Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 30, 2019 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 0-19969 | ||
Entity Registrant Name | ARCBEST CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 71-0673405 | ||
Entity Address, Address Line One | 8401 McClure Drive | ||
Entity Address, City or Town | Fort Smith | ||
Entity Address, State or Province | AR | ||
Entity Address, Postal Zip Code | 72916 | ||
City Area Code | 479 | ||
Local Phone Number | 785-6000 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | ARCB | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 705,623,207 | ||
Entity Common Stock, Shares Outstanding | 25,367,197 | ||
Entity Central Index Key | 0000894405 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 201,909 | $ 190,186 |
Short-term investments | 116,579 | 106,806 |
Accounts receivable, less allowances (2019 - $5,448; 2018 - $7,380) | 282,579 | 297,051 |
Other accounts receivable, less allowances (2019 - $476; 2018 - $806) | 18,774 | 19,146 |
Prepaid expenses | 30,377 | 25,304 |
Prepaid and refundable income taxes | 9,439 | 1,726 |
Other | 4,745 | 9,007 |
TOTAL CURRENT ASSETS | 664,402 | 649,226 |
PROPERTY, PLANT AND EQUIPMENT | ||
Land and structures | 342,122 | 339,640 |
Revenue equipment | 896,020 | 858,251 |
Service, office, and other equipment | 233,354 | 199,230 |
Software | 151,068 | 138,517 |
Leasehold improvements | 10,383 | 9,365 |
TOTAL PROPERTY, PLANT AND EQUIPMENT, Gross | 1,632,947 | 1,545,003 |
Less allowances for depreciation and amortization | 949,355 | 913,815 |
PROPERTY, PLANT AND EQUIPMENT, net | 683,592 | 631,188 |
GOODWILL | 88,320 | 108,320 |
INTANGIBLE ASSETS, net | 58,832 | 68,949 |
OPERATING RIGHT-OF-USE ASSETS | 68,470 | |
DEFERRED INCOME TAXES | 7,725 | 7,468 |
OTHER LONG-TERM ASSETS | 79,866 | 74,080 |
TOTAL ASSETS | 1,651,207 | 1,539,231 |
CURRENT LIABILITIES | ||
Accounts payable | 134,374 | 143,785 |
Income taxes payable | 12 | 1,688 |
Accrued expenses | 228,749 | 243,111 |
Current portion of long-term debt | 57,305 | 54,075 |
Current portion of operating lease liabilities | 20,265 | |
Current portion of pension and postretirement liabilities | 3,572 | 8,659 |
TOTAL CURRENT LIABILITIES | 444,277 | 451,318 |
LONG-TERM DEBT, less current portion | 266,214 | 237,600 |
OPERATING LEASE LIABILITIES, less current portion | 52,277 | |
PENSION AND POSTRETIREMENT LIABILITIES, less current portion | 20,294 | 31,504 |
OTHER LONG-TERM LIABILITIES | 38,892 | 44,686 |
DEFERRED INCOME TAXES | 66,210 | 56,441 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2019: 28,810,902 shares, 2018: 28,684,779 shares | 288 | 287 |
Additional paid-in capital | 333,943 | 325,712 |
Retained earnings | 533,187 | 501,389 |
Treasury stock, at cost, 2019: 3,404,639 shares; 2018: 3,097,634 shares | (104,578) | (95,468) |
Accumulated other comprehensive income (loss) | 203 | (14,238) |
TOTAL STOCKHOLDERS' EQUITY | 763,043 | 717,682 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,651,207 | $ 1,539,231 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 5,448 | $ 7,380 |
Other accounts receivable, allowances (in dollars) | $ 476 | $ 806 |
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 | 28,810,902 | 28,684,779 |
Treasury stock, at cost, shares | 3,404,639 | 3,097,634 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
REVENUES | $ 717,418 | $ 787,563 | $ 771,490 | $ 711,839 | $ 774,279 | $ 826,158 | $ 793,350 | $ 700,001 | $ 2,988,310 | $ 3,093,788 | $ 2,826,457 |
OPERATING EXPENSES | 728,647 | 756,355 | 736,290 | 703,248 | 737,117 | 770,103 | 790,194 | 687,276 | 2,924,540 | 2,984,690 | 2,765,109 |
OPERATING INCOME | (11,229) | 31,208 | 35,200 | 8,591 | 37,162 | 56,055 | 3,156 | 12,725 | 63,770 | 109,098 | 61,348 |
OTHER INCOME (COSTS) | |||||||||||
Interest and dividend income | 6,453 | 3,914 | 1,293 | ||||||||
Interest and other related financing costs | (11,467) | (9,468) | (6,342) | ||||||||
Other, net | (7,285) | (19,158) | (4,723) | ||||||||
TOTAL OTHER INCOME (COSTS) | (798) | (7,866) | (1,640) | (1,995) | (16,492) | (2,064) | (2,422) | (3,734) | (12,299) | (24,712) | (9,772) |
INCOME BEFORE INCOME TAXES | 51,471 | 84,386 | 51,576 | ||||||||
INCOME TAX PROVISION (BENEFIT) | (6,478) | 7,072 | 9,184 | 1,708 | 5,371 | 13,215 | (499) | (963) | 11,486 | 17,124 | (8,150) |
NET INCOME | $ (5,549) | $ 16,270 | $ 24,376 | $ 4,888 | $ 15,299 | $ 40,776 | $ 1,233 | $ 9,954 | $ 39,985 | $ 67,262 | $ 59,726 |
EARNINGS PER COMMON SHARE(1) | |||||||||||
Basic (in dollars per share) | $ (0.22) | $ 0.64 | $ 0.95 | $ 0.19 | $ 0.59 | $ 1.58 | $ 0.05 | $ 0.39 | $ 1.56 | $ 2.61 | $ 2.32 |
Diluted (in dollars per share) | $ (0.22) | $ 0.62 | $ 0.92 | $ 0.18 | $ 0.57 | $ 1.52 | $ 0.05 | $ 0.37 | $ 1.51 | $ 2.51 | $ 2.25 |
AVERAGE COMMON SHARES OUTSTANDING | |||||||||||
Basic (in shares) | 25,490,393 | 25,527,982 | 25,554,286 | 25,570,415 | 25,707,335 | 25,697,509 | 25,670,325 | 25,642,871 | 25,535,529 | 25,679,736 | 25,683,745 |
Diluted (in shares) | 25,490,393 | 26,416,595 | 26,431,592 | 26,512,349 | 26,682,262 | 26,795,659 | 26,699,549 | 26,596,376 | 26,450,055 | 26,698,831 | 26,424,389 |
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 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
NET INCOME | $ 39,985 | $ 67,262 | $ 59,726 |
Pension and other postretirement benefit plans: | |||
Net actuarial gain (loss), net of tax of: (2019 - $2,308; 2018 - $477; 2017 - $1,682) | 6,657 | (1,376) | (2,640) |
Pension settlement expense, including termination expense, net of tax of: (2019 - $1,167; 2018 - $3,327; 2017 - $1,617) | 7,338 | 9,598 | 2,539 |
Amortization of unrecognized net periodic benefit costs, net of tax of: (2019 - $314; 2018 - $740; 2017 - $1,446) | |||
Net actuarial loss | 931 | 2,204 | 2,388 |
Prior service credit | (25) | (69) | (116) |
Interest rate swap and foreign currency translation: | |||
Change in unrealized income (loss) on interest rate swap, net of tax of:(2019 - $357) | (1,007) | ||
Change in unrealized income (loss) on interest rate swap, net of tax of:(2018 - $84; 2017 - $402) | 236 | 621 | |
Change in foreign currency translation, net of tax of: (2019 - $194; 2018 - $241; 2017 - $33) | 547 | (681) | 51 |
OTHER COMPREHENSIVE INCOME, net of tax | 14,441 | 9,912 | 2,843 |
TOTAL COMPREHENSIVE INCOME | $ 54,426 | $ 77,174 | $ 62,569 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net actuarial gain (loss), tax expense (benefit) | $ 2,308 | $ (477) | $ (1,682) |
Pension settlement expense, including termination expense, tax | 1,167 | 3,327 | 1,617 |
Amortization of unrecognized net periodic benefit costs, tax | 314 | 740 | 1,446 |
Change in unrealized income (loss) on interest rate swap, tax (benefit) | (357) | ||
Change in unrealized income (loss) on interest rate swap, tax expense | 84 | 402 | |
Change in foreign currency translation, tax expense (benefit) | $ 194 | $ (241) | $ 33 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total |
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 | ||||||
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 | |||
Adjustments to beginning retained earnings for adoption of accounting standards | (3,576) | |||||
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 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 39,985 | 39,985 | ||||
Other comprehensive income, net of tax | 14,441 | 14,441 | ||||
Issuance of common stock under share-based compensation plans | $ 1 | (1) | ||||
Issuance of common stock under share-based compensation plans (in shares) | 126 | |||||
Tax effect of share-based compensation plans | (1,291) | (1,291) | ||||
Share-based compensation expense | 9,523 | 9,523 | ||||
Purchase of treasury stock | $ (9,110) | (9,110) | ||||
Purchase of treasury stock (in shares) | 307 | |||||
Dividends declared on common stock | (8,187) | (8,187) | ||||
Balances at Dec. 31, 2019 | $ 288 | $ 333,943 | $ 533,187 | $ (104,578) | $ 203 | $ 763,043 |
Balances (in shares) at Dec. 31, 2019 | 28,811 | 3,405 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING ACTIVITIES | |||
Net income | $ 39,985 | $ 67,262 | $ 59,726 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 108,099 | 104,114 | 98,530 |
Amortization of intangibles | 4,367 | 4,521 | 4,538 |
Pension settlement expense, including termination expense | 8,505 | 12,925 | 4,156 |
Share-based compensation expense | 9,523 | 8,413 | 6,958 |
Provision for losses on accounts receivable | 1,223 | 2,336 | 4,081 |
Change in deferred income taxes | 5,411 | 1,872 | (10,213) |
Asset impairment | 26,514 | ||
Gain on sale of property and equipment | (5,247) | (59) | (75) |
Gain on sale of subsidiaries | (1,945) | (152) | |
Changes in operating assets and liabilities: | |||
Receivables | 13,720 | (23,554) | (19,588) |
Prepaid expenses | (4,756) | (2,988) | (64) |
Other assets | (1,365) | (4,341) | (4,231) |
Income taxes | (8,720) | 12,169 | (2,144) |
Operating right-of-use assets and lease liabilities, net | 728 | ||
Multiemployer pension fund withdrawal liability | (584) | 22,602 | |
Accounts payable, accrued expenses, and other liabilities | (27,039) | 52,020 | 10,393 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 170,364 | 255,347 | 151,915 |
INVESTING ACTIVITIES | |||
Purchases of property, plant and equipment, net of financings | (90,955) | (43,992) | (65,781) |
Proceeds from sale of property and equipment | 13,490 | 4,256 | 4,279 |
Proceeds from sale of subsidiaries | 4,680 | 2,490 | |
Purchases of short-term investments | (129,709) | (108,495) | (73,459) |
Proceeds from sale of short-term investments | 120,409 | 58,698 | 73,842 |
Capitalization of internally developed software | (11,476) | (10,097) | (9,840) |
NET CASH USED IN INVESTING ACTIVITIES | (98,241) | (94,950) | (68,469) |
FINANCING ACTIVITIES | |||
Payments on long-term debt | (58,938) | (71,260) | (68,924) |
Borrowings under accounts receivable securitization program | 10,000 | ||
Proceeds from notes payable | 20,410 | ||
Net change in book overdrafts | (2,722) | 262 | (502) |
Deferred financing costs | (562) | (202) | (937) |
Payment of common stock dividends | (8,187) | (8,244) | (8,264) |
Purchases of treasury stock | (9,110) | (9,404) | (6,019) |
Payments for tax withheld on share-based compensation | (1,291) | (2,135) | (3,270) |
NET CASH USED IN FINANCING ACTIVITIES | (60,400) | (90,983) | (77,916) |
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 11,723 | 69,414 | 5,530 |
Cash and cash equivalents and restricted cash at beginning of period | 190,186 | 120,772 | 115,242 |
CASH AND CASH EQUIVALENTS CASH AT END OF PERIOD | 201,909 | 190,186 | 120,772 |
NONCASH INVESTING ACTIVITIES | |||
Equipment and other financings | 70,372 | 94,016 | 84,170 |
Accruals for equipment received | 234 | $ 2,807 | $ 1,734 |
Lease liabilities arising from obtaining right-of-use assets | $ 32,761 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | 12 Months Ended |
Dec. 31, 2019 | |
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 N Organization and Description of Business ArcBest Corporation ™ ® The Asset-Based segment represented approximately 69% of the Company’s 2019 total revenues before other revenues and intercompany eliminations. As of December 2019, 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 implemented on July 29, 2018, effective retroactive to April 1, 2018, and will remain in effect through June 30, 2023. Financial Statement Presentation Consolidation: Segment Information: Use of Estimates: |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
ACCOUNTING POLICIES | |
ACCOUNTING POLICIES | NOTE B – ACCOUNTING POLICIES Cash, Cash Equivalents, and Short-Term Investments: 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. Concentration of Credit Risk: 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 2019, 2018, or 2017 or more than 6% of its accounts receivable balance at December 31, 2019 and 2018. 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: 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: . Assets to be disposed of are reclassified as assets held for sale at the lower of their carrying amount or fair value less cost to sell. Assets held for sale primarily represent Asset-Based segment nonoperating properties, older revenue equipment, and other equipment. Adjustments to write down assets to fair value less the amount of costs to sell are reported in operating income. Assets held for sale are expected to be disposed of by selling the assets within the next 12 months. Gains and losses on property and equipment are reported in operating income. Assets held for sale of $1.3 million and $0.7 million are reported within other noncurrent assets as of December 31, 2019 and 2018, respectively. Goodwill and Intangible Assets: 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. Income Taxes: 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: Insurance Reserves 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: Contingent Consideration: Interest Rate Swap Derivative Instruments Leases: Leases The short-term lease exemption was elected under ASC Topic 842 for all classes of assets to include real property, revenue equipment, and service, office, and other equipment. The Company adopted the policy election as a lessee for all classes of assets to account for each lease component and its related non-lease component(s) as a single lease component. In determining the discount rate, the Company uses ArcBest Corporation’s incremental borrowing rate unless the rate implicit in the lease is readily determinable when entering into a lease as a lessee. The incremental borrowing rate is determined by the price of a fully collateralized loan with similar terms based on current market rates. For contracts entered into on or after the effective date, an assessment is made as to whether the contract is, or contains, a lease at the inception of a contract. The assessment is based on: (1) whether the contract involves the use of a distinct identified asset; (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period; and (3) whether the Company has the right to direct the use of the asset. For all operating leases that meet the scope of ASC Topic 842, a right-of-use asset and a lease liability are recognized. The right-of-use asset is measured as the initial amount of the lease liability, plus any initial direct costs incurred, less any prepayments prior to commencement or lease incentives received. The lease liability is initially measured at the present value of the lease payments, discounted using the Company’s secured incremental borrowing rate for the same term as the underlying lease unless the interest rate implicit in the lease is readily determined, then the implicit rate will be used. Lease payments included in the measurement of the lease liability are comprised of the following: (1) the fixed noncancelable lease payments, (2) payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and (3) payments for early termination options unless it is reasonably certain the lease will not be terminated early. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the initial lease liability. Additional payments based on the change in an index or rate are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability. 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 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 is reported within operating expenses in the consolidated statements of operations. The other components of net periodic benefit cost (including pension settlement expense) 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). 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 established 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 recorded quarterly pension settlement expense related to the nonunion defined benefit pension plan when qualifying distributions determined to be settlements were 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 plan and SBP is presented in Note I. In September 2018, the nonunion defined benefit pension plan received a favorable determination letter from the U.S. Internal Revenue Service (the “IRS”) regarding qualification of the plan termination as of December 31, 2017. 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 and upon each quarterly remeasurement for settlements during 2019 until the benefit obligation of the plan was settled as of September 30, 2019. For plan termination assumptions, the Company utilized a short-term discount rate which represented the Company’s current borrowing rate and an annuity contract interest rate based on current published rates. Revenue Recognition: 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 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 in both December 31, 2019 and 2018, 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: Earnings Per 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 and the income tax effects of awards are recognized in the statement of operations when awards vest or are settled. Fair Value Measurements: ● 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: Exit or Disposal Activities: Adopted Accounting Pronouncements ASC Topic 842, which was adopted by the Company effective 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. The Company elected the modified retrospective method of applying the transition provisions at the beginning of the period of adoption and, as a result, has not adjusted comparative period financial information and has not included the new lease disclosures for periods before the effective date. Prior period amounts continue to be reported under the Company’s historical accounting in accordance with the previous lease guidance included in ASC Topic 840. The Company has excluded short-term leases from accounting under ASC Topic 842 and has elected the package of practical expedients as permitted under the transition guidance, which allowed the Company to not reassess: (1) whether contracts are, or contain, leases; (2) lease classification; and (3) capitalization of initial direct costs. For contracts entered into on or after the effective date, an assessment is made as to whether the contract is, or contains, a lease at the inception of a contract. Consistent with the package of practical expedients elected, leases entered into prior to January 1, 2019, are accounted for under ASC Topic 840 and were not reassessed. For all classes of assets, the policy election was made to account for each lease component and its related non-lease component(s) as a single lease component. The election to not recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less did not have a material effect on the right-of-use assets and lease liabilities. The majority of the Company’s lease portfolio consists of real property operating leases related to facilities used in the Asset-Based segment service center operations. The lease portfolio also includes operating leases related to certain revenue equipment used in the ArcBest segment operations as well as a small number of office equipment finance leases. Management has recorded the right-of-use assets and associated lease liabilities for operating leases on the consolidated balance sheet as of December 31, 2019 in accordance with ASC Topic 842. The Company has a small number of finance leases and income leases that are not material to the consolidated financial statements. The most significant impact of adopting ASC Topic 842 was the recognition of right-of-use assets and lease liabilities on the balance sheet for operating leases of $58.7 million as of January 1, 2019. The accounting for finance leases remained substantially unchanged. The expense recognition for operating leases and finance leases under ASC Topic 842 is substantially consistent with ASC Topic 840 and the impact of the new standard is noncash in nature. As a result, there was no significant impact on the Company’s results of operations or cash flows presented in the Company’s consolidated financial statements upon adoption. ASC Topic 815, Derivatives and Hedging The U.S. Securities and Exchange Commission (the “SEC”) issued Final Rule 33-10618, FAST Act Modernization and Simplification of Regulation S-K Accounting Pronouncements Not Yet Adopted ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement Internal-Use Software ASC Topic 820, Fair Value Measurement ASC Topic 326, Financial Instruments – Credit Losses ASC Topic 740, Income Taxes |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2019 | |
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 2019 2018 (in thousands) Cash and cash equivalents Cash deposits (1) $ 166,619 $ 124,938 Variable rate demand notes (1)(2) 14,750 19,786 Money market funds (3) 20,540 42,470 U.S. Treasury securities (4) — 2,992 Total cash and cash equivalents $ 201,909 $ 190,186 Short-term investments Certificates of deposit (1) $ 69,314 $ 82,949 U.S. Treasury securities (4) 47,265 23,857 Total short-term investments $ 116,579 $ 106,806 (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. 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 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, 2019 and 2018, cash, cash equivalents, and short-term investments totaling $66.2 million and $94.7 million, respectively, were neither FDIC insured nor direct obligations of the U.S. government. Fair value and carrying value disclosures of financial instruments as of December 31 are presented in the following table: 2019 2018 (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 40,000 40,000 Notes payable (3) 213,504 216,432 181,409 181,560 $ 323,504 $ 326,432 $ 291,409 $ 291,560 (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, 2019 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) $ 20,540 $ 20,540 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,427 2,427 — — $ 22,967 $ 22,967 $ — $ — Liabilities: Interest rate swaps (3) $ 563 $ — $ 563 $ — 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 (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 or other long-term liabilities. The fair values of the interest rate swaps were determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are considered to be in Level 3 of the fair value hierarchy. The Company assessed Level 3 inputs as insignificant to the valuation at December 31, 2019 and December 31, 2018 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, which 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. In January 2019, final payment of the contingent consideration was released from an escrow account reported in other current assets in the consolidated balance sheets. 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, 2017 $ 6,970 Payments (1) (3,528) Change in fair value included in operating expenses 1,030 Balances at December 31, 2018 $ 4,472 Payments (1) (4,472) Balances at December 31, 2019 $ — (1) Payments released from escrow account that is reported in other current assets in the consolidated balance sheets. Assets Measured at Fair Value on a Nonrecurring Basis The following table presents the fair value of assets remeasured on a nonrecurring basis. December 31, 2019 Nonrecurring Fair Value Remeasurements Using Significant Unobservable Inputs Total (Level 3) Losses (in thousands) Goodwill (1) $ 83,842 $ (20,000) Long-lived assets (2) 6,805 (6,514) $ 90,647 $ (26,514) (1) A portion of the goodwill within the ArcBest segment was reduced to its implied fair value as of October 1, 2019 (see Note D). (2) Represents fair value of the truckload-dedicated asset group within the ArcBest segment. Losses include write-downs of $6.0 million related to customer relationship intangibles (see Note D) and $0.5 million related to revenue equipment within the truckload-dedicated asset group included in the ArcBest segment reducing the carrying amounts to implied fair value as of October 1, 2019. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
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, 2017 and 2018 $ 108,320 $ 107,690 $ 630 Goodwill impairment (1) (20,000) (20,000) — Balances December 31, 2019 $ 88,320 $ 87,690 $ 630 Accumulated impairment December 31, 2019 $ (20,000) $ (20,000) $ — (1) Goodwill impairment charge related to the ArcBest segment further described within this Note. Goodwill is recorded as the excess of an acquired entity’s purchase price over the value of the amounts assigned to identifiable assets acquired and liabilities assumed. Goodwill is not amortized, but rather is evaluated for impairment annually or more frequently if indicators of impairment exist. The fair value estimated for this evaluation is derived with the assistance of a third-party valuation firm and utilizing a combination of valuation methods, including EBITDA and revenue multiples (market approach) and the present value of discounted cash flows (income approach). Significant unobservable inputs into the valuation include forecasted cash flows for the reporting unit and the discount rate (level 3 of the fair value hierarchy). The annual impairment testing on the goodwill balances was performed as of October 1, 2019, and it was determined that the recorded balances of the domestic freight reporting unit within the ArcBest segment exceeded the estimated fair value of the reporting unit. As a result, the Company recorded a noncash goodwill impairment charge of $20.0 million, which was recognized in “Asset impairment” within the ArcBest segment operating expenses for the year ended December 31, 2019. The impairment resulted primarily from underperformance of the truckload and truckload-dedicated businesses within the domestic freight reporting unit of the ArcBest segment during 2019. Current economic conditions, including lack of growth in the industrial and manufacturing sectors, tariff impacts of international trade, and higher customer inventory levels, contributed to uncertainty on projected shipment levels for purposes of these accounting assessments. The goodwill balances for each of the other reporting units was assessed qualitatively and it was determined that it was more likely than not that there was no impairment of goodwill as of the assessment date. The evaluation of goodwill impairment requires management’s judgment and the use of estimates and assumptions to determine the fair value of the reporting unit. Assumptions require considerable judgment because changes in broad economic factors and industry factors can result in variable and volatile fair values. Changes in key estimates and assumptions that impact the fair value of the operations could materially affect the impairment analysis. Intangible assets consisted of the following as of December 31: 2019 2018 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 $ 52,721 $ 26,667 $ 26,054 $ 60,431 $ 24,130 $ 36,301 Other 11 1,294 816 478 1,032 684 348 14 54,015 27,483 26,532 61,463 24,814 36,649 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 $ 86,315 $ 27,483 $ 58,832 $ 93,763 $ 24,814 $ 68,949 Considering the analysis of truckload and truckload-dedicated shipment levels, pricing, and operating costs previously discussed for our annual goodwill impairment testing, it was determined that potential impairment indicators existed and an impairment test of the asset groups, including our finite-lived intangible assets was performed as of October 1, 2019. It was determined that the estimated undiscounted future cash flows expected from the asset group associated with the acquisition of our truckload-dedicated business did not support the recorded value of the related asset group. As a result, the Company recorded a noncash impairment charge of $6.5 million, which was recognized in “Asset impairment” within the ArcBest segment operating expenses for the year ended December 31, 2019 to record the asset group at fair value. Approximately $6.0 million of the impairment was related to customer relationships and an additional $0.5 million was related to revenue equipment. Significant unobservable inputs into the valuation of the asset group include forecasted cash flows for the asset group and the discount rate (level 3 of the fair value hierarchy). The future amortization for intangible assets and software acquired through business acquisitions as of December 31, 2019 were as follows: Amortization of Intangible Assets (in thousands) 2020 $ 3,911 2021 3,869 2022 3,842 2023 3,744 2024 3,695 Thereafter 7,471 Total amortization $ 26,532 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
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 Income Taxes 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, 2019, the Company has determined these provisions of the Tax Reform Act will not have a significant impact on the Company’s consolidated financial statements. Additional tax law changes occurred in December 2019 which had an impact on the 2019 tax provision. The nature and effect of these 2019 changes are described in the reconciliation of the effective tax rate and the statutory tax rate below. Significant components of the provision or benefit for income taxes for the years ended December 31 were as follows: 2019 2018 (1) 2017 (1) (in thousands, except percentages) Current provision (benefit): Federal $ 2,202 $ 9,750 $ (1,969) State 1,813 3,264 3,701 Foreign 2,060 2,238 331 6,075 15,252 2,063 Deferred provision (benefit): Federal 4,196 1,157 (9,312) State 1,221 737 (867) Foreign (6) (22) (34) 5,411 1,872 (10,213) Total provision (benefit) for income taxes $ 11,486 $ 17,124 $ (8,150) (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: 2019 (1) 2018 (1)(2) 2017 (1)(2) (in thousands) Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets $ 16,255 $ 23,153 $ 21,876 Amortization of intangibles and impairment (6,933) (763) (1,030) Changes in reserves for workers’ compensation, third-party casualty, and cargo claims (1,880) 469 (812) Revenue recognition (1,437) (2,524) 332 Allowance for doubtful accounts 541 (115) (719) Nonunion pension and other retirement plans 564 (2,810) (1,977) Multiemployer pension fund withdrawal (3) 150 (5,818) — Federal and state net operating loss carryforwards utilized 59 746 257 State depreciation adjustments (1,302) (1,761) (1,244) Share-based compensation (709) (529) 352 Valuation allowance increase (decrease) 383 (744) 401 Other accrued expenses (699) (4,881) (852) Impact of the Tax Reform Act (2) — (3,772) (24,542) Prepaid expenses (4) 1,782 1,313 (1,331) Operating lease right-of-use assets/liabilities – net (5) (1,049) — — Other (4) (314) (92) (924) Deferred tax provision (benefit) $ 5,411 $ 1,872 $ (10,213) (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, a blended rate for 2018 (as previously discussed within this Note), and 21% for 2019. (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). (4) Prepaid expenses are presented as a separate component of the deferred tax provision (benefit). Certain reclassifications have been made to the prior period components to conform to the current year presentation. (5) Net change in operating lease right-of-use deferred tax assets and liabilities recorded due to the adoption of ASC Topic 842 in 2019. Significant components of the deferred tax assets and liabilities at December 31 were as follows: 2019 2018 (in thousands) Deferred tax assets: Accrued expenses $ 41,757 $ 39,885 Operating lease liabilities (1) 19,726 — Pension liabilities (2) — 1,721 Supplemental pension liabilities (2) 1,091 1,033 Multiemployer pension fund withdrawal (3) 5,546 5,710 Postretirement liabilities other than pensions 5,359 7,660 Share-based compensation 5,605 4,893 Federal and state net operating loss carryovers 1,093 1,152 Other 1,538 1,355 Total deferred tax assets 81,715 63,409 Valuation allowance (668) (53) Total deferred tax assets, net of valuation allowance 81,047 63,356 Deferred tax liabilities: Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets 107,835 93,525 Operating lease right-of-use assets (1) 18,703 — Intangibles 7,373 14,066 Revenue recognition 669 1,513 Prepaid expenses 4,952 3,225 Total deferred tax liabilities 139,532 112,329 Net deferred tax liabilities $ (58,485) $ (48,973) (1) Operating lease right-of-use assets and liabilities were recorded in 2019 due to the adoption of ASC Topic 842. (2) Supplemental pension liabilities are presented as a separate component of deferred tax assets. Certain reclassifications have been made to the prior period components to conform to the current year presentation. (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). 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: 2019 (1) 2018 (1) 2017 (2) (in thousands, except percentages) Income tax provision at the statutory federal rate $ 10,809 $ 17,721 $ 18,052 Federal income tax effects of: State income taxes (637) (840) (992) Nondeductible expenses (3) 1,344 1,682 1,551 Life insurance proceeds and changes in cash surrender value (775) 7 (927) Alternative fuel credit (2,340) (1,203) — Net increase (decrease) in valuation allowances 382 (891) 401 Net increase (decrease) in uncertain tax positions (20) 933 (720) Settlement of share-based compensation 388 (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) Nonunion pension termination expense 1,040 — — Foreign tax credits generated (3) (2,054) (2,216) (297) Federal research and development tax credits (1,354) — — Other (3) (385) 187 (1,390) Federal income tax provision (benefit) 6,398 10,907 (11,281) State income tax provision 3,034 4,001 2,834 Foreign income tax provision 2,054 2,216 297 Total provision (benefit) for income taxes $ 11,486 $ 17,124 $ (8,150) Effective tax (benefit) rate 22.3 % 20.3 % (15.8) % (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) Foreign tax credits generated are presented as a separate component of the federal income tax provision (benefit). Certain reclassifications, including the separate presentation of foreign tax credits, have been made to the prior period components to conform to the current year presentation. Income taxes paid, excluding income tax refunds, totaled $28.1 million, $21.8 million, and $22.7 million in 2019, 2018, and 2017, respectively. Income tax refunds totaled $13.1 million, $18.5 million, and $18.5 million in 2019, 2018, and 2017, respectively. Under ASC Topic 718, Compensation – Stock Compensation The Company had state net operating loss carryforwards of $11.7 million and state contribution carryforwards of $0.5 million at December 31, 2019. At December 31, 2018, the Company had a valuation allowance of $0.1 million related to state contribution carryforwards. Due to the utilization of a significant portion of the carryforward in 2019 the valuation allowance was reversed in 2019. 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 a significant portion of the state net operating loss carryforwards were utilized. The valuation allowance of $0.7 million was reversed in 2018. As the Canadian tax rate is now higher than the U.S. tax rate, it is unlikely that foreign tax credit carryforwards will be useable. Thus, the foreign tax credit carryover of $0.7 million at December 31, 2019 is fully reserved by a valuation allowance of $0.7 million. The Company acquired Panther on June 15, 2012. At December 31, 2019, Panther had federal net operating loss carryforwards of approximately $1.2 million from periods ending on or prior to June 15, 2012. Federal net operating loss carryforwards will expire if not used within 12 years. Section 382 of the Internal Revenue Code (“IRC”). 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. Consolidated federal income tax returns filed for tax years through 2015 are closed by the applicable statute of limitations. The Company is under examination by one state taxing authority at December 31, 2019. The Company is not under examination by foreign taxing authorities at December 31, 2019. At December 31, 2019, 2018, and 2017, the Company had reserves for uncertain tax positions of $0.9 million, $1.0 million, and less than $0.1 million, respectively. A $0.7 million reserve for uncertain tax positions as of December 31, 2017 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, 2017, and maintained the reserve at December 31, 2018, related to credits taken on a federal return. The statute of limitations for the federal return on which these credits were claimed expired in the fourth quarter of 2019, and the reserve was removed at December 31, 2019. 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 2019, 2018 and 2017, interest of less than $0.1 million was paid related to foreign and state income taxes. Accrued interest on the foreign income tax obligations of less than $0.1 million remained at December 31, 2019. Any interest or penalties related to income taxes are charged to operating expenses. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
LEASES | NOTE F – LEASES The Company leases, under finance and operating lease arrangements, certain facilities used primarily in the Asset-Based segment service center operations, certain revenue equipment used in the ArcBest segment operations, and certain other office equipment. Current operating leases have remaining terms of less than 10 years , some of which include one or more options to renew, with renewal option terms up to five years , and some of which include options to terminate the leases within the next two years . The right-of-use assets and lease liabilities as of December 31, 2019 do not assume the option to early terminate any of the Company’s leases, and all renewal options that have been exercised or are reasonably certain to be exercised as of December 31, 2019 are included in the right-of-use assets and lease liabilities. Variable lease cost for operating leases consists of subsequent changes in CPI index, rent payments that are based on usage, and other lease related payments which are subject to change and not considered fixed payments. All fixed lease and non-lease component payments are combined in determining the right-of-use asset and lease liability. The components of operating lease expense were as follows: December 31, 2019 (in thousands) Operating lease expense $ 22,291 Variable lease expense 3,366 Sublease income (324) Total operating lease expense (1) $ 25,333 (1) Operating lease expense excludes short-term leases with a term of 12 months or less. Rental expense for operating leases, excluding expenses related to leases with initial terms of less than one year, totaled $20.5 million, net of sublease income, for 2018 and 2017. The operating cash flows from operating lease activity were as follows: December 31, 2019 (in thousands) Noncash change in operating right-of-use assets $ 20,439 Change in operating lease liabilities (19,711) Operating right-use-of-assets and lease liabilities, net $ 728 Cash paid for amounts included in the measurement of operating lease liabilities $ (21,714) Supplemental balance sheet information related to operating leases was as follows: December 31, 2019 (in thousands, except lease term and discount rate) Land and Equipment Total Structures and Others Operating right-of-use assets (long-term) $ 68,470 $ 67,227 $ 1,243 Operating lease liabilities (current) $ 20,265 $ 19,293 $ 972 Operating lease liabilities (long-term) 52,277 52,008 269 Total operating lease liabilities $ 72,542 $ 71,301 $ 1,241 Weighted-average remaining lease term (in years) 5.3 Weighted-average discount rate 3.77% Maturities of operating lease liabilities at December 31, 2019 were as follows: Equipment Land and and Total Structures (1) Other (in thousands) 2020 $ 22,576 $ 21,578 $ 998 2021 16,737 16,467 270 2022 12,253 12,253 — 2023 8,871 8,871 — 2024 6,275 6,275 — Thereafter 13,309 13,309 — Total lease payments 80,021 78,753 1,268 Less imputed interest (7,479) (7,452) (27) Total $ 72,542 $ 71,301 $ 1,241 (1) Excludes future minimum payments of $36.6 million for two operating leases for office space and a service center facility, that were executed but had not yet commenced as of December 31, 2019, which will be paid over terms of approximately 12 years . The Company has taken possession of the office space location as of January 1, 2020 and possession of the service center facility is expected in late-summer 2020, pending Lessor’s completion of construction to the premises. 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, 2019 | |
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 finance lease obligations related to the financing of revenue equipment (tractors and trailers used primarily in Asset-Based segment operations), certain other equipment, and software as follows: December 31 December 31 2019 2018 (in thousands) Credit Facility (interest rate of 2.9% (1) $ 70,000 $ 70,000 Accounts receivable securitization borrowings (interest rate of 2.6% at December 31, 2019) 40,000 40,000 Notes payable (weighted-average interest rate of 3.3% at December 31, 2019) 213,504 181,409 Finance lease obligations (weighted-average interest rate of 3.3% at December 31, 2019) 15 266 323,519 291,675 Less current portion 57,305 54,075 Long-term debt, less current portion $ 266,214 $ 237,600 (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 2.98% and 3.10% based on the margin of the Credit Facility as of December 31, 2019 and 2018, respectively. Scheduled maturities of long term debt obligations as of December 31, 2019 were as follows: Accounts Receivable Credit Securitization Notes Finance Lease Total Facility (1) Program (1) Payable Obligations (in thousands) 2020 $ 66,398 $ 1,947 $ 1,021 $ 63,423 $ 7 2021 102,230 1,845 40,719 59,659 7 2022 52,850 1,885 — 50,964 1 2023 37,030 1,966 — 35,064 — 2024 90,084 71,515 — 18,569 — Thereafter 203 — — 203 — Total payments 348,795 79,158 41,740 227,882 15 Less amounts representing interest 25,276 9,158 1,740 14,378 — Long-term debt $ 323,519 $ 70,000 $ 40,000 $ 213,504 $ 15 (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. Assets securing notes payable or held under finance leases at December 31 were included in property, plant and equipment as follows: 2019 2018 (in thousands) Revenue equipment $ 265,315 $ 264,396 Land and structures (service centers) — 1,794 Software 2,140 1,484 Service, office, and other equipment 26,344 5,941 Total assets securing notes payable or held under finance leases 293,799 273,615 Less accumulated depreciation and amortization (1) 71,405 79,961 Net assets securing notes payable or held under finance leases $ 222,394 $ 193,654 (1) Amortization of assets held under finance 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 3.1% at December 31, 2019. The Company paid interest of $10.9 million, $8.7 million, and $5.8 million in 2019, 2018, and 2017, respectively, net of capitalized interest which totaled $0.2 million, $0.2 million, and $0.9 million for 2019, 2018 and 2017, respectively. Financing Arrangements Credit Facility The Company has a revolving credit facility (the “Credit Facility”) under its Third Amended and Restated Credit Agreement which was amended and restated in September 2019 (the “Credit Agreement”) to increase the initial maximum credit amount from $200.0 million to $250.0 million, including a swing line facility of an aggregate amount of up to $25.0 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’s option to request additional revolving commitments or incremental term loans thereunder increased from $100.0 million to $125.0 million, subject to certain additional conditions as provided in the Credit Agreement. As of December 31, 2019, the Company had available borrowing capacity of $180.0 million under the initial maximum credit amount of the Credit Facility. Principal payments under the Credit Facility are due upon maturity of the facility on October 1, 2024; 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, 2019. 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 2.98% based on the margin of the Credit Facility as of December 31, 2019. The fair value of the interest rate swap of less than $0.1 million was recorded in other long-term liabilities in the consolidated balance sheet at December 31, 2019. At December 31, 2018, the fair value of the interest rate swap of $0.3 million was recorded in other long-term assets in the consolidated balance. In June 2017, the Company entered into a forward-starting interest rate swap agreement with a $50.0 million notional amount beginning 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 3.12% based on the margin of the Credit Facility as of December 31, 2019. The fair value of the interest rate swap of $0.6 million was recorded in other long-term liabilities in the consolidated balance sheet at December 31, 2019. At December 31, 2018, the fair value of the interest rate swap of $0.5 million was recorded in other long-term assets in the consolidated balance. 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, 2019 and 2018, and the change in the unrealized income on the interest rate swaps for the years ended December 31, 2019 and 2018 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, 2019. Accounts Receivable Securitization Program The Company’s accounts receivable securitization program, which matures on October 1, 2021, allows for cash proceeds of $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. As of December 31, 2019 and 2018, $40.0 million was borrowed under the program. The Company was in compliance with the covenants under the accounts receivable securitization program as of December 31, 2019. 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, 2019, standby letters of credit of $12.2 million have been issued under the program, which reduced the available borrowing capacity to $72.8 million. Letter of Credit Agreements and Surety Bond Programs As of December 31, 2019 and 2018, the Company had letters of credit outstanding of $12.8 million and $17.2 million, respectively, (including $12.2 million and $16.6 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, 2019 and 2018, surety bonds outstanding related to the self-insurance program totaled $62.3 million and $49.1 million, respectively. Notes Payable The Company has financed the purchase of certain revenue equipment, other equipment, and software through promissory note arrangements, including $90.8 million, $94.0 million, and $84.2 million for revenue equipment and other equipment during the year ended December 31, 2019, 2018, and 2017, respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED EXPENSES | |
ACCRUED EXPENSES | NOTE H – ACCRUED EXPENSES December 31 2019 2018 (in thousands) Workers’ compensation, third-party casualty, and loss and damage claims reserves $ 107,149 $ 103,015 Accrued vacation pay 47,730 41,474 Accrued compensation, including retirement benefits (1) 49,148 71,447 Taxes other than income 8,722 8,457 Other (1) 16,000 18,718 Total accrued expenses $ 228,749 $ 243,111 (1) Certain reclassifications have been made to the prior period accrued expenses in this table to conform to the current year presentation. There was no impact on total accrued expenses as a result of the reclassifications. Certain accrued expense balances previously presented within “Other” in this table have been reclassed to “Accrued compensation, including retirement benefits” to conform to the current year presentation. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2019 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | NOTE I – EMPLOYEE BENEFIT PLANS Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans The Company had 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 related to the plan termination in fourth quarter 2018 and continued making these distributions through third quarter 2019. During third quarter 2019, the plan purchased a nonparticipating annuity contract from an insurance company for $14.0 million to settle the pension obligation related to the vested benefits of approximately 120 plan participants and beneficiaries who were either receiving monthly benefit payments at the time of the contract purchase or who did not elect to receive a lump sum benefit upon plan termination. The remaining benefit obligation of $1.5 million for the vested benefits of 30 plan participants who could not be located for payment was transferred to the Pension Benefit Guaranty Corporation (the “PBGC”) during third quarter 2019. The Company made $7.7 million of tax-deductible cash contributions to the plan in third quarter 2019 to fund the plan benefit and expense distributions in excess of plan assets. Termination of the nonunion defined benefit plan was completed in 2019 and the plan was liquidated as of December 31, 2019. The plan had previously purchased a $7.6 million nonparticipating annuity contract from an insurance company during 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 The Company also has an unfunded supplemental benefit plan (“SBP”) for the purpose of supplementing benefits under the Company’s nonunion defined benefit pension plan for executive officers designated as participants in the SBP by the Company’s Board of Directors. The Compensation Committee of the Company’s Board of Directors (“Compensation Committee”) elected to close the SBP to new entrants and to place a cap on the maximum payment per participant to existing participants in the SBP effective January 1, 2006. In place of the SBP, eligible officers of the Company appointed after 2005 participate in a long-term cash incentive plan (see Cash Long-Term Incentive Compensation Plan section within this Note). Effective December 31, 2009, the Compensation Committee elected to freeze the accrual of benefits for remaining participants under the SBP. With the exception of early retirement penalties that may apply in certain cases, the valuation inputs for calculating the frozen SBP benefits to be paid to participants, including final average salary and the interest rate, were frozen at December 31, 2009. As presented in the tables within this Note, pension settlement expense and a corresponding reduction in the net actuarial loss was recorded in 2019 related to lump-sum SBP benefit distributions. The SBP did not incur pension settlement expense in 2018 or 2017. 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 2019 2018 2019 2018 2019 2018 (in thousands) Change in benefit obligations Benefit obligations at December 31, 2018 $ 33,373 $ 137,417 $ 3,948 $ 3,897 $ 29,488 $ 24,097 Service cost — — — — 320 366 Interest cost 624 4,269 39 108 1,212 837 Actuarial (gain) loss (1) 300 (3,685) 186 (57) (9,542) 4,957 Benefits paid (34,297) (105,522) (937) — (848) (769) Settlement loss — 894 — — — — Benefit obligations at December 31, 2019 — 33,373 3,236 3,948 20,630 29,488 Change in plan assets Fair value of plan assets at December 31, 2018 26,646 124,831 — — — — Actual return on plan assets (59) 1,837 — — — — Employer contributions 7,710 5,500 937 — 848 769 Benefits paid (34,297) (105,522) (937) — (848) (769) Fair value of plan assets at December 31, 2019 — 26,646 — — — — Funded status at period end $ — $ (6,727) $ (3,236) $ (3,948) $ (20,630) $ (29,488) Accumulated benefit obligation $ — $ 33,373 $ 3,236 $ 3,948 $ 20,630 $ 29,488 (1) The actuarial gain on the nonunion defined benefit pension plan for 2018 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 gain on the postretirement health benefit plan for 2019 is primarily related to the impact of a lower cost prescription drug plan effective January 1, 2020, versus the actuarial loss for 2018 which was primarily related to changes in the medical trend rate assumption used to measure the plan obligation at the 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 2019 2018 2019 2018 2019 2018 (in thousands) Current portion of pension and postretirement liabilities $ — $ (6,727) $ (2,886) $ (937) $ (686) $ (995) Pension and postretirement liabilities, less current portion — — (350) (3,011) (19,944) (28,493) Liabilities recognized $ — $ (6,727) $ (3,236) $ (3,948) $ (20,630) $ (29,488) 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 2019 2018 2017 2019 2018 2017 2019 2018 2017 (in thousands) Service cost $ — $ — $ — $ — $ — $ — $ 320 $ 366 $ 489 Interest cost 624 4,269 4,514 39 108 102 1,212 837 1,060 Expected return on plan assets (31) (1,582) (5,712) — — — — — — Amortization of prior service credit — — — — — — (33) (93) (190) Pension settlement expense (1) 4,164 12,925 4,156 370 — — — — — Amortization of net actuarial loss (2) 260 2,583 3,132 95 81 82 898 304 694 Net periodic benefit cost $ 5,017 $ 18,195 $ 6,090 $ 504 $ 189 $ 184 $ 2,397 $ 1,414 $ 2,053 (1) For 2019, the presentation of pension settlement expense excludes a $4.0 million noncash pension termination expense which is further described within this Note. (2) 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 2019 (1) 2018 (2) 2017 (3) 2019 (4) 2018 2017 (5) (in thousands, except per share data) Pension settlement distributions $ 33,938 $ 105,279 $ 26,261 $ 937 $ — $ 989 Pension settlement expense, pre-tax (6) $ 4,164 $ 12,925 $ 4,156 $ 370 $ — $ — Pension settlement expense per diluted share, net of taxes $ 0.12 $ 0.36 $ 0.10 $ 0.01 $ — $ — (1) Pension settlement distributions for 2019 represent $18.4 million of lump-sum benefit distributions, including participant-elected distributions associated with the plan’s termination, a $14.0 million nonparticipating annuity contract purchase, and a $1.5 million transfer of benefit obligations to the PBGC. (2) Pension settlement distributions for 2018 represent lump-sum benefit distributions, including participant-elected distributions associated with the plan’s termination. (3) Pension settlement distributions for 2017 represent $18.7 million of lump-sum benefit distributions and a $7.6 million nonparticipating annuity contract purchase. (4) The 2019 SBP distribution excludes the portion of the benefit related to an officer retirement which is delayed for six months after retirement in accordance with IRC Section 409A. The pension settlement expense related to the delayed distribution is recognized in 2019. (5) 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. (6) For 2019, the presentation of pension settlement expense excludes a $4.0 million noncash pension termination expense which is further described within this Note. 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 2019 2018 2019 2018 2019 2018 (in thousands) Unrecognized net actuarial (gain) loss $ — $ 4,034 $ 127 $ 405 $ (3,024) $ 7,416 Unrecognized prior service credit — — — — (1) (34) Total $ — $ 4,034 $ 127 $ 405 $ (3,025) $ 7,382 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. After 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 represented the Company’s current borrowing rate was utilized to discount the plan’s annuity contract obligation from the expected date to settle the plan obligation back to the December 31, 2018 measurement date. 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 2019 2018 2019 2018 2019 2018 Discount rate N/A 3.9 % 2.4 % 3.6 % 3.1 % 4.2 % 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 2019 (1) 2018 (2) 2017 (3) 2019 2018 2017 2019 2018 2017 Discount rate 3.9 % 3.1 % 3.4 % 3.6 % 2.8 % 2.7 % 4.2 % 3.5 % 4.0 % Expected return on plan assets 1.4 % 1.4 % 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 2019 expense, and the short-term discount rate established upon quarterly settlements in 2019 of 3.8% and 3.7% , was used to calculate the expense for the second and third quarter of 2019, respectively. The expected return on plan assets presented was used to determine nonunion pension expense for first quarter 2019, and a 0.0% expected return on plan assets was used to determine nonunion pension expense for the second and third quarters of 2019, as further discussed in the following Nonunion Defined Benefit Pension Plan Assets section within this Note. (2) The discount rate presented was used to determine the first quarter 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. (3) 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 nonunion pension credit for the first half of 2017, and a 2.5% expected return on plan assets was used to determine nonunion pension expense for the second half of 2017, as further discussed in the following Nonunion Defined Benefit Pension Plan Assets section within this Note. The assumed health care cost trend rates for the Company’s postretirement health benefit plan at December 31 were as follows: 2019 2018 Health care cost trend rate assumed for next year (1) 7.5 % 8.0 % Rate to which the cost trend rate is assumed to decline 5.0 % 5.0 % Year that the rate reaches the cost trend assumed rate 2026 2026 (1) At each December 31 measurement date, health care cost rates for the following year are based on known premiums for the fully-insured postretirement health benefit plan. Therefore, the first year of assumed health care cost trend rates presented as of December 31, 2019 and 2018 are for 2021 and 2020, respectively. Estimated future benefit payments from the Company’s SBP and postretirement health benefit plans, which reflect expected future service as appropriate, as of December 31, 2019 are as follows: Supplemental Postretirement Benefit Health Plan Benefit Plan 2020 $ 2,886 $ 686 2021 $ — $ 735 2022 $ — $ 754 2023 $ — $ 849 2024 $ — $ 815 2025-2029 $ 424 $ 4,428 Nonunion Defined Benefit Pension Plan Assets Prior to plan termination, the Company established 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 during 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 Company’s short-term rate of return assumption, net of estimated expenses expected to be paid from plan assets, was lowered to 0.0% for the second and third quarters of 2019, as estimated expenses expected to be paid from plan assets were expected to offset investment returns on plan assets which were held in money market mutual funds during 2019. As previously discussed, the plan began liquidating its income securities in the fourth quarter of 2018 and held investments primarily in cash equivalents as of December 31, 2018. Termination of the nonunion defined benefit plan was completed in 2019 and the plan was liquidated as of December 31, 2019. 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 — — Fair value of plan assets at December 31, 2018 $ 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. Deferred Compensation Plans The Company has deferred salary agreements with certain executives for which liabilities of $2.1 million and $2.5 million were recorded as of December 31, 2019 and 2018, 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, 2019 and 2018, VSP balances of $2.4 million and $2.3 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 $6.8 million, $6.1 million, and $5.6 million for 2019, 2018, and 2017, 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. The Company recognized expense of $10.9 million, $11.6 million, and $8.3 million in 2019, 2018, and 2017, 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, 2019, 2018, and 2017, $13.7 million, $18.3 million, $6.6 million, respectively, were accrued for future payments under the plans. Other Plans Other long-term assets include $53.2 million and $49.3 million at December 31, 2019 and 2018, 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 gain of $3.7 million during 2019, a loss of less than $0.1 million during 2018, and a gain of $2.6 million during 2017, associated with changes in the cash surrender value and proceeds from life insurance policies. 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 pension 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 Pension Protection Act of 2006 (the “PPA”), which was permanently extended by the Multiemployer Pension Reform Act (the “Reform Act”) included in the Consolidated and Further Continuing Appropriations Act of 2015. 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 year ended December 31, 2018, approximately 57% of ABF Freight’s multiemployer pension plan contributions for the year ended December 31, 2019 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 3% 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. ABF Freight’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) 2019 2018 Implemented (c) 2019 2018 2017 Imposed (e) Central States, Southeast and Southwest Areas Pension Plan (1)(2) 36-6044243 Critical and Declining Critical and Declining Implemented (3) $ 75,803 $ 74,177 $ 78,230 No Western Conference of Teamsters Pension Plan (2) 91-6145047 Green Green No 24,860 25,268 26,320 No Central Pennsylvania Teamsters Defined Benefit Plan (1)(2) 23-6262789 Green Green No 13,907 13,393 13,391 No I. B. of T. Union Local No. 710 Pension Fund (5)(6) 36-2377656 Green (4) Green (4) No 10,164 9,929 10,054 No New England Teamsters Pension Fund (7)(8) 04-6372430 Critical and Declining (9) Critical and Declining (9) Implemented (10) 4,802 20,090 5,026 No All other plans in the aggregate 24,210 24,392 25,395 Total multiemployer pension contributions paid (11) $ 153,746 $ 167,249 $ 158,416 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 2019 and 2018 is for the plan’s year-end status at December 31, 2018 and 2017, 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 dur |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE J – STOCKHOLDERS’ EQUITY Accumulated Other Comprehensive Income (Loss) Components of accumulated other comprehensive income (loss) were as follows at December 31: 2019 2018 2017 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit credit (costs) $ 2,898 $ (11,821) $ (25,768) Interest rate swap (563) 801 481 Foreign currency translation (2,075) (2,816) (1,894) Total $ 260 $ (13,836) $ (27,181) After-tax amounts: Unrecognized net periodic benefit credit (costs) (1) $ 2,152 $ (12,749) $ (19,715) Interest rate swap (416) 591 292 Foreign currency translation (1,533) (2,080) (1,151) Total $ 203 $ (14,238) $ (20,574) (1) The years ended December 31, 2018 and 2017 include $4.0 million related to a previous valuation allowance on deferred tax assets for nonunion defined benefit pension liabilities which was recognized as pension termination expense during 2019 upon extinguishment of the nonunion defined benefit pension plan (see Note I). The reclassification of stranded income tax effects related to this item was not permitted by the amendment to ASC Topic 220 which the Company adopted as of January 1, 2018. The following is a summary of the changes in accumulated other comprehensive income (loss), net of tax, by component: Unrecognized Net Interest Foreign Periodic Benefit Rate Currency Total Credit (Costs) Swap Translation (in thousands) 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) Other comprehensive income (loss) before reclassifications 6,197 6,657 (1,007) 547 Amounts reclassified from accumulated other comprehensive loss 8,244 8,244 — — Net current-period other comprehensive income (loss) 14,441 14,901 (1,007) 547 Balances at December 31, 2019 $ 203 $ 2,152 $ (416) $ (1,533) (1) The Company elected to reclassify the stranded income tax effects in accumulated other comprehensive income (loss) to retained earnings as of January 1, 2018 as a result of adopting an amendment to ASC Topic 220. The following is a summary of the significant reclassifications out of accumulated other comprehensive income (loss) by component for the years ended December 31: Unrecognized Net Periodic Benefit Costs (1)(2) 2019 2018 (in thousands) Amortization of net actuarial loss (3) $ (1,253) $ (2,968) Amortization of prior service credit 33 93 Pension settlement expense, including termination expense (3)(4) (8,505) (12,925) Total, pre-tax (9,725) (15,800) Tax benefit 1,481 4,067 Total, net of tax (3) $ (8,244) $ (11,733) (1) Amounts in parentheses indicate increases in expense or loss. (2) These components of accumulated other comprehensive income (loss) are included in the computation of net periodic benefit cost (see Note I). (3) For the year ended December 31, 2019, amounts included in accumulated other comprehensive income related to the nonunion defined benefit pension plan were reclassed to net income in their entirety upon settlement of the pension benefit obligation. These amounts include amortization of net actuarial loss of $0.3 million (pre-tax) and pension settlement expense, including termination expense, of $8.1 million (pre-tax) which were recognized in the “Other, net” line of other income (costs). These reclassifications impacted net income by $7.3 million for the year ended December 31, 2019. (4) The year ended December 31, 2019 includes a $4.0 million noncash pension termination expense (with no tax benefit) related to an amount which was stranded in accumulated other comprehensive income until the pension benefit obligation was settled upon plan termination (see Note I). Dividends on Common Stock The following table is a summary of dividends declared during the applicable quarter: 2019 2018 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ 0.08 $ 2,052 $ 0.08 $ 2,058 Second quarter $ 0.08 $ 2,050 $ 0.08 $ 2,058 Third quarter $ 0.08 $ 2,043 $ 0.08 $ 2,060 Fourth quarter $ 0.08 $ 2,042 $ 0.08 $ 2,068 On January 28, 2020, the Company’s Board of Directors declared a dividend of $0.08 per share payable to stockholders of record as of February 11, 2020. 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 2019, the Company purchased 307,005 shares for an aggregate cost of $9.1 million, leaving $13.2 million available for repurchase under the program as of December 31, 2019. Treasury shares totaled 3,404,639 and 3,097,634 as of December 31, 2019 and 2018, respectively. As of February 21, 2020, the Company had purchased an additional 50,000 shares of its common stock for an aggregate cost of $1.2 million, leaving $12.0 million available for repurchase under the current buyback program. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2019 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE K – SHARE-BASED COMPENSATION Stock Awards As of December 31, 2018, the Company had outstanding restricted stock units (“RSUs”) granted under the 2005 Ownership Incentive Plan (“the 2005 Plan”). On April 30, 2019, the Company’s stockholders approved the ArcBest Ownership Incentive Plan (“the Ownership Incentive Plan”) to amend and restate the 2005 Plan. The Ownership Incentive Plan provides for the granting of 4.0 million shares, which may be awarded as incentive and nonqualified stock options, stock appreciation rights, restricted stock, RSUs, or performance award units. The Company had outstanding RSUs granted under the Ownership Incentive Plan as of December 31, 2019. Restricted Stock Units A summary of the Company’s RSU award program is presented below: Weighted-Average Grant Date Units Fair Value Outstanding – January 1, 2019 1,436,983 $ 25.81 Granted 386,840 $ 27.75 Vested (170,935) $ 39.60 Forfeited (1) (35,768) $ 25.97 Outstanding – December 31, 2019 1,617,120 $ 24.82 (1) Forfeitures are recognized as they occur. The Compensation Committee of the Company’s Board of Directors granted RSUs during the years ended December 31, 2019, 2018, and 2017 as follows: k Weighted-Average Grant Date Units Fair Value 2019 386,840 $ 27.75 2018 231,510 $ 44.50 2017 504,550 $ 16.39 Beginning with 2018 grants, the vesting date for RSUs granted to employees was reduced from the end of a five-year period to the end of a four-year period following the date of grant. The fair value of restricted stock awards that vested in 2019, 2018, and 2017 was $4.9 million, $9.6 million, and $11.2 million, respectively. Unrecognized compensation cost related to restricted stock awards outstanding as of December 31, 2019 was $18.3 million, which is expected to be recognized over a weighted-average period of approximately 2.05 years. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
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: 2019 2018 2017 (in thousands, except share and per share data) Basic Numerator: Net income $ 39,985 $ 67,262 $ 59,726 Effect of unvested restricted stock awards (22) (150) (238) Adjusted net income $ 39,963 $ 67,112 $ 59,488 Denominator: Weighted-average shares 25,535,529 25,679,736 25,683,745 Earnings per common share $ 1.56 $ 2.61 $ 2.32 Diluted Numerator: Net income $ 39,985 $ 67,262 $ 59,726 Effect of unvested restricted stock awards (21) (145) (233) Adjusted net income $ 39,964 $ 67,117 $ 59,493 Denominator: Weighted-average shares 25,535,529 25,679,736 25,683,745 Effect of dilutive securities 914,526 1,019,095 740,644 Adjusted weighted-average shares and assumed conversions 26,450,055 26,698,831 26,424,389 Earnings per common share $ 1.51 $ 2.51 $ 2.25 Under the two-class method of calculating earnings per share, dividends paid and a portion of undistributed net income, but not losses, are allocated to unvested RSUs that receive dividends, which are considered participating securities. Beginning with 2015 grants, the RSU agreements were modified to remove dividend rights and, therefore, the RSUs granted in 2019, 2018, and 2017 are not participating securities. For the year ended December 31, 2019, 2018, and 2017 outstanding stock awards of 0.2 million, 0.1 million, and 0.1 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, 2019 | |
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. The Company began a pilot test program in early 2019 to improve freight handling at ABF Freight. The pilot utilizes patented handling equipment, software, and a patented process to load and unload trailers more rapidly and safely. During the third quarter of 2019, the presentation of operating expenses was modified to present innovative technology costs associated with the pilot test program as a separate operating expense line item for the Asset-Based segment. Previously, innovative technology costs incurred directly by the segment or allocated through shared services were categorized in individual segment expense line items. Certain reclassifications have been made to the prior period operating segment expenses to conform to the current year presentation. There was no impact on total consolidated expenses or total segment 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 technology investments. Shared services costs attributable to the operating segments are predominantly allocated based upon estimated and planned resource utilization-related metrics such as estimated shipment levels, number of pricing proposals, or number of personnel supported. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual incidence of cost incurred by the operating segments. Management believes the methods used to allocate expenses are reasonable. The Company’s reportable operating segments are as follows: ● The Asset-Based segment includes the results of operations of ABF Freight System, Inc. and certain other subsidiaries (“ABF Freight”). The segment 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. ● 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. FleetNet’s revenues for services provided to the Asset-Based and ArcBest segments totaled approximately 17% , 6% , and 2% for the year ended December 31, 2019, 2018, and 2017, respectively. 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: 2019 2018 2017 (in thousands) REVENUES Asset-Based $ 2,144,679 $ 2,175,585 $ 1,993,314 ArcBest 738,392 781,123 706,698 FleetNet 211,738 195,126 156,341 Other and eliminations (106,499) (58,046) (29,896) Total consolidated revenues $ 2,988,310 $ 3,093,788 $ 2,826,457 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 1,148,761 $ 1,128,030 $ 1,125,131 Fuel, supplies, and expenses (1) 257,133 255,655 234,006 Operating taxes and licenses 50,209 48,792 47,767 Insurance 32,516 32,887 30,761 Communications and utilities 18,614 16,983 17,373 Depreciation and amortization 89,798 85,951 82,507 Rents and purchased transportation (1) 221,479 242,247 206,457 Shared services (1) 212,773 215,302 182,568 Multiemployer pension fund withdrawal liability charge (2) — 37,922 — Gain on sale of property and equipment (3) (5,892) (410) (695) Innovative technology costs (1)(4) 13,739 3,810 2,966 Other (1) 3,488 4,554 6,248 Restructuring costs (5) — — 344 Total Asset-Based 2,042,618 2,071,723 1,935,433 ArcBest Purchased transportation 606,113 631,501 563,497 Supplies and expenses 10,789 13,329 15,087 Depreciation and amortization 11,344 13,750 13,090 Shared services 93,961 91,266 83,660 Other 9,860 9,143 11,116 Asset impairment (6) 26,514 — — Restructuring costs (5) — 491 875 Gain on sale of subsidiaries (7) — (1,945) (152) Total ArcBest 758,581 757,535 687,173 FleetNet 206,932 190,741 152,864 Other and eliminations (83,591) (35,309) (10,361) Total consolidated operating expenses $ 2,924,540 $ 2,984,690 $ 2,765,109 (1) As previously discussed in this Note, the presentation of Asset-Based segment expenses was modified in third quarter 2019 to present innovative technology costs as a separate operating expense line item. Certain reclassifications have been made to the prior period operating segment expenses to conform to the current year presentation. (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) Includes a $4.0 million gain on sale of property previously used in Asset-Based segment service center operations following the transition to a new facility. (4) Represents costs associated with the freight handling pilot test program at ABF Freight previously discussed in this Note. (5) Restructuring costs relate to the realignment of the Company’s corporate structure (see Note N). (6) The ArcBest segment recognized a noncash impairment charge in 2019 related to a portion of the goodwill, customer relationship intangible assets, and revenue equipment associated with the acquisition of truckload and truckload-dedicated businesses within the segment (see Note D). (7) Gains recognized in 2018 and 2017 relate to the sale of the ArcBest segment’s military moving businesses in December 2017 and 2016, respectively. For the year ended December 31 2019 2018 2017 (in thousands) OPERATING INCOME Asset-Based $ 102,061 $ 103,862 $ 57,881 ArcBest (20,189) 23,588 19,525 FleetNet 4,806 4,385 3,477 Other and eliminations (22,908) (22,737) (19,535) Total consolidated operating income $ 63,770 $ 109,098 $ 61,348 OTHER INCOME (COSTS) Interest and dividend income $ 6,453 $ 3,914 $ 1,293 Interest and other related financing costs (11,467) (9,468) (6,342) Other, net (1) (7,285) (19,158) (4,723) Total other income (costs) (12,299) (24,712) (9,772) INCOME BEFORE INCOME TAXES $ 51,471 $ 84,386 $ 51,576 (1) Includes the components of net periodic benefit cost other than service cost, including pension settlement and termination expense (see Note I), and 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 2019 2018 2017 (in thousands) CAPITAL EXPENDITURES, GROSS Asset-Based (1) $ 122,437 $ 116,505 $ 112,751 ArcBest 3,909 5,174 9,823 FleetNet 590 1,365 1,089 Other and eliminations (2)(3) 33,748 14,631 26,288 $ 160,684 $ 137,675 $ 149,951 For the year ended December 31 2019 2018 2017 (in thousands) DEPRECIATION AND AMORTIZATION EXPENSE (2) Asset-Based $ 89,798 $ 85,951 $ 82,507 ArcBest (4) 11,344 13,750 13,090 FleetNet (5) 1,341 1,140 1,089 Other and eliminations (2) 9,983 7,794 6,382 $ 112,466 $ 108,635 $ 103,068 (1) Includes assets acquired through notes payable and finance leases of $67.6 million in 2019, $86.8 million in 2018, and $84.2 million in 2017. (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 $23.2 million and $6.9 million in 2019 and 2018, respectively. (4) Includes amortization of intangibles of $4.2 million in 2019, and $4.3 million in 2018 and 2017. (5) Includes amortization of intangibles which totaled $0.2 million in 2019, 2018, and 2017. 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 2019 2018 2017 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 1,408,409 $ 1,398,348 $ 1,361,224 Rents, purchased transportation, and other costs of services 934,958 989,006 869,584 Fuel, supplies, and expenses 316,047 325,126 304,126 Depreciation and amortization (1) 112,466 108,635 103,068 Other 126,146 123,998 124,144 Asset impairment (2) 26,514 — — Multiemployer pension fund withdrawal liability charge (3) — 37,922 — Restructuring costs (4) — 1,655 2,963 $ 2,924,540 $ 2,984,690 $ 2,765,109 (1) Includes amortization of intangible assets. (2) The ArcBest segment recognized a noncash impairment charge in 2019 related to a portion of the goodwill, customer relationship intangible assets, and revenue equipment associated with the acquisition of truckload and truckload-dedicated businesses within the segment (see Note D). (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). |
RESTRUCTURING CHARGES
RESTRUCTURING CHARGES | 12 Months Ended |
Dec. 31, 2019 | |
RESTRUCTURING CHARGES | |
RESTRUCTURING CHARGES | NOTE N – RESTRUCTURING CHARGES 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, the Company recorded restructuring charges during 2018 and 2017, the majority of which are noncash, related to contract and lease terminations, severance, and relocation expenses. The following table presents restructuring charges recorded in operating expenses for the years ended December 31: 2019 2018 2017 (in thousands) Contract terminations (1) $ — $ 427 $ — Severance and other (2) — 1,228 2,963 Total charges $ — $ 1,655 $ 2,963 (1) Charges associated with the termination of noncancelable lease and consulting agreements. (2) 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, 2019 | |
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 56 underground tanks located in 16 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, 2019 and 2018, the Company’s reserve, which was included in accrued expenses, for estimated environmental cleanup costs of properties currently or previously operated by the Company totaled $0.4 million and $0.6 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, 2019 | |
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 2019 and 2018. 2019 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands, except share and per share data) Revenues $ 711,839 $ 771,490 $ 787,563 $ 717,418 Operating expenses (1) 703,248 736,290 756,355 728,647 Operating income (loss) (1) 8,591 35,200 31,208 (11,229) Other income (costs) (2) (1,995) (1,640) (7,866) (798) Income tax provision (benefit) 1,708 9,184 7,072 (6,478) Net income (loss) (1)(2) $ 4,888 $ 24,376 $ 16,270 $ (5,549) Earnings (loss) per common share (3) Basic (1)(2) $ 0.19 $ 0.95 $ 0.64 $ (0.22) Diluted (1)(2) $ 0.18 $ 0.92 $ 0.62 $ (0.22) Average common shares outstanding Basic 25,570,415 25,554,286 25,527,982 25,490,393 Diluted 26,512,349 26,431,592 26,416,595 25,490,393 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 (4) 687,276 790,194 770,103 737,117 Operating income (4) 12,725 3,156 56,055 37,162 Other income (costs) (2) (3,734) (2,422) (2,064) (16,492) Income tax provision (benefit) (963) (499) 13,215 5,371 Net income (2)(4) $ 9,954 $ 1,233 $ 40,776 $ 15,299 Earnings per common share (3) Basic (2)(4) $ 0.39 $ 0.05 $ 1.58 $ 0.59 Diluted (2)(4) $ 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 (1) Fourth quarter 2019 includes a noncash impairment charge of $26.5 million (pre-tax), or $19.8 million (after-tax) and $0.78 per diluted share, related to a portion of the goodwill, customer relationship intangible assets, and revenue equipment associated with the acquisition of truckload and truckload-dedicated businesses within the ArcBest segment. See Note D. (2) Includes nonunion pension expense, including settlement, for each quarter of 2018 and 2019. Pension settlements related to termination of the nonunion defined benefit pension plan began in fourth quarter 2018 and continued through third quarter 2019. In third quarter 2019, when the benefit obligation of the plan was settled, nonunion defined benefit pension expense, including settlement and termination expense, totaled $6.7 million (pre-tax), or $6.0 million (after-tax) and $0.23 diluted share. In fourth quarter 2018, when the pension settlements related to plan termination began, nonunion defined benefit pension expense, including settlement, totaled $12.6 million (pre-tax), or $9.4 million (after-tax) and $0.35 per diluted share. See Nonunion Defined Benefit Pension Plan disclosures within Note I for annual amounts of nonunion pension expense, including settlement and termination expense. (3) The Company uses the two-class method for calculating earnings per share. See Note L. (4) 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. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 Deducted from asset accounts: Allowance for doubtful accounts receivable and revenue adjustments $ 7,380 $ 1,223 $ (245) (a) $ 2,910 (b) $ 5,448 Allowance for other accounts receivable $ 806 $ (330) (c) $ — $ — $ 476 Allowance for deferred tax assets $ 53 $ — $ — $ (615) (d) $ 668 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 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, 2019 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
Consolidation | Consolidation: |
Segment Information | Segment Information: |
Use of Estimates | Use of Estimates: |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
ACCOUNTING POLICIES | |
Cash, Cash Equivalents, and Short-Term Investments | Cash, Cash Equivalents, and Short-Term Investments: 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. |
Concentration of Credit Risk | Concentration of Credit Risk: 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 2019, 2018, or 2017 or more than 6% of its accounts receivable balance at December 31, 2019 and 2018. 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: |
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: . Assets to be disposed of are reclassified as assets held for sale at the lower of their carrying amount or fair value less cost to sell. Assets held for sale primarily represent Asset-Based segment nonoperating properties, older revenue equipment, and other equipment. Adjustments to write down assets to fair value less the amount of costs to sell are reported in operating income. Assets held for sale are expected to be disposed of by selling the assets within the next 12 months. Gains and losses on property and equipment are reported in operating income. Assets held for sale of $1.3 million and $0.7 million are reported within other noncurrent assets as of December 31, 2019 and 2018, respectively. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets: 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. |
Income Taxes | Income Taxes: 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: |
Insurance Reserves | Insurance Reserves 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: |
Contingent Consideration | Contingent Consideration: |
Interest Rate Swap Derivative Instruments | Interest Rate Swap Derivative Instruments |
Leases | Leases: Leases The short-term lease exemption was elected under ASC Topic 842 for all classes of assets to include real property, revenue equipment, and service, office, and other equipment. The Company adopted the policy election as a lessee for all classes of assets to account for each lease component and its related non-lease component(s) as a single lease component. In determining the discount rate, the Company uses ArcBest Corporation’s incremental borrowing rate unless the rate implicit in the lease is readily determinable when entering into a lease as a lessee. The incremental borrowing rate is determined by the price of a fully collateralized loan with similar terms based on current market rates. For contracts entered into on or after the effective date, an assessment is made as to whether the contract is, or contains, a lease at the inception of a contract. The assessment is based on: (1) whether the contract involves the use of a distinct identified asset; (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period; and (3) whether the Company has the right to direct the use of the asset. For all operating leases that meet the scope of ASC Topic 842, a right-of-use asset and a lease liability are recognized. The right-of-use asset is measured as the initial amount of the lease liability, plus any initial direct costs incurred, less any prepayments prior to commencement or lease incentives received. The lease liability is initially measured at the present value of the lease payments, discounted using the Company’s secured incremental borrowing rate for the same term as the underlying lease unless the interest rate implicit in the lease is readily determined, then the implicit rate will be used. Lease payments included in the measurement of the lease liability are comprised of the following: (1) the fixed noncancelable lease payments, (2) payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and (3) payments for early termination options unless it is reasonably certain the lease will not be terminated early. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the initial lease liability. Additional payments based on the change in an index or rate are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability. |
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 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 is reported within operating expenses in the consolidated statements of operations. The other components of net periodic benefit cost (including pension settlement expense) 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). 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 established 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 recorded quarterly pension settlement expense related to the nonunion defined benefit pension plan when qualifying distributions determined to be settlements were 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 plan and SBP is presented in Note I. In September 2018, the nonunion defined benefit pension plan received a favorable determination letter from the U.S. Internal Revenue Service (the “IRS”) regarding qualification of the plan termination as of December 31, 2017. 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 and upon each quarterly remeasurement for settlements during 2019 until the benefit obligation of the plan was settled as of September 30, 2019. For plan termination assumptions, the Company utilized a short-term discount rate which represented the Company’s current borrowing rate and an annuity contract interest rate based on current published rates. |
Revenue Recognition | Revenue Recognition: 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 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 in both December 31, 2019 and 2018, 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: |
Earnings Per Share | Earnings Per 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 and the income tax effects of awards are recognized in the statement of operations when awards vest or are settled. |
Fair Value Measurements | Fair Value Measurements: ● 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: |
Exit or Disposal Activities | Exit or Disposal Activities: |
Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted | Adopted Accounting Pronouncements ASC Topic 842, which was adopted by the Company effective 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. The Company elected the modified retrospective method of applying the transition provisions at the beginning of the period of adoption and, as a result, has not adjusted comparative period financial information and has not included the new lease disclosures for periods before the effective date. Prior period amounts continue to be reported under the Company’s historical accounting in accordance with the previous lease guidance included in ASC Topic 840. The Company has excluded short-term leases from accounting under ASC Topic 842 and has elected the package of practical expedients as permitted under the transition guidance, which allowed the Company to not reassess: (1) whether contracts are, or contain, leases; (2) lease classification; and (3) capitalization of initial direct costs. For contracts entered into on or after the effective date, an assessment is made as to whether the contract is, or contains, a lease at the inception of a contract. Consistent with the package of practical expedients elected, leases entered into prior to January 1, 2019, are accounted for under ASC Topic 840 and were not reassessed. For all classes of assets, the policy election was made to account for each lease component and its related non-lease component(s) as a single lease component. The election to not recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less did not have a material effect on the right-of-use assets and lease liabilities. The majority of the Company’s lease portfolio consists of real property operating leases related to facilities used in the Asset-Based segment service center operations. The lease portfolio also includes operating leases related to certain revenue equipment used in the ArcBest segment operations as well as a small number of office equipment finance leases. Management has recorded the right-of-use assets and associated lease liabilities for operating leases on the consolidated balance sheet as of December 31, 2019 in accordance with ASC Topic 842. The Company has a small number of finance leases and income leases that are not material to the consolidated financial statements. The most significant impact of adopting ASC Topic 842 was the recognition of right-of-use assets and lease liabilities on the balance sheet for operating leases of $58.7 million as of January 1, 2019. The accounting for finance leases remained substantially unchanged. The expense recognition for operating leases and finance leases under ASC Topic 842 is substantially consistent with ASC Topic 840 and the impact of the new standard is noncash in nature. As a result, there was no significant impact on the Company’s results of operations or cash flows presented in the Company’s consolidated financial statements upon adoption. ASC Topic 815, Derivatives and Hedging The U.S. Securities and Exchange Commission (the “SEC”) issued Final Rule 33-10618, FAST Act Modernization and Simplification of Regulation S-K Accounting Pronouncements Not Yet Adopted ASC Subtopic 350-40, Intangibles – Goodwill and Other – Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement Internal-Use Software ASC Topic 820, Fair Value Measurement ASC Topic 326, Financial Instruments – Credit Losses ASC Topic 740, Income Taxes |
FINANCIAL INSTRUMENTS AND FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
Schedule components of cash and cash equivalents, short term investments, and restricted funds | December 31 December 31 2019 2018 (in thousands) Cash and cash equivalents Cash deposits (1) $ 166,619 $ 124,938 Variable rate demand notes (1)(2) 14,750 19,786 Money market funds (3) 20,540 42,470 U.S. Treasury securities (4) — 2,992 Total cash and cash equivalents $ 201,909 $ 190,186 Short-term investments Certificates of deposit (1) $ 69,314 $ 82,949 U.S. Treasury securities (4) 47,265 23,857 Total short-term investments $ 116,579 $ 106,806 (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. 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 | 2019 2018 (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 40,000 40,000 Notes payable (3) 213,504 216,432 181,409 181,560 $ 323,504 $ 326,432 $ 291,409 $ 291,560 (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, 2019 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) $ 20,540 $ 20,540 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 2,427 2,427 — — $ 22,967 $ 22,967 $ — $ — Liabilities: Interest rate swaps (3) $ 563 $ — $ 563 $ — 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 (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 or other long-term liabilities. The fair values of the interest rate swaps were determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are considered to be in Level 3 of the fair value hierarchy. The Company assessed Level 3 inputs as insignificant to the valuation at December 31, 2019 and December 31, 2018 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, which 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. In January 2019, final payment of the contingent consideration was released from an escrow account reported in other current assets in the consolidated balance sheets. |
Schedule of changes in fair value of the liabilities | 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, 2017 $ 6,970 Payments (1) (3,528) Change in fair value included in operating expenses 1,030 Balances at December 31, 2018 $ 4,472 Payments (1) (4,472) Balances at December 31, 2019 $ — (1) Payments released from escrow account that is reported in other current assets in the consolidated balance sheets. |
Schedule of fair value of assets measured on non recurring basis | The following table presents the fair value of assets remeasured on a nonrecurring basis. December 31, 2019 Nonrecurring Fair Value Remeasurements Using Significant Unobservable Inputs Total (Level 3) Losses (in thousands) Goodwill (1) $ 83,842 $ (20,000) Long-lived assets (2) 6,805 (6,514) $ 90,647 $ (26,514) (1) A portion of the goodwill within the ArcBest segment was reduced to its implied fair value as of October 1, 2019 (see Note D). (2) Represents fair value of the truckload-dedicated asset group within the ArcBest segment. Losses include write-downs of $6.0 million related to customer relationship intangibles (see Note D) and $0.5 million related to revenue equipment within the truckload-dedicated asset group included in the ArcBest segment reducing the carrying amounts to implied fair value as of October 1, 2019. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of goodwill by reportable operating segment | Total ArcBest FleetNet (in thousands) Balances December 31, 2017 and 2018 $ 108,320 $ 107,690 $ 630 Goodwill impairment (1) (20,000) (20,000) — Balances December 31, 2019 $ 88,320 $ 87,690 $ 630 Accumulated impairment December 31, 2019 $ (20,000) $ (20,000) $ — (1) Goodwill impairment charge related to the ArcBest segment further described within this Note. |
Schedule of intangible assets | Intangible assets consisted of the following as of December 31: 2019 2018 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 $ 52,721 $ 26,667 $ 26,054 $ 60,431 $ 24,130 $ 36,301 Other 11 1,294 816 478 1,032 684 348 14 54,015 27,483 26,532 61,463 24,814 36,649 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 $ 86,315 $ 27,483 $ 58,832 $ 93,763 $ 24,814 $ 68,949 |
Schedule of future amortization for intangible assets | Amortization of Intangible Assets (in thousands) 2020 $ 3,911 2021 3,869 2022 3,842 2023 3,744 2024 3,695 Thereafter 7,471 Total amortization $ 26,532 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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: 2019 2018 (1) 2017 (1) (in thousands, except percentages) Current provision (benefit): Federal $ 2,202 $ 9,750 $ (1,969) State 1,813 3,264 3,701 Foreign 2,060 2,238 331 6,075 15,252 2,063 Deferred provision (benefit): Federal 4,196 1,157 (9,312) State 1,221 737 (867) Foreign (6) (22) (34) 5,411 1,872 (10,213) Total provision (benefit) for income taxes $ 11,486 $ 17,124 $ (8,150) (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 | 2019 (1) 2018 (1)(2) 2017 (1)(2) (in thousands) Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets $ 16,255 $ 23,153 $ 21,876 Amortization of intangibles and impairment (6,933) (763) (1,030) Changes in reserves for workers’ compensation, third-party casualty, and cargo claims (1,880) 469 (812) Revenue recognition (1,437) (2,524) 332 Allowance for doubtful accounts 541 (115) (719) Nonunion pension and other retirement plans 564 (2,810) (1,977) Multiemployer pension fund withdrawal (3) 150 (5,818) — Federal and state net operating loss carryforwards utilized 59 746 257 State depreciation adjustments (1,302) (1,761) (1,244) Share-based compensation (709) (529) 352 Valuation allowance increase (decrease) 383 (744) 401 Other accrued expenses (699) (4,881) (852) Impact of the Tax Reform Act (2) — (3,772) (24,542) Prepaid expenses (4) 1,782 1,313 (1,331) Operating lease right-of-use assets/liabilities – net (5) (1,049) — — Other (4) (314) (92) (924) Deferred tax provision (benefit) $ 5,411 $ 1,872 $ (10,213) (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, a blended rate for 2018 (as previously discussed within this Note), and 21% for 2019. (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). (4) Prepaid expenses are presented as a separate component of the deferred tax provision (benefit). Certain reclassifications have been made to the prior period components to conform to the current year presentation. (5) Net change in operating lease right-of-use deferred tax assets and liabilities recorded due to the adoption of ASC Topic 842 in 2019. |
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: 2019 2018 (in thousands) Deferred tax assets: Accrued expenses $ 41,757 $ 39,885 Operating lease liabilities (1) 19,726 — Pension liabilities (2) — 1,721 Supplemental pension liabilities (2) 1,091 1,033 Multiemployer pension fund withdrawal (3) 5,546 5,710 Postretirement liabilities other than pensions 5,359 7,660 Share-based compensation 5,605 4,893 Federal and state net operating loss carryovers 1,093 1,152 Other 1,538 1,355 Total deferred tax assets 81,715 63,409 Valuation allowance (668) (53) Total deferred tax assets, net of valuation allowance 81,047 63,356 Deferred tax liabilities: Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets 107,835 93,525 Operating lease right-of-use assets (1) 18,703 — Intangibles 7,373 14,066 Revenue recognition 669 1,513 Prepaid expenses 4,952 3,225 Total deferred tax liabilities 139,532 112,329 Net deferred tax liabilities $ (58,485) $ (48,973) (1) Operating lease right-of-use assets and liabilities were recorded in 2019 due to the adoption of ASC Topic 842. (2) Supplemental pension liabilities are presented as a separate component of deferred tax assets. Certain reclassifications have been made to the prior period components to conform to the current year presentation. (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). |
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: 2019 (1) 2018 (1) 2017 (2) (in thousands, except percentages) Income tax provision at the statutory federal rate $ 10,809 $ 17,721 $ 18,052 Federal income tax effects of: State income taxes (637) (840) (992) Nondeductible expenses (3) 1,344 1,682 1,551 Life insurance proceeds and changes in cash surrender value (775) 7 (927) Alternative fuel credit (2,340) (1,203) — Net increase (decrease) in valuation allowances 382 (891) 401 Net increase (decrease) in uncertain tax positions (20) 933 (720) Settlement of share-based compensation 388 (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) Nonunion pension termination expense 1,040 — — Foreign tax credits generated (3) (2,054) (2,216) (297) Federal research and development tax credits (1,354) — — Other (3) (385) 187 (1,390) Federal income tax provision (benefit) 6,398 10,907 (11,281) State income tax provision 3,034 4,001 2,834 Foreign income tax provision 2,054 2,216 297 Total provision (benefit) for income taxes $ 11,486 $ 17,124 $ (8,150) Effective tax (benefit) rate 22.3 % 20.3 % (15.8) % (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) Foreign tax credits generated are presented as a separate component of the federal income tax provision (benefit). Certain reclassifications, including the separate presentation of foreign tax credits, have been made to the prior period components to conform to the current year presentation. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of components of lease expense | December 31, 2019 (in thousands) Operating lease expense $ 22,291 Variable lease expense 3,366 Sublease income (324) Total operating lease expense (1) $ 25,333 (1) Operating lease expense excludes short-term leases with a term of 12 months or less. |
Schedule of operating cash flows from operating lease activity | December 31, 2019 (in thousands) Noncash change in operating right-of-use assets $ 20,439 Change in operating lease liabilities (19,711) Operating right-use-of-assets and lease liabilities, net $ 728 Cash paid for amounts included in the measurement of operating lease liabilities $ (21,714) |
Schedule of supplemental balance sheet information related to lease liabilities | December 31, 2019 (in thousands, except lease term and discount rate) Land and Equipment Total Structures and Others Operating right-of-use assets (long-term) $ 68,470 $ 67,227 $ 1,243 Operating lease liabilities (current) $ 20,265 $ 19,293 $ 972 Operating lease liabilities (long-term) 52,277 52,008 269 Total operating lease liabilities $ 72,542 $ 71,301 $ 1,241 Weighted-average remaining lease term (in years) 5.3 Weighted-average discount rate 3.77% |
Schedule of maturities of operating lease liabilities | Equipment Land and and Total Structures (1) Other (in thousands) 2020 $ 22,576 $ 21,578 $ 998 2021 16,737 16,467 270 2022 12,253 12,253 — 2023 8,871 8,871 — 2024 6,275 6,275 — Thereafter 13,309 13,309 — Total lease payments 80,021 78,753 1,268 Less imputed interest (7,479) (7,452) (27) Total $ 72,542 $ 71,301 $ 1,241 (1) Excludes future minimum payments of $36.6 million for two operating leases for office space and a service center facility, that were executed but had not yet commenced as of December 31, 2019, which will be paid over terms of approximately 12 years . The Company has taken possession of the office space location as of January 1, 2020 and possession of the service center facility is expected in late-summer 2020, pending Lessor’s completion of construction to the premises. |
Schedule of maturities of operating lease liabilities at December 31, 2018 | 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, 2019 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
Schedule of long-term debt | December 31 December 31 2019 2018 (in thousands) Credit Facility (interest rate of 2.9% (1) $ 70,000 $ 70,000 Accounts receivable securitization borrowings (interest rate of 2.6% at December 31, 2019) 40,000 40,000 Notes payable (weighted-average interest rate of 3.3% at December 31, 2019) 213,504 181,409 Finance lease obligations (weighted-average interest rate of 3.3% at December 31, 2019) 15 266 323,519 291,675 Less current portion 57,305 54,075 Long-term debt, less current portion $ 266,214 $ 237,600 (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 2.98% and 3.10% based on the margin of the Credit Facility as of December 31, 2019 and 2018, respectively. |
Scheduled maturities of long-term debt obligations | Scheduled maturities of long term debt obligations as of December 31, 2019 were as follows: Accounts Receivable Credit Securitization Notes Finance Lease Total Facility (1) Program (1) Payable Obligations (in thousands) 2020 $ 66,398 $ 1,947 $ 1,021 $ 63,423 $ 7 2021 102,230 1,845 40,719 59,659 7 2022 52,850 1,885 — 50,964 1 2023 37,030 1,966 — 35,064 — 2024 90,084 71,515 — 18,569 — Thereafter 203 — — 203 — Total payments 348,795 79,158 41,740 227,882 15 Less amounts representing interest 25,276 9,158 1,740 14,378 — Long-term debt $ 323,519 $ 70,000 $ 40,000 $ 213,504 $ 15 (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. Assets securing notes payable or held under finance leases at December 31 were included in property, plant and equipment as follows: 2019 2018 (in thousands) Revenue equipment $ 265,315 $ 264,396 Land and structures (service centers) — 1,794 Software 2,140 1,484 Service, office, and other equipment 26,344 5,941 Total assets securing notes payable or held under finance leases 293,799 273,615 Less accumulated depreciation and amortization (1) 71,405 79,961 Net assets securing notes payable or held under finance leases $ 222,394 $ 193,654 (1) Amortization of assets held under finance leases and depreciation of assets securing notes payable are included in depreciation expense. |
Schedule of assets securing notes payable or held under capital leases | |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED EXPENSES | |
Schedule of accrued expenses | December 31 2019 2018 (in thousands) Workers’ compensation, third-party casualty, and loss and damage claims reserves $ 107,149 $ 103,015 Accrued vacation pay 47,730 41,474 Accrued compensation, including retirement benefits (1) 49,148 71,447 Taxes other than income 8,722 8,457 Other (1) 16,000 18,718 Total accrued expenses $ 228,749 $ 243,111 (1) Certain reclassifications have been made to the prior period accrued expenses in this table to conform to the current year presentation. There was no impact on total accrued expenses as a result of the reclassifications. Certain accrued expense balances previously presented within “Other” in this table have been reclassed to “Accrued compensation, including retirement benefits” to conform to the current year presentation. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 2019 2018 2019 2018 2019 2018 (in thousands) Change in benefit obligations Benefit obligations at December 31, 2018 $ 33,373 $ 137,417 $ 3,948 $ 3,897 $ 29,488 $ 24,097 Service cost — — — — 320 366 Interest cost 624 4,269 39 108 1,212 837 Actuarial (gain) loss (1) 300 (3,685) 186 (57) (9,542) 4,957 Benefits paid (34,297) (105,522) (937) — (848) (769) Settlement loss — 894 — — — — Benefit obligations at December 31, 2019 — 33,373 3,236 3,948 20,630 29,488 Change in plan assets Fair value of plan assets at December 31, 2018 26,646 124,831 — — — — Actual return on plan assets (59) 1,837 — — — — Employer contributions 7,710 5,500 937 — 848 769 Benefits paid (34,297) (105,522) (937) — (848) (769) Fair value of plan assets at December 31, 2019 — 26,646 — — — — Funded status at period end $ — $ (6,727) $ (3,236) $ (3,948) $ (20,630) $ (29,488) Accumulated benefit obligation $ — $ 33,373 $ 3,236 $ 3,948 $ 20,630 $ 29,488 (1) The actuarial gain on the nonunion defined benefit pension plan for 2018 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 gain on the postretirement health benefit plan for 2019 is primarily related to the impact of a lower cost prescription drug plan effective January 1, 2020, versus the actuarial loss for 2018 which was primarily related to changes in the medical trend rate assumption used to measure the plan obligation at the 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 2019 2018 2019 2018 2019 2018 (in thousands) Current portion of pension and postretirement liabilities $ — $ (6,727) $ (2,886) $ (937) $ (686) $ (995) Pension and postretirement liabilities, less current portion — — (350) (3,011) (19,944) (28,493) Liabilities recognized $ — $ (6,727) $ (3,236) $ (3,948) $ (20,630) $ (29,488) |
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 2019 2018 2017 2019 2018 2017 2019 2018 2017 (in thousands) Service cost $ — $ — $ — $ — $ — $ — $ 320 $ 366 $ 489 Interest cost 624 4,269 4,514 39 108 102 1,212 837 1,060 Expected return on plan assets (31) (1,582) (5,712) — — — — — — Amortization of prior service credit — — — — — — (33) (93) (190) Pension settlement expense (1) 4,164 12,925 4,156 370 — — — — — Amortization of net actuarial loss (2) 260 2,583 3,132 95 81 82 898 304 694 Net periodic benefit cost $ 5,017 $ 18,195 $ 6,090 $ 504 $ 189 $ 184 $ 2,397 $ 1,414 $ 2,053 (1) For 2019, the presentation of pension settlement expense excludes a $4.0 million noncash pension termination expense which is further described within this Note. (2) 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 2019 (1) 2018 (2) 2017 (3) 2019 (4) 2018 2017 (5) (in thousands, except per share data) Pension settlement distributions $ 33,938 $ 105,279 $ 26,261 $ 937 $ — $ 989 Pension settlement expense, pre-tax (6) $ 4,164 $ 12,925 $ 4,156 $ 370 $ — $ — Pension settlement expense per diluted share, net of taxes $ 0.12 $ 0.36 $ 0.10 $ 0.01 $ — $ — (1) Pension settlement distributions for 2019 represent $18.4 million of lump-sum benefit distributions, including participant-elected distributions associated with the plan’s termination, a $14.0 million nonparticipating annuity contract purchase, and a $1.5 million transfer of benefit obligations to the PBGC. (2) Pension settlement distributions for 2018 represent lump-sum benefit distributions, including participant-elected distributions associated with the plan’s termination. (3) Pension settlement distributions for 2017 represent $18.7 million of lump-sum benefit distributions and a $7.6 million nonparticipating annuity contract purchase. (4) The 2019 SBP distribution excludes the portion of the benefit related to an officer retirement which is delayed for six months after retirement in accordance with IRC Section 409A. The pension settlement expense related to the delayed distribution is recognized in 2019. (5) 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. (6) For 2019, the presentation of pension settlement expense excludes a $4.0 million noncash pension termination expense which is further described within this Note. |
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 2019 2018 2019 2018 2019 2018 (in thousands) Unrecognized net actuarial (gain) loss $ — $ 4,034 $ 127 $ 405 $ (3,024) $ 7,416 Unrecognized prior service credit — — — — (1) (34) Total $ — $ 4,034 $ 127 $ 405 $ (3,025) $ 7,382 |
Weighted-average assumptions used to determine benefit obligations and net periodic benefit cost for nonunion defined benefit plans | Nonunion Defined Supplemental Postretirement Benefit Pension Plan Benefit Plan Health Benefit Plan 2019 2018 2019 2018 2019 2018 Discount rate N/A 3.9 % 2.4 % 3.6 % 3.1 % 4.2 % 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 2019 (1) 2018 (2) 2017 (3) 2019 2018 2017 2019 2018 2017 Discount rate 3.9 % 3.1 % 3.4 % 3.6 % 2.8 % 2.7 % 4.2 % 3.5 % 4.0 % Expected return on plan assets 1.4 % 1.4 % 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 2019 expense, and the short-term discount rate established upon quarterly settlements in 2019 of 3.8% and 3.7% , was used to calculate the expense for the second and third quarter of 2019, respectively. The expected return on plan assets presented was used to determine nonunion pension expense for first quarter 2019, and a 0.0% expected return on plan assets was used to determine nonunion pension expense for the second and third quarters of 2019, as further discussed in the following Nonunion Defined Benefit Pension Plan Assets section within this Note. (2) The discount rate presented was used to determine the first quarter 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. (3) 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 nonunion pension credit for the first half of 2017, and a 2.5% expected return on plan assets was used to determine nonunion pension expense for the second half of 2017, as further discussed in the following Nonunion Defined Benefit Pension Plan Assets section within this Note. |
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: 2019 2018 Health care cost trend rate assumed for next year (1) 7.5 % 8.0 % Rate to which the cost trend rate is assumed to decline 5.0 % 5.0 % Year that the rate reaches the cost trend assumed rate 2026 2026 (1) At each December 31 measurement date, health care cost rates for the following year are based on known premiums for the fully-insured postretirement health benefit plan. Therefore, the first year of assumed health care cost trend rates presented as of December 31, 2019 and 2018 are for 2021 and 2020, respectively. |
Schedule of estimated future benefit payments for nonunion defined benefit plans | Estimated future benefit payments from the Company’s SBP and postretirement health benefit plans, which reflect expected future service as appropriate, as of December 31, 2019 are as follows: Supplemental Postretirement Benefit Health Plan Benefit Plan 2020 $ 2,886 $ 686 2021 $ — $ 735 2022 $ — $ 754 2023 $ — $ 849 2024 $ — $ 815 2025-2029 $ 424 $ 4,428 |
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 — — Fair value of plan assets at December 31, 2018 $ 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. |
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) 2019 2018 Implemented (c) 2019 2018 2017 Imposed (e) Central States, Southeast and Southwest Areas Pension Plan (1)(2) 36-6044243 Critical and Declining Critical and Declining Implemented (3) $ 75,803 $ 74,177 $ 78,230 No Western Conference of Teamsters Pension Plan (2) 91-6145047 Green Green No 24,860 25,268 26,320 No Central Pennsylvania Teamsters Defined Benefit Plan (1)(2) 23-6262789 Green Green No 13,907 13,393 13,391 No I. B. of T. Union Local No. 710 Pension Fund (5)(6) 36-2377656 Green (4) Green (4) No 10,164 9,929 10,054 No New England Teamsters Pension Fund (7)(8) 04-6372430 Critical and Declining (9) Critical and Declining (9) Implemented (10) 4,802 20,090 5,026 No All other plans in the aggregate 24,210 24,392 25,395 Total multiemployer pension contributions paid (11) $ 153,746 $ 167,249 $ 158,416 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 2019 and 2018 is for the plan’s year-end status at December 31, 2018 and 2017, 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, 2018 and 2017. (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, 2018 and 2017. (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, 2018 – January 31, 2019 and February 1, 2017 – January 31, 2018. (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, 2019 and 2018. (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, 2019 and 2018. (7) Contributions include $1.6 million and $15.7 million for 2019 and 2018, respectively, 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, 2018 and 2017. (9) PPA zone status relates to plan years October 1, 2018 – September 30, 2019 and October 1, 2017 – September 30, 2018. (10) Adopted a rehabilitation plan effective January 1, 2009. (11) 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 year-over-year changes in multiemployer pension plan contributions presented above were 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, 2019 | |
STOCKHOLDERS' EQUITY | |
Components of accumulated other comprehensive income (loss) | Components of accumulated other comprehensive income (loss) were as follows at December 31: 2019 2018 2017 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit credit (costs) $ 2,898 $ (11,821) $ (25,768) Interest rate swap (563) 801 481 Foreign currency translation (2,075) (2,816) (1,894) Total $ 260 $ (13,836) $ (27,181) After-tax amounts: Unrecognized net periodic benefit credit (costs) (1) $ 2,152 $ (12,749) $ (19,715) Interest rate swap (416) 591 292 Foreign currency translation (1,533) (2,080) (1,151) Total $ 203 $ (14,238) $ (20,574) (1) The years ended December 31, 2018 and 2017 include $4.0 million related to a previous valuation allowance on deferred tax assets for nonunion defined benefit pension liabilities which was recognized as pension termination expense during 2019 upon extinguishment of the nonunion defined benefit pension plan (see Note I). The reclassification of stranded income tax effects related to this item was not permitted by the amendment to ASC Topic 220 which the Company adopted as of January 1, 2018. |
Summary of changes in accumulated other comprehensive loss, net of tax, by component | Unrecognized Net Interest Foreign Periodic Benefit Rate Currency Total Credit (Costs) Swap Translation (in thousands) 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) Other comprehensive income (loss) before reclassifications 6,197 6,657 (1,007) 547 Amounts reclassified from accumulated other comprehensive loss 8,244 8,244 — — Net current-period other comprehensive income (loss) 14,441 14,901 (1,007) 547 Balances at December 31, 2019 $ 203 $ 2,152 $ (416) $ (1,533) (1) The Company elected to reclassify the stranded income tax effects in accumulated other comprehensive income (loss) to retained earnings as of January 1, 2018 as a result of adopting an amendment to ASC Topic 220. |
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 income (loss) by component for the years ended December 31: Unrecognized Net Periodic Benefit Costs (1)(2) 2019 2018 (in thousands) Amortization of net actuarial loss (3) $ (1,253) $ (2,968) Amortization of prior service credit 33 93 Pension settlement expense, including termination expense (3)(4) (8,505) (12,925) Total, pre-tax (9,725) (15,800) Tax benefit 1,481 4,067 Total, net of tax (3) $ (8,244) $ (11,733) (1) Amounts in parentheses indicate increases in expense or loss. (2) These components of accumulated other comprehensive income (loss) are included in the computation of net periodic benefit cost (see Note I). (3) For the year ended December 31, 2019, amounts included in accumulated other comprehensive income related to the nonunion defined benefit pension plan were reclassed to net income in their entirety upon settlement of the pension benefit obligation. These amounts include amortization of net actuarial loss of $0.3 million (pre-tax) and pension settlement expense, including termination expense, of $8.1 million (pre-tax) which were recognized in the “Other, net” line of other income (costs). These reclassifications impacted net income by $7.3 million for the year ended December 31, 2019. (4) The year ended December 31, 2019 includes a $4.0 million noncash pension termination expense (with no tax benefit) related to an amount which was stranded in accumulated other comprehensive income until the pension benefit obligation was settled upon plan termination (see Note I). |
Summary of dividends declared | 2019 2018 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ 0.08 $ 2,052 $ 0.08 $ 2,058 Second quarter $ 0.08 $ 2,050 $ 0.08 $ 2,058 Third quarter $ 0.08 $ 2,043 $ 0.08 $ 2,060 Fourth quarter $ 0.08 $ 2,042 $ 0.08 $ 2,068 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SHARE-BASED COMPENSATION | |
Summary of the Company's restricted stock unit award program | Weighted-Average Grant Date Units Fair Value Outstanding – January 1, 2019 1,436,983 $ 25.81 Granted 386,840 $ 27.75 Vested (170,935) $ 39.60 Forfeited (1) (35,768) $ 25.97 Outstanding – December 31, 2019 1,617,120 $ 24.82 (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 RSUs during the years ended December 31, 2019, 2018, and 2017 as follows: k Weighted-Average Grant Date Units Fair Value 2019 386,840 $ 27.75 2018 231,510 $ 44.50 2017 504,550 $ 16.39 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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: 2019 2018 2017 (in thousands, except share and per share data) Basic Numerator: Net income $ 39,985 $ 67,262 $ 59,726 Effect of unvested restricted stock awards (22) (150) (238) Adjusted net income $ 39,963 $ 67,112 $ 59,488 Denominator: Weighted-average shares 25,535,529 25,679,736 25,683,745 Earnings per common share $ 1.56 $ 2.61 $ 2.32 Diluted Numerator: Net income $ 39,985 $ 67,262 $ 59,726 Effect of unvested restricted stock awards (21) (145) (233) Adjusted net income $ 39,964 $ 67,117 $ 59,493 Denominator: Weighted-average shares 25,535,529 25,679,736 25,683,745 Effect of dilutive securities 914,526 1,019,095 740,644 Adjusted weighted-average shares and assumed conversions 26,450,055 26,698,831 26,424,389 Earnings per common share $ 1.51 $ 2.51 $ 2.25 |
OPERATING SEGMENT DATA (Tables)
OPERATING SEGMENT DATA (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
OPERATING SEGMENT DATA | |
Schedule of reportable operating segment information | The following table reflects reportable operating segment information for the years ended December 31: 2019 2018 2017 (in thousands) REVENUES Asset-Based $ 2,144,679 $ 2,175,585 $ 1,993,314 ArcBest 738,392 781,123 706,698 FleetNet 211,738 195,126 156,341 Other and eliminations (106,499) (58,046) (29,896) Total consolidated revenues $ 2,988,310 $ 3,093,788 $ 2,826,457 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 1,148,761 $ 1,128,030 $ 1,125,131 Fuel, supplies, and expenses (1) 257,133 255,655 234,006 Operating taxes and licenses 50,209 48,792 47,767 Insurance 32,516 32,887 30,761 Communications and utilities 18,614 16,983 17,373 Depreciation and amortization 89,798 85,951 82,507 Rents and purchased transportation (1) 221,479 242,247 206,457 Shared services (1) 212,773 215,302 182,568 Multiemployer pension fund withdrawal liability charge (2) — 37,922 — Gain on sale of property and equipment (3) (5,892) (410) (695) Innovative technology costs (1)(4) 13,739 3,810 2,966 Other (1) 3,488 4,554 6,248 Restructuring costs (5) — — 344 Total Asset-Based 2,042,618 2,071,723 1,935,433 ArcBest Purchased transportation 606,113 631,501 563,497 Supplies and expenses 10,789 13,329 15,087 Depreciation and amortization 11,344 13,750 13,090 Shared services 93,961 91,266 83,660 Other 9,860 9,143 11,116 Asset impairment (6) 26,514 — — Restructuring costs (5) — 491 875 Gain on sale of subsidiaries (7) — (1,945) (152) Total ArcBest 758,581 757,535 687,173 FleetNet 206,932 190,741 152,864 Other and eliminations (83,591) (35,309) (10,361) Total consolidated operating expenses $ 2,924,540 $ 2,984,690 $ 2,765,109 (1) As previously discussed in this Note, the presentation of Asset-Based segment expenses was modified in third quarter 2019 to present innovative technology costs as a separate operating expense line item. Certain reclassifications have been made to the prior period operating segment expenses to conform to the current year presentation. (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) Includes a $4.0 million gain on sale of property previously used in Asset-Based segment service center operations following the transition to a new facility. (4) Represents costs associated with the freight handling pilot test program at ABF Freight previously discussed in this Note. (5) Restructuring costs relate to the realignment of the Company’s corporate structure (see Note N). (6) The ArcBest segment recognized a noncash impairment charge in 2019 related to a portion of the goodwill, customer relationship intangible assets, and revenue equipment associated with the acquisition of truckload and truckload-dedicated businesses within the segment (see Note D). (7) Gains recognized in 2018 and 2017 relate to the sale of the ArcBest segment’s military moving businesses in December 2017 and 2016, respectively. For the year ended December 31 2019 2018 2017 (in thousands) OPERATING INCOME Asset-Based $ 102,061 $ 103,862 $ 57,881 ArcBest (20,189) 23,588 19,525 FleetNet 4,806 4,385 3,477 Other and eliminations (22,908) (22,737) (19,535) Total consolidated operating income $ 63,770 $ 109,098 $ 61,348 OTHER INCOME (COSTS) Interest and dividend income $ 6,453 $ 3,914 $ 1,293 Interest and other related financing costs (11,467) (9,468) (6,342) Other, net (1) (7,285) (19,158) (4,723) Total other income (costs) (12,299) (24,712) (9,772) INCOME BEFORE INCOME TAXES $ 51,471 $ 84,386 $ 51,576 (1) Includes the components of net periodic benefit cost other than service cost, including pension settlement and termination expense (see Note I), and 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 2019 2018 2017 (in thousands) CAPITAL EXPENDITURES, GROSS Asset-Based (1) $ 122,437 $ 116,505 $ 112,751 ArcBest 3,909 5,174 9,823 FleetNet 590 1,365 1,089 Other and eliminations (2)(3) 33,748 14,631 26,288 $ 160,684 $ 137,675 $ 149,951 For the year ended December 31 2019 2018 2017 (in thousands) DEPRECIATION AND AMORTIZATION EXPENSE (2) Asset-Based $ 89,798 $ 85,951 $ 82,507 ArcBest (4) 11,344 13,750 13,090 FleetNet (5) 1,341 1,140 1,089 Other and eliminations (2) 9,983 7,794 6,382 $ 112,466 $ 108,635 $ 103,068 (1) Includes assets acquired through notes payable and finance leases of $67.6 million in 2019, $86.8 million in 2018, and $84.2 million in 2017. (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 $23.2 million and $6.9 million in 2019 and 2018, respectively. (4) Includes amortization of intangibles of $4.2 million in 2019, and $4.3 million in 2018 and 2017. (5) Includes amortization of intangibles which totaled $0.2 million in 2019, 2018, and 2017. 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 2019 2018 2017 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 1,408,409 $ 1,398,348 $ 1,361,224 Rents, purchased transportation, and other costs of services 934,958 989,006 869,584 Fuel, supplies, and expenses 316,047 325,126 304,126 Depreciation and amortization (1) 112,466 108,635 103,068 Other 126,146 123,998 124,144 Asset impairment (2) 26,514 — — Multiemployer pension fund withdrawal liability charge (3) — 37,922 — Restructuring costs (4) — 1,655 2,963 $ 2,924,540 $ 2,984,690 $ 2,765,109 (1) Includes amortization of intangible assets. (2) The ArcBest segment recognized a noncash impairment charge in 2019 related to a portion of the goodwill, customer relationship intangible assets, and revenue equipment associated with the acquisition of truckload and truckload-dedicated businesses within the segment (see Note D). (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). |
RESTRUCTURING CHARGES (Tables)
RESTRUCTURING CHARGES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
RESTRUCTURING CHARGES | |
Schedule of restructuring charges | The following table presents restructuring charges recorded in operating expenses for the years ended December 31: 2019 2018 2017 (in thousands) Contract terminations (1) $ — $ 427 $ — Severance and other (2) — 1,228 2,963 Total charges $ — $ 1,655 $ 2,963 (1) Charges associated with the termination of noncancelable lease and consulting agreements. (2) 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, 2019 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |
Schedule of unaudited quarterly financial information | 2019 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands, except share and per share data) Revenues $ 711,839 $ 771,490 $ 787,563 $ 717,418 Operating expenses (1) 703,248 736,290 756,355 728,647 Operating income (loss) (1) 8,591 35,200 31,208 (11,229) Other income (costs) (2) (1,995) (1,640) (7,866) (798) Income tax provision (benefit) 1,708 9,184 7,072 (6,478) Net income (loss) (1)(2) $ 4,888 $ 24,376 $ 16,270 $ (5,549) Earnings (loss) per common share (3) Basic (1)(2) $ 0.19 $ 0.95 $ 0.64 $ (0.22) Diluted (1)(2) $ 0.18 $ 0.92 $ 0.62 $ (0.22) Average common shares outstanding Basic 25,570,415 25,554,286 25,527,982 25,490,393 Diluted 26,512,349 26,431,592 26,416,595 25,490,393 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 (4) 687,276 790,194 770,103 737,117 Operating income (4) 12,725 3,156 56,055 37,162 Other income (costs) (2) (3,734) (2,422) (2,064) (16,492) Income tax provision (benefit) (963) (499) 13,215 5,371 Net income (2)(4) $ 9,954 $ 1,233 $ 40,776 $ 15,299 Earnings per common share (3) Basic (2)(4) $ 0.39 $ 0.05 $ 1.58 $ 0.59 Diluted (2)(4) $ 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 (1) Fourth quarter 2019 includes a noncash impairment charge of $26.5 million (pre-tax), or $19.8 million (after-tax) and $0.78 per diluted share, related to a portion of the goodwill, customer relationship intangible assets, and revenue equipment associated with the acquisition of truckload and truckload-dedicated businesses within the ArcBest segment. See Note D. (2) Includes nonunion pension expense, including settlement, for each quarter of 2018 and 2019. Pension settlements related to termination of the nonunion defined benefit pension plan began in fourth quarter 2018 and continued through third quarter 2019. In third quarter 2019, when the benefit obligation of the plan was settled, nonunion defined benefit pension expense, including settlement and termination expense, totaled $6.7 million (pre-tax), or $6.0 million (after-tax) and $0.23 diluted share. In fourth quarter 2018, when the pension settlements related to plan termination began, nonunion defined benefit pension expense, including settlement, totaled $12.6 million (pre-tax), or $9.4 million (after-tax) and $0.35 per diluted share. See Nonunion Defined Benefit Pension Plan disclosures within Note I for annual amounts of nonunion pension expense, including settlement and termination expense. (3) The Company uses the two-class method for calculating earnings per share. See Note L. (4) Second quarter 2018 includes a multiemployer pension fund withdrawal liability charge of $37.9 million (pre-tax), or $28.2 million (after-tax) and $1.05 per diluted share. See Multiemployer Plans within Note I. |
ORGANIZATION AND DESCRIPTION _3
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Organization) (Details) | 12 Months Ended |
Dec. 31, 2019segment | |
Organization and description of business | |
Number of reportable operating segments | 3 |
Asset-Based | |
Organization and description of business | |
Percentage of the Company's revenues, before other revenues and intercompany eliminations, represented by the Asset-Based segment | 69.00% |
Asset-Based | Unionized employees concentration risk | Number of employees | |
Organization and description of business | |
Percentage of Asset-Based segment employees covered under collective bargaining agreement with the IBT | 82.00% |
ACCOUNTING POLICIES (Concentrat
ACCOUNTING POLICIES (Concentration) (Details) - Minimum | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | Customer concentration risk | |||
Concentrations | |||
Percentage for concentration of credit risk disclosure | 5.00% | 5.00% | 5.00% |
Accounts receivable | Credit concentration risk | |||
Concentrations | |||
Percentage for concentration of credit risk disclosure | 6.00% | 6.00% |
ACCOUNTING POLICIES (Property)
ACCOUNTING POLICIES (Property) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment | |||
Long-lived assets impairment | $ 6,500 | ||
Goodwill impairment | 20,000 | ||
Asset Impairment Charges | $ 26,500 | 26,514 | |
Held-for-sale | Other long-term assets | |||
Property, Plant and Equipment | |||
Assets held for sale which are reported within other noncurrent assets | $ 1,300 | $ 1,300 | $ 700 |
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, 2019 | Dec. 31, 2018 |
Accounts Payable | ||
Book Overdrafts | ||
Amount of book overdrafts | $ 14.7 | $ 17.5 |
ACCOUNTING POLICIES (Other Reco
ACCOUNTING POLICIES (Other Recognition and Disclosure) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Other Recognition and Disclosure | ||
Deferred revenue | $ 0.5 | $ 0.5 |
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-Based Compensation | |||||
Vesting period | 4 years | 4 years | 5 years | ||
Employee | |||||
Share-Based Compensation | |||||
Vesting period | 4 years | 4 years | 5 years | ||
Nonemployee Director | |||||
Share-Based Compensation | |||||
Vesting period | 1 year | 1 year | 1 year | 1 year | 3 years |
ACCOUNTING POLICIES (Lease - AS
ACCOUNTING POLICIES (Lease - ASC Topic 842) (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2019 |
Assets and liabilities | ||
Lease, Practical Expedients, Package | true | |
Operating right-of-use assets | $ 68,470 | |
Lease liability | $ 72,542 | |
ASC Topic 842, Leases | ||
Assets and liabilities | ||
Change in Accounting Principle, Accounting Standards Update, Adopted | true | |
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected | Modified Retrospective | |
ASC Topic 842, Leases | Adjustment | ||
Assets and liabilities | ||
Operating right-of-use assets | $ 58,700 | |
Lease liability | $ 58,700 |
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, 2019 | Dec. 31, 2018 |
Fair value disclosure | ||
Cash and cash equivalents | $ 201,909 | $ 190,186 |
Short-term investments | 116,579 | 106,806 |
Concentrations of Credit Risk of Financial Instruments | ||
Cash, cash equivalents and short-term investments not FDIC-insured | 66,200 | 94,700 |
Cash deposits | ||
Fair value disclosure | ||
Cash and cash equivalents | 166,619 | 124,938 |
Variable rate demand notes | ||
Fair value disclosure | ||
Cash and cash equivalents | 14,750 | 19,786 |
Money market funds | ||
Fair value disclosure | ||
Cash and cash equivalents | 20,540 | 42,470 |
Certificates of deposit | ||
Fair value disclosure | ||
Short-term investments | 69,314 | 82,949 |
U.S. Treasury securities | ||
Fair value disclosure | ||
Cash and cash equivalents | 2,992 | |
Short-term investments | $ 47,265 | $ 23,857 |
FINANCIAL INSTRUMENTS AND FAI_4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying Value | ||
Fair value disclosure | ||
Debt obligations | $ 323,504 | $ 291,409 |
Fair Value | ||
Fair value disclosure | ||
Debt obligations | 326,432 | 291,560 |
Credit Facility | Level 2 | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 70,000 | 70,000 |
Credit Facility | Level 2 | Fair Value | ||
Fair value disclosure | ||
Debt obligations | 70,000 | 70,000 |
Accounts receivable securitization borrowings | Level 2 | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 40,000 | 40,000 |
Accounts receivable securitization borrowings | Level 2 | Fair Value | ||
Fair value disclosure | ||
Debt obligations | 40,000 | 40,000 |
Notes payable | Level 2 | Carrying Value | ||
Fair value disclosure | ||
Debt obligations | 213,504 | 181,409 |
Notes payable | Level 2 | Fair Value | ||
Fair value disclosure | ||
Debt obligations | $ 216,432 | $ 181,560 |
FINANCIAL INSTRUMENTS AND FAI_5
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Assets and Liabilities) (Details) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Assets | $ 22,967 | $ 45,613 |
Cash and cash equivalents | ||
Assets: | ||
Money market funds | 20,540 | 42,470 |
Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 2,427 | 2,342 |
Interest rate swaps | 801 | |
Accrued and other long term liabilities | ||
Liabilities: | ||
Contingent consideration | 4,472 | |
Other long-term liabilities | ||
Liabilities: | ||
Interest rate swap | 563 | |
Level 1 | ||
Assets: | ||
Assets | 22,967 | 44,812 |
Level 1 | Cash and cash equivalents | ||
Assets: | ||
Money market funds | 20,540 | 42,470 |
Level 1 | Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 2,427 | 2,342 |
Level 2 | ||
Assets: | ||
Assets | 801 | |
Level 2 | Other long-term assets | ||
Assets: | ||
Interest rate swaps | 801 | |
Level 2 | Other long-term liabilities | ||
Liabilities: | ||
Interest rate swap | $ 563 | |
Level 3 | Accrued and other long term liabilities | ||
Liabilities: | ||
Contingent consideration | $ 4,472 |
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, 2019 | Dec. 31, 2018 | |
Fair Value of liabilities level 3 hierarchy | ||
Balance beginning of period | $ 4,472 | $ 6,970 |
Payments | $ (4,472) | (3,528) |
Change in fair value included in operating expenses | 1,030 | |
Balance at end of period | $ 4,472 |
FINANCIAL INSTRUMENTS AND FAI_7
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (FV of assets) (Details) - USD ($) $ in Thousands | Oct. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill impairment | $ (20,000) | ||
Long-lived assets impairment | (6,500) | ||
Total Losses/Impairment | $ (26,500) | (26,514) | |
Level 3 | Nonrecurring basis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill | 83,842 | 83,842 | |
Long-lived assets | 6,805 | 6,805 | |
Assets | $ 90,647 | 90,647 | |
Goodwill impairment | (20,000) | ||
Long-lived assets impairment | (6,514) | ||
Total Losses/Impairment | (26,514) | ||
ArcBest | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Goodwill impairment | (20,000) | ||
Long-lived assets impairment | (6,500) | ||
ArcBest | Customer relationships | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment of customer relationship intangibles | (6,000) | ||
ArcBest | Revenue Equipment | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment of revenue equipment | $ (500) | ||
ArcBest | Level 3 | Customer relationships | Nonrecurring basis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment of customer relationship intangibles | $ 6,000 | ||
ArcBest | Level 3 | Revenue Equipment | Nonrecurring basis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment of revenue equipment | $ 500 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Goodwill) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | $ 108,320 |
Goodwill impairment | (20,000) |
Balance at the end of the period | 88,320 |
Accumulated impairment | (20,000) |
ArcBest | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | 107,690 |
Goodwill impairment | (20,000) |
Balance at the end of the period | 87,690 |
Accumulated impairment | (20,000) |
FleetNet | |
Goodwill by reportable operating segment | |
Balance at the beginning of the period | 630 |
Balance at the end of the period | $ 630 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Intangible) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 14 years | |
Cost | $ 54,015 | $ 61,463 |
Accumulated Amortization | 27,483 | 24,814 |
Net Value | 26,532 | 36,649 |
Total intangible assets | ||
Cost | 86,315 | 93,763 |
Net Value | 58,832 | 68,949 |
Impairment Assessment of Intangible Assets | ||
Long-lived assets impairment | 6,500 | |
ArcBest | ||
Impairment Assessment of Intangible Assets | ||
Long-lived assets impairment | 6,500 | |
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 | $ 52,721 | 60,431 |
Accumulated Amortization | 26,667 | 24,130 |
Net Value | 26,054 | 36,301 |
Customer relationships | ArcBest | ||
Impairment Assessment of Intangible Assets | ||
Impairment of finite-lived intangible assets | $ 6,000 | |
Other intangible assets | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 11 years | |
Cost | $ 1,294 | 1,032 |
Accumulated Amortization | 816 | 684 |
Net Value | 478 | $ 348 |
Revenue Equipment | ArcBest | ||
Impairment Assessment of Intangible Assets | ||
Impairment of revenue equipment | $ 500 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Amortization) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Future amortization for intangible assets | ||
2020 | $ 3,911 | |
2021 | 3,869 | |
2022 | 3,842 | |
2023 | 3,744 | |
2024 | 3,695 | |
Thereafter | 7,471 | |
Net Value | $ 26,532 | $ 36,649 |
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Impact of Tax Reform Act | |||||||
Statutory federal rate (as a percent) | 32.74% | 35.00% | 21.00% | 32.74% | 21.00% | 21.00% | 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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current provision (benefit): | |||||||||||||||
Federal | $ 2,202 | $ 9,750 | $ (1,969) | ||||||||||||
State | 1,813 | 3,264 | 3,701 | ||||||||||||
Foreign | 2,060 | 2,238 | 331 | ||||||||||||
Current tax provision | 6,075 | 15,252 | 2,063 | ||||||||||||
Deferred provision (benefit): | |||||||||||||||
Federal | 4,196 | 1,157 | (9,312) | ||||||||||||
State | 1,221 | 737 | (867) | ||||||||||||
Foreign | (6) | (22) | (34) | ||||||||||||
Deferred tax provision (benefit) | 5,411 | 1,872 | (10,213) | ||||||||||||
Total provision (benefit) for income taxes | $ (6,478) | $ 7,072 | $ 9,184 | $ 1,708 | $ 5,371 | $ 13,215 | $ (499) | $ (963) | $ 11,486 | 17,124 | (8,150) | ||||
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% | 21.00% | 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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Components of the deferred tax provision or benefit | |||||||
Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets | $ 16,255 | $ 23,153 | $ 21,876 | ||||
Amortization of intangibles and impairment | (6,933) | (763) | (1,030) | ||||
Changes in reserves for workers' compensation, third-party casualty, and cargo claims | (1,880) | 469 | (812) | ||||
Revenue recognition | (1,437) | (2,524) | 332 | ||||
Allowance for doubtful accounts | 541 | (115) | (719) | ||||
Nonunion pension and other retirement plans | 564 | (2,810) | (1,977) | ||||
Multiemployer pension fund withdrawal | 150 | (5,818) | |||||
Federal and state net operating loss carryforwards utilized | 59 | 746 | 257 | ||||
State depreciation adjustments | (1,302) | (1,761) | (1,244) | ||||
Share-based compensation | (709) | (529) | 352 | ||||
Valuation allowance increase (decrease) | 383 | (744) | 401 | ||||
Other accrued expenses | (699) | (4,881) | (852) | ||||
Impact of the Tax Reform Act | (3,772) | (24,542) | |||||
Prepaid expenses | 1,782 | 1,313 | (1,331) | ||||
Operating lease right-of-use assets/liabilities - net | (1,049) | ||||||
Other | (314) | (92) | (924) | ||||
Deferred tax provision (benefit) | $ 5,411 | $ 1,872 | $ (10,213) | ||||
Statutory federal rate (as a percent) | 32.74% | 35.00% | 21.00% | 32.74% | 21.00% | 21.00% | 35.00% |
INCOME TAXES (Deferred) (Detail
INCOME TAXES (Deferred) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Accrued expenses | $ 41,757 | $ 39,885 |
Operating lease liabilities | 19,726 | |
Pension liabilities | 1,721 | |
Supplemental pension liabilities | 1,091 | 1,033 |
Multiemployer pension fund withdrawal | 5,546 | 5,710 |
Postretirement liabilities other than pensions | 5,359 | 7,660 |
Share-based compensation | 5,605 | 4,893 |
Federal and state net operating loss carryforwards | 1,093 | 1,152 |
Other | 1,538 | 1,355 |
Total deferred tax assets | 81,715 | 63,409 |
Valuation allowance | (668) | (53) |
Total deferred tax assets, net of valuation allowance | 81,047 | 63,356 |
Deferred tax liabilities: | ||
Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets | 107,835 | 93,525 |
Operating lease right-of-use assets | 18,703 | |
Intangibles | 7,373 | 14,066 |
Revenue recognition | 669 | 1,513 |
Prepaid expenses | 4,952 | 3,225 |
Total deferred tax liabilities | 139,532 | 112,329 |
Net deferred tax liabilities | $ (58,485) | $ (48,973) |
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
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 | $ 10,809 | $ 17,721 | $ 18,052 | ||||||||||||
Federal income tax effects of: | |||||||||||||||
State income taxes | (637) | (840) | (992) | ||||||||||||
Nondeductible expenses | 1,344 | 1,682 | 1,551 | ||||||||||||
Life insurance proceeds and changes in cash surrender value | (775) | 7 | (927) | ||||||||||||
Alternative fuel tax credit | (2,340) | (1,203) | |||||||||||||
Net increase (decrease) in valuation allowances | 382 | (891) | 401 | ||||||||||||
Net increase (decrease) in uncertain tax positions | (20) | 933 | (720) | ||||||||||||
Settlement of share-based compensation | 388 | (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) | |||||||||||||
Nonunion pension termination expense | 1,040 | ||||||||||||||
Foreign tax credits generated | (2,054) | (2,216) | (297) | ||||||||||||
Federal research and development tax credits | (1,354) | ||||||||||||||
Other | (385) | 187 | (1,390) | ||||||||||||
Federal income tax provision (benefit) | 6,398 | 10,907 | (11,281) | ||||||||||||
State income tax provision | 3,034 | 4,001 | 2,834 | ||||||||||||
Foreign income tax provision | 2,054 | 2,216 | 297 | ||||||||||||
Total provision (benefit) for income taxes | $ (6,478) | $ 7,072 | $ 9,184 | $ 1,708 | $ 5,371 | $ 13,215 | $ (499) | $ (963) | $ 11,486 | $ 17,124 | $ (8,150) | ||||
Effective tax (benefit) rate (as a percent) | 22.30% | 20.30% | (15.80%) | ||||||||||||
Statutory federal rate (as a percent) | 32.74% | 35.00% | 21.00% | 32.74% | 21.00% | 21.00% | 35.00% | ||||||||
Income taxes paid, excluding income tax refunds | $ 28,100 | $ 21,800 | $ 22,700 | ||||||||||||
Income tax refunds | $ 13,100 | $ 18,500 | $ 18,500 |
INCOME TAXES (ASC Topic 718) (D
INCOME TAXES (ASC Topic 718) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Adopted Accounting Pronouncements | |||
Effective tax (benefit) rate (as a percent) | 22.30% | 20.30% | (15.80%) |
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) | 0.90% | (0.80%) | (2.20%) |
INCOME TAXES (NOL) (Details)
INCOME TAXES (NOL) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Operating loss and contribution carryforwards | |||
Reversal of valuation allowance | $ 700 | ||
Foreign tax credit carryforward | $ 700 | ||
Valuation allowance | $ 668 | 53 | |
Number of state taxing authorities for which the entity is under examination | item | 1 | ||
State | |||
Operating loss and contribution carryforwards | |||
Operating loss carryforwards | $ 11,700 | ||
Contribution carryforwards | $ 500 | ||
Valuation allowance related to net operating loss and contribution carryforwards | $ 100 | ||
Valuation allowance related to net operating loss carryforwards | $ 700 | ||
Net operating loss carryforwards expiration period | 5 years |
INCOME TAXES (Uncertain Tax Pos
INCOME TAXES (Uncertain Tax Positions) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income taxes | |||
Reserve for uncertain tax positions | $ 0.9 | $ 1 | |
Maximum | |||
Income taxes | |||
Reserve for uncertain tax positions | $ 0.1 | ||
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 | |||
Decrease in reserve, Expiration of statute of limitations | 0.7 | ||
Increase in reserve, Prior period tax positions | 0.9 | ||
Federal | Maximum | |||
Income taxes | |||
Reserve for uncertain tax positions | $ 0.1 | $ 0.1 |
LEASES (Lease terms) (Details)
LEASES (Lease terms) (Details) - Maximum | 12 Months Ended |
Dec. 31, 2019 | |
Operating leases | |
Remaining lease term | 10 years |
Operating lease, renewal term | 5 years |
Option to terminate lease, period | 2 years |
LEASES (Components of Lease Exp
LEASES (Components of Lease Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases | |||
Operating lease expense | $ 22,291 | ||
Variable lease expense | 3,366 | ||
Sublease income | (324) | ||
Total operating lease expense | $ 25,333 | ||
Rental expense for operating leases | $ 20,500 | $ 20,500 |
LEASES (Cash flows) (Details)
LEASES (Cash flows) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Operating leases | |
Noncash change in operating right-of-use assets | $ 20,439 |
Change in operating lease liabilities | (19,711) |
Operating right-use-of-assets and lease liabilities, net | 728 |
Cash paid for amounts included in the measurement of operating lease liabilities | $ (21,714) |
LEASES (Supplemental Balance Sh
LEASES (Supplemental Balance Sheet Information) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating leases | |
Operating right-of-use assets (long-term) | $ 68,470 |
Operating lease liabilities (current) | 20,265 |
Operating lease liabilities (long-term) | 52,277 |
Total operating lease liabilities | $ 72,542 |
Weighted average remaining lease term (in years) | 5 years 3 months 18 days |
Weighted average discount rate | 3.77% |
Land and Structures | |
Operating leases | |
Operating right-of-use assets (long-term) | $ 67,227 |
Operating lease liabilities (current) | 19,293 |
Operating lease liabilities (long-term) | 52,008 |
Total operating lease liabilities | 71,301 |
Equipment and Others | |
Operating leases | |
Operating right-of-use assets (long-term) | 1,243 |
Operating lease liabilities (current) | 972 |
Operating lease liabilities (long-term) | 269 |
Total operating lease liabilities | $ 1,241 |
LEASES (Maturities of Operating
LEASES (Maturities of Operating Lease Liabilities - 2019) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)lease | Dec. 31, 2018 | |
Maturities of operating lease liabilities | ||
2020 | $ 22,576 | |
2021 | 16,737 | |
2022 | 12,253 | |
2023 | 8,871 | |
2024 | 6,275 | |
Thereafter | 13,309 | |
Total lease payments | 80,021 | |
Less imputed interest | (7,479) | |
Total operating lease liabilities | 72,542 | |
Lease term for lease commitments that have not yet commenced | 10 years | |
Land and Structures | ||
Maturities of operating lease liabilities | ||
2020 | 21,578 | |
2021 | 16,467 | |
2022 | 12,253 | |
2023 | 8,871 | |
2024 | 6,275 | |
Thereafter | 13,309 | |
Total lease payments | 78,753 | |
Less imputed interest | (7,452) | |
Total operating lease liabilities | 71,301 | |
Future minimum payments for leases that have not yet commenced | $ 36,600 | |
Number of operating leases that have been executed but not yet commenced | lease | 2 | |
Lease term for lease commitments that have not yet commenced | 12 years | |
Equipment and Others | ||
Maturities of operating lease liabilities | ||
2020 | $ 998 | |
2021 | 270 | |
Total lease payments | 1,268 | |
Less imputed interest | (27) | |
Total operating lease liabilities | $ 1,241 |
LEASES (Maturities of Operati_2
LEASES (Maturities of Operating Lease Liabilities - 2018) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Maturities of operating lease liabilities | ||
2019 | $ 19,130 | |
2020 | 14,620 | |
2021 | 10,972 | |
2022 | 7,125 | |
2023 | 4,477 | |
Thereafter | 5,850 | |
Total | 62,174 | |
Future minimum payments for leases not yet commenced | $ 21,000 | |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 10 years | |
Land and Structures | ||
Maturities of operating lease liabilities | ||
2019 | $ 18,067 | |
2020 | 13,676 | |
2021 | 10,716 | |
2022 | 7,125 | |
2023 | 4,477 | |
Thereafter | 5,850 | |
Total | 59,911 | |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 12 years | |
Equipment and Others | ||
Maturities of operating lease liabilities | ||
2019 | 1,063 | |
2020 | 944 | |
2021 | 256 | |
Total | $ 2,263 |
LONG-TERM DEBT AND FINANCING _3
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Summary) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Long-term debt obligations | ||
Long-term debt | $ 323,519 | $ 291,675 |
Less current portion | 57,305 | 54,075 |
Long-term debt, less current portion | $ 266,214 | 237,600 |
Weighted-average interest rate (as a percent) | 3.10% | |
Payments under long-term debt obligations | ||
2020 | $ 66,398 | |
2021 | 102,230 | |
2022 | 52,850 | |
2023 | 37,030 | |
2024 | 90,084 | |
Thereafter | 203 | |
Total payments | 348,795 | |
Less amounts representing interest | 25,276 | |
Long-term debt | 323,519 | 291,675 |
Credit Facility | ||
Long-term debt obligations | ||
Long-term debt | $ 70,000 | 70,000 |
Interest rate (as a percent) | 2.90% | |
Payments under long-term debt obligations | ||
2020 | $ 1,947 | |
2021 | 1,845 | |
2022 | 1,885 | |
2023 | 1,966 | |
2024 | 71,515 | |
Total payments | 79,158 | |
Less amounts representing interest | 9,158 | |
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) | 2.98% | 3.10% |
Accounts receivable securitization borrowings | ||
Long-term debt obligations | ||
Long-term debt | $ 40,000 | $ 40,000 |
Interest rate (as a percent) | 2.60% | |
Payments under long-term debt obligations | ||
2020 | $ 1,021 | |
2021 | 40,719 | |
Total payments | 41,740 | |
Less amounts representing interest | 1,740 | |
Long-term debt | 40,000 | 40,000 |
Notes payable | ||
Long-term debt obligations | ||
Long-term debt | $ 213,504 | 181,409 |
Weighted-average interest rate (as a percent) | 3.30% | |
Payments under long-term debt obligations | ||
2020 | $ 63,423 | |
2021 | 59,659 | |
2022 | 50,964 | |
2023 | 35,064 | |
2024 | 18,569 | |
Thereafter | 203 | |
Total payments | 227,882 | |
Less amounts representing interest | 14,378 | |
Long-term debt | 213,504 | 181,409 |
Finance lease obligations | ||
Long-term debt obligations | ||
Long-term debt | $ 15 | 266 |
Weighted-average interest rate (as a percent) | 3.30% | |
Payments under long-term debt obligations | ||
2020 | $ 7 | |
2021 | 7 | |
2022 | 1 | |
Total payments | 15 | |
Long-term debt | $ 15 | $ 266 |
LONG-TERM DEBT AND FINANCING _4
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Assets Sec) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Financing Arrangements | |||
Total assets securing notes payable or held under finance leases | $ 293,799 | $ 273,615 | |
Less accumulated depreciation and amortization | 71,405 | 79,961 | |
Net assets securing notes payable or held under finance leases | $ 222,394 | 193,654 | |
Weighted-average interest rate (as a percent) | 3.10% | ||
Interest paid, net of capitalized interest | $ 10,900 | 8,700 | $ 5,800 |
Capitalized interest | 200 | 200 | $ 900 |
Revenue equipment | |||
Financing Arrangements | |||
Total assets securing notes payable or held under finance leases | 265,315 | 264,396 | |
Land and structures (service centers) | |||
Financing Arrangements | |||
Total assets securing notes payable or held under finance leases | 1,794 | ||
Software | |||
Financing Arrangements | |||
Total assets securing notes payable or held under finance leases | 2,140 | 1,484 | |
Service, office, and other equipment | |||
Financing Arrangements | |||
Total assets securing notes payable or held under finance leases | $ 26,344 | $ 5,941 |
LONG-TERM DEBT AND FINANCING _5
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Credit Facility) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Aug. 31, 2019 |
Credit Facility | ||
Financing Arrangements | ||
Maximum borrowing capacity | $ 250 | $ 200 |
Additional borrowing capacity that may be requested | 125 | $ 100 |
Remaining borrowing capacity | 180 | |
Swing Line Facility | ||
Financing Arrangements | ||
Maximum borrowing capacity | 25 | |
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, 2019 | Dec. 31, 2018 | 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 | |||
Interest rate swap agreement | Other long-term assets | Maximum | ||||
Financing Arrangements | ||||
Fair value of interest rate swap, asset | $ 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) | 2.98% | 3.10% | ||
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 liabilities | ||||
Financing Arrangements | ||||
Fair value of interest rate swap, liability | $ 0.6 | |||
Forward-starting interest rate swap agreement | Other long-term assets | ||||
Financing Arrangements | ||||
Fair value of interest rate swap, asset | $ 0.5 | |||
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) | 3.12% |
LONG-TERM DEBT AND FINANCING _7
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Financing arrangements - Securitization program) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Financing Arrangements | ||
Outstanding letters of credit | $ 12.8 | $ 17.2 |
Accounts receivable securitization borrowings | ||
Financing Arrangements | ||
Maximum borrowing capacity | 125 | |
Additional borrowing capacity that may be requested | 25 | |
Amount outstanding | 40 | 40 |
Outstanding letters of credit | 12.2 | $ 16.6 |
Remaining borrowing capacity | $ 72.8 |
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, 2019 | Dec. 31, 2018 |
Financing Arrangements | ||
Outstanding letters of credit | $ 12.8 | $ 17.2 |
Accounts receivable securitization borrowings | ||
Financing Arrangements | ||
Outstanding letters of credit | 12.2 | 16.6 |
Surety bonds | ||
Financing Arrangements | ||
Outstanding surety bonds under uncollateralized bond programs | $ 62.3 | $ 49.1 |
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Notes payable | Revenue equipment and software | |||
Financing Arrangements | |||
Assets financed during the period under promissory note arrangements | $ 90.8 | $ 94 | $ 84.2 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
ACCRUED EXPENSES | ||
Workers' compensation, third-party casualty, and loss and damage claims reserves | $ 107,149 | $ 103,015 |
Accrued vacation pay | 47,730 | 41,474 |
Accrued compensation, including retirement benefits | 49,148 | 71,447 |
Taxes other than income | 8,722 | 8,457 |
Other | 16,000 | 18,718 |
Total accrued expenses | $ 228,749 | $ 243,111 |
EMPLOYEE BENEFIT PLANS (Plan su
EMPLOYEE BENEFIT PLANS (Plan summary) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2019USD ($)planperson | Mar. 31, 2017USD ($)person | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Pension and other postretirement benefit plans | |||||
Noncash charge to pension settlement expense | $ 4,000 | ||||
Nonunion Defined Benefit Pension Plan | |||||
Pension and other postretirement benefit plans | |||||
Nonparticipating annuity contract purchase price | $ 14,000 | $ 7,600 | 14,000 | $ 7,600 | |
Number of plan participants for which vested pension benefits were settled | person | 120 | 50 | |||
Transfer of remaining obligation to PGBC | $ 1,500 | 1,500 | |||
Number of plan participants for which benefit obligation was transferred to PBGC. | plan | 30 | ||||
Employer contributions | $ 7,700 | 7,710 | $ 5,500 | ||
Noncash charge to pension settlement expense | 4,000 | ||||
Postretirement Health Benefit Plan | |||||
Pension and other postretirement benefit plans | |||||
Employer contributions | $ 848 | $ 769 | |||
Unrecognized prior service credit, amortization period | 9 years |
EMPLOYEE BENEFIT PLANS (Funded
EMPLOYEE BENEFIT PLANS (Funded status) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Nonunion Defined Benefit Pension Plan | ||||
Change in benefit obligations | ||||
Benefit obligations at beginning of period | $ 33,373 | $ 137,417 | ||
Interest cost | 624 | 4,269 | $ 4,514 | |
Actuarial (gain) loss | 300 | (3,685) | ||
Benefits paid | (34,297) | (105,522) | ||
Settlement loss | 894 | |||
Benefit obligations at end of period | 33,373 | 137,417 | ||
Change in plan assets | ||||
Fair value of plan assets at beginning of period | 26,646 | 124,831 | ||
Actual return on plan assets | (59) | 1,837 | ||
Employer contributions | $ 7,700 | 7,710 | 5,500 | |
Benefits paid | (34,297) | (105,522) | ||
Fair value of plan assets at end of period | 26,646 | 124,831 | ||
Funded status at period end | (6,727) | |||
Accumulated benefit obligation | 33,373 | |||
Supplemental Benefit Plan | ||||
Change in benefit obligations | ||||
Benefit obligations at beginning of period | 3,948 | 3,897 | ||
Interest cost | 39 | 108 | 102 | |
Actuarial (gain) loss | 186 | (57) | ||
Benefits paid | (937) | |||
Benefit obligations at end of period | 3,236 | 3,948 | 3,897 | |
Change in plan assets | ||||
Employer contributions | 937 | |||
Benefits paid | (937) | |||
Funded status at period end | (3,236) | (3,948) | ||
Accumulated benefit obligation | 3,236 | 3,948 | ||
Postretirement Health Benefit Plan | ||||
Change in benefit obligations | ||||
Benefit obligations at beginning of period | 29,488 | 24,097 | ||
Service cost | 320 | 366 | 489 | |
Interest cost | 1,212 | 837 | 1,060 | |
Actuarial (gain) loss | (9,542) | 4,957 | ||
Benefits paid | (848) | (769) | ||
Benefit obligations at end of period | 20,630 | 29,488 | $ 24,097 | |
Change in plan assets | ||||
Employer contributions | 848 | 769 | ||
Benefits paid | (848) | (769) | ||
Funded status at period end | (20,630) | (29,488) | ||
Accumulated benefit obligation | $ 20,630 | $ 29,488 |
EMPLOYEE BENEFIT PLANS (Recogni
EMPLOYEE BENEFIT PLANS (Recognized in Balance Sheet) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Amounts recognized in the consolidated balance sheets | ||
Current portion of pension and postretirement liabilities | $ (3,572) | $ (8,659) |
Pension and postretirement liabilities, less current portion | (20,294) | (31,504) |
Nonunion Defined Benefit Pension Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Current portion of pension and postretirement liabilities | (6,727) | |
Liabilities recognized | (6,727) | |
Supplemental Benefit Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Current portion of pension and postretirement liabilities | (2,886) | (937) |
Pension and postretirement liabilities, less current portion | (350) | (3,011) |
Liabilities recognized | (3,236) | (3,948) |
Postretirement Health Benefit Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Current portion of pension and postretirement liabilities | (686) | (995) |
Pension and postretirement liabilities, less current portion | (19,944) | (28,493) |
Liabilities recognized | $ (20,630) | $ (29,488) |
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Components of net periodic benefit cost | ||||
Pension settlement expense | $ 8,505 | $ 12,925 | $ 4,156 | |
Noncash charge to pension settlement expense | 4,000 | |||
Nonunion Defined Benefit Pension Plan | ||||
Components of net periodic benefit cost | ||||
Interest cost | 624 | 4,269 | 4,514 | |
Expected return on plan assets | (31) | (1,582) | (5,712) | |
Pension settlement expense | 4,164 | 12,925 | 4,156 | |
Amortization of net actuarial loss | 260 | 2,583 | 3,132 | |
Net periodic benefit cost | $ 12,600 | 5,017 | 18,195 | 6,090 |
Noncash charge to pension settlement expense | 4,000 | |||
Supplemental Benefit Plan | ||||
Components of net periodic benefit cost | ||||
Interest cost | 39 | 108 | 102 | |
Pension settlement expense | 370 | |||
Amortization of net actuarial loss | 95 | 81 | 82 | |
Net periodic benefit cost | 504 | 189 | 184 | |
Postretirement Health Benefit Plan | ||||
Components of net periodic benefit cost | ||||
Service cost | 320 | 366 | 489 | |
Interest cost | 1,212 | 837 | 1,060 | |
Amortization of prior service credit | (33) | (93) | (190) | |
Amortization of net actuarial loss | 898 | 304 | 694 | |
Net periodic benefit cost | $ 2,397 | $ 1,414 | $ 2,053 |
EMPLOYEE BENEFIT PLANS (Settlem
EMPLOYEE BENEFIT PLANS (Settlement distributions and expense) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Mar. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Distributions and pension settlement expense | |||||
Pension settlement expense | $ 8,505 | $ 12,925 | $ 4,156 | ||
Noncash charge to pension settlement expense | 4,000 | ||||
Nonunion Defined Benefit Pension Plan | |||||
Distributions and pension settlement expense | |||||
Pension settlement distributions | 33,938 | 105,279 | 26,261 | ||
Pension settlement expense | $ 4,164 | $ 12,925 | $ 4,156 | ||
Pension settlement expense per diluted share, net of taxes | $ 0.12 | $ 0.36 | $ 0.10 | ||
Lump-sum distributions | $ 18,400 | $ 18,700 | |||
Nonparticipating annuity contract purchase price | $ 14,000 | $ 7,600 | 14,000 | 7,600 | |
Transfer of remaining obligation to PGBC | $ 1,500 | 1,500 | |||
Noncash charge to pension settlement expense | 4,000 | ||||
Supplemental Benefit Plan | |||||
Distributions and pension settlement expense | |||||
Pension settlement distributions | 937 | $ 989 | |||
Pension settlement expense | $ 370 | ||||
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, 2019 | Dec. 31, 2018 |
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 (gain) loss | $ 4,034 | |
Total | 4,034 | |
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 (gain) loss | $ 127 | 405 |
Total | 127 | 405 |
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 (gain) loss | (3,024) | 7,416 |
Unrecognized prior service credit | (1) | (34) |
Total | $ (3,025) | $ 7,382 |
EMPLOYEE BENEFIT PLANS (Discoun
EMPLOYEE BENEFIT PLANS (Discount rate and assumptions) (Details) | Jul. 01, 2017 | Jan. 01, 2017 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Nonunion Defined Benefit Pension Plan | ||||||||||||||
Weighted-average assumptions used to determine nonunion benefit obligations | ||||||||||||||
Discount rate (as a percent) | 3.90% | 3.90% | ||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||||||||||
Discount rate (as a percent) | 3.70% | 3.80% | 3.60% | 3.80% | 3.60% | 3.10% | 3.20% | 3.40% | 3.90% | 3.10% | 3.40% | |||
Expected return on plan assets, net of estimated expenses (as a percent) | 2.50% | 6.50% | 0.00% | 0.00% | 2.50% | 1.40% | 1.40% | 6.50% | ||||||
Supplemental Benefit Plan | ||||||||||||||
Weighted-average assumptions used to determine nonunion benefit obligations | ||||||||||||||
Discount rate (as a percent) | 3.60% | 2.40% | 3.60% | |||||||||||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||||||||||
Discount rate (as a percent) | 3.60% | 2.80% | 2.70% | |||||||||||
Postretirement Health Benefit Plan | ||||||||||||||
Weighted-average assumptions used to determine nonunion benefit obligations | ||||||||||||||
Discount rate (as a percent) | 4.20% | 3.10% | 4.20% | |||||||||||
Weighted-average assumptions used to determine net periodic benefit cost | ||||||||||||||
Discount rate (as a percent) | 4.20% | 3.50% | 4.00% |
EMPLOYEE BENEFIT PLANS (Health
EMPLOYEE BENEFIT PLANS (Health care trend rates) (Details) - Postretirement Health Benefit Plan | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Assumed health care cost trend rates | ||
Health care cost trend rate assumed for next year (as a percent) | 7.50% | 8.00% |
Rate to which the cost trend rate is assumed to decline (as a percent) | 5.00% | 5.00% |
Year that the rate reaches the cost trend assumed rate | 2026 | 2026 |
EMPLOYEE BENEFIT PLANS (Future
EMPLOYEE BENEFIT PLANS (Future benefit payments) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Supplemental Benefit Plan | |
Estimated future benefit payments | |
2020 | $ 2,886 |
2025-2029 | 424 |
Postretirement Health Benefit Plan | |
Estimated future benefit payments | |
2020 | 686 |
2021 | 735 |
2022 | 754 |
2023 | 849 |
2024 | 815 |
2025-2029 | $ 4,428 |
EMPLOYEE BENEFIT PLANS (Nonunio
EMPLOYEE BENEFIT PLANS (Nonunion Plan Assets) (Details) - Nonunion Defined Benefit Pension Plan | Jul. 01, 2017 | Jan. 01, 2017 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
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% | 0.00% | 0.00% | 2.50% | 1.40% | 1.40% | 6.50% |
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 |
Pension and other postretirement benefit plans | ||
Fair value of plan assets | $ 26,646 | $ 124,831 |
Cash and cash equivalents | ||
Pension and other postretirement benefit plans | ||
Fair value of plan assets | 19,856 | |
Debt instruments | ||
Pension and other postretirement benefit plans | ||
Fair value of plan assets | 10 | |
Floating rate loans | ||
Pension and other postretirement benefit plans | ||
Fair value of plan assets | 6,780 | |
Level 1 | ||
Pension and other postretirement benefit plans | ||
Fair value of plan assets | 26,636 | |
Level 1 | Cash and cash equivalents | ||
Pension and other postretirement benefit plans | ||
Fair value of plan assets | 19,856 | |
Level 1 | Floating rate loans | ||
Pension and other postretirement benefit plans | ||
Fair value of plan assets | 6,780 | |
Level 2 | ||
Pension and other postretirement benefit plans | ||
Fair value of plan assets | 10 | |
Level 2 | Debt instruments | ||
Pension and other postretirement benefit plans | ||
Fair value of plan assets | $ 10 |
EMPLOYEE BENEFIT PLANS (Deferre
EMPLOYEE BENEFIT PLANS (Deferred Comp Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred salary agreements | ||
Deferred Compensation Plans | ||
Recorded liabilities | $ 2.1 | $ 2.5 |
Voluntary Savings Plan - mutual funds held in trust | ||
Deferred Compensation Plans | ||
Minimum period for election to defer receipt of a portion of salary and incentive compensation | 6 months | |
Voluntary Savings Plan - mutual funds held in trust | Other long-term assets | ||
Deferred Compensation Plans | ||
VSP assets | $ 2.4 | 2.3 |
Voluntary Savings Plan - mutual funds held in trust | Other long-term liabilities | ||
Deferred Compensation Plans | ||
VSP liabilities | $ 2.4 | $ 2.3 |
EMPLOYEE BENEFIT PLANS (Defined
EMPLOYEE BENEFIT PLANS (Defined Contribution Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
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 | $ 13.7 | $ 18.3 | $ 6.6 |
Other Plans | |||
Cash surrender value of life insurance policies | 53.2 | 49.3 | |
Recognized gains associated with changes in the cash surrender value and proceeds from life insurance policies | $ 3.7 | 0.1 | 2.6 |
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 | $ 6.8 | 6.1 | 5.6 |
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 | $ 10.9 | $ 11.6 | $ 8.3 |
EMPLOYEE BENEFIT PLANS (Multiem
EMPLOYEE BENEFIT PLANS (Multiemployer Plans) (Details) $ in Thousands | Aug. 01, 2019 | Jan. 31, 2019 | Aug. 01, 2018 | Feb. 01, 2018 | Jan. 31, 2018 | Aug. 01, 2017 | Feb. 01, 2017 | Jun. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2019USD ($)plan | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2018 | Jan. 01, 2017 |
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 | 57.00% | ||||||||||||||
Percentage of contributions to the multiemployer pension plans that are in critical status | 3.00% | ||||||||||||||
Percentage of contributions to the multiemployer pension plans that are in endangered status | 4.00% | ||||||||||||||
Total contributions to multiemployer plans | $ 153,746 | 167,249 | $ 158,416 | ||||||||||||
Asset-Based | Multiemployer pension plans | Central States Pension Plan | |||||||||||||||
Multiemployer Plans | |||||||||||||||
Total contributions to multiemployer plans | $ 75,803 | $ 74,177 | $ 78,230 | ||||||||||||
Threshold percentage of the entity's contributions relative to total fund contributions, which was exceeded during the period | 5.00% | 5.00% | |||||||||||||
Maximum projected time to insolvency without legislative action | 6 years | ||||||||||||||
Percentage of contributions to multiemployer pension plan | 50.00% | 50.00% | 50.00% | ||||||||||||
Actuarially certified projected funded percentage of multiemployer pension plan | 27.20% | 37.80% | |||||||||||||
Asset-Based | Multiemployer pension plans | Western Conference of Teamsters Pension Plan | |||||||||||||||
Multiemployer Plans | |||||||||||||||
Total contributions to multiemployer plans | $ 24,860 | $ 25,268 | $ 26,320 | ||||||||||||
Asset-Based | Multiemployer pension plans | Central Pennsylvania Teamsters Pension Plan | |||||||||||||||
Multiemployer Plans | |||||||||||||||
Total contributions to multiemployer plans | 13,907 | $ 13,393 | $ 13,391 | ||||||||||||
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 | Local 710 Pension Fund | |||||||||||||||
Multiemployer Plans | |||||||||||||||
Total contributions to multiemployer plans | 10,164 | $ 9,929 | $ 10,054 | ||||||||||||
Threshold percentage of the entity's contributions relative to total fund contributions, which was exceeded during the period | 5.00% | 5.00% | 5.00% | 5.00% | |||||||||||
Asset-Based | Multiemployer pension plans | New England Pension Fund | |||||||||||||||
Multiemployer Plans | |||||||||||||||
Total contributions to multiemployer plans | 4,802 | 20,090 | 5,026 | ||||||||||||
Contributions to multiemployer plans related to pension fund withdrawal liability | 1,600 | 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 | 22,000 | ||||||||||||||
Fair value of withdrawal obligation | $ 24,500 | ||||||||||||||
Discount rate using 20-year U.S. Treasury (as a percent) | 3.40% | ||||||||||||||
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 | 21,400 | ||||||||||||||
Asset-Based | Multiemployer pension plans | All Other Pension Plans in Aggregate | |||||||||||||||
Multiemployer Plans | |||||||||||||||
Total contributions to multiemployer plans | $ 24,210 | 24,392 | 25,395 | ||||||||||||
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 | 1.00% | ||||||||||||||
Asset-Based | Multiemployer pension plans | Western Pennsylvania Teamsters and Employers Pension Fund | |||||||||||||||
Multiemployer Plans | |||||||||||||||
Percentage of contributions to multiemployer pension plan | 1.00% | ||||||||||||||
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 | $ 172,000 | $ 162,100 | $ 162,200 | ||||||||||||
Percentage increase in contribution rate for time worked related to benefit costs | 4.00% | 4.10% | 3.70% | ||||||||||||
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accumulated Other Comprehensive Loss | ||||
Total after-tax amount | $ 763,043 | $ 717,682 | $ 651,462 | $ 599,055 |
Amount remaining in unrecognized net periodic benefit costs portion of accumulated other comprehensive income for previous valuation allowance on deferred tax assets | 4,000 | 4,000 | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | 260 | (13,836) | (27,181) | |
Total after-tax amount | 203 | (14,238) | (20,574) | $ (23,417) |
Unrecognized Net Periodic Benefit Credit (Costs) | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | 2,898 | (11,821) | (25,768) | |
Total after-tax amount | 2,152 | (12,749) | (19,715) | |
Interest Rate Swap, 2019 | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | (563) | |||
Total after-tax amount | (416) | 591 | ||
Interest Rate Swap, 2018 and 2017 | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | 801 | 481 | ||
Total after-tax amount | 591 | 292 | ||
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Loss | ||||
Total pre-tax amount | (2,075) | (2,816) | (1,894) | |
Total after-tax amount | $ (1,533) | $ (2,080) | $ (1,151) |
STOCKHOLDERS' EQUITY (AOCI comp
STOCKHOLDERS' EQUITY (AOCI comp) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | $ 717,682 | $ 651,462 | $ 599,055 |
Adjusted Balances | 651,878 | ||
OTHER COMPREHENSIVE INCOME, net of tax | 14,441 | 9,912 | 2,843 |
Balances | 763,043 | 717,682 | 651,462 |
Accumulated Other Comprehensive Income (Loss) | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | (14,238) | (20,574) | (23,417) |
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | (3,576) | ||
Adjusted Balances | (24,150) | ||
Other comprehensive income (loss) before reclassifications | 6,197 | (1,821) | |
Amounts reclassified from accumulated other comprehensive loss | 8,244 | 11,733 | |
OTHER COMPREHENSIVE INCOME, net of tax | 14,441 | 9,912 | 2,843 |
Balances | 203 | (14,238) | (20,574) |
Unrecognized Net Periodic Benefit Credit (Costs) | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | (12,749) | (19,715) | |
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | (3,391) | ||
Adjusted Balances | (23,106) | ||
Other comprehensive income (loss) before reclassifications | 6,657 | (1,376) | |
Amounts reclassified from accumulated other comprehensive loss | 8,244 | 11,733 | |
OTHER COMPREHENSIVE INCOME, net of tax | 14,901 | 10,357 | |
Balances | 2,152 | (12,749) | (19,715) |
Interest Rate Swap, 2019 | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | 591 | ||
Other comprehensive income (loss) before reclassifications | (1,007) | ||
OTHER COMPREHENSIVE INCOME, net of tax | (1,007) | ||
Balances | (416) | 591 | |
Interest Rate Swap, 2018 and 2017 | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | 591 | 292 | |
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | 63 | ||
Adjusted Balances | 355 | ||
Other comprehensive income (loss) before reclassifications | 236 | ||
OTHER COMPREHENSIVE INCOME, net of tax | 236 | ||
Balances | 591 | 292 | |
Foreign Currency Translation | |||
Changes in accumulated other comprehensive loss, net of tax, by component | |||
Balances | (2,080) | (1,151) | |
Adjustment to beginning balance of accumulated other comprehensive loss for adoption of accounting standard | (248) | ||
Adjusted Balances | (1,399) | ||
Other comprehensive income (loss) before reclassifications | 547 | (681) | |
OTHER COMPREHENSIVE INCOME, net of tax | 547 | (681) | |
Balances | $ (1,533) | $ (2,080) | $ (1,151) |
STOCKHOLDERS' EQUITY (Reclass)
STOCKHOLDERS' EQUITY (Reclass) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Unrecognized Net Periodic Benefit Credit (Costs) | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ (9,725) | $ (15,800) |
Tax benefit | 1,481 | 4,067 |
Total, net of tax | (8,244) | (11,733) |
Unrecognized Net Periodic Benefit Credit (Costs) | Nonunion Defined Benefit Pension Plan | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, net of tax | (7,300) | |
Amortization of net actuarial loss | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (1,253) | (2,968) |
Amortization of net actuarial loss | Nonunion Defined Benefit Pension Plan | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (300) | |
Amortization of prior service credit | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | 33 | 93 |
Pension settlement expense, including termination expense | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (8,505) | $ (12,925) |
Pension settlement expense, including termination expense | Nonunion Defined Benefit Pension Plan | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (8,100) | |
Pension termination expense | Nonunion Defined Benefit Pension Plan | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | (4,000) | |
Tax benefit | $ 0 |
STOCKHOLDERS' EQUITY (Dividends
STOCKHOLDERS' EQUITY (Dividends) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 28, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
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 | $ 2,042 | $ 2,043 | $ 2,050 | $ 2,052 | $ 2,068 | $ 2,060 | $ 2,058 | $ 2,058 | $ 8,187 | $ 8,244 | $ 8,264 | |
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. 21, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2015 |
Treasury Stock | |||||
Aggregate cost of shares repurchased during the period | $ 9,110 | $ 9,404 | $ 6,019 | ||
Treasury stock (in shares) | 3,404,639 | 3,097,634 | |||
Stock Repurchase Program | |||||
Treasury Stock | |||||
Amount of stock repurchases authorized | $ 50,000 | ||||
Number of shares repurchased during the period | 307,005 | ||||
Aggregate cost of shares repurchased during the period | $ 9,100 | ||||
Amount available for repurchase | $ 13,200 | ||||
Stock Repurchase Program | Subsequent Event | |||||
Treasury Stock | |||||
Number of shares repurchased during the period | 50,000 | ||||
Aggregate cost of shares repurchased during the period | $ 1,200 | ||||
Amount available for repurchase | $ 12,000 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based compensation | |||
Number of shares authorized | 4,000,000 | ||
Restricted Stock Units | |||
Award activity | |||
Outstanding at the beginning of the period (in shares) | 1,436,983 | ||
Granted (in shares) | 386,840 | 231,510 | 504,550 |
Vested (in shares) | (170,935) | ||
Forfeited (in shares) | (35,768) | ||
Outstanding at the end of the period (in shares) | 1,617,120 | 1,436,983 | |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 25.81 | ||
Granted (in dollars per share) | 27.75 | $ 44.50 | $ 16.39 |
Vested (in dollars per share) | 39.60 | ||
Forfeited (in dollars per share) | 25.97 | ||
Outstanding at the end of the period (in dollars per share) | $ 24.82 | $ 25.81 | |
Other disclosure | |||
Vesting period | 4 years | 4 years | 5 years |
Fair value of restricted stock awards vested | $ 4.9 | $ 9.6 | $ 11.2 |
Unrecognized compensation cost | $ 18.3 | ||
Weighted-average period of recognition of unrecognized compensation cost | 2 years 18 days |
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Basic, numerator: | |||||||||||
Net income | $ (5,549) | $ 16,270 | $ 24,376 | $ 4,888 | $ 15,299 | $ 40,776 | $ 1,233 | $ 9,954 | $ 39,985 | $ 67,262 | $ 59,726 |
Effect of unvested restricted stock unit awards | (22) | (150) | (238) | ||||||||
Adjusted net income | $ 39,963 | $ 67,112 | $ 59,488 | ||||||||
Basic, denominator: | |||||||||||
Weighted-average shares | 25,490,393 | 25,527,982 | 25,554,286 | 25,570,415 | 25,707,335 | 25,697,509 | 25,670,325 | 25,642,871 | 25,535,529 | 25,679,736 | 25,683,745 |
Earnings per common share (in dollars per share) | $ (0.22) | $ 0.64 | $ 0.95 | $ 0.19 | $ 0.59 | $ 1.58 | $ 0.05 | $ 0.39 | $ 1.56 | $ 2.61 | $ 2.32 |
Diluted, numerator: | |||||||||||
Net income | $ (5,549) | $ 16,270 | $ 24,376 | $ 4,888 | $ 15,299 | $ 40,776 | $ 1,233 | $ 9,954 | $ 39,985 | $ 67,262 | $ 59,726 |
Effect of unvested restricted stock unit awards | (21) | (145) | (233) | ||||||||
Adjusted net income | $ 39,964 | $ 67,117 | $ 59,493 | ||||||||
Diluted, denominator: | |||||||||||
Weighted-average shares | 25,490,393 | 25,527,982 | 25,554,286 | 25,570,415 | 25,707,335 | 25,697,509 | 25,670,325 | 25,642,871 | 25,535,529 | 25,679,736 | 25,683,745 |
Effect of dilutive securities | 914,526 | 1,019,095 | 740,644 | ||||||||
Adjusted weighted-average shares and assumed conversions | 25,490,393 | 26,416,595 | 26,431,592 | 26,512,349 | 26,682,262 | 26,795,659 | 26,699,549 | 26,596,376 | 26,450,055 | 26,698,831 | 26,424,389 |
Earnings per common share (in dollars per share) | $ (0.22) | $ 0.62 | $ 0.92 | $ 0.18 | $ 0.57 | $ 1.52 | $ 0.05 | $ 0.37 | $ 1.51 | $ 2.51 | $ 2.25 |
EARNINGS PER SHARE (AntiDil) (D
EARNINGS PER SHARE (AntiDil) (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock awards | |||
Antidilutive securities | |||
Outstanding stock awards not included in calculation of diluted earnings (loss) per share (in shares) | 0.2 | 0.1 | 0.1 |
OPERATING SEGMENT DATA - (Conce
OPERATING SEGMENT DATA - (Concentrations) (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | Customer concentration risk | Asset-Based and ArcBest segments | FleetNet | |||
Concentrations | |||
Concentration Risk, Percentage | 17.00% | 6.00% | 2.00% |
OPERATING SEGMENT DATA - (Rev a
OPERATING SEGMENT DATA - (Rev and Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
REVENUES | |||||||||||
Revenues | $ 717,418 | $ 787,563 | $ 771,490 | $ 711,839 | $ 774,279 | $ 826,158 | $ 793,350 | $ 700,001 | $ 2,988,310 | $ 3,093,788 | $ 2,826,457 |
OPERATING EXPENSES | |||||||||||
Salaries, wages, and benefits | 1,408,409 | 1,398,348 | 1,361,224 | ||||||||
Fuel, supplies, and expenses | 316,047 | 325,126 | 304,126 | ||||||||
Depreciation and amortization | 112,466 | 108,635 | 103,068 | ||||||||
Multiemployer pension fund withdrawal liability charge | 37,900 | 37,922 | |||||||||
Gain on sale of property and equipment | (5,247) | (59) | (75) | ||||||||
Other | 126,146 | 123,998 | 124,144 | ||||||||
Asset impairment | 26,500 | 26,514 | |||||||||
Restructuring costs | 1,655 | 2,963 | |||||||||
Gain on sale of subsidiaries | (1,945) | (152) | |||||||||
Total consolidated operating expenses | 728,647 | 756,355 | 736,290 | 703,248 | 737,117 | 770,103 | 790,194 | 687,276 | 2,924,540 | 2,984,690 | 2,765,109 |
OPERATING INCOME | |||||||||||
Operating income | (11,229) | 31,208 | 35,200 | 8,591 | 37,162 | 56,055 | 3,156 | 12,725 | 63,770 | 109,098 | 61,348 |
OTHER INCOME (COSTS) | |||||||||||
Interest and dividend income | 6,453 | 3,914 | 1,293 | ||||||||
Interest and other related financing costs | (11,467) | (9,468) | (6,342) | ||||||||
Other, net | (7,285) | (19,158) | (4,723) | ||||||||
TOTAL OTHER INCOME (COSTS) | $ (798) | $ (7,866) | $ (1,640) | $ (1,995) | $ (16,492) | $ (2,064) | $ (2,422) | $ (3,734) | (12,299) | (24,712) | (9,772) |
INCOME BEFORE INCOME TAXES | 51,471 | 84,386 | 51,576 | ||||||||
Asset-Based | Land and structures (service centers) | |||||||||||
OPERATING EXPENSES | |||||||||||
Gain on sale of property and equipment | 4,000 | ||||||||||
Operating Segments | Asset-Based | |||||||||||
REVENUES | |||||||||||
Revenues | 2,144,679 | 2,175,585 | 1,993,314 | ||||||||
OPERATING EXPENSES | |||||||||||
Salaries, wages, and benefits | 1,148,761 | 1,128,030 | 1,125,131 | ||||||||
Fuel, supplies, and expenses | 257,133 | 255,655 | 234,006 | ||||||||
Operating taxes and licenses | 50,209 | 48,792 | 47,767 | ||||||||
Insurance | 32,516 | 32,887 | 30,761 | ||||||||
Communications and utilities | 18,614 | 16,983 | 17,373 | ||||||||
Depreciation and amortization | 89,798 | 85,951 | 82,507 | ||||||||
Rents and purchased transportation | 221,479 | 242,247 | 206,457 | ||||||||
Shared services | 212,773 | 215,302 | 182,568 | ||||||||
Multiemployer pension fund withdrawal liability charge | 37,922 | ||||||||||
Gain on sale of property and equipment | (5,892) | (410) | (695) | ||||||||
Innovative technology costs | 13,739 | 3,810 | 2,966 | ||||||||
Other | 3,488 | 4,554 | 6,248 | ||||||||
Restructuring costs | 344 | ||||||||||
Total consolidated operating expenses | 2,042,618 | 2,071,723 | 1,935,433 | ||||||||
OPERATING INCOME | |||||||||||
Operating income | 102,061 | 103,862 | 57,881 | ||||||||
Operating Segments | ArcBest | |||||||||||
REVENUES | |||||||||||
Revenues | 738,392 | 781,123 | 706,698 | ||||||||
OPERATING EXPENSES | |||||||||||
Purchased transportation | 606,113 | 631,501 | 563,497 | ||||||||
Supplies and expenses | 10,789 | 13,329 | 15,087 | ||||||||
Depreciation and amortization | 11,344 | 13,750 | 13,090 | ||||||||
Shared services | 93,961 | 91,266 | 83,660 | ||||||||
Other | 9,860 | 9,143 | 11,116 | ||||||||
Asset impairment | 26,514 | ||||||||||
Restructuring costs | 491 | 875 | |||||||||
Gain on sale of subsidiaries | (1,945) | (152) | |||||||||
Total consolidated operating expenses | 758,581 | 757,535 | 687,173 | ||||||||
OPERATING INCOME | |||||||||||
Operating income | (20,189) | 23,588 | 19,525 | ||||||||
Operating Segments | FleetNet | |||||||||||
REVENUES | |||||||||||
Revenues | 211,738 | 195,126 | 156,341 | ||||||||
OPERATING EXPENSES | |||||||||||
Depreciation and amortization | 1,341 | 1,140 | 1,089 | ||||||||
Total consolidated operating expenses | 206,932 | 190,741 | 152,864 | ||||||||
OPERATING INCOME | |||||||||||
Operating income | 4,806 | 4,385 | 3,477 | ||||||||
Other and eliminations | |||||||||||
REVENUES | |||||||||||
Revenues | (106,499) | (58,046) | (29,896) | ||||||||
OPERATING EXPENSES | |||||||||||
Depreciation and amortization | 9,983 | 7,794 | 6,382 | ||||||||
Total consolidated operating expenses | (83,591) | (35,309) | (10,361) | ||||||||
OPERATING INCOME | |||||||||||
Operating income | $ (22,908) | $ (22,737) | $ (19,535) |
OPERATING SEGMENT DATA (Assets)
OPERATING SEGMENT DATA (Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | $ 160,684 | $ 137,675 | $ 149,951 |
DEPRECIATION AND AMORTIZATION EXPENSE | 112,466 | 108,635 | 103,068 |
Amortization of intangibles | 4,367 | 4,521 | 4,538 |
Operating Segments | ArcBest | |||
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | 3,909 | 5,174 | 9,823 |
DEPRECIATION AND AMORTIZATION EXPENSE | 11,344 | 13,750 | 13,090 |
Amortization of intangibles | 4,200 | 4,300 | 4,300 |
Operating Segments | FleetNet | |||
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | 590 | 1,365 | 1,089 |
DEPRECIATION AND AMORTIZATION EXPENSE | 1,341 | 1,140 | 1,089 |
Amortization of intangibles | 200 | 200 | 200 |
Operating Segments | Asset-Based | |||
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | 122,437 | 116,505 | 112,751 |
DEPRECIATION AND AMORTIZATION EXPENSE | 89,798 | 85,951 | 82,507 |
Assets acquired through notes payable and capital leases | 67,600 | 86,800 | 84,200 |
Other and eliminations | |||
OPERATING SEGMENT DATA | |||
CAPITAL EXPENDITURES, GROSS | 33,748 | 14,631 | 26,288 |
DEPRECIATION AND AMORTIZATION EXPENSE | 9,983 | 7,794 | $ 6,382 |
Assets acquired through notes payable | $ 23,200 | $ 6,900 |
OPERATING SEGMENT DATA - (Opera
OPERATING SEGMENT DATA - (Operating Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING EXPENSES | |||||||||||
Salaries, wages, and benefits | $ 1,408,409 | $ 1,398,348 | $ 1,361,224 | ||||||||
Rents, purchased transportation, and other costs of services | 934,958 | 989,006 | 869,584 | ||||||||
Fuel, supplies, and expenses | 316,047 | 325,126 | 304,126 | ||||||||
Depreciation and amortization | 112,466 | 108,635 | 103,068 | ||||||||
Other | 126,146 | 123,998 | 124,144 | ||||||||
Asset impairment | $ 26,500 | 26,514 | |||||||||
Multiemployer pension fund withdrawal liability charge | $ 37,900 | 37,922 | |||||||||
Restructuring costs | 1,655 | 2,963 | |||||||||
Total consolidated operating expenses | $ 728,647 | $ 756,355 | $ 736,290 | $ 703,248 | $ 737,117 | $ 770,103 | $ 790,194 | $ 687,276 | $ 2,924,540 | $ 2,984,690 | $ 2,765,109 |
RESTRUCTURING CHARGES (Details)
RESTRUCTURING CHARGES (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016employee | |
Restructuring Charges | |||
Restructuring charges | $ 1,655 | $ 2,963 | |
Contract terminations | |||
Restructuring Charges | |||
Restructuring charges | 427 | ||
Severance and other | |||
Restructuring Charges | |||
Restructuring charges | $ 1,228 | $ 2,963 | |
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, 2019USD ($)tankstate | Dec. 31, 2018USD ($) | |
Underground fuel storage tanks | ||
Environmental Matters | ||
Number of underground tanks where the company's subsidiaries store fuel for use in tractors and trucks | tank | 56 | |
Number of states in which underground tanks are located | state | 16 | |
Environmental cleanup costs | ||
Environmental Matters | ||
Reserve for environmental contingencies | $ | $ 0.4 | $ 0.6 |
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | $ 717,418 | $ 787,563 | $ 771,490 | $ 711,839 | $ 774,279 | $ 826,158 | $ 793,350 | $ 700,001 | $ 2,988,310 | $ 3,093,788 | $ 2,826,457 |
Operating expenses | 728,647 | 756,355 | 736,290 | 703,248 | 737,117 | 770,103 | 790,194 | 687,276 | 2,924,540 | 2,984,690 | 2,765,109 |
OPERATING INCOME | (11,229) | 31,208 | 35,200 | 8,591 | 37,162 | 56,055 | 3,156 | 12,725 | 63,770 | 109,098 | 61,348 |
Other income (costs) | (798) | (7,866) | (1,640) | (1,995) | (16,492) | (2,064) | (2,422) | (3,734) | (12,299) | (24,712) | (9,772) |
Income tax provision (benefit) | (6,478) | 7,072 | 9,184 | 1,708 | 5,371 | 13,215 | (499) | (963) | 11,486 | 17,124 | (8,150) |
NET INCOME | $ (5,549) | $ 16,270 | $ 24,376 | $ 4,888 | $ 15,299 | $ 40,776 | $ 1,233 | $ 9,954 | $ 39,985 | $ 67,262 | $ 59,726 |
Earnings (loss) per common share | |||||||||||
Basic (in dollars per share) | $ (0.22) | $ 0.64 | $ 0.95 | $ 0.19 | $ 0.59 | $ 1.58 | $ 0.05 | $ 0.39 | $ 1.56 | $ 2.61 | $ 2.32 |
Diluted (in dollars per share) | $ (0.22) | $ 0.62 | $ 0.92 | $ 0.18 | $ 0.57 | $ 1.52 | $ 0.05 | $ 0.37 | $ 1.51 | $ 2.51 | $ 2.25 |
AVERAGE COMMON SHARES OUTSTANDING | |||||||||||
Basic (in shares) | 25,490,393 | 25,527,982 | 25,554,286 | 25,570,415 | 25,707,335 | 25,697,509 | 25,670,325 | 25,642,871 | 25,535,529 | 25,679,736 | 25,683,745 |
Diluted (in shares) | 25,490,393 | 26,416,595 | 26,431,592 | 26,512,349 | 26,682,262 | 26,795,659 | 26,699,549 | 26,596,376 | 26,450,055 | 26,698,831 | 26,424,389 |
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 | ||||||||||
Goodwill and Intangible Asset Impairment [Abstract] | |||||||||||
Noncash impairment charge (pre-tax) | $ 26,500 | $ 26,514 | |||||||||
Noncash impairment charge (after-tax) | $ 19,800 | ||||||||||
Noncash impairment charge diluted (in dollars per share) | $ 0.78 | ||||||||||
Nonunion Defined Benefit Pension Plan | |||||||||||
Nonunion pension expense | |||||||||||
Nonunion pension expense, including settlement (pre-tax) | $ 12,600 | $ 5,017 | $ 18,195 | $ 6,090 | |||||||
Nonunion pension expense, including settlement (after-tax) | $ 9,400 | ||||||||||
Nonunion pension expense, including settlement diluted (in dollars per share) | $ 0.35 | ||||||||||
Nonunion pension expense, including settlement and termination expense (pre-tax) | $ 6,700 | ||||||||||
Nonunion pension expense, including settlement and termination expense (after-tax) | $ 6,000 | ||||||||||
Nonunion pension expense per diluted share, including settlement and termination expense (in dollars per share) | $ 0.23 |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for doubtful accounts receivable and revenue adjustments | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | $ 7,380 | $ 7,657 | $ 5,437 |
Additions, Charged to Costs and Expenses | 1,223 | 2,336 | 4,081 |
Additions, Charged to Other Accounts | (245) | 863 | 2,416 |
Deductions | 2,910 | 3,476 | 4,277 |
Balance at End of Period | 5,448 | 7,380 | 7,657 |
Allowance for other accounts receivable | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | 806 | 921 | 849 |
Additions, Charged to Costs and Expenses | (330) | (115) | 72 |
Balance at End of Period | 476 | 806 | 921 |
Allowance for deferred tax assets | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | 53 | 844 | 293 |
Deductions | (615) | 791 | (551) |
Balance at End of Period | $ 668 | $ 53 | $ 844 |