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OPERATING SEGMENT DATA | 6 Months Ended
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Jun. 30, 2013
OPERATING SEGMENT DATA |
OPERATING SEGMENT DATA | NOTE K — 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. Certain reclassifications have been made to the prior year’s operating segment data to conform to the current year presentation. Financial information of Global Supply Chain Services and Supply Chain Services, businesses which provide ocean container transport and warehousing services, respectively, have been reclassified from the Freight Transportation segment to “Other and eliminations.” There was no impact on consolidated amounts as a result of these reclassifications. Effective July 1, 2013, the Company formed a new operating segment, ABF Logistics, consisting of Global Supply Chain Services, Supply Chain Services, and the Company’s transportation brokerage services subsidiary, FreightValue, Inc.®, which was reported as the Truck Brokerage and Management segment as of June 30, 2013. The Company’s reportable operating segments are impacted by seasonal fluctuations, as described below, and therefore, operating results for the interim periods presented may not necessarily be indicative of the results for the fiscal year. The Company’s reportable operating segments are as follows: · Freight Transportation, 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. ABF is impacted by seasonal fluctuations which affect tonnage and shipment levels and, consequently, revenues and operating results. The second and third calendar quarters of each year usually have the highest tonnage levels while the first quarter generally has the lowest, although other factors, including the state of the U.S. and global economies, may influence quarterly tonnage levels. · Premium Logistics and Expedited Freight Services includes the results of operations of Panther, which the Company acquired on June 15, 2012 (see Note C). 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. Operations of the Premium Logistics and Expedited Freight Services segment are influenced by seasonal fluctuations that impact customers’ supply chains and the resulting demand for expedited services. Expedited shipments may decline during winter months because of post-holiday slowdowns but can be subject to short-term increases depending on the impact of weather disruptions to customers’ supply chains. Plant shutdowns during summer months may affect shipments for automotive and manufacturing customers, but hurricanes and other weather events can result in higher demand for expedited services. · Truck Brokerage and Management includes the results of operations of the Company’s transportation brokerage services subsidiary, FreightValue, Inc. The truck brokerage industry is impacted by seasonal fluctuations which affect tonnage and shipment levels and, consequently, revenues and operating results. The second and third calendar quarters of each year usually have the highest tonnage levels while the first quarter generally has the lowest, although other factors, including the state of the U.S. and global economies, may influence quarterly tonnage levels. However, seasonal fluctuations are less apparent in the operating results of Truck Brokerage and Management than in the industry as a whole because of business growth in the segment. · 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. Emergency roadside services are impacted by weather conditions that affect commercial vehicle operations, and results of operations will be influenced by seasonal variations in business levels. · Household Goods Moving Services 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. For the three and six months ended June 30, 2013, the Household Goods Moving Services segment includes the results of the logistics company acquired by Albert Companies, Inc. on May 31, 2013 (see Note C). 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. Operations of the Household Goods Moving Services segments are impacted by seasonal fluctuations, resulting in higher business levels in the second and third calendar quarters of the year as the demand for moving services is typically higher in the summer months. The Company’s other business activities and operating segments that are not reportable include Arkansas Best Corporation, the parent holding company, and other subsidiaries. A substantial portion of the 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 three and six months ended June 30:
|  | Three Months Ended |  | Six Months Ended |
|  | June 30 |  | June 30 |
|  | 2013 |  | 2012 |  | 2013 |  | 2012 |
|  | (in thousands) |
OPERATING REVENUES |  |  |  |  |  |  |  |  |
Freight Transportation |  | $ | 446,750 |  | $ | 440,351 |  | $ | 854,031 |  | $ | 836,864 |
Premium Logistics and Expedited Freight Services |  | 60,431 |  | 10,835 |  | 113,683 |  | 10,835 |
Truck Brokerage and Management |  | 16,335 |  | 10,021 |  | 30,939 |  | 18,060 |
Emergency and Preventative Maintenance |  | 32,935 |  | 30,101 |  | 65,457 |  | 52,479 |
Household Goods Moving Services |  | 21,252 |  | 20,479 |  | 34,828 |  | 35,531 |
Other and eliminations |  | (804 | ) | (1,244 | ) | (1,352 | ) | (2,359 | )
Total consolidated operating revenues |  | $ | 576,899 |  | $ | 510,543 |  | $ | 1,097,586 |  | $ | 951,410 |
OPERATING EXPENSES AND COSTS |  |  |  |  |  |  |  |  |
Freight Transportation |  |  |  |  |  |  |  |  |
Salaries, wages, and benefits |  | $ | 272,641 |  | $ | 268,995 |  | $ | 539,819 |  | $ | 534,057 |
Fuel, supplies, and expenses |  | 82,441 |  | 82,696 |  | 165,773 |  | 163,336 |
Operating taxes and licenses |  | 10,939 |  | 10,823 |  | 21,929 |  | 21,624 |
Insurance |  | 6,068 |  | 5,585 |  | 10,552 |  | 10,466 |
Communications and utilities |  | 3,879 |  | 3,459 |  | 7,812 |  | 7,258 |
Depreciation and amortization |  | 18,967 |  | 19,464 |  | 38,541 |  | 38,037 |
Rents and purchased transportation |  | 44,260 |  | 39,681 |  | 82,729 |  | 72,897 |
Gain on sale of property and equipment |  | (182 | ) | (231 | ) | (394 | ) | (513 | )
Other |  | 2,240 |  | 2,258 |  | 4,322 |  | 3,940 |
Total Freight Transportation |  | 441,253 |  | 432,730 |  | 871,083 |  | 851,102 |
Premium Logistics and Expedited Freight Services |  |  |  |  |  |  |  |  |
Purchased transportation |  | 46,233 |  | 8,247 |  | 87,270 |  | 8,247 |
Depreciation and amortization |  | 2,594 |  | 473 |  | 5,144 |  | 473 |
Other |  | 10,098 |  | 1,635 |  | 20,627 |  | 1,635 |
Total Premium Logistics and Expedited Freight Services |  | 58,925 |  | 10,355 |  | 113,041 |  | 10,355 |
Truck Brokerage and Management |  | 15,643 |  | 9,366 |  | 29,480 |  | 17,011 |
Emergency and Preventative Maintenance |  | 32,125 |  | 29,407 |  | 63,935 |  | 51,921 |
Household Goods Moving Services |  | 20,304 |  | 20,314 |  | 34,111 |  | 36,157 |
Other and eliminations |  | 232 |  | 1,170 |  | 870 |  | 650 |
Total consolidated operating expenses and costs |  | $ | 568,482 |  | $ | 503,342 |  | $ | 1,112,520 |  | $ | 967,196 |
OPERATING INCOME (LOSS) |  |  |  |  |  |  |  |  |
Freight Transportation |  | $ | 5,497 |  | $ | 7,621 |  | $ | (17,052 | ) | $ | (14,238 | )
Premium Logistics and Expedited Freight Services |  | 1,506 |  | 480 |  | 642 |  | 480 |
Truck Brokerage and Management |  | 692 |  | 655 |  | 1,459 |  | 1,049 |
Emergency and Preventative Maintenance |  | 810 |  | 694 |  | 1,522 |  | 558 |
Household Goods Moving Services |  | 948 |  | 165 |  | 717 |  | (626 | )
Other and eliminations |  | (1,036 | ) | (2,414 | ) | (2,222 | ) | (3,009 | )
Total consolidated operating income (loss) |  | $ | 8,417 |  | $ | 7,201 |  | $ | (14,934 | ) | $ | (15,786 | )
OTHER INCOME (EXPENSE) |  |  |  |  |  |  |  |  |
Interest and dividend income |  | $ | 161 |  | $ | 215 |  | $ | 332 |  | $ | 469 |
Interest expense and other related financing costs |  | (1,079 | ) | (1,112 | ) | (2,286 | ) | (2,255 | )
Other, net(1) |  | 366 |  | (220 | ) | 1,450 |  | 1,120 |
|  | (552 | ) | (1,117 | ) | (504 | ) | (666 | )
INCOME (LOSS) BEFORE INCOME TAXES |  | $ | 7,865 |  | $ | 6,084 |  | $ | (15,438 | ) | $ | (16,452 | )
(1) Other, net includes changes in cash surrender value and proceeds of life insurance policies.

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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 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 2: 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 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 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 5: 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 6: 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 7: 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 8: 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 9: 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 10: 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 11: 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 12: 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 Reference 13: 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 14: 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 15: 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 + Details
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