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OPERATING SEGMENT DATA | 12 Months Ended
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Dec. 31, 2015
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 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’s reportable operating segments are as follows:
| · |  | Freight Transportation (ABF Freight), the Company’s principal operating segment, includes the results of operations of ABF Freight System, Inc. and certain other subsidiaries. The operations of ABF Freight include, national, inter-regional, and regional transportation of general commodities through standard, expedited, and guaranteed LTL services. Revenue and expense for freight transportation related to consumer household goods self-move services provided by ABF Freight are reported in the ABF Freight segment and certain support costs related to these services are allocated to ABF Freight from the ABF Moving segment.
| · |  | Premium Logistics (Panther) 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 ABF Freight and ABF Logistics segments.
| · |  | Transportation Management (ABF Logistics) 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.
| · |  | Emergency & Preventative Maintenance (FleetNet) 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. FleetNet provides services to the ABF Freight and Panther segments.
| · |  | Household Goods Moving Services (ABF Moving) includes the results of operations of the Company’s subsidiaries that provide transportation, warehousing, and delivery services to the consumer, corporate, and military household goods moving markets. ABF Freight provides transportation services to ABF Moving. Certain costs incurred by ABF Moving in support of consumer self-move services provided by ABF Freight are allocated to the ABF Freight segment.
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 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:
|  | 2015 |  | 2014 |  | 2013 |
|  | (in thousands) |
REVENUES |  |  |  |  |  |  |  |  |  |
Freight Transportation (ABF Freight) |  | $ | 1,918,450 |  | $ | 1,930,990 |  | $ | 1,761,716 |
Premium Logistics (Panther) |  |  | 300,368 |  |  | 316,668 |  |  | 246,849 |
Transportation Management (ABF Logistics) |  |  | 203,529 |  |  | 152,632 |  |  | 105,223 |
Emergency & Preventative Maintenance (FleetNet) |  |  | 174,952 |  |  | 158,581 |  |  | 137,546 |
Household Goods Moving Services (ABF Moving) |  |  | 119,252 |  |  | 94,628 |  |  | 82,169 |
Other and eliminations |  |  | (49,646) |  |  | (40,806) |  |  | (33,954) |
Total consolidated revenues |  | $ | 2,666,905 |  | $ | 2,612,693 |  | $ | 2,299,549 |
OPERATING EXPENSES |  |  |  |  |  |  |  |  |  |
Freight Transportation (ABF Freight) |  |  |  |  |  |  |  |  |  |
Salaries, wages, and benefits |  | $ | 1,174,357 |  | $ | 1,121,177 |  | $ | 1,075,259 |
Fuel, supplies, and expenses |  |  | 307,348 |  |  | 360,850 |  |  | 332,433 |
Operating taxes and licenses |  |  | 48,992 |  |  | 46,955 |  |  | 43,865 |
Insurance |  |  | 28,847 |  |  | 24,960 |  |  | 21,823 |
Communications and utilities |  |  | 16,129 |  |  | 15,398 |  |  | 15,027 |
Depreciation and amortization |  |  | 74,765 |  |  | 68,752 |  |  | 72,971 |
Rents and purchased transportation |  |  | 197,073 |  |  | 229,443 |  |  | 180,689 |
Gain on sale of property and equipment |  |  | (1,734) |  |  | (1,471) |  |  | (576) |
Pension settlement expense(1) |  |  | 2,404 |  |  | 5,309 |  |  | 1,831 |
Other |  |  | 7,833 |  |  | 9,524 |  |  | 8,361 |
Total Freight Transportation (ABF Freight) |  |  | 1,856,014 |  |  | 1,880,897 |  |  | 1,751,683 |
Premium Logistics (Panther) |  |  |  |  |  |  |  |  |  |
Purchased transportation |  |  | 220,994 |  |  | 235,006 |  |  | 188,561 |
Depreciation and amortization |  |  | 11,436 |  |  | 11,362 |  |  | 10,516 |
Salaries, benefits, insurance, and other |  |  | 57,140 |  |  | 54,660 |  |  | 40,816 |
Total Premium Logistics (Panther) |  |  | 289,570 |  |  | 301,028 |  |  | 239,893 |
Transportation Management (ABF Logistics) |  |  | 197,668 |  |  | 148,797 |  |  | 102,250 |
Emergency & Preventative Maintenance (FleetNet) |  |  | 171,998 |  |  | 155,459 |  |  | 134,272 |
Household Goods Moving Services (ABF Moving) |  |  | 114,416 |  |  | 91,449 |  |  | 80,319 |
Other and eliminations(1) |  |  | (38,257) |  |  | (34,176) |  |  | (27,938) |
Total consolidated operating expenses(1) |  | $ | 2,591,409 |  | $ | 2,543,454 |  | $ | 2,280,479 |
OPERATING INCOME |  |  |  |  |  |  |  |  |  |
Freight Transportation (ABF Freight) |  | $ | 62,436 |  | $ | 50,093 |  | $ | 10,033 |
Premium Logistics (Panther) |  |  | 10,798 |  |  | 15,640 |  |  | 6,956 |
Transportation Management (ABF Logistics) |  |  | 5,861 |  |  | 3,835 |  |  | 2,973 |
Emergency & Preventative Maintenance (FleetNet) |  |  | 2,954 |  |  | 3,122 |  |  | 3,274 |
Household Goods Moving Services (ABF Moving) |  |  | 4,836 |  |  | 3,179 |  |  | 1,850 |
Other and eliminations |  |  | (11,389) |  |  | (6,630) |  |  | (6,016) |
Total consolidated operating income |  | $ | 75,496 |  | $ | 69,239 |  | $ | 19,070 |
OTHER INCOME (COSTS) |  |  |  |  |  |  |  |  |  |
Interest and dividend income |  | $ | 1,284 |  | $ | 851 |  | $ | 681 |
Interest and other related financing costs |  |  | (4,400) |  |  | (3,190) |  |  | (4,183) |
Other, net(2) |  |  | 354 |  |  | 3,712 |  |  | 3,893 |
Total other income (costs) |  |  | (2,762) |  |  | 1,373 |  |  | 391 |
INCOME BEFORE INCOME TAXES |  | $ | 72,734 |  | $ | 70,612 |  | $ | 19,461 |
| (1) |  | Pension settlement expense totaled $3.2 million (pre‑tax) on a consolidated basis for the year ended December 31, 2015, of which $2.4 million was reported by ABF Freight, $0.7 million was reported in Other and eliminations, and $0.1 million was reported by asset‑light logistics segments. Pension settlement expense totaled $6.6 million (pre‑tax) on a consolidated basis for the year ended December 31, 2014, of which $5.3 million was reported by ABF Freight, $1.1 million was reported in Other and eliminations, and $0.2 million was reported by asset‑light logistics segments. Pension settlement expense totaled $2.1 million (pre‑tax) for the year ended December 31, 2013, of which $1.8 million was reported by ABF Freight and $0.3 million was reported in Other and eliminations.
| (2) |  | Includes changes in cash surrender value and proceeds of life insurance policies.
The following table presents operating expenses by category on a consolidated basis:
|  |  | For the year ended December 31 |
|  |  | 2015 |  | 2014 |  | 2013 |
|  |  | (in thousands) |
OPERATING EXPENSES |  |  |  |  |  |  |  |  |  |  |
Salaries, wages, and benefits |  |  | $ | 1,295,197 |  | $ | 1,231,783 |  | $ | 1,166,185 |
Rents, purchased transportation, and other costs of services |  |  |  | 780,428 |  |  | 759,252 |  |  | 598,604 |
Fuel, supplies, and expenses |  |  |  | 300,370 |  |  | 353,385 |  |  | 321,887 |
Depreciation and amortization(1) |  |  |  | 93,042 |  |  | 86,222 |  |  | 88,389 |
Other |  |  |  | 122,372 |  |  | 112,812 |  |  | 105,414 |
|  |  | $ | 2,591,409 |  | $ | 2,543,454 |  | $ | 2,280,479 |
| (1) |  | Includes amortization of intangible assets.
The following table provides asset, capital expenditure, and depreciation and amortization information by reportable operating segment:
|  | December 31
|  | 2015 |  | 2014 |  | 2013
|  | (in thousands)
ASSETS |  |  |  |  |  |  |  |  |
Freight Transportation (ABF Freight) |  | $ | 694,059 |  | $ | 621,734 |  | $ | 530,678
Premium Logistics (Panther) |  |  | 216,075 |  |  | 218,135 |  |  | 216,747
Transportation Management (ABF Logistics) |  |  | 75,023 |  |  | 37,571 |  |  | 27,836
Emergency & Preventative Maintenance (FleetNet) |  |  | 21,958 |  |  | 23,532 |  |  | 21,517
Household Goods Moving Services (ABF Moving) |  |  | 28,547 |  |  | 22,276 |  |  | 20,941
Other and eliminations(1) |  |  | 227,247 |  |  | 204,374 |  |  | 199,607
|  | $ | 1,262,909 |  | $ | 1,127,622 |  | $ | 1,017,326
|  | For the year ended December 31
|  | 2015 |  | 2014 |  | 2013
|  | (in thousands)
CAPITAL EXPENDITURES, GROSS |  |  |  |  |  |  |  |  |
Freight Transportation (ABF Freight)(2) |  | $ | 122,542 |  | $ | 78,766 |  | $ | 11,091
Premium Logistics (Panther) |  |  | 23,275 |  |  | 6,414 |  |  | 3,854
Transportation Management (ABF Logistics) |  |  | 241 |  |  | 158 |  |  | 286
Emergency & Preventative Maintenance (FleetNet) |  |  | 1,007 |  |  | 550 |  |  | 1,314
Household Goods Moving Services (ABF Moving) |  |  | 703 |  |  | 424 |  |  | 493
Other and eliminations |  |  | 11,249 |  |  | 4,496 |  |  | 9,367
|  | $ | 159,017 |  | $ | 90,808 |  | $ | 26,405
|  | For the year ended December 31
|  | 2015 |  | 2014 |  | 2013
|  | (in thousands)
DEPRECIATION AND AMORTIZATION EXPENSE(1) |  |  |  |  |  |  |  |  |
Freight Transportation (ABF Freight) |  | $ | 74,765 |  | $ | 68,752 |  | $ | 72,971
Premium Logistics (Panther)(3) |  |  | 11,436 |  |  | 11,362 |  |  | 10,516
Transportation Management (ABF Logistics)(4) |  |  | 1,138 |  |  | 1,006 |  |  | 640
Emergency & Preventative Maintenance (FleetNet)(5) |  |  | 1,119 |  |  | 961 |  |  | 540
Household Goods Moving Services (ABF Moving) |  |  | 1,186 |  |  | 1,384 |  |  | 1,247
Other and eliminations |  |  | 3,398 |  |  | 2,757 |  |  | 2,475
|  | $ | 93,042 |  | $ | 86,222 |  | $ | 88,389
| (1) |  | 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.
| (2) |  | Includes assets acquired through notes payable and capital leases of $80.6 million in 2015, $55.3 million in 2014, and less than $0.1 million in 2013.
| (3) |  | Includes amortization of intangibles of $3.6 million, $4.2 million, and $4.2 million in 2015, 2014, and 2013, respectively.
| (4) |  | Includes amortization of intangibles which totaled $0.1 million in 2015.
| (5) |  | Includes amortization of intangibles which totaled $0.3 million and $0.2 million in 2015 and 2014, respectively.

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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 34 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8981-108599 Reference 2: 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=51669610&loc=d3e9038-108599 Reference 3: 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=51669610&loc=d3e8971-108599 Reference 4: 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=51669610&loc=d3e8595-108599 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=51669610&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 32 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8933-108599 Reference 7: 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=51669610&loc=d3e8844-108599 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=51669610&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 40 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9031-108599 Reference 10: 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=51669610&loc=d3e9054-108599 Reference 11: 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=51669610&loc=d3e8538-108599 Reference 12: 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=51669610&loc=d3e8864-108599 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=51669610&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 30 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8906-108599 + Details
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