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OPERATING SEGMENT DATA
 9 Months Ended
Sep. 30, 2023
OPERATING SEGMENT DATA  
OPERATING SEGMENT DATA

NOTE J – 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 (loss), and key operating statistics to evaluate performance and allocate resources to the Company’s operations.

​

On February 28, 2023, the Company sold FleetNet, a wholly owned subsidiary and reportable operating segment of the Company. Following the sale, FleetNet is reported as discontinued operations. As such, historical results of FleetNet have been excluded from both continuing operations and segment results for all periods presented, and reclassifications have been made to the prior-period financial statements to conform to the current-year presentation.

​

The Company’s reportable operating segments are impacted by seasonal fluctuations which affect tonnage and shipment levels and demand for services, as described below; therefore, operating results for the interim periods presented may not necessarily be indicative of the results for the fiscal year. Inclement weather conditions can adversely affect freight shipments and operating costs of the Asset-Based and Asset-Light segments. Shipments may decline during winter months

because of post-holiday slowdowns and during summer months due to plant shutdowns affecting automotive and manufacturing customers of the Asset-Light segment; however, weather and other disruptive events can result in higher short-term demand for expedite services depending on the impact to customers' supply chains.

​

Historically, the second and third calendar quarters of each year usually have the highest tonnage and shipment levels, while the first quarter generally has the lowest, although other factors, including the state of the U.S. and global economies; available capacity in the market; the impact of yield initiatives; and the impact of external events or conditions, may influence quarterly business levels. The Company’s yield initiatives, along with increased technology-driven intelligence and visibility with respect to demand, have allowed for shipment optimization in non-peak times, reducing the Company’s susceptibility to seasonal fluctuations in recent years, including the three and nine months ended September 30, 2023 and 2022.

​

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. The segment operations include national, inter-regional, and regional transportation of general commodities through standard, expedited, and guaranteed LTL services. The Asset-Based segment provides services to the Asset-Light segment, including freight transportation related to managed transportation solutions and other services.

​

●The Asset-Light segment includes the results of operations of the Company’s service offerings in ground truckload, expedite, dedicated, intermodal, household goods moving, managed transportation, warehousing and distribution, and international freight transportation for air, ocean, and ground. The Asset-Light segment provides services to the Asset-Based segment.

​

The Company’s other business activities and operations that are not reportable segments include ArcBest Corporation (the parent holding company) and certain subsidiaries. Certain costs incurred by the parent holding company and the Company’s shared services subsidiary are allocated to the reportable segments. The Company eliminates intercompany transactions in consolidation. However, the information used by the Company’s management with respect to its reportable operating segments is before intersegment eliminations of revenues and expenses.

​

Shared services represent costs incurred to support all segments, including sales, pricing, customer service, marketing, capacity sourcing functions, human resources, financial services, information technology, 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 Company’s Board of Directors, and certain technology investments. Shared services costs attributable to the reportable operating segments are predominantly allocated based upon estimated and planned resource utilization-related metrics, such as estimated shipment levels or number of personnel supported. The bases for such charges are modified and adjusted by management when necessary or appropriate to fairly and equitably reflect the actual incidence of cost incurred by the reportable operating segments. Management believes the methods used to allocate expenses are reasonable.

​

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 tables reflect the Company’s reportable operating segment information from continuing operations:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended 

​

Nine Months Ended 

 

​

​

September 30

​

September 30

 

​

    

2023

    

2022

    

2023

    

2022

 

​

​

(in thousands)

 

REVENUES

​

​

​

​

​

​

​

​

​

​

​

​

​

Asset-Based

​

$

741,186

​

$

791,531

 

$

2,161,018

 

$

2,299,464

​

Asset-Light

​

 

419,312

​

 

515,235

​

 

1,267,220

​

 

1,660,174

​

Other and eliminations

​

 

(32,148)

​

 

(31,036)

​

 

(90,330)

​

 

(94,125)

​

Total consolidated revenues

 

$

1,128,350

 

$

1,275,730

 

$

3,337,908

 

$

3,865,513

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

OPERATING EXPENSES

​

​

​

​

​

​

​

​

​

​

​

​

​

Asset-Based

​

​

​

​

​

​

​

​

​

​

​

​

​

Salaries, wages, and benefits

​

$

357,582

​

$

332,359

 

$

1,037,725

 

$

973,924

​

Fuel, supplies, and expenses

​

 

91,493

​

 

97,279

​

 

276,678

​

 

281,406

​

Operating taxes and licenses

​

 

13,865

​

 

13,089

​

 

41,938

​

 

38,405

​

Insurance

​

 

13,654

​

 

13,180

​

 

39,816

​

 

35,808

​

Communications and utilities

​

 

4,729

​

 

4,794

​

 

14,586

​

 

14,129

​

Depreciation and amortization

​

 

26,537

​

 

24,117

​

 

76,721

​

 

72,885

​

Rents and purchased transportation

​

 

79,233

​

 

123,714

​

 

271,899

​

 

348,249

​

Shared services

​

​

70,699

​

​

72,286

​

​

209,780

​

​

215,020

​

(Gain) loss on sale of property and equipment and lease impairment charges(1)

​

 

540

​

 

(5,910)

​

 

905

​

 

(9,975)

​

Innovative technology costs(2)

​

 

7,300

​

 

6,068

​

 

21,711

​

 

20,982

​

Other

​

 

731

​

 

1,243

​

 

3,640

​

 

2,629

​

Total Asset-Based

​

 

666,363

​

 

682,219

​

​

1,995,399

​

​

1,993,462

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Asset-Light

​

​

​

​

​

​

​

​

​

​

​

​

​

Purchased transportation

​

 

365,217

​

 

425,567

​

 

1,078,482

​

 

1,382,107

​

Supplies and expenses

​

 

2,773

​

 

4,378

​

 

10,193

​

 

11,907

​

Depreciation and amortization(3)

​

 

5,097

​

 

5,072

​

 

15,250

​

 

15,720

​

Shared services

​

​

47,411

​

​

56,371

​

​

147,825

​

​

164,554

​

Contingent consideration(4)

​

​

(17,840)

​

​

—

​

​

(12,800)

​

​

810

​

Lease impairment charges(5)

​

​

14,407

​

​

—

​

​

14,407

​

​

—

​

Gain on sale of subsidiary(6)

​

​

—

​

​

—

​

​

—

​

​

(402)

​

Other

​

​

5,951

​

 

8,463

​

​

18,478

​

​

21,499

​

Total Asset-Light

​

 

423,016

​

 

499,851

​

 

1,271,835

​

 

1,596,195

​

​

​

​

​

​

​

​

​

 

​

​

 

​

​

Other and eliminations(7)

​

 

(6,120)

​

 

(21,676)

 

 

(37,692)

​

 

(68,461)

​

Total consolidated operating expenses

​

$

1,083,259

​

$

1,160,394

​

$

3,229,542

​

$

3,521,196

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(1)The three and nine months ended September 30, 2023 include a $0.7 million noncash lease-related impairment charge for a service center. The three and nine months ended September 30, 2022 include a $4.3 million noncash gain on a like-kind property exchange of a service center, with the remaining gains related primarily to sales of replaced equipment.
(2)Represents costs associated with the freight handling pilot test program at ABF Freight. The decision was made to pause the pilot during third quarter 2023, as previously announced.
(3)Depreciation and amortization includes amortization of intangibles associated with acquired businesses.
(4)Represents the change in fair value of the contingent earnout consideration related to the MoLo acquisition (see Note B). The decrease in fair value for third quarter 2023 and the net decrease in fair value for the nine months ended September 30, 2023 reflect the impact of continuing softer market conditions in 2023 and revised business growth assumptions for 2024 and 2025 on the forecasts utilized at the September 30, 2023 remeasurement date.
(5)Represents noncash lease-related impairment charges for certain office spaces that were made available for sublease.
(6)Gain relates to the contingent amount recognized in second quarter 2022 when funds from the May 2021 sale of the labor services portion of the Asset-Light segment’s moving business were released from escrow.
(7)“Other and eliminations” includes $15.1 million of noncash lease-related impairment charges for a freight handling pilot facility.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended 

​

Nine Months Ended 

 

 

​

​

September 30

​

September 30

​

​

​

​

2023

    

2022

    

2023

    

2022

 

 

​

​

(in thousands)

 

 

OPERATING INCOME (LOSS)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Asset-Based

​

$

74,823

​

$

109,312

​

$

165,619

​

$

306,002

​

​

Asset-Light

​

 

(3,704)

​

 

15,384

​

 

(4,615)

​

 

63,979

​

​

Other and eliminations(1)

​

 

(26,028)

​

 

(9,360)

​

 

(52,638)

​

 

(25,664)

​

​

Total consolidated operating income

​

$

45,091

​

$

115,336

​

$

108,366

​

$

344,317

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

OTHER INCOME (COSTS)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest and dividend income

​

$

3,946

​

$

1,127

​

$

10,604

​

$

1,579

​

​

Interest and other related financing costs

​

 

(2,236)

​

 

(1,755)

​

 

(6,768)

​

 

(5,558)

​

​

Other, net(2)

​

 

89

​

 

(189)

​

 

6,907

​

 

(3,822)

​

​

Total other income (costs)

​

 

1,799

​

 

(817)

​

 

10,743

​

 

(7,801)

​

​

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

​

$

46,890

​

$

114,519

​

$

119,109

​

$

336,516

​

​

(1)“Other and eliminations” includes $15.1 million of noncash lease-related impairment charges for a freight handling pilot facility.
(2)Includes the components of net periodic benefit cost (credit) other than service cost related to the Company’s SBP and postretirement health benefit plan and proceeds and changes in cash surrender value of life insurance policies. For the nine months ended September 30, 2023, includes a $3.7 million fair value increase related to the Company’s equity investment in Phantom Auto, based on an observable price change during second quarter 2023 (see Note B).

​

The following table reflects information about revenues from customers and intersegment revenues:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Three Months Ended 

​

Nine Months Ended 

 

​

​

September 30

​

September 30

 

​

    

2023

    

2022(1)

    

2023

    

2022(1)

 

​

​

(in thousands)

 

Revenues from customers

​

​

​

​

​

​

​

​

​

​

​

​

​

Asset-Based

​

$

709,126

​

$

761,616

 

$

2,073,101

 

$

2,211,688

​

Asset-Light

​

 

417,744

​

 

512,745

​

 

1,261,703

​

 

1,650,737

​

Other

​

 

1,480

​

 

1,369

​

 

3,104

​

 

3,088

​

Total consolidated revenues

 

$

1,128,350

 

$

1,275,730

 

$

3,337,908

 

$

3,865,513

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Intersegment revenues

​

​

​

​

​

​

​

​

​

​

​

​

​

Asset-Based

​

$

32,060

​

$

29,915

​

$

87,917

​

$

87,776

​

Asset-Light

​

​

1,568

​

​

2,490

​

​

5,517

​

​

9,437

​

Other and eliminations

​

​

(33,628)

​

​

(32,405)

​

​

(93,434)

​

​

(97,213)

​

Total intersegment revenues

​

$

—

 

$

—

 

$

—

 

$

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total segment revenues

​

​

​

​

​

​

​

​

​

​

​

​

​

Asset-Based

​

$

741,186

​

$

791,531

​

$

2,161,018

​

$

2,299,464

​

Asset-Light

​

​

419,312

​

​

515,235

​

​

1,267,220

​

​

1,660,174

​

Other and eliminations

​

​

(32,148)

​

​

(31,036)

​

​

(90,330)

​

​

(94,125)

​

Total consolidated revenues

​

$

1,128,350

​

$

1,275,730

​

$

3,337,908

​

$

3,865,513

​

(1)The 2022 amounts have been adjusted from those previously reported to correct the intersegment breakdown of certain revenues from customers and intersegment revenues between the segments. Adjustments made are not material.

​

The following table presents operating expenses by category on a consolidated basis:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Three Months Ended 

​

Nine Months Ended 

 

​

​

September 30

​

September 30

​

​

    

2023

    

2022

    

2023

    

2022

 

​

 

(in thousands)

​

OPERATING EXPENSES

​

​

​

​

​

​

​

​

​

​

​

​

​

Salaries, wages, and benefits

​

$

456,022

​

$

444,164

​

$

1,342,028

​

$

1,301,944

​

Rents, purchased transportation, and other costs of services

​

 

410,436

​

 

517,106

​

 

1,255,753

​

 

1,633,193

​

Fuel, supplies, and expenses

​

 

122,700

​

 

125,349

​

 

369,466

​

 

365,213

​

Depreciation and amortization(1)

​

 

37,141

​

 

34,229

​

 

107,962

​

 

103,509

​

Contingent consideration(2)

​

​

(17,840)

​

​

—

​

​

(12,800)

​

​

810

​

Lease impairment charges(3)

​

​

30,162

​

​

—

​

​

30,162

​

​

—

​

Other

​

 

44,638

​

 

39,546

​

 

136,971

​

 

116,527

​

​

​

$

1,083,259

​

$

1,160,394

​

$

3,229,542

​

$

3,521,196

​

(1)Includes amortization of intangible assets.
(2)Represents the change in fair value of the contingent earnout consideration related to the MoLo acquisition (see Note B).
(3)Represents noncash lease-related impairment charges for a freight handling pilot facility, a service center, and office spaces that were made available for sublease.