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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended
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Sep. 30, 2023
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS |
Schedule components of cash and cash equivalents, short term investments, and restricted funds | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | September 30 |  | December 31 |
​ | ​ | 2023 | ​ | 2022 |
​ | ​ | (in thousands) | ​
Cash and cash equivalents | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash deposits(1) | ​ | $ | 160,671 | ​ | $ | 137,247 | ​
Variable rate demand notes(1)(2) | ​ |  | — | ​ |  | 9,285 | ​
Money market funds(3) | ​ |  | 90,832 | ​ |  | 11,732 | ​
Total cash and cash equivalents | ​ | $ | 251,503 | ​ | $ | 158,264 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Short-term investments | ​ | ​ | ​ | ​ | ​ | ​ | ​
Certificates of deposit(1) | ​ | $ | 69,421 | ​ | $ | 88,851 | ​
U.S. Treasury securities(4) | ​ | ​ | 19,905 | ​ | ​ | 78,811 | ​
Total short-term investments | ​ | $ | 89,326 | ​ | $ | 167,662 | ​
​
(1) | Recorded at cost plus accrued interest, which approximates fair value.
(2) | Amounts may be redeemed on a daily basis with the original issuer.
(3) | Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note).
(4) | Recorded at amortized cost plus accrued interest, which approximates fair value. U.S. Treasury securities included in short-term investments are held-to-maturity investments with maturity dates of less than one year.
​
Schedule of fair value and carrying value disclosures of financial instruments | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30 | ​ | December 31 | ​
​ |  | 2023 |  | 2022 |
​ | ​ | (in thousands) | ​
​ | ​ | ​ | Carrying |  | ​ | Fair |  | ​ | Carrying |  | ​ | Fair | ​
​ | ​ | ​ | Value |  | ​ | Value |  | ​ | Value |  | ​ | Value | ​
Credit Facility(1) | ​ | $ | 50,000 | ​ | $ | 50,000 | ​ | $ | 50,000 | ​ | $ | 50,000 | ​
Notes payable(2) | ​ |  | 193,158 | ​ |  | 188,841 | ​ |  | 214,623 | ​ |  | 207,778 | ​
New England Pension Fund withdrawal liability(3) | ​ | ​ | 19,579 | ​ | ​ | 17,408 | ​ | ​ | 20,100 | ​ | ​ | 18,911 | ​
​ | ​ | $ | 262,737 | ​ | $ | 256,249 | ​ | $ | 284,723 | ​ | $ | 276,689 | ​
​
(1) | The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on Secured Overnight Financing Rate (“SOFR”), plus a margin, priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy).
(2) | Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy).
(3) | ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund (the “New England Pension Fund”) was restructured under a transition agreement effective on August 1, 2018, which resulted in a related withdrawal liability. The fair value of the outstanding withdrawal liability is equal to the present value of the future withdrawal liability payments, discounted at an interest rate of 6.1% and 5.3% at September 30, 2023 and December 31, 2022, respectively, determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). As of September 30, 2023, the outstanding withdrawal liability totaled $19.6 million, of which $0.7 million was recorded in accrued expenses, and the remaining portion was recorded in other long-term liabilities.
Schedule of financial assets and liabilities measured at fair value on a recurring basis | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2023 | ​
​ | ​ | ​ | ​ | ​ | Fair Value Measurements Using | ​
​ | ​ | ​ | ​ | ​ | Quoted Prices |  | Significant |  | Significant | ​
​ |  | ​ | ​ | ​ | In Active | ​ | Observable | ​ | Unobservable | ​
​ | ​ | ​ | ​ | ​ | Markets | ​ | Inputs | ​ | Inputs | ​
​ | ​ | Total |  | (Level 1) |  | (Level 2) |  | (Level 3) |
​ | ​ | (in thousands) | ​
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Money market funds(1) | ​ | $ | 90,832 | ​ | $ | 90,832 | ​ | $ | — | ​ | $ | — | ​
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan(2) | ​ |  | 4,072 | ​ |  | 4,072 | ​ |  | — | ​ |  | — | ​
Interest rate swap(3) | ​ | ​ | 2,468 | ​ | ​ | — | ​ | ​ | 2,468 | ​ | ​ | — | ​
​ | ​ | $ | 97,372 | ​ | $ | 94,904 | ​ | $ | 2,468 | ​ | $ | — | ​
Liabilities: | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Contingent consideration(4) | ​ | ​ | 99,200 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 99,200 | ​
​ | ​ | $ | 99,200 | ​ | $ | — | ​ | $ | — | ​ | $ | 99,200 | ​
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2022 | ​
​ | ​ | ​ | ​ | ​ | Fair Value Measurements Using | ​
​ | ​ | ​ | ​ | ​ | Quoted Prices |  | Significant |  | Significant | ​
​ |  | ​ | ​ | ​ | In Active | ​ | Observable | ​ | Unobservable | ​
​ | ​ | ​ | ​ | ​ | Markets | ​ | Inputs | ​ | Inputs | ​
​ | ​ | Total |  | (Level 1) |  | (Level 2) |  | (Level 3) |
​ | ​ | (in thousands) | ​
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Money market funds(1) | ​ | $ | 11,732 | ​ | $ | 11,732 | ​ | $ | — | ​ | $ | — | ​
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan(2) | ​ |  | 3,982 | ​ |  | 3,982 | ​ |  | — | ​ |  | — | ​
Interest rate swap(3) | ​ | ​ | 3,526 | ​ | ​ | — | ​ | ​ | 3,526 | ​ | ​ | — | ​
​ | ​ | $ | 19,240 | ​ | $ | 15,714 | ​ | $ | 3,526 | ​ | $ | — | ​
Liabilities: | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Contingent consideration(4) | ​ | ​ | 112,000 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 112,000 | ​
​ | ​ | $ | 112,000 | ​ | $ | — | ​ | $ | — | ​ | $ | 112,000 | ​
​
(1) | Included in cash and cash equivalents.
(2) | Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third-party brokerage firm. Included in other long-term assets, with a corresponding liability reported within other long-term liabilities.
(3) | Included in other long-term assets. The fair value of the interest rate swap was determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are generally considered to be in Level 3 of the fair value hierarchy. However, the Company assessed Level 3 inputs as insignificant to the valuation at September 30, 2023 and December 31, 2022 and considers the interest rate swap valuation in Level 2 of the fair value hierarchy.
(4) | As part of the Agreement and Plan of Merger (the “Merger Agreement”) of MoLo, executed in November 2021, certain additional cash consideration is required to be paid by the Company based on the achievement of certain incremental targets of adjusted earnings before interest, taxes, depreciation, and amortization for each of the years ended December 31, 2023, 2024, and 2025. At 100% of the target, the cumulative additional consideration for years 2023 through 2025 would be $215.0 million, with the possible undiscounted cash consideration due ranging from a total of $95.0 million at 80% of target to $455.0 million at 300% of target, as outlined in the Merger Agreement. The estimated fair value of contingent earnout consideration is determined by assessing Level 3 inputs. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues and earnings before interest, taxes, depreciation, and amortization to be achieved for the applicable performance periods, volatility factors applied to the simulations, and the discount rate applied, which was 14.5% and 14.0% as of September 30, 2023 and December 31, 2022, respectively. Changes in the significant unobservable inputs might result in a significantly higher or lower fair value at the reporting date. As of September 30, 2023, the contingent earnout consideration was recorded in long-term liabilities based on the September 30, 2023 remeasurement as achievement of the 2023 target is not expected. The decrease in fair value of contingent earnout consideration as of September 30, 2023, compared to December 31, 2022, reflects revised assumptions for
| business growth in 2024 and 2025, as well as the impact of continuing softer market conditions during 2023 and a higher discount rate at the September 30, 2023 remeasurement date.
Schedule of changes in fair value of liabilities measured at fair value using inputs categorized in Level 3 | ​
​ | ​ | ​ | ​ | ​
​ | ​ | Contingent Consideration | ​
​ | ​ | (in thousands) | ​
Balance at December 31, 2022 | ​ | $ | 112,000 | ​
Change in fair value included in operating income | ​ | ​ | (12,800) | ​
Balance at September 30, 2023 | ​ | $ | 99,200 | ​
Schedule of assets measured at fair value on a nonrecurring basis | The following table provides the change in fair value of equity investments on a nonrecurring basis using inputs categorized in Level 3 of the fair value hierarchy: ​
​ | ​ | ​ | ​ | ​
​ | ​ | Equity Investment(1) |
​ | ​ | (in thousands) | ​
Balance at December 31, 2022 | ​ | $ | 25,000 | ​
Change in fair value included in operating income | ​ | ​ | 3,739 | ​
Balance at September 30, 2023 | ​ | $ | 28,739 | ​
(1) | Represents the Company’s equity investment in Phantom Auto, a provider of human-centered remote operation software. The equity investment is accounted for as a nonmarketable equity security without a readily determinable value using the measurement alternative, which allows for the investment to be recorded at cost, less any impairment and adjusted for observable price changes in orderly transactions for an identical or similar equity security of the same issuer. The $3.7 million increase in fair value of the Company’s equity investment was measured as of April 26, 2023, based on an observable price change upon the closing of Phantom Auto’s Series B-2 funding round. The fair value of the investment was estimated using a hybrid method of the Black-Scholes option pricing model and the probability-weighted expected return method. This method produces a per-share value based on a probability-weighted scenario analysis. The scenarios reflect changes to the liquidation preferences based on the potential liquidity event. The Black-Scholes option pricing model used various inputs, including expected volatility, expected term to liquidity, risk-free rate over the expected term, breakpoints values, and liquidation preferences.
​ The following table provides the changes in the long-lived assets measured on a nonrecurring basis for which impairment charges were recognized during the three and nine months ended September 30, 2023. The fair value measurements used inputs categorized in Level 3 of the fair value hierarchy. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Lease | ​ | ​ | ​
​ | ​ | Carrying Value |  | Impairment Charges(1) |  | Fair Value |
​ | ​ | (in thousands) | ​
Operating right-of-use assets | ​ | $ | 48,417 | ​ | $ | (28,124) | ​ | $ | 20,293 | ​
Leasehold improvements | ​ | ​ | 3,874 | ​ | ​ | (2,038) | ​ | ​ | 1,836 | ​
​ | ​ | $ | 52,291 | ​ | $ | (30,162) | ​ | $ | 22,129 | ​
​
(1) | During the third quarter of 2023, the Company recorded impairment charges of $30.2 million related to operating right-of-use assets and leasehold improvements associated with a freight handling pilot facility, a service center, and office spaces that were made available for sublease. The fair value of these asset groups was estimated at September 1, 2023, using a discounted cash flow method utilizing market-participant discount rates ranging from 7.5% to 9.5% and certain unobservable inputs, including estimated cash flows based on anticipated future sublease terms as determined using third-party real estate broker quotes. See Note F for additional discussion related to these impairment charges.
​

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