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OPERATING SEGMENT DATA | 12 Months Ended
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Dec. 31, 2012
OPERATING SEGMENT DATA |
OPERATING SEGMENT DATA | NOTE N – 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 operating revenues, operating expense categories, operating ratios, operating income, and key operating statistics to evaluate performance and allocate resources to the Company’s operations. The Company’s reportable operating segments are as follows: · Freight Transportation, the Company’s principal operating segment, includes the results of operations of ABF Freight System, Inc. and certain other subsidiaries of the Company (collectively “ABF”). ABF Freight System, Inc.’s self-move service operations provided by U-Pack Moving® are also reported in the Freight Transportation segment. The operations of ABF include, in the aggregate, national, inter-regional and regional transportation of general commodities through standard, expedited, and guaranteed LTL services. ABF is headquartered in Fort Smith, Arkansas. The ABF transportation system operates throughout North America, providing direct service to over 98% of the cities in the United States having a population of 30,000 or more. ABF also offers global customizable supply chain solutions and provides motor carrier services in Canada, Puerto Rico, and, through arrangements with other trucking companies, in Mexico. · Premium Logistics and Expedited Freight Services includes the results of operations of Panther, which the Company acquired on June 15, 2012 (see Note D). The segment provides expedited freight transportation services to commercial and government customers and offers premium logistics services that involve the rapid deployment of highly specialized equipment to meet extremely specific linehaul requirements, such as temperature control, hazardous materials, geofencing (routing a shipment across a mandatory, defined route with satellite monitoring and automated alerts concerning any deviation from the route), specialized government cargo, security services, and life sciences. Through its premium logistics and global freight forwarding businesses, Panther offers domestic and international freight transportation with air, ocean, and ground service offerings. The segment provides services to the Freight Transportation and Truck Brokerage and Management segments. Revenue and expense associated with these intersegment transactions are eliminated in consolidation. · Truck Brokerage and Management includes the results of operations of the Company’s transportation brokerage services subsidiary, FreightValue, Inc.® · Emergency and Preventative Maintenance includes the results of operations of FleetNet America, Inc., the subsidiary of the Company that provides roadside assistance and equipment services for commercial vehicles through a network of third-party service providers. · Household Goods Moving Services, which was reported as the Special Services Logistics segment in the Company’s 2011 Annual Report on Form 10-K, includes the results of operations of Albert Companies, Inc. and Moving Solutions, Inc., the Company’s subsidiaries that provide transportation, warehousing, and delivery services to the consumer, corporate, and military household goods moving markets. Certain costs incurred by Household Goods Moving Services in support of ABF Freight System, Inc.’s self-move services are allocated to Freight Transportation at cost. Revenue and expense associated with these intersegment allocations are eliminated in consolidation. The Company’s other business activities and operating segments that are not reportable include Arkansas Best Corporation, the parent holding company, and certain other subsidiaries. Certain costs incurred by the parent holding company are allocated to the reporting segments. The Company eliminates intercompany transactions in consolidation. However, the information used by the Company’s management with respect to its reportable segments is before intersegment eliminations of revenues and expenses. Further classifications of operations or revenues by geographic location are impracticable and, therefore, are not provided. The Company’s foreign operations are not significant. The following table reflects reportable operating segment information for the years ended December 31:
|  | 2012(1) |  | 2011 |  | 2010 |
|  |  |  | (in thousands) |  |  |
OPERATING REVENUES |  |  |  |  |  |  |
Freight Transportation |  | $ | 1,725,134 |  | $ | 1,730,773 |  | $ | 1,514,108 |
Premium Logistics and Expedited Freight Services(1) |  | 132,326 |  | – |  | – |
Truck Brokerage and Management |  | 42,710 |  | 25,429 |  | 19,241 |
Emergency and Preventative Maintenance |  | 115,968 |  | 92,554 |  | 74,927 |
Household Goods Moving Services |  | 77,619 |  | 85,611 |  | 63,733 |
Other and eliminations |  | (27,758 | ) | (26,758 | ) | (14,145 | )
Total consolidated operating revenues |  | $ | 2,065,999 |  | $ | 1,907,609 |  | $ | 1,657,864 |
OPERATING EXPENSES AND COSTS |  |  |  |  |  |  |
Freight Transportation |  |  |  |  |  |  |
Salaries, wages, and benefits |  | $ | 1,073,205 |  | $ | 1,061,213 |  | $ | 1,004,267 |
Fuel, supplies, and expenses |  | 330,063 |  | 333,779 |  | 262,420 |
Operating taxes and licenses |  | 43,337 |  | 45,469 |  | 43,539 |
Insurance |  | 20,751 |  | 24,490 |  | 18,745 |
Communications and utilities |  | 14,733 |  | 15,118 |  | 14,655 |
Depreciation and amortization |  | 78,748 |  | 70,810 |  | 68,695 |
Rents and purchased transportation |  | 176,977 |  | 169,212 |  | 154,119 |
Gain on sale of property and equipment |  | (711 | ) | (2,370 | ) | (1,338 | )
Pension settlement expense |  | – |  | 1,125 |  | 178 |
Other |  | 7,441 |  | 8,318 |  | 8,568 |
Total Freight Transportation |  | 1,744,544 |  | 1,727,164 |  | 1,573,848 |
Premium Logistics and Expedited Freight Services(1) |  |  |  |  |  |  |
Purchased transportation |  | 101,559 |  | – |  | – |
Depreciation and amortization |  | 5,438 |  | – |  | – |
Salaries, benefits, insurance, and other |  | 22,927 |  | – |  | – |
Total Premium Logistics and Expedited Freight Services |  | 129,924 |  | – |  | – |
Truck Brokerage and Management |  | 40,087 |  | 23,539 |  | 17,868 |
Emergency and Preventative Maintenance |  | 114,033 |  | 89,572 |  | 72,208 |
Household Goods Moving Services |  | 76,927 |  | 82,893 |  | 62,014 |
Other and eliminations |  | (24,948 | ) | (25,318 | ) | (13,529 | )
Total consolidated operating expenses and costs |  | $ | 2,080,567 |  | $ | 1,897,850 |  | $ | 1,712,409 |
OPERATING INCOME (LOSS) |  |  |  |  |  |  |
Freight Transportation |  | $ | (19,410 | ) | $ | 3,609 |  | $ | (59,740 | )
Premium Logistics and Expedited Freight Services(1) |  | 2,402 |  | – |  | – |
Truck Brokerage and Management |  | 2,623 |  | 1,890 |  | 1,373 |
Emergency and Preventative Maintenance |  | 1,935 |  | 2,982 |  | 2,719 |
Household Goods Moving Services |  | 692 |  | 2,718 |  | 1,719 |
Other and eliminations |  | (2,810 | ) | (1,440 | ) | (616 | )
Total consolidated operating income (loss) |  | $ | (14,568 | ) | $ | 9,759 |  | $ | (54,545 | )
OTHER INCOME (EXPENSE) |  |  |  |  |  |  |
Interest and dividend income |  | $ | 808 |  | $ | 1,069 |  | $ | 1,194 |
Interest expense and other related financing costs |  | (5,273 | ) | (3,953 | ) | (2,852 | )
Other, net(2) |  | 2,041 |  | 2,618 |  | 2,406 |
|  | (2,424 | ) | (266 | ) | 748 |
INCOME (LOSS) BEFORE INCOME TAXES |  | $ | (16,992 | ) | $ | 9,493 |  | $ | (53,797 | )
(1) Includes operations of the Premium Logistics and Expedited Freight Services segment since the June 15, 2012 acquisition of Panther. (2) Other, net includes gains on cash surrender value and proceeds of life insurance policies. The following table provides asset, capital expenditure, and depreciation and amortization information by reportable operating segment:
|  | December 31 |
|  | 2012 |  | 2011 |  | 2010 |
|  |  |  | (in thousands) |  |  |
ASSETS |  |  |  |  |  |  |
Freight Transportation |  | $ | 556,195 |  | $ | 600,239 |  | $ | 565,461 |
Premium Logistics and Expedited Freight Services |  | 222,280 |  | – |  | – |
Truck Brokerage and Management |  | 9,656 |  | 6,225 |  | 5,250 |
Emergency and Preventative Maintenance |  | 18,413 |  | 13,634 |  | 12,373 |
Household Goods Moving Services |  | 21,754 |  | 20,687 |  | 18,016 |
Other and eliminations(1) |  | 206,164 |  | 275,435 |  | 259,851 |
|  | $ | 1,034,462 |  | $ | 916,220 |  | $ | 860,951 |
|  | For the year ended December 31 |
|  | 2012 |  | 2011 |  | 2010 |
|  |  |  | (in thousands) |  |  |
CAPITAL EXPENDITURES, GROSS |  |  |  |  |  |  |
Freight Transportation(2) |  | $ | 68,235 |  | $ | 78,875 |  | $ | 44,637 |
Premium Logistics and Expedited Freight Services(3) |  | 1,579 |  | – |  | – |
Truck Brokerage and Management |  | 45 |  | 163 |  | 12 |
Emergency and Preventative Maintenance |  | 685 |  | 307 |  | 311 |
Household Goods Moving Services |  | 416 |  | 480 |  | 209 |
Other and eliminations |  | 4,291 |  | 3,812 |  | 2,596 |
|  | $ | 75,251 |  | $ | 83,637 |  | $ | 47,765 |
|  | For the year ended December 31 |
|  | 2012 |  | 2011 |  | 2010 |
|  |  |  | (in thousands) |  |  |
DEPRECIATION AND AMORTIZATION EXPENSE |  |  |  |  |  |  |
Freight Transportation |  | $ | 78,748 |  | $ | 70,810 |  | $ | 68,695 |
Premium Logistics and Expedited Freight Services(3)(4) |  | 3,179 |  | – |  | – |
Truck Brokerage and Management |  | 288 |  | 154 |  | 153 |
Emergency and Preventative Maintenance |  | 497 |  | 476 |  | 514 |
Household Goods Moving Services |  | 413 |  | 332 |  | 323 |
Other and eliminations |  | 2,368 |  | 1,970 |  | 1,880 |
|  | $ | 85,493 |  | $ | 73,742 |  | $ | 71,565 |
(1) Includes certain assets held by the parent holding company for strategic reasons, including unrestricted and restricted cash, cash equivalents, and short-term investments, as well as certain assets held for the benefit of multiple segments, including land and structures of the Company’s corporate headquarters and information systems equipment. Depreciation and amortization associated with these assets is allocated to the reporting segments. (2) Includes assets acquired through notes payable and capital leases of $38.0 million, $30.4 million, and $36.3 million in 2012, 2011, and 2010, respectively. (3) Includes operations of the Premium Logistics and Expedited Freight Services segment since the June 15, 2012 acquisition of Panther. (4) Excludes amortization of intangibles which totaled $2.3 million in 2012 (see Note E).

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 131 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 + Details
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