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OPERATING SEGMENT DATA
 12 Months Ended
Dec. 31, 2013
Segment Reporting [Abstract]  
OPERATING SEGMENT DATA
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. Effective July 1, 2013, the Company formed a new operating segment, Domestic & Global Transportation Management, combining the Company’s transportation brokerage operations, worldwide ocean shipping solutions, and transportation and warehouse management services. The strategic alignment of the sales and logistics functions related to these services into one reportable segment under a single executive management operating team better supports the delivery of these solutions and allows customers to gain greater awareness for these service offerings in an evolving marketplace. The Company’s transportation brokerage operations were previously reported as the Truck Brokerage and Management segment and the worldwide ocean shipping solutions and transportation and warehouse management services were previously reported within the Freight Transportation segment as of and for the years ended December 31, 2012 and 2011. There was no impact on consolidated amounts as a result of these reclassifications.

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 Freight”). The operations of ABF Freight include, national, inter‑regional, and regional transportation of general commodities through standard, expedited, and guaranteed LTL services. Freight transportation related to consumer household goods self‑move services provided by ABF Freight are also reported in the Freight Transportation segment. ABF Freight is headquartered in Fort Smith, Arkansas. The ABF Freight 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 Freight also provides motor carrier services in Canada, Puerto Rico, and, through arrangements with other trucking companies, Mexico.

•
Premium Logistics & 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 Domestic & Global Transportation Management segments. Revenue and expense associated with these intersegment transactions are eliminated in consolidation.

•
Domestic & Global Transportation Management, operating as ABF Logistics, Inc., includes the results of operations of the Company’s businesses which provide freight brokerage and intermodal transportation services, worldwide ocean shipping solutions, and transportation and warehouse management services. The Domestic & Global Transportation Management segment provides third‑party transportation brokerage and management services throughout North America by sourcing a variety of equipment types including truckload, flatbed, intermodal, temperature‑controlled, and specialized equipment. The segment also offers full‑container‑load and expedited less‑than‑container‑load ocean transport to and from the United States and scalable transportation and warehouse management services that can be customized to efficiently manage customers’ supply chain needs.

•
Emergency & 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 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 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 D). Certain costs incurred by the Household Goods Moving Services segment in support of consumer self‑move services provided by ABF Freight are allocated to the Freight Transportation segment 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. 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 years ended December 31:

 
2013

2012

2011
 
 

(in thousands)

 
OPERATING REVENUES
 


 


 

Freight Transportation(1)
$
1,761,716

 
$
1,701,495

 
$
1,714,232

Premium Logistics & Expedited Freight Services(2)
246,849

 
132,326

 
—

Domestic & Global Transportation Management(1)
105,223

 
66,431

 
41,966

Emergency & Preventative Maintenance
137,546

 
115,968

 
92,554

Household Goods Moving Services
82,169

 
77,619

 
85,611

Other and eliminations
(33,954
)
 
(27,840
)
 
(26,754
)
Total consolidated operating revenues
$
2,299,549

 
$
2,065,999

 
$
1,907,609

OPERATING EXPENSES
 

 
 

 
 

Freight Transportation(1)
 

 
 

 
 

Salaries, wages, and benefits
$
1,075,259

 
$
1,071,084

 
$
1,059,815

Fuel, supplies, and expenses
332,433

 
329,284

 
333,242

Operating taxes and licenses
43,865

 
43,336

 
45,469

Insurance
21,823

 
20,742

 
24,481

Communications and utilities
15,027

 
14,713

 
15,106

Depreciation and amortization
72,971

 
78,672

 
70,767

Rents and purchased transportation
180,689

 
156,810

 
154,363

Gain on sale of property and equipment
(576
)
 
(711
)
 
(2,370
)
Pension settlement expense
1,831

 
—

 
1,125

Other
8,361

 
7,365

 
8,297

Total Freight Transportation
1,751,683

 
1,721,295

 
1,710,295

Premium Logistics & Expedited Freight Services(2)
 

 
 

 
 

Purchased transportation
188,561

 
101,559

 
—

Depreciation and amortization
10,516

 
5,438

 
—

Other
40,816

 
22,927

 
—

Total Premium Logistics & Expedited Freight Services
239,893

 
129,924

 
—

Domestic & Global Transportation Management(1)
102,250

 
63,418

 
40,404

Emergency & Preventative Maintenance
134,272

 
114,033

 
89,572

Household Goods Moving Services
80,319

 
76,927

 
82,893

Other and eliminations(3)
(27,938
)
 
(25,030
)
 
(25,314
)
Total consolidated operating expenses
$
2,280,479

 
$
2,080,567

 
$
1,897,850

OPERATING INCOME (LOSS)
 

 
 

 
 

Freight Transportation(1)
$
10,033

 
$
(19,800
)
 
$
3,937

Premium Logistics & Expedited Freight Services(2)
6,956

 
2,402

 
—

Domestic & Global Transportation Management(1)
2,973

 
3,013

 
1,562

Emergency & Preventative Maintenance
3,274

 
1,935

 
2,982

Household Goods Moving Services
1,850

 
692

 
2,718

Other and eliminations(3)
(6,016
)
 
(2,810
)
 
(1,440
)
Total consolidated operating income (loss)
$
19,070

 
$
(14,568
)
 
$
9,759

OTHER INCOME (EXPENSE)
 

 
 

 
 

Interest and dividend income(2)
$
681

 
$
808

 
$
1,069

Interest expense and other related financing costs(2)
(4,183
)
 
(5,273
)
 
(3,953
)
Other, net(4)
3,893

 
2,041

 
2,618

Total other income (expense)
391

 
(2,424
)
 
(266
)
INCOME (LOSS) BEFORE INCOME TAXES
$
19,461

 
$
(16,992
)
 
$
9,493


(1)
As previously discussed in this Note, certain reclassifications have been made to the prior years’ operating segment data to conform to the current year presentation which includes the Domestic & Global Transportation Management segment formed in third quarter 2013. The measurement of operating income for the Domestic & Global Transportation Management operating segment was changed in 2013 to include certain intercompany cost allocations. While it is impracticable to recalculate the cost allocations for all prior year periods, management estimated such amounts to be approximately $0.6 million in 2012 and $0.3 million in 2011. If the segment information was presented on a comparable basis for all periods, Domestic & Global Transportation Management operating expenses would increase by $0.6 million in 2012 and $0.3 million in 2011 with corresponding decreases in operating income for those years, and Freight Transportation operating expenses would decrease by the same amounts with corresponding increases in operating income for those years.
(2)
Includes operations of the Premium Logistics & Expedited Freight Services segment since the June 15, 2012 acquisition of Panther.
(3)
2013 includes workers’ compensation expense reserve increase associated with an insolvent insurance carrier and costs of long‑term incentive plans that were driven by the Company’s total shareholder return relative to its peer group.
(4)
Includes changes in 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
 
2013

2012

2011
 
 


(in thousands)

 

ASSETS
 


 


 

Freight Transportation(1)
$
530,678

 
$
550,676

 
$
590,777

Premium Logistics & Expedited Freight Services
216,747

 
222,280

 
—

Domestic & Global Transportation Management(1)
27,836

 
15,437

 
8,131

Emergency & Preventative Maintenance
21,517

 
18,413

 
13,634

Household Goods Moving Services
20,941

 
21,754

 
20,687

Other and eliminations(1)(2)
199,607

 
205,902

 
282,991

 
$
1,017,326

 
$
1,034,462

 
$
916,220







 
For the year ended December 31
 
2013

2012

2011
 
 

(in thousands)

 

CAPITAL EXPENDITURES, GROSS
 


 


 

Freight Transportation(1)(3)
$
11,091

 
$
68,235

 
$
78,875

Premium Logistics & Expedited Freight Services(4)
3,854

 
1,579

 
—

Domestic & Global Transportation Management(1)
286

 
45

 
163

Emergency & Preventative Maintenance
1,314

 
685

 
307

Household Goods Moving Services
493

 
416

 
480

Other and eliminations
9,367

 
4,291

 
3,812

 
$
26,405

 
$
75,251

 
$
83,637







 
For the year ended December 31
 
2013

2012

2011
 
 

(in thousands)

 

DEPRECIATION AND AMORTIZATION EXPENSE(2)
 


 


 

Freight Transportation(1)
$
72,971

 
$
78,672

 
$
70,767

Premium Logistics & Expedited Freight Services(4)(5)
6,342

 
3,179

 
—

Domestic & Global Transportation Management(1)
640

 
364

 
197

Emergency & Preventative Maintenance
540

 
497

 
476

Household Goods Moving Services
1,247

 
769

 
645

Other and eliminations
2,475

 
2,012

 
1,657

 
$
84,215

 
$
85,493

 
$
73,742

 
(1)
As previously discussed in this Note, certain reclassifications have been made to the prior years’ operating segment data to conform to the current year presentation which includes the Domestic & Global Transportation Management segment that was formed in third quarter 2013.
(2)
Other and eliminations 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. Depreciation and amortization expense includes amortization of internally developed capitalized software which has not been included in gross capital expenditures presented in the table.
(3)
Includes assets acquired through notes payable and capital leases of less than $0.1 million in 2013, $38.0 million in 2012, and $30.4 million in 2011.
(4)
Includes operations of the Premium Logistics & Expedited Freight Services segment since the June 15, 2012 acquisition of Panther.
(5)
Excludes amortization of intangibles which totaled $4.2 million in 2013 and $2.3 million in 2012 (see Note E).