalized interest | 200 | 900 | $ 700 |
Revenue equipment | |||
Financing Arrangements | |||
Total assets securing notes payable or held under capital leases | 264,396 | 269,950 | |
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 | 1,484 | 486 | |
Service, office, and other equipment | |||
Financing Arrangements | |||
Total assets securing notes payable or held under capital leases | $ 5,941 | $ 100 |
LONG-TERM DEBT AND FINANCING _5
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Credit Facility) (Details) $ in Millions | Dec. 31, 2018USD ($) |
Credit Facility | |
Financing Arrangements | |
Maximum borrowing capacity | $ 200 |
Additional borrowing capacity that may be requested | 100 |
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 _6
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Interest rate swaps) (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Nov. 30, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
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 assets | ||||
Financing Arrangements | ||||
Fair value of interest rate swap, asset | $ 0.3 | $ 0.1 | ||
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) | 3.10% | 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 of interest rate swap, asset | $ 0.5 | $ 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) | 3.24% |
LONG-TERM DEBT AND FINANCING _7
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Securitization program) (Details) - Accounts receivable securitization borrowings - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financing Arrangements | ||
Maximum borrowing capacity | $ 125 | |
Additional borrowing capacity that may be requested | 25 | |
Repayment of accounts receivable securitization | 5 | |
Amount outstanding | 40 | $ 45 |
Outstanding letters of credit | 16.6 | $ 17.7 |
Remaining borrowing capacity | $ 68.4 |
LONG-TERM DEBT AND FINANCING _8
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Letters of credit & Surety bonds (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts receivable securitization borrowings | ||
Financing Arrangements | ||
Outstanding letters of credit | $ 16.6 | $ 17.7 |
Letter of Credit Agreements | ||
Financing Arrangements | ||
Outstanding letters of credit | 17.2 | 18.3 |
Surety bonds | ||
Financing Arrangements | ||
Outstanding surety bonds under uncollateralized bond programs | $ 49.1 | $ 60.4 |
LONG-TERM DEBT AND FINANCING _9
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Notes payable) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue equipment and software | Notes payable | |||
Financing Arrangements | |||
Equipment financed during the period under notes payable | $ 94 | $ 84.2 | $ 83.4 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
ACCRUED EXPENSES | ||
Workers' compensation, third-party casualty, and loss and damage claims reserves | $ 103,015 | $ 99,969 |
Accrued vacation pay | 41,474 | 36,034 |
Accrued compensation | 52,626 | 35,718 |
Taxes other than income | 8,457 | 8,215 |
Other | 37,539 | 30,548 |
Total accrued expenses | $ 243,111 | $ 210,484 |
ACCRUED EXPENSES (Reclassificat
ACCRUED EXPENSES (Reclassifications) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Accrued expenses | |
Reclassifications | |
Reclassification | $ (0.8) |
Current portion of pension and postretirement liabilities | |
Reclassifications | |
Reclassification | $ 0.8 |
EMPLOYEE BENEFIT PLANS (Plans)
EMPLOYEE BENEFIT PLANS (Plans) (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2018USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2017USD ($)person | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans | ||||||
Pension settlement expense, pre-tax | $ 12,925 | $ 4,156 | $ 3,229 | |||
Nonunion Defined Benefit Pension Plan | ||||||
Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans | ||||||
Nonparticipating annuity contract | $ 7,600 | 7,600 | ||||
Pension settlement expense, pre-tax | 12,925 | 4,156 | $ 3,023 | |||
Employer contributions | $ 5,500 | 5,500 | ||||
Number of plan participants for which vested pension benefits were settled | person | 50 | |||||
Postretirement Health Benefit Plan | ||||||
Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans | ||||||
Employer contributions | $ 769 | $ 733 | ||||
Unrecognized prior service credit, amortization period | 9 years | |||||
Forecast | Nonunion Defined Benefit Pension Plan | ||||||
Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans | ||||||
Pension settlement expense, pre-tax | $ 4,000 | |||||
Pension settlement expense, after-tax | 3,000 | |||||
Employer contributions | $ 7,000 |
EMPLOYEE BENEFIT PLANS (Funded
EMPLOYEE BENEFIT PLANS (Funded status) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Nonunion Defined Benefit Pension Plan | ||||
Change in benefit obligations | ||||
Benefit obligations at beginning of period | $ 137,417 | $ 152,006 | ||
Interest cost | 4,269 | 4,514 | $ 4,572 | |
Actuarial (gain) loss | (3,685) | 6,448 | ||
Benefits paid | (105,522) | (26,491) | ||
Settlement loss | 894 | 940 | ||
Benefit obligations at end of period | 33,373 | 137,417 | 152,006 | |
Change in plan assets | ||||
Fair value of plan assets at beginning of period | 124,831 | 144,805 | ||
Actual return on plan assets | 1,837 | 6,517 | ||
Employer contributions | $ 5,500 | 5,500 | ||
Benefits paid | (105,522) | (26,491) | ||
Fair value of plan assets at end of period | 26,646 | 124,831 | 144,805 | |
Funded status at period end | (6,727) | (12,586) | ||
Accumulated benefit obligation | 33,373 | 137,417 | ||
Supplemental Benefit Plan | ||||
Change in benefit obligations | ||||
Benefit obligations at beginning of period | 3,897 | 4,794 | ||
Interest cost | 108 | 102 | 130 | |
Actuarial (gain) loss | (57) | (10) | ||
Benefits paid | (989) | |||
Benefit obligations at end of period | 3,948 | 3,897 | 4,794 | |
Change in plan assets | ||||
Employer contributions | 989 | |||
Benefits paid | (989) | |||
Funded status at period end | (3,948) | (3,897) | ||
Accumulated benefit obligation | 3,948 | 3,897 | ||
Postretirement Health Benefit Plan | ||||
Change in benefit obligations | ||||
Benefit obligations at beginning of period | 24,097 | 25,532 | ||
Service cost | 366 | 489 | 429 | |
Interest cost | 837 | 1,060 | 1,017 | |
Actuarial (gain) loss | 4,957 | (2,251) | ||
Benefits paid | (769) | (733) | ||
Benefit obligations at end of period | 29,488 | 24,097 | $ 25,532 | |
Change in plan assets | ||||
Employer contributions | 769 | 733 | ||
Benefits paid | (769) | (733) | ||
Funded status at period end | (29,488) | (24,097) | ||
Accumulated benefit obligation | $ 29,488 | $ 24,097 |
EMPLOYEE BENEFIT PLANS (Recogni
EMPLOYEE BENEFIT PLANS (Recognized in Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amounts recognized in the consolidated balance sheets | ||
Current liabilities (included in current portion of pension and postretirement liabilities) | $ (8,659) | $ (753) |
Noncurrent liabilities (included in pension and postretirement liabilities) | (31,504) | (39,827) |
Nonunion Defined Benefit Pension Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Current liabilities (included in current portion of pension and postretirement liabilities) | (6,727) | |
Noncurrent liabilities (included in pension and postretirement liabilities) | (12,586) | |
Liabilities recognized | (6,727) | (12,586) |
Supplemental Benefit Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Current liabilities (included in current portion of pension and postretirement liabilities) | (937) | |
Noncurrent liabilities (included in pension and postretirement liabilities) | (3,011) | (3,897) |
Liabilities recognized | (3,948) | (3,897) |
Postretirement Health Benefit Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Current liabilities (included in current portion of pension and postretirement liabilities) | (995) | (753) |
Noncurrent liabilities (included in pension and postretirement liabilities) | (28,493) | (23,344) |
Liabilities recognized | $ (29,488) | $ (24,097) |
EMPLOYEE BENEFIT PLANS (Compone
EMPLOYEE BENEFIT PLANS (Components of cost) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of net periodic benefit cost | ||||
Pension settlement expense | $ 12,925 | $ 4,156 | $ 3,229 | |
Nonunion Defined Benefit Pension Plan | ||||
Components of net periodic benefit cost | ||||
Interest cost | 4,269 | 4,514 | 4,572 | |
Expected return on plan assets | (1,582) | (5,712) | (8,607) | |
Pension settlement expense | 12,925 | 4,156 | 3,023 | |
Amortization of net actuarial loss | 2,583 | 3,132 | 4,087 | |
Net periodic benefit cost | $ 12,600 | 18,195 | 6,090 | 3,075 |
Supplemental Benefit Plan | ||||
Components of net periodic benefit cost | ||||
Interest cost | 108 | 102 | 130 | |
Pension settlement expense | 206 | |||
Amortization of net actuarial loss | 81 | 82 | 152 | |
Net periodic benefit cost | 189 | 184 | 488 | |
Postretirement Health Benefit Plan | ||||
Components of net periodic benefit cost | ||||
Service cost | 366 | 489 | 429 | |
Interest cost | 837 | 1,060 | 1,017 | |
Amortization of prior service credit | (93) | (190) | (190) | |
Amortization of net actuarial loss | 304 | 694 | 705 | |
Net periodic benefit cost | $ 1,414 | $ 2,053 | $ 1,961 |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Distributions and pension settlement expense | ||||
Pension settlement expense, pre-tax | $ 12,925 | $ 4,156 | $ 3,229 | |
Nonunion Defined Benefit Pension Plan | ||||
Distributions and pension settlement expense | ||||
Pension settlement distributions | 105,279 | 26,261 | 16,515 | |
Pension settlement expense, pre-tax | $ 12,925 | $ 4,156 | $ 3,023 | |
Pension settlement expense per diluted share, net of taxes | $ 0.36 | $ 0.10 | $ 0.07 | |
Lump-sum distributions | $ 18,700 | |||
Nonparticipating annuity contract | $ 7,600 | 7,600 | ||
Supplemental Benefit Plan | ||||
Distributions and pension settlement expense | ||||
Pension settlement distributions | $ 989 | $ 246 | ||
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 |
EMPLOYEE BENEFIT PLANS (Include
EMPLOYEE BENEFIT PLANS (Included in AOCI) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
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 | $ 4,034 | $ 22,588 |
Total | 4,034 | 22,588 |
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 | 405 | 543 |
Total | 405 | 543 |
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 | 7,416 | 2,764 |
Unrecognized prior service credit | (34) | (127) |
Total | $ 7,382 | $ 2,637 |
EMPLOYEE BENEFIT PLANS (Discoun
EMPLOYEE BENEFIT PLANS (Discount rate and assumptions) (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Nonunion Defined Benefit Pension Plan | ||||||||||||||
Weighted-average assumptions used to determine nonunion benefit obligations | ||||||||||||||
Discount rate (as a percent) | 3.90% | 3.10% | 3.10% | 3.90% | 3.10% | |||||||||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||||||||||
Discount rate (as a percent) | 3.60% | 3.80% | 3.60% | 3.10% | 3.20% | 3.40% | 2.70% | 2.70% | 3.00% | 3.10% | 3.40% | 3.50% | ||
Expected return on plan assets, net of estimated expenses (as a percent) | 2.50% | 6.50% | 1.40% | 6.50% | 6.50% | |||||||||
Supplemental Benefit Plan | ||||||||||||||
Weighted-average assumptions used to determine nonunion benefit obligations | ||||||||||||||
Discount rate (as a percent) | 3.60% | 2.80% | 2.80% | 3.60% | 2.80% | |||||||||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||||||||||
Discount rate (as a percent) | 2.80% | 2.70% | 2.60% | |||||||||||
Postretirement Health Benefit Plan | ||||||||||||||
Weighted-average assumptions used to determine nonunion benefit obligations | ||||||||||||||
Discount rate (as a percent) | 4.20% | 3.50% | 3.50% | 4.20% | 3.50% | |||||||||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||||||||||
Discount rate (as a percent) | 3.50% | 4.00% | 4.20% |
EMPLOYEE BENEFIT PLANS (Health
EMPLOYEE BENEFIT PLANS (Health care trend rates) (Details) - Postretirement Health Benefit Plan | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
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) | 5.00% | |
Year that the rate reaches the cost trend assumed rate | 2,026 | |
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 | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
Nonunion Defined Benefit Pension Plan | ||||
Estimated future benefit payments | ||||
2,019 | $ 33,373 | |||
Employer contributions | $ 5,500 | 5,500 | ||
Adjusted funding target attainment percentage | 109.30% | |||
Supplemental Benefit Plan | ||||
Estimated future benefit payments | ||||
2,019 | 938 | |||
2,020 | 2,169 | |||
2024-2028 | 1,142 | |||
Employer contributions | $ 989 | |||
Postretirement Health Benefit Plan | ||||
Estimated future benefit payments | ||||
2,019 | 995 | |||
2,020 | 1,046 | |||
2,021 | 1,092 | |||
2,022 | 1,177 | |||
2,023 | 1,316 | |||
2024-2028 | 7,031 | |||
Employer contributions | $ 769 | $ 733 |
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 | |
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% | 1.40% | 6.50% | 6.50% |
Target allocations, acceptable ranges, and actual asset allocations | |||||
Target allocation (as a percent) | 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 | ||||
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 | ||||
Debt Instruments | |||||
Target allocations, acceptable ranges, and actual asset allocations | |||||
Target allocation (as a percent) | 70.00% | ||||
Weighted-Average Allocation (as a percent) | 73.60% | 73.60% | |||
Debt Instruments | Minimum | |||||
Target allocations, acceptable ranges, and actual asset allocations | |||||
Target allocation (as a percent) | 20.00% | ||||
Debt Instruments | Maximum | |||||
Target allocations, acceptable ranges, and actual asset allocations | |||||
Target allocation (as a percent) | 100.00% | ||||
Floating Rate Loan Fund | |||||
Target allocations, acceptable ranges, and actual asset allocations | |||||
Target allocation (as a percent) | 10.00% | ||||
Weighted-Average Allocation (as a percent) | 13.10% | 25.50% | 13.10% | ||
Floating Rate Loan Fund | Minimum | |||||
Target allocations, acceptable ranges, and actual asset allocations | |||||
Target allocation (as a percent) | 3.00% | ||||
Floating Rate Loan Fund | Maximum | |||||
Target allocations, acceptable ranges, and actual asset allocations | |||||
Target allocation (as a percent) | 100.00% | ||||
Cash and Cash Equivalents | |||||
Target allocations, acceptable ranges, and actual asset allocations | |||||
Target allocation (as a percent) | 20.00% | ||||
Weighted-Average Allocation (as a percent) | 13.30% | 74.50% | 13.30% | ||
Cash and Cash Equivalents | Minimum | |||||
Target allocations, acceptable ranges, and actual asset allocations | |||||
Target allocation (as a percent) | 0.00% | ||||
Cash and Cash Equivalents | Maximum | |||||
Target allocations, acceptable ranges, and actual asset allocations | |||||
Target allocation (as a percent) | 100.00% |
EMPLOYEE BENEFIT PLANS (Nonun_2
EMPLOYEE BENEFIT PLANS (Nonunion Plan Assets - FV) (Details) - Nonunion Defined Benefit Pension Plan - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Pension and other postretirement benefit plans | |||
Fair value of plan assets | $ 26,646 | $ 124,831 | $ 144,805 |
Cash and Cash Equivalents | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 19,856 | 16,641 | |
Debt Instruments | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 10 | 91,778 | |
Floating Rate Loan Fund | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 6,780 | 16,412 | |
Level 1 | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 26,636 | 43,140 | |
Level 1 | Cash and Cash Equivalents | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 19,856 | 16,641 | |
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 | 6,780 | 16,412 | |
Level 2 | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | 10 | 81,691 | |
Level 2 | Debt Instruments | |||
Pension and other postretirement benefit plans | |||
Fair value of plan assets | $ 10 | $ 81,691 | |
Level 2 | Corporate debt securities | |||
Pension and other postretirement benefit plans | |||
Percentage of investments in debt instruments | 80.00% | ||
Level 2 | Asset-backed securities | |||
Pension and other postretirement benefit plans | |||
Percentage of investments in debt instruments | 16.00% | ||
Level 2 | Mortgage-backed instruments | |||
Pension and other postretirement benefit plans | |||
Percentage of investments in debt instruments | 4.00% |
EMPLOYEE BENEFIT PLANS (Deferre
EMPLOYEE BENEFIT PLANS (Deferred Comp Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred salary agreements | ||
Deferred Compensation Plans | ||
Recorded liabilities | $ 2.5 | $ 2.9 |
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 | $ 2.3 | 2.4 |
Voluntary Savings Plan - mutual funds held in trust | Other long-term liabilities | ||
Deferred Compensation Plans | ||
VSP liabilities | $ 2.3 | $ 2.4 |
EMPLOYEE BENEFIT PLANS (Defined
EMPLOYEE BENEFIT PLANS (Defined Contribution Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
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 | $ 18.3 | $ 6.6 | $ 3.9 |
Other Plans | |||
Cash surrender value of life insurance policies | 49.3 | 49.7 | |
Recognized gains associated with changes in the cash surrender value and proceeds from life insurance policies | $ 0.1 | 2.6 | 2.9 |
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 | $ 6.1 | 5.6 | 5.7 |
DC Retirement Plan | |||
Defined Contribution Plans | |||
Period of service for participants' full vesting in the employer's contributions | 3 years | ||
Expense for employer contribution to defined contribution plan | $ 11.6 | $ 8.3 | $ 5 |
EMPLOYEE BENEFIT PLANS (Multiem
EMPLOYEE BENEFIT PLANS (Multiemployer Plans) (Details) $ in Thousands | Aug. 01, 2018 | Aug. 01, 2017 | Aug. 01, 2016 | Jun. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($)plan | Jan. 31, 2018 | Dec. 31, 2017USD ($) | Jan. 31, 2017 | Dec. 31, 2016USD ($) | Jan. 01, 2017 | Jan. 01, 2016 |
Multiemployer Plans | |||||||||||||
Multiemployer pension fund withdrawal liability charge (pre-tax) | $ 37,900 | $ 37,922 | |||||||||||
Asset-Based | |||||||||||||
Multiemployer Plans | |||||||||||||
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 | 62.00% | ||||||||||||
Percentage of contributions to the multiemployer pension plans that are in critical status | 2.00% | ||||||||||||
Percentage of contributions to the multiemployer pension plans that are in endangered status | 4.00% | ||||||||||||
Total contributions to multiemployer plans | $ 167,249 | $ 158,416 | $ 154,139 | ||||||||||
Percentage increase in contribution rate for time worked related to benefit costs | 1.30% | 0.30% | |||||||||||
Asset-Based | Multiemployer pension plans | Central States Pension Plan | |||||||||||||
Multiemployer Plans | |||||||||||||
Total contributions to multiemployer plans | $ 74,177 | $ 78,230 | $ 77,891 | ||||||||||
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 | |||||||||||
Maximum projected time to insolvency without legislative action | 10 years | ||||||||||||
Percentage of contributions to multiemployer pension plan | 50.00% | 50.00% | 50.00% | ||||||||||
Actuarially certified projected funded percentage of multiemployer pension plan | 37.80% | 42.10% | |||||||||||
Asset-Based | Multiemployer pension plans | Central Pennsylvania Teamsters Pension Plan | |||||||||||||
Multiemployer Plans | |||||||||||||
Total contributions to multiemployer plans | $ 13,393 | $ 13,391 | $ 13,381 | ||||||||||
Asset-Based | Multiemployer pension plans | Western Conference of Teamsters Pension Plan | |||||||||||||
Multiemployer Plans | |||||||||||||
Total contributions to multiemployer plans | 25,268 | 26,320 | 25,075 | ||||||||||
Approved increase in contribution (as a percent) | 0 | 0 | |||||||||||
Asset-Based | Multiemployer pension plans | Local 710 Pension Fund | |||||||||||||
Multiemployer Plans | |||||||||||||
Total contributions to multiemployer plans | 9,929 | 10,054 | 9,670 | ||||||||||
Threshold percentage of the entity's contributions relative to total fund contributions, which was exceeded during the period | 5.00% | 5.00% | |||||||||||
Asset-Based | Multiemployer pension plans | All Other Pension Plans in Aggregate | |||||||||||||
Multiemployer Plans | |||||||||||||
Total contributions to multiemployer plans | 24,392 | 25,395 | 23,718 | ||||||||||
Asset-Based | Multiemployer pension plans | New England Pension Fund | |||||||||||||
Multiemployer Plans | |||||||||||||
Total contributions to multiemployer plans | 20,090 | 5,026 | 4,404 | ||||||||||
Contributions to multiemployer plans related to pension fund withdrawal liability | 15,700 | ||||||||||||
Contribution rate frozen period (in years) | 10 years | ||||||||||||
Multiemployer pension fund withdrawal liability charge (pre-tax) | $ 37,900 | ||||||||||||
Initial lump sum payment of withdrawal liability | $ 15,100 | ||||||||||||
Withdrawal liability monthly payments period (in years) | 23 years | ||||||||||||
Aggregate present value of monthly payments | $ 22,800 | ||||||||||||
Outstanding withdrawal liability | 22,600 | ||||||||||||
Fair value of withdrawal obligation | $ 23,400 | ||||||||||||
Discount rate using 20-year U.S. Treasury (as a percent) | 4.10% | ||||||||||||
Asset-Based | Multiemployer pension plans | New England Pension Fund | Accrued expenses | |||||||||||||
Multiemployer Plans | |||||||||||||
Outstanding withdrawal liability | $ 600 | ||||||||||||
Asset-Based | Multiemployer pension plans | New England Pension Fund | Other long-term liabilities | |||||||||||||
Multiemployer Plans | |||||||||||||
Outstanding withdrawal liability | $ 22,000 | ||||||||||||
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 | 38 | ||||||||||||
Total contributions to multiemployer plans | $ 162,100 | $ 162,200 | $ 153,300 | ||||||||||
Percentage increase in contribution rate for time worked related to benefit costs | 3.90% | 3.70% | 3.50% | ||||||||||
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 | 82.00% |
STOCKHOLDERS' EQUITY (AOCI) (De
STOCKHOLDERS' EQUITY (AOCI) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accumulated Other Comprehensive Loss | ||||
Total after-tax amount | $ 717,682 | $ 651,462 | $ 599,055 | $ 588,728 |
Amount remaining in unrecognized net periodic benefit costs portion of accumulated other comprehensive income for previous valuation allowance on deferred tax assets | 4,000 | |||
Accumulated Other Comprehensive Loss | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | (13,836) | (27,181) | (31,840) | |
Total after-tax amount | (14,238) | (20,574) | (23,417) | $ (27,496) |
Unrecognized Net Periodic Benefit Costs | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | (11,821) | (25,768) | (29,320) | |
Total after-tax amount | (12,749) | (19,715) | (21,886) | |
Interest Rate Swap | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | 801 | 481 | (542) | |
Total after-tax amount | 591 | 292 | (329) | |
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | (2,816) | (1,894) | (1,978) | |
Total after-tax amount | $ (2,080) | $ (1,151) | $ (1,202) |
STOCKHOLDERS' EQUITY (AOCI comp
STOCKHOLDERS' EQUITY (AOCI comp) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | $ 651,462 | $ 599,055 | $ 588,728 |
Adjusted Balances | 651,878 | ||
OTHER COMPREHENSIVE INCOME, net of tax | 9,912 | 2,843 | 4,079 |
Balances | 717,682 | 651,462 | 599,055 |
Accumulated Other Comprehensive Loss | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | (20,574) | (23,417) | (27,496) |
Adjusted Balances | (24,150) | ||
Other comprehensive income (loss) before reclassifications | (1,821) | (1,968) | |
Amounts reclassified from accumulated other comprehensive loss | 11,733 | 4,811 | |
OTHER COMPREHENSIVE INCOME, net of tax | 9,912 | 2,843 | 4,079 |
Balances | (14,238) | (20,574) | (23,417) |
Unrecognized Net Periodic Benefit Costs | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | (19,715) | (21,886) | |
Adjusted Balances | (23,106) | ||
Other comprehensive income (loss) before reclassifications | (1,376) | (2,640) | |
Amounts reclassified from accumulated other comprehensive loss | 11,733 | 4,811 | |
OTHER COMPREHENSIVE INCOME, net of tax | 10,357 | 2,171 | |
Balances | (12,749) | (19,715) | (21,886) |
Interest Rate Swap | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | 292 | (329) | |
Adjusted Balances | 355 | ||
Other comprehensive income (loss) before reclassifications | 236 | 621 | |
OTHER COMPREHENSIVE INCOME, net of tax | 236 | 621 | |
Balances | 591 | 292 | (329) |
Foreign Currency Translation | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | (1,151) | (1,202) | |
Adjusted Balances | (1,399) | ||
Other comprehensive income (loss) before reclassifications | (681) | 51 | |
OTHER COMPREHENSIVE INCOME, net of tax | (681) | 51 | |
Balances | $ (2,080) | (1,151) | $ (1,202) |
ASC Topic 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Loss | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | (3,576) | ||
ASC Topic 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | Unrecognized Net Periodic Benefit Costs | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | (3,391) | ||
ASC Topic 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | Interest Rate Swap | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | 63 | ||
ASC Topic 220, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | Foreign Currency Translation | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | $ (248) |
STOCKHOLDERS' EQUITY (Reclass)
STOCKHOLDERS' EQUITY (Reclass) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Unrecognized Net Periodic Benefit Costs | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ (15,800) | $ (7,874) |
Tax benefit | 4,067 | 3,063 |
Total, net of tax | (11,733) | (4,811) |
Amortization of net actuarial loss | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (2,968) | (3,908) |
Amortization of prior service credit | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | 93 | 190 |
Pension settlement expense | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ (12,925) | $ (4,156) |
STOCKHOLDERS' EQUITY (Dividends
STOCKHOLDERS' EQUITY (Dividends) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 25, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
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 | $ 0.32 | |
Dividend Amount | $ 2,068 | $ 2,060 | $ 2,058 | $ 2,058 | $ 2,057 | $ 2,063 | $ 2,078 | $ 2,066 | $ 8,244 | $ 8,264 | $ 8,318 | |
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 | Feb. 22, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2015 |
Treasury Stock | |||||
Aggregate cost of shares repurchased during the period | $ 9,404 | $ 6,019 | $ 9,510 | ||
Treasury stock (in shares) | 3,097,634 | 2,851,578 | |||
Stock Repurchase Program | |||||
Treasury Stock | |||||
Amount of stock repurchases authorized | $ 50,000 | ||||
Number of shares repurchased during the period | 246,056 | ||||
Aggregate cost of shares repurchased during the period | $ 9,400 | ||||
Amount available for repurchase | $ 22,300 | ||||
Stock Repurchase Program | Subsequent Event | |||||
Treasury Stock | |||||
Number of shares repurchased during the period | 29,385 | ||||
Aggregate cost of shares repurchased during the period | $ 1,100 | ||||
Amount available for repurchase | $ 21,200 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based compensation | |||
Number of shares authorized | 3,400,000 | ||
Restricted Stock Units | |||
Award activity | |||
Outstanding at the beginning of the period (in shares) | 1,459,260 | ||
Granted (in shares) | 231,510 | 504,550 | 536,440 |
Vested (in shares) | (246,789) | ||
Forfeited (in shares) | (6,998) | ||
Outstanding at the end of the period (in shares) | 1,436,983 | 1,459,260 | |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 22.98 | ||
Granted (in dollars per share) | 44.50 | $ 16.39 | $ 15.89 |
Vested (in dollars per share) | 26.60 | ||
Forfeited (in dollars per share) | 24.72 | ||
Outstanding at the end of the period (in dollars per share) | $ 25.81 | $ 22.98 | |
Other disclosure | |||
Fair value of restricted stock awards vested | $ 9.6 | $ 11.2 | $ 5.8 |
Unrecognized compensation cost | $ 17.9 | ||
Weighted-average period of recognition of unrecognized compensation cost | 2 years 5 months 12 days | ||
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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Basic, numerator: | ||||||||||||||
Net income | $ 15,299 | $ 40,776 | $ 1,233 | $ 9,954 | $ 36,568 | $ 14,788 | $ 15,777 | $ (7,407) | $ 67,262 | $ 59,726 | $ 18,652 | |||
Effect of unvested restricted stock unit awards | (150) | (238) | (138) | |||||||||||
Adjusted net income | $ 67,112 | $ 59,488 | $ 18,514 | |||||||||||
Basic, denominator: | ||||||||||||||
Weighted-average shares | 25,707,335 | 25,697,509 | 25,670,325 | 25,642,871 | 25,637,568 | 25,671,535 | 25,767,791 | 25,684,475 | 25,679,736 | 25,683,745 | 25,751,544 | |||
Earnings per common share (in dollars per share) | $ 0.59 | $ 1.58 | $ 0.05 | $ 0.39 | $ 1.42 | $ 0.57 | $ 0.61 | $ (0.29) | $ 2.61 | [1] | $ 2.32 | [1] | $ 0.72 | [1] |
Diluted, numerator: | ||||||||||||||
Net income | $ 15,299 | $ 40,776 | $ 1,233 | $ 9,954 | $ 36,568 | $ 14,788 | $ 15,777 | $ (7,407) | $ 67,262 | $ 59,726 | $ 18,652 | |||
Effect of unvested restricted stock unit awards | (145) | (233) | (137) | |||||||||||
Adjusted net income | $ 67,117 | $ 59,493 | $ 18,515 | |||||||||||
Diluted, denominator: | ||||||||||||||
Weighted-average shares | 25,707,335 | 25,697,509 | 25,670,325 | 25,642,871 | 25,637,568 | 25,671,535 | 25,767,791 | 25,684,475 | 25,679,736 | 25,683,745 | 25,751,544 | |||
Effect of dilutive securities | 1,019,095 | 740,644 | 505,026 | |||||||||||
Adjusted weighted-average shares and assumed conversions | 26,682,262 | 26,795,659 | 26,699,549 | 26,596,376 | 26,540,716 | 26,393,359 | 26,291,641 | 25,684,475 | 26,698,831 | 26,424,389 | 26,256,570 | |||
Earnings per common share (in dollars per share) | $ 0.57 | $ 1.52 | $ 0.05 | $ 0.37 | $ 1.37 | $ 0.56 | $ 0.60 | $ (0.29) | $ 2.51 | $ 2.25 | $ 0.71 | |||
[1] | The Company uses the twoclass method for calculating earnings per share. See Note L. |
EARNINGS PER SHARE (AntiDil) (D
EARNINGS PER SHARE (AntiDil) (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock awards | |||
Antidilutive securities | |||
Outstanding stock awards not included in calculation of diluted earnings (loss) per share (in shares) | 0.1 | 0.1 | 0.4 |
OPERATING SEGMENT DATA - (Rev a
OPERATING SEGMENT DATA - (Rev and Expenses) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
REVENUES | ||||||||||||
Revenues | $ 774,279 | $ 826,158 | $ 793,350 | $ 700,001 | $ 710,721 | $ 744,280 | $ 720,368 | $ 651,088 | $ 3,093,788 | $ 2,826,457 | $ 2,700,219 | |
OPERATING EXPENSES | ||||||||||||
Salaries, wages, and benefits | 1,398,348 | 1,361,224 | 1,340,577 | |||||||||
Fuel, supplies, and expenses | 325,126 | 304,126 | 270,138 | |||||||||
Depreciation and amortization | 108,635 | 103,068 | 103,053 | |||||||||
Multiemployer pension fund withdrawal liability charge | 37,900 | 37,922 | ||||||||||
Gain on sale of property and equipment | (59) | (75) | (3,335) | |||||||||
Other | 123,998 | 124,144 | 118,390 | |||||||||
Restructuring costs | 1,655 | 2,963 | 10,313 | |||||||||
Gain on sale of subsidiaries | (1,945) | (152) | ||||||||||
Total consolidated operating expenses | 737,117 | 770,103 | 790,194 | 687,276 | 691,982 | 717,538 | 694,601 | 660,988 | 2,984,690 | 2,765,109 | 2,666,154 | |
OPERATING INCOME | ||||||||||||
OPERATING INCOME | 37,162 | 56,055 | 3,156 | 12,725 | 18,739 | 26,742 | 25,767 | (9,900) | 109,098 | 61,348 | 34,065 | |
OTHER INCOME (COSTS) | ||||||||||||
Interest and dividend income | 3,914 | 1,293 | 1,523 | |||||||||
Interest and other related financing costs | (9,468) | (6,342) | (5,150) | |||||||||
Other, net | (19,158) | (4,723) | (2,151) | |||||||||
TOTAL OTHER INCOME (COSTS) | $ (16,492) | $ (2,064) | $ (2,422) | $ (3,734) | $ (2,719) | $ (2,674) | $ (1,632) | $ (2,747) | (24,712) | (9,772) | (5,778) | |
INCOME BEFORE INCOME TAXES | 84,386 | 51,576 | 28,287 | |||||||||
Asset-Based | Multiemployer pension plans | New England Pension Fund | ||||||||||||
OPERATING EXPENSES | ||||||||||||
Multiemployer pension fund withdrawal liability charge | $ 37,900 | |||||||||||
Operating Segments | Asset-Based | ||||||||||||
REVENUES | ||||||||||||
Revenues | 2,175,585 | 1,993,314 | 1,916,394 | |||||||||
OPERATING EXPENSES | ||||||||||||
Salaries, wages, and benefits | 1,128,030 | 1,125,131 | 1,102,895 | |||||||||
Fuel, supplies, and expenses | 256,472 | 234,006 | 216,263 | |||||||||
Operating taxes and licenses | 48,792 | 47,767 | 48,180 | |||||||||
Insurance | 32,887 | 30,761 | 29,178 | |||||||||
Communications and utilities | 16,983 | 17,373 | 16,181 | |||||||||
Depreciation and amortization | 85,951 | 82,507 | 80,331 | |||||||||
Rents and purchased transportation | 242,252 | 206,457 | 198,594 | |||||||||
Shared services | 218,290 | 185,257 | 184,256 | |||||||||
Multiemployer pension fund withdrawal liability charge | 37,922 | |||||||||||
Gain on sale of property and equipment | (410) | (695) | (2,979) | |||||||||
Other | 4,554 | 6,525 | 4,889 | |||||||||
Restructuring costs | 344 | 1,173 | ||||||||||
Total consolidated operating expenses | 2,071,723 | 1,935,433 | 1,878,961 | |||||||||
OPERATING INCOME | ||||||||||||
OPERATING INCOME | 103,862 | 57,881 | 37,433 | |||||||||
Operating Segments | ArcBest | ||||||||||||
REVENUES | ||||||||||||
Revenues | 781,123 | 706,698 | 640,734 | |||||||||
OPERATING EXPENSES | ||||||||||||
Purchased transportation | 631,501 | 563,497 | 502,159 | |||||||||
Supplies and expenses | 13,329 | 15,087 | 13,145 | |||||||||
Depreciation and amortization | 13,750 | 13,090 | 13,612 | |||||||||
Shared services | 91,266 | 83,660 | 85,068 | |||||||||
Other | 9,143 | 11,116 | 11,678 | |||||||||
Restructuring costs | 491 | 875 | 8,038 | |||||||||
Gain on sale of subsidiaries | (1,945) | (152) | ||||||||||
Total consolidated operating expenses | 757,535 | 687,173 | 633,700 | |||||||||
OPERATING INCOME | ||||||||||||
OPERATING INCOME | 23,588 | 19,525 | 7,034 | |||||||||
Operating Segments | FleetNet | ||||||||||||
REVENUES | ||||||||||||
Revenues | 195,126 | 156,341 | 162,629 | |||||||||
OPERATING EXPENSES | ||||||||||||
Depreciation and amortization | 1,140 | 1,089 | 1,210 | |||||||||
Total consolidated operating expenses | 190,741 | 152,864 | 160,132 | |||||||||
OPERATING INCOME | ||||||||||||
OPERATING INCOME | 4,385 | 3,477 | 2,497 | |||||||||
Other and eliminations | ||||||||||||
REVENUES | ||||||||||||
Revenues | (58,046) | (29,896) | (19,538) | |||||||||
OPERATING EXPENSES | ||||||||||||
Depreciation and amortization | 7,794 | 6,382 | 7,900 | |||||||||
Total consolidated operating expenses | (35,309) | (10,361) | (6,639) | |||||||||
OPERATING INCOME | ||||||||||||
OPERATING INCOME | $ (22,737) | $ (19,535) | $ (12,899) |
OPERATING SEGMENT DATA (Assets)
OPERATING SEGMENT DATA (Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | $ 137,675 | $ 149,951 | $ 151,637 |
DEPRECIATION AND AMORTIZATION EXPENSE | 108,635 | 103,068 | 103,053 |
Amortization of intangibles | 4,521 | 4,538 | 4,239 |
Operating Segments | Asset-Based | |||
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | 116,505 | 112,751 | 110,170 |
DEPRECIATION AND AMORTIZATION EXPENSE | 85,951 | 82,507 | 80,331 |
Assets acquired through notes payable and capital leases | 86,800 | 84,200 | 83,400 |
Operating Segments | ArcBest | |||
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | 5,174 | 9,823 | 6,154 |
DEPRECIATION AND AMORTIZATION EXPENSE | 13,750 | 13,090 | 13,612 |
Amortization of intangibles | 4,300 | 4,300 | 4,000 |
Operating Segments | FleetNet | |||
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | 1,365 | 1,089 | 403 |
DEPRECIATION AND AMORTIZATION EXPENSE | 1,140 | 1,089 | 1,210 |
Amortization of intangibles | 200 | 200 | 200 |
Other and eliminations | |||
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | 14,631 | 26,288 | 34,910 |
DEPRECIATION AND AMORTIZATION EXPENSE | 7,794 | $ 6,382 | $ 7,900 |
Assets acquired through notes payable | $ 6,900 |
OPERATING SEGMENT DATA - (Opera
OPERATING SEGMENT DATA - (Operating Expenses) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
OPERATING EXPENSES | ||||||||||||
Salaries, wages, and benefits | $ 1,398,348 | $ 1,361,224 | $ 1,340,577 | |||||||||
Rents, purchased transportation, and other costs of services | 989,006 | 869,584 | 823,683 | |||||||||
Fuel, supplies, and expenses | 325,126 | 304,126 | 270,138 | |||||||||
Depreciation and amortization | 108,635 | 103,068 | 103,053 | |||||||||
Other | 123,998 | 124,144 | 118,390 | |||||||||
Multiemployer pension fund withdrawal liability charge | $ 37,900 | 37,922 | ||||||||||
Restructuring costs | 1,655 | 2,963 | 10,313 | |||||||||
Total consolidated operating expenses | $ 737,117 | $ 770,103 | $ 790,194 | $ 687,276 | $ 691,982 | $ 717,538 | $ 694,601 | $ 660,988 | $ 2,984,690 | $ 2,765,109 | $ 2,666,154 | |
Asset-Based | Multiemployer pension plans | New England Pension Fund | ||||||||||||
OPERATING EXPENSES | ||||||||||||
Multiemployer pension fund withdrawal liability charge | $ 37,900 |
RESTRUCTURING CHARGES AND IMP_3
RESTRUCTURING CHARGES AND IMPAIRMENT (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)employee | |
Restructuring Charges and Impairment | |||
Restructuring charges | $ 1,655 | $ 2,963 | $ 10,313 |
Software impairment | |||
Restructuring Charges and Impairment | |||
Restructuring charges | 6,244 | ||
Contract terminations | |||
Restructuring Charges and Impairment | |||
Restructuring charges | 427 | 2,875 | |
Severance and other | |||
Restructuring Charges and Impairment | |||
Restructuring charges | $ 1,228 | $ 2,963 | $ 1,194 |
Number of positions in headcount reduction | employee | 130 |
LEGAL PROCEEDINGS, ENVIRONMEN_2
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS (Environmental Matters) (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2018USD ($)tankstate | Dec. 31, 2017USD ($) | |
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 | $ | $ 0.6 | $ 0.4 |
QUARTERLY RESULTS OF OPERATIO_3
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Revenues | $ 774,279 | $ 826,158 | $ 793,350 | $ 700,001 | $ 710,721 | $ 744,280 | $ 720,368 | $ 651,088 | $ 3,093,788 | $ 2,826,457 | $ 2,700,219 | |||
Operating expenses | 737,117 | 770,103 | 790,194 | 687,276 | 691,982 | 717,538 | 694,601 | 660,988 | 2,984,690 | 2,765,109 | 2,666,154 | |||
OPERATING INCOME | 37,162 | 56,055 | 3,156 | 12,725 | 18,739 | 26,742 | 25,767 | (9,900) | 109,098 | 61,348 | 34,065 | |||
Other income (costs) | (16,492) | (2,064) | (2,422) | (3,734) | (2,719) | (2,674) | (1,632) | (2,747) | (24,712) | (9,772) | (5,778) | |||
Income tax provision (benefit) | 5,371 | 13,215 | (499) | (963) | (20,548) | 9,280 | 8,358 | (5,240) | 17,124 | (8,150) | 9,635 | |||
NET INCOME | $ 15,299 | $ 40,776 | $ 1,233 | $ 9,954 | $ 36,568 | $ 14,788 | $ 15,777 | $ (7,407) | $ 67,262 | $ 59,726 | $ 18,652 | |||
Earnings (loss) per common share | ||||||||||||||
Basic (in dollars per share) | $ 0.59 | $ 1.58 | $ 0.05 | $ 0.39 | $ 1.42 | $ 0.57 | $ 0.61 | $ (0.29) | $ 2.61 | [1] | $ 2.32 | [1] | $ 0.72 | [1] |
Diluted (in dollars per share) | $ 0.57 | $ 1.52 | $ 0.05 | $ 0.37 | $ 1.37 | $ 0.56 | $ 0.60 | $ (0.29) | $ 2.51 | $ 2.25 | $ 0.71 | |||
AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||
Basic (in shares) | 25,707,335 | 25,697,509 | 25,670,325 | 25,642,871 | 25,637,568 | 25,671,535 | 25,767,791 | 25,684,475 | 25,679,736 | 25,683,745 | 25,751,544 | |||
Diluted (in shares) | 26,682,262 | 26,795,659 | 26,699,549 | 26,596,376 | 26,540,716 | 26,393,359 | 26,291,641 | 25,684,475 | 26,698,831 | 26,424,389 | 26,256,570 | |||
Multiemployer pension fund | ||||||||||||||
Multiemployer pension fund withdrawal liability charge (pre-tax) | $ 37,900 | $ 37,922 | ||||||||||||
Multiemployer pension fund withdrawal liability charge (after-tax) | $ 28,200 | |||||||||||||
Multiemployer pension fund withdrawal liability charge, diluted (in dollars per share) | $ 1.05 | |||||||||||||
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 | $ 0.97 | |||||||||||||
Nonunion Defined Benefit Pension Plan | ||||||||||||||
Nonunion pension expense | ||||||||||||||
Nonunion pension expense, including settlement | $ 12,600 | $ 18,195 | $ 6,090 | $ 3,075 | ||||||||||
Nonunion pension expense, including settlement (after-tax) | $ 9,400 | |||||||||||||
Nonunion pension expense, including settlement diluted (in dollars per share) | $ 0.35 | |||||||||||||
[1] | The Company uses the twoclass method for calculating earnings per share. See Note L. |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for doubtful accounts receivable and revenue adjustments | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | $ 7,657 | $ 5,437 | $ 4,825 |
Additions, Charged to Costs and Expenses | 2,336 | 4,081 | 1,643 |
Additions, Charged to Other Accounts | 863 | 2,416 | 980 |
Deductions | 3,476 | 4,277 | 2,011 |
Balance at End of Period | 7,380 | 7,657 | 5,437 |
Allowance for other accounts receivable | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | 921 | 849 | 1,029 |
Additions, Charged to Costs and Expenses | (115) | 72 | (180) |
Balance at End of Period | 806 | 921 | 849 |
Allowance for deferred tax assets | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | 844 | 293 | 354 |
Deductions | 791 | (551) | 61 |
Balance at End of Period | $ 53 | $ 844 | $ 293 |