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OPERATING SEGMENT DATA | 12 Months Ended
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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).

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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