Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 20, 2023 | Jun. 30, 2022 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 0-19969 | ||
Entity Registrant Name | ARCBEST CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 71-0673405 | ||
Entity Address, Address Line One | 8401 McClure Drive | ||
Entity Address, City or Town | Fort Smith | ||
Entity Address, State or Province | AR | ||
Entity Address, Postal Zip Code | 72916 | ||
City Area Code | 479 | ||
Local Phone Number | 785-6000 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | ARCB | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,689,914,269 | ||
Entity Common Stock, Shares Outstanding | 24,258,338 | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Location | Tulsa, Oklahoma | ||
Auditor Firm ID | 42 | ||
Entity Central Index Key | 0000894405 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 158,372 | $ 76,620 |
Short-term investments | 167,662 | 48,339 |
Accounts receivable, less allowances (2022 - $14,172; 2021 - $13,226) | 580,515 | 582,344 |
Other accounts receivable, less allowances (2022 - $713; 2021 - $690) | 11,867 | 13,094 |
Prepaid expenses | 40,240 | 40,104 |
Prepaid and refundable income taxes | 19,239 | 9,654 |
Other | 11,888 | 5,898 |
TOTAL CURRENT ASSETS | 989,783 | 776,053 |
PROPERTY, PLANT AND EQUIPMENT | ||
Land and structures | 406,620 | 350,694 |
Revenue equipment | 1,038,832 | 980,283 |
Service, office, and other equipment | 302,891 | 251,085 |
Software | 180,929 | 175,989 |
Leasehold improvements | 23,466 | 16,931 |
TOTAL PROPERTY, PLANT AND EQUIPMENT, Gross | 1,952,738 | 1,774,982 |
Less allowances for depreciation and amortization | 1,142,218 | 1,079,061 |
PROPERTY, PLANT AND EQUIPMENT, net | 810,520 | 695,921 |
GOODWILL | 305,382 | 300,337 |
INTANGIBLE ASSETS, net | 113,796 | 126,580 |
OPERATING RIGHT-OF-USE ASSETS | 166,515 | 106,686 |
DEFERRED INCOME TAXES | 6,342 | 5,470 |
OTHER LONG-TERM ASSETS | 101,948 | 101,629 |
TOTAL ASSETS | 2,494,286 | 2,112,676 |
CURRENT LIABILITIES | ||
Accounts payable | 317,541 | 311,401 |
Income taxes payable | 16,630 | 12,087 |
Accrued expenses | 341,822 | 305,851 |
Current portion of long-term debt | 66,252 | 50,615 |
Current portion of operating lease liabilities | 26,225 | 22,740 |
TOTAL CURRENT LIABILITIES | 768,470 | 702,694 |
LONG-TERM DEBT, less current portion | 198,371 | 174,917 |
OPERATING LEASE LIABILITIES, less current portion | 147,828 | 88,835 |
POSTRETIREMENT LIABILITIES, less current portion | 12,196 | 16,733 |
OTHER LONG-TERM LIABILITIES | 154,745 | 135,537 |
DEFERRED INCOME TAXES | 61,275 | 64,893 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2022: 29,758,716 shares, 2021: 29,359,597 shares | 298 | 294 |
Additional paid-in capital | 339,582 | 318,033 |
Retained earnings | 1,088,693 | 801,314 |
Treasury stock, at cost, 2022: 5,529,383 shares; 2021: 4,492,514 shares | (284,275) | (194,273) |
Accumulated other comprehensive income | 7,103 | 3,699 |
TOTAL STOCKHOLDERS' EQUITY | 1,151,401 | 929,067 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,494,286 | $ 2,112,676 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 14,172 | $ 13,226 |
Other accounts receivable, allowances (in dollars) | $ 713 | $ 690 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 70,000,000 | 70,000,000 |
Common stock, issued shares | 29,758,716 | 29,359,597 |
Treasury stock, at cost, shares | 5,529,383 | 4,492,514 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
REVENUES | $ 5,324,052 | $ 3,980,067 | $ 2,940,163 |
OPERATING EXPENSES | 4,924,783 | 3,699,081 | 2,841,885 |
OPERATING INCOME | 399,269 | 280,986 | 98,278 |
OTHER INCOME (COSTS) | |||
Interest and dividend income | 3,957 | 1,275 | 3,616 |
Interest and other related financing costs | (7,701) | (8,904) | (11,697) |
Other, net | (2,370) | 3,797 | 2,299 |
TOTAL OTHER INCOME (COSTS) | (6,114) | (3,832) | (5,782) |
INCOME BEFORE INCOME TAXES | 393,155 | 277,154 | 92,496 |
INCOME TAX PROVISION | 94,946 | 63,633 | 21,396 |
NET INCOME | $ 298,209 | $ 213,521 | $ 71,100 |
EARNINGS PER COMMON SHARE | |||
Basic | $ 12.13 | $ 8.38 | $ 2.80 |
Diluted | $ 11.69 | $ 7.98 | $ 2.69 |
AVERAGE COMMON SHARES OUTSTANDING | |||
Basic | 24,585,205 | 25,471,939 | 25,410,232 |
Diluted | 25,504,508 | 26,772,126 | 26,422,523 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
NET INCOME | $ 298,209 | $ 213,521 | $ 71,100 |
Postretirement benefit plans: | |||
Net actuarial gain, net of tax of: (2022 - $1,144; 2021 - $451; 2020 - $513) | 3,298 | 1,300 | 1,480 |
Pension settlement expense, net of tax of: (2020 - $23) | 66 | ||
Amortization of unrecognized net periodic benefit credit, net of tax of: (2022 - $195; 2021 - $139; 2020 - $152) | |||
Net actuarial gain | (562) | (400) | (437) |
Prior service credit | (1) | ||
Interest rate swap and foreign currency translation: | |||
Change in unrealized income (loss) on interest rate swap, net of tax of: (2022 - $812; 2021 - $534; 2020 - $277) | 2,295 | 1,507 | (782) |
Change in foreign currency translation, net of tax of: (2022 - $576; 2021 - $36; 2020 - $232) | (1,627) | 102 | 661 |
OTHER COMPREHENSIVE INCOME, net of tax | 3,404 | 2,509 | 987 |
TOTAL COMPREHENSIVE INCOME | $ 301,613 | $ 216,030 | $ 72,087 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net actuarial gain, tax | $ 1,144 | $ 451 | $ 513 |
Pension settlement expense, tax | 23 | ||
Amortization of unrecognized net periodic benefit credit, tax | (195) | (139) | (152) |
Change in unrealized income on interest rate swap, tax | 812 | 534 | (277) |
Change in foreign currency translation, tax | $ (576) | $ 36 | $ 232 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock Cumulative Effect, Period of Adoption, Adjusted Balance | Common Stock | Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjusted Balance | Additional Paid-In Capital | Retained Earnings Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings Cumulative Effect, Period of Adoption, Adjusted Balance | Retained Earnings | Treasury Stock Cumulative Effect, Period of Adoption, Adjusted Balance | Treasury Stock | Accumulated Other Comprehensive Income (Loss) Cumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Other Comprehensive Income (Loss) | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Accelerated Share Repurchase Agreement ("ASR") | Total |
Balances at Dec. 31, 2019 | $ 288 | $ 288 | $ 333,943 | $ 333,943 | $ (198) | $ 532,989 | $ 533,187 | $ (104,578) | $ (104,578) | $ 203 | $ 203 | $ (198) | $ 762,845 | $ 763,043 | |
Balances (in shares) at Dec. 31, 2019 | 28,811,000 | 28,811,000 | |||||||||||||
Balances, Treasury stock (in shares) at Dec. 31, 2019 | 3,405,000 | 3,405,000 | |||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Net income | 71,100 | 71,100 | |||||||||||||
Other comprehensive income (loss), net of tax | 987 | 987 | |||||||||||||
Issuance of common stock under share-based compensation plans | $ 2 | (2) | |||||||||||||
Issuance of common stock under share-based compensation plans (in shares) | 234,000 | ||||||||||||||
Shares withheld for employee tax remittance on share-based compensation | (2,065) | (2,065) | |||||||||||||
Share-based compensation expense | 10,478 | 10,478 | |||||||||||||
Purchase of treasury stock | $ (6,595) | (6,595) | |||||||||||||
Purchase of treasury stock (in shares) | 252,000 | ||||||||||||||
Dividends declared on common stock | (8,157) | (8,157) | |||||||||||||
Balances at Dec. 31, 2020 | $ 290 | 342,354 | 595,932 | $ (111,173) | 1,190 | 828,593 | |||||||||
Balances (in shares) at Dec. 31, 2020 | 29,045,000 | ||||||||||||||
Balances, Treasury stock (in shares) at Dec. 31, 2020 | 3,657,000 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Net income | 213,521 | 213,521 | |||||||||||||
Other comprehensive income (loss), net of tax | 2,509 | 2,509 | |||||||||||||
Issuance of common stock under share-based compensation plans | $ 4 | (4) | |||||||||||||
Issuance of common stock under share-based compensation plans (in shares) | 315,000 | ||||||||||||||
Shares withheld for employee tax remittance on share-based compensation | (10,743) | (10,743) | |||||||||||||
Share-based compensation expense | 11,426 | 11,426 | |||||||||||||
Purchase of treasury stock | $ (83,100) | $ (75,000) | (83,100) | ||||||||||||
Purchase of treasury stock (in shares) | 836,000 | ||||||||||||||
Forward contract for accelerated share repurchase | (25,000) | (25,000) | |||||||||||||
Dividends declared on common stock | (8,139) | (8,139) | |||||||||||||
Balances at Dec. 31, 2021 | $ 294 | 318,033 | 801,314 | $ (194,273) | 3,699 | $ 929,067 | |||||||||
Balances (in shares) at Dec. 31, 2021 | 29,360,000 | ||||||||||||||
Balances, Treasury stock (in shares) at Dec. 31, 2021 | 4,493,000 | 4,492,514 | |||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Net income | 298,209 | $ 298,209 | |||||||||||||
Other comprehensive income (loss), net of tax | 3,404 | 3,404 | |||||||||||||
Issuance of common stock under share-based compensation plans | $ 4 | (4) | |||||||||||||
Issuance of common stock under share-based compensation plans (in shares) | 399,000 | ||||||||||||||
Shares withheld for employee tax remittance on share-based compensation | (16,222) | (16,222) | |||||||||||||
Share-based compensation expense | 12,775 | 12,775 | |||||||||||||
Purchase of treasury stock | $ (65,002) | $ (25,000) | (65,002) | ||||||||||||
Purchase of treasury stock (in shares) | 822,000 | 214,763 | |||||||||||||
Forward contract for accelerated share repurchase | 25,000 | $ (25,000) | |||||||||||||
Forward contract for accelerated share repurchase (in shares) | 214,000 | ||||||||||||||
Dividends declared on common stock | (10,830) | (10,830) | |||||||||||||
Balances at Dec. 31, 2022 | $ 298 | $ 339,582 | $ 1,088,693 | $ (284,275) | $ 7,103 | $ 1,151,401 | |||||||||
Balances (in shares) at Dec. 31, 2022 | 29,759,000 | ||||||||||||||
Balances, Treasury stock (in shares) at Dec. 31, 2022 | 5,529,000 | 5,529,383 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING ACTIVITIES | |||
Net income | $ 298,209 | $ 213,521 | $ 71,100 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 127,119 | 118,864 | 114,379 |
Amortization of intangibles | 12,920 | 5,357 | 4,012 |
Pension settlement expense | 89 | ||
Share-based compensation expense | 12,775 | 11,426 | 10,478 |
Provision for losses on accounts receivable | 6,955 | 1,466 | 4,327 |
Change in deferred income taxes | (6,250) | (7,589) | 7,715 |
Gain on sale of property and equipment | (11,650) | (8,520) | (2,376) |
Gain on sale of subsidiary | (402) | (6,923) | |
Changes in operating assets and liabilities: | |||
Receivables | (10,349) | (122,782) | (38,129) |
Prepaid expenses | (410) | (1,482) | (7,966) |
Other assets | (2,941) | 354 | 2,646 |
Income taxes | (5,041) | 13,136 | (1,712) |
Operating right-of-use assets and lease liabilities, net | 2,952 | 623 | 756 |
Accounts payable, accrued expenses, and other liabilities | 46,932 | 106,064 | 40,670 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 470,819 | 323,515 | 205,989 |
INVESTING ACTIVITIES | |||
Purchases of property, plant and equipment, net of financings | (148,223) | (58,412) | (43,248) |
Proceeds from sale of property and equipment | 19,691 | 13,815 | 13,348 |
Business acquisition, net of cash acquired | 2,279 | (239,380) | |
Proceeds from sale of subsidiary | 475 | 9,013 | |
Purchases of short-term investments | (182,352) | (56,011) | (165,133) |
Proceeds from sale of short-term investments | 64,329 | 73,182 | 216,735 |
Capitalization of internally developed software | (17,282) | (20,061) | (14,241) |
Purchase of long-term investments | (25,350) | ||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (261,083) | (303,204) | 7,461 |
FINANCING ACTIVITIES | |||
Borrowings under credit facilities | 58,000 | 50,000 | 180,000 |
Borrowings under accounts receivable securitization program | 45,000 | ||
Proceeds from notes payable | 14,206 | 3,523 | |
Payments on long-term debt | (115,540) | (171,915) | (326,098) |
Net change in book overdrafts | 8,356 | (1,957) | 6,510 |
Deferred financing costs | (952) | (314) | |
Payment of common stock dividends | (10,830) | (8,139) | (8,157) |
Purchases of treasury stock | (65,002) | (83,100) | (6,595) |
Forward contract for accelerated share repurchase | (25,000) | ||
Payments for tax withheld on share-based compensation | (16,222) | (10,743) | (2,065) |
NET CASH USED IN FINANCING ACTIVITIES | (127,984) | (247,645) | (111,405) |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 81,752 | (227,334) | 102,045 |
Cash and cash equivalents at beginning of period | 76,620 | 303,954 | 201,909 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 158,372 | 76,620 | 303,954 |
NONCASH INVESTING ACTIVITIES | |||
Equipment financed | 82,425 | 59,700 | 61,803 |
Accruals for equipment received | 4,337 | 1,704 | 1,667 |
Lease liabilities arising from obtaining right-of-use assets | $ 87,294 | $ 14,671 | $ 67,819 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | NOTE A – ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATIO N Organization and Description of Business ArcBest Corporation ™ ® The Asset-Based segment represented approximately 55% of the Company’s 2022 total revenues before other revenues and intercompany eliminations. As of December 2022, approximately 82% of the Asset-Based segment’s employees were covered under a collective bargaining agreement, the ABF National Master Freight Agreement (the “2018 ABF NMFA”), with the International Brotherhood of Teamsters (the “IBT”), which will remain in effect through June 30, 2023. Financial Statement Presentation Consolidation: Segment Information: Use of Estimates: |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTING POLICIES | |
ACCOUNTING POLICIES | NOTE B – ACCOUNTING POLICIES Cash, Cash Equivalents, and Short-Term Investments: Certificates of deposit are valued at cost plus accrued interest, which approximates fair value. Held-to-maturity U.S. Treasury securities are recorded at amortized cost with interest and amortization of premiums and discounts included in interest income. Quarterly, the Company evaluates held-to-maturity securities for any other-than-temporary impairments related to any intention to sell or requirement to sell before its amortized costs are recovered. If a security is considered to be other-than-temporarily impaired, the difference between amortized cost and the amount that is determined to be recoverable is recorded in earnings. Concentration of Credit Risk: The Company’s services are provided primarily to customers throughout the United States and, to a lesser extent, Canada, Mexico, and other international locations. On a consolidated basis, the Company had no single customer representing more than 3% of its revenues in 2022, 2021, or 2020 or more than 7% of its accounts receivable balance at December 31, 2022 and 2021. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Historically, credit losses have been within management’s expectations. Receivable Allowances: Property, Plant and Equipment, Including Repairs and Maintenance: Computer Software for Internal Use, Including Web Site Development and Cloud Computing Costs: Impairment Assessment of Long-Lived Assets: . Assets to be disposed of are reclassified as assets held for sale at the lower of their carrying amount or fair value less cost to sell. Assets held for sale primarily represent Asset-Based segment nonoperating properties, older revenue equipment, and other equipment. Adjustments to write down assets to fair value less the amount of costs to sell are reported in operating income. Assets held for sale are expected to be disposed of by selling the assets within the next 12 months. Gains and losses on property and equipment are reported in operating income. Assets held for sale of $0.8 million and $0.6 million are reported within other noncurrent assets as of December 31, 2022 and 2021, respectively. Business Combinations: Contingent Consideration: Goodwill and Intangible Assets: Indefinite-lived intangible assets are also not amortized but rather are evaluated for impairment annually or more frequently if indicators of impairment exist. Consistent with goodwill, the Company assesses qualitative factors to determine if it is more likely than not that the fair value of indefinite-lived intangible assets is less than its carrying value and performs a quantitative analysis if it is determined it is more likely than not the indefinite-lived intangible is impaired. The Company amortizes finite-lived intangible assets over their respective estimated useful lives. Income Taxes: Management applies considerable judgment in determining the consolidated income tax provision, including valuation allowances on deferred tax assets. The valuation allowance for deferred tax assets is determined by evaluating whether it is more likely than not that the benefits of deferred tax assets will be realized through future reversal of existing taxable temporary differences, taxable income in carryback years in jurisdictions in which they are allowable, projected future taxable income, or tax-planning strategies. Uncertain tax positions, which also require significant judgment, are measured to determine the amounts to be recognized in the financial statements. The income tax provision and valuation allowances are complicated by complex and frequently changing rules administered in multiple jurisdictions, including U.S. federal, state, and foreign governments. Long-Term Investments: Book Overdrafts: Insurance Reserves Liabilities for self-insured workers’ compensation and third-party casualty claims are based on the case reserve amounts plus an estimate of loss development and incurred but not reported (“IBNR”) claims, which is developed from an independent actuarial analysis. The process of determining reserve requirements utilizes historical trends and involves an evaluation of claim frequency and severity, claims management, and other factors. Case reserves are evaluated as loss experience develops and new information becomes available. Adjustments to previously estimated aggregate reserves are reflected in financial results in the periods in which they are made. Aggregate reserves represent an estimate of the costs of claims incurred, and it is possible that the ultimate liability may differ significantly from such estimates. The Company develops an estimate of self-insured cargo loss and damage claims liabilities based on historical trends and certain event-specific information. Claims liabilities are recorded in accrued expenses and are not offset by insurance receivables which are reported in other accounts receivable. Loss Contingencies: Long-Term Debt: Interest Rate Swap Derivative Instruments Leases: The Company elected the short-term lease exemption for all classes of assets to include real property, revenue equipment, and service, office, and other equipment. The Company adopted the policy election as a lessee for all classes of assets to account for each lease component and its related non-lease component(s) as a single lease component. In determining the discount rate, the Company uses ArcBest Corporation’s incremental borrowing rate unless the rate implicit in the lease is readily determinable when entering into a lease as a lessee. The incremental borrowing rate is determined by the price of a fully collateralized loan with similar terms based on current market rates. An assessment is made on or after the effective date of newly signed contracts as to whether the contract is, or contains, a lease at the inception of a contract. The assessment is based on: (1) whether the contract involves the use of a distinct identified asset; (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period; and (3) whether the Company has the right to direct the use of the asset. The operating right-of-use asset is measured as the initial amount of the operating lease liability, plus any initial direct costs incurred, less any prepayments prior to commencement or lease incentives received. The operating lease liability is initially measured at the present value of the lease payments, discounted using the Company’s secured incremental borrowing rate for the same term as the underlying lease unless the interest rate implicit in the lease is readily determined, then the implicit rate will be used. Lease payments included in the measurement of the lease liability are comprised of the following: (1) the fixed noncancelable lease payments, (2) payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and (3) payments for early termination options unless it is reasonably certain the lease will not be terminated early. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the initial lease liability. Additional payments based on the change in an index or rate are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability. Supplemental Benefit and Postretirement Health Benefit Plans: The Company has not incurred service cost under the SBP since the accrual of benefits under the plan was frozen on December 31, 2009, however, the Company incurs service cost under the postretirement health benefit plan which is reported within operating expenses in the consolidated statements of operations. The other components of net periodic benefit cost (credit) of the SBP (including pension settlement expense), and the postretirement health benefit plan are reported within the other line item of other income (costs). The expense and liability related to the postretirement health benefit plan are measured based upon a number of assumptions and using the services of a third-party actuary. Assumptions are made regarding the discount rate, expected retirement age, mortality, employee turnover, and future increases in health care costs. The discount rates used to discount the SBP and postretirement health benefit plan obligations are determined by matching projected cash distributions with appropriate high-quality corporate bond yields in a yield curve analysis. The assumptions used directly impact the net periodic benefit cost (credit) for a particular year. An actuarial gain or loss results when actual experience varies from the assumptions or when there are changes in actuarial assumptions. Actuarial gains and losses are not included in net periodic benefit cost (credit) in the period when they arise but are recognized as a component of other comprehensive income or loss and subsequently amortized as a component of net periodic benefit cost (credit). The Company uses December 31 as the measurement date for the SBP and postretirement health benefit plan. Plan obligations are also remeasured upon curtailment and upon settlement. Benefit distributions under the SBP individually exceed the annual interest cost of the plan, and the Company records the related settlement expense when the amount of the benefit to be distributed is fixed, which is generally upon an employee’s termination of employment. Pension settlement expense for the SBP is presented in Note J. Revenue Recognition: adjustments occur due to rating or other billing adjustments. The Company also estimates revenue adjustments based on historical information and current trends, and revenue is recognized accordingly. Asset-Based Segment Asset-Based segment revenues consist primarily of less-than-truckload freight delivery. Performance obligations are satisfied upon final delivery of the freight to the specified destination. Revenue is recognized based on the relative transit time in each reporting period with expenses recognized as incurred. A bill-by-bill analysis is used to establish estimates of revenue in transit for recognition in the appropriate period. Because the bill-by-bill methodology utilizes the approximate location of the shipment in the delivery process to determine the revenue to recognize, management believes it to be a reliable method. Certain contracts may provide for volume-based or other discounts which are accounted for as variable consideration. The Company estimates these amounts based on a historical expectation of discounts to be earned by customers, and revenue is recognized based on the estimates. Management believes that actual amounts will not vary significantly from estimates of variable consideration. Revenue, purchased transportation expense, and third-party service expenses are reported on a gross basis for certain shipments and services where the Company utilizes a third-party carrier for pickup, linehaul, delivery of freight, or performance of services but remains primarily responsible for fulfilling delivery to the customer and maintains discretion in setting the price for the services. ArcBest Segment ArcBest segment revenues consist primarily of asset-light logistics services using third-party vendors to provide transportation services. ArcBest segment revenue is generally recognized based on the relative transit time in each reporting period using estimated standard delivery times for freight in transit at the end of the reporting period. Purchased transportation expense is recognized as incurred consistent with the recognition of revenue. Revenue and purchased transportation expense are reported on a gross basis for shipments and services where the Company utilizes a third-party carrier for pickup and delivery but remains primarily responsible to the customer for delivery and maintains discretion in setting the price for the service. FleetNet Segment FleetNet segment revenues consist of service fee revenue, roadside repair revenue and routine maintenance services revenue. Service fee revenue for the FleetNet segment is recognized upon response to the service event. Repair and routine maintenance service revenue for the FleetNet segment is recognized upon completion of the service by third-party vendors. Revenue and expense from repair and maintenance services performed by third-party vendors are reported on a gross basis as FleetNet controls the services prior to transfer to the customer and remains primarily responsible to the customer for completion of the services. Other Recognition and Disclosure Payment terms with customers may vary depending on the service provided, location or specific agreement with the customer. The term between invoicing and when payment is due is not significant. For certain services, payment is required before the services are provided to the customer. The Company expenses sales commissions when incurred because the amortization period is one year or less. The Company has elected not to disclose the value of unsatisfied performance obligations for contracts with an original length of one year or less or contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed. Comprehensive Income or Loss: in Note K. The changes in accumulated other comprehensive income or loss, net of tax, and the significant reclassifications out of accumulated other comprehensive income or loss are disclosed, by component, in Note K. Accelerated Share Repurchase: Earnings Per Share: Share-Based Compensation: one-third Share-based awards are amortized to compensation expense on a straight-line basis over the vesting period of awards or over the period to which the recipient first becomes eligible for retirement, whichever is shorter, with vesting accelerated upon death or disability. The Company recognizes forfeitures as they occur, and the income tax effects of awards are recognized in the statement of operations when awards vest or are settled. Fair Value Measurements: ● Level 1 – Quoted prices for identical assets and liabilities in active markets. ● Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. ● Level 3 – Unobservable inputs (Company’s market assumptions) that are significant to the valuation model. Environmental Matters: Exit or Disposal Activities: Accounting Pronouncements Not Yet Adopted Management believes there is no new accounting guidance issued but not yet effective that would have a material impact to the Company’s current financial statements. |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | NOTE C – FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Financial Instruments The following table presents the components of cash and cash equivalents and short-term investments: December 31 December 31 2022 2021 (in thousands) Cash and cash equivalents Cash deposits (1) $ 137,355 $ 72,790 Variable rate demand notes (1)(2) 9,285 230 Money market funds (3) 11,732 3,600 Total cash and cash equivalents $ 158,372 $ 76,620 Short-term investments Certificates of deposit (1) $ 88,851 $ 48,339 U.S. Treasury securities (4) 78,811 — Total short-term investments $ 167,662 $ 48,339 (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. The Company’s long-term financial instruments are presented in the table of financial assets and liabilities measured at fair value within this Note. Concentrations of Credit Risk of Financial Instruments The Company is potentially subject to concentrations of credit risk related to its cash, cash equivalents, and short-term investments. The Company reduces credit risk by maintaining its cash deposits and short-term investments in accounts and certificates of deposit which are primarily FDIC-insured, or in direct obligations of the U.S. government. However, certain cash deposits and certificates of deposit may exceed federally insured limits. At December 31, 2022 and 2021, cash, cash equivalents, and short-term investments totaling $99.4 million and $42.6 million, respectively, were neither FDIC insured nor direct obligations of the U.S. government. Fair value and carrying value disclosures of financial instruments as of December 31 are presented in the following table: 2022 2021 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ 50,000 $ 50,000 $ 50,000 $ 50,000 Notes payable (2) 214,623 207,778 175,530 175,937 New England Pension Fund withdrawal liability (3) 20,100 18,911 20,769 23,521 $ 284,723 $ 276,689 $ 246,299 $ 249,458 (1) The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on London Inter-Bank Offered Rate (“LIBOR”), plus a margin, for the year ended December 31, 2021 through October 7, 2022, and effective October 7, 2022, Secured Overnight Financing Rate (“SOFR”), plus a margin, is considered to be 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 5.3% and 3.1% at December 31, 2022 and 2021, respectively, determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). As of December 31, 2022, the outstanding withdrawal liability totaled $20.1 million, of which $0.7 million and $19.4 million were recorded in accrued expenses and other long-term liabilities, respectively. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the assets and liabilities that are measured at fair value on a recurring basis: 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 December 31, 2021 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) $ 3,600 $ 3,600 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 3,848 3,848 — — Interest rate swap (3) 874 — 874 — $ 8,322 $ 7,448 $ 874 $ — Liabilities: Interest rate swap (3) $ 455 $ — $ 455 $ — Contingent consideration (4) 93,700 — — 93,700 $ 94,155 $ — $ 455 $ 93,700 (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 or other long-term liabilities. The fair values of the interest rate swaps were 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 December 31, 2022 and 2021, and considers the interest rate swap valuations in Level 2 of the fair value hierarchy. (4) Included in other long-term liabilities, based on when expected payouts become due. The estimated fair value of contingent consideration for the earnout agreement related to the November 2021 acquisition of MoLo was 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 14.0% and 9.0% as of December 2022 and 2021, respectively. Changes in the significant unobservable inputs might result in a significantly higher or lower fair value at the reporting date. The following table provides the changes in fair value of the liabilities measured at fair value using inputs categorized in Level 3 of the fair value hierarchy: Contingent Consideration (in thousands) Balances at December 31, 2021 $ 93,700 Change in fair value included in operating income 18,300 Balances at December 31, 2022 $ 112,000 Assets Measured at Fair Value on a Nonrecurring Basis There were no assets remeasured on a nonrecurring basis at December 31, 2022 or 2021. |
ACQUISITION
ACQUISITION | 12 Months Ended |
Dec. 31, 2022 | |
ACQUISITION. | |
ACQUISITION | NOTE D – ACQUISITION On November 1, 2021 (the “acquisition date”), the Company acquired MoLo, a Chicago-based truckload freight brokerage company, pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated September 29, 2021. Net cash consideration related to the transaction totaled $237.1 million, adjusted for certain post-closing adjustments. The Company funded the initial purchase price with cash on hand and subsequently received $2.3 million from escrow related to certain post-closing adjustments during the year ended December 31, 2022, which is reported in the accompanying consolidated statements of cash flows as business acquisition, net of cash acquired. The Merger Agreement provides for certain additional cash consideration 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. See Note C for change in fair value of the contingent earnout consideration. The following table represents the components of the total purchase consideration for the acquisition of MoLo. The Company recorded the estimated fair value of the contingent earnout consideration at the acquisition date as a part of the purchase price consideration for the acquisition (see Note B). Purchase Consideration (in thousands) Net cash consideration, including post-closing adjustments $ 237,101 Contingent consideration 93,700 Total purchase consideration $ 330,801 The results of MoLo’s operations subsequent to the acquisition date have been included in the accompanying consolidated financial statements, with the acquired operations included within the ArcBest operating segment (see Note N). The acquisition of MoLo enhances the scale of the Company’s truckload brokerage services by providing additional truckload capacity, support, and expertise in the Company’s Asset-Light operations and increasing cross-selling potential. The following table summarizes the estimated fair values of the acquired assets and liabilities assumed at the acquisition date, including measurement period adjustments related to working capital. Purchase Allocation (in thousands) Accounts receivable $ 131,378 Prepaid expenses 468 Property and equipment 1,533 Operating lease right-of-use assets 844 Intangible assets 76,900 Other assets 170 Total identifiable assets acquired 211,293 Accounts payable 94,053 Accrued expenses and other current liabilities 4,470 Operating lease liabilities 983 Total liabilities 99,506 Total identifiable net assets 111,787 Goodwill 219,014 Net assets acquired $ 330,801 The MoLo acquisition has been accounted for as a business combination using the acquisition method of accounting (see Note B). The total purchase consideration to acquire MoLo has been allocated to the assets acquired and liabilities assumed as of November 1, 2021, with the excess purchase price recorded as goodwill. During the measurement period, the net working capital decreased based on the actual versus estimated fair value of net working capital as of the transaction date. These measurement period adjustments resulted in a $5.0 million increase in goodwill related to the MoLo acquisition. See Note E for further discussion of acquired goodwill and intangible assets. Operating revenues of $120.3 million and operating loss of $1.2 million, including intangible asset amortization expense, related to MoLo from the acquisition date through December 31, 2021 were included in the accompanying consolidated statements of operations. The Company recognized $6.0 million of acquisition related costs in operating expenses in 2021. For segment reporting purposes, these transaction costs have been reported in “Other and eliminations” (see Note N). The following unaudited pro forma supplemental information presents the Company’s consolidated results of operations as if the MoLo acquisition had occurred on January 1, 2020: Year Ended December 31 2021 2020 (Unaudited) (in thousands, except per share data) Revenues $ 4,488,564 $ 3,213,722 Income before income taxes $ 266,866 $ 63,622 Net income $ 205,728 $ 48,290 Diluted EPS $ 7.68 $ 1.83 The pro forma results of operations are based on historical information adjusted to include the pro forma effect of applying the Company’s accounting policies; adjusting interest expense and interest income for the initial cash consideration and elimination of MoLo debt; recording amortization expense related to the estimated fair value of intangibles acquired; eliminating the gain on debt forgiveness related to MoLo’s Payment Protection Program loan; eliminating transaction expenses related to the acquisition; and recording the related tax effects of these adjustments. The pro forma information is presented for illustrative purposes only and does not reflect either the realization of potential cost savings or any related integration costs. Certain business synergies and cost savings may result from the MoLo acquisition, although there can be no assurance these will be achieved. The pro forma information does not purport to be indicative of the results that would have actually been obtained if the acquisition had occurred as of the date indicated, nor does the pro forma information intend to be a projection of results that may be obtained in the future. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE E – GOODWILL AND INTANGIBLE ASSETS Goodwill by reportable operating segment consisted of the following: Total ArcBest FleetNet (in thousands) Balances at December 31, 2020 $ 88,320 $ 87,690 $ 630 Goodwill acquired (1) 213,969 213,969 — Goodwill divested (2) (1,952) (1,952) — Balances at December 31, 2021 $ 300,337 $ 299,707 $ 630 Purchase accounting adjustments (3) 5,045 5,045 — Balances at December 31, 2022 $ 305,382 $ 304,752 $ 630 Accumulated impairment at December 31, 2022 and 2021 $ (20,000) $ (20,000) $ — (1) Goodwill acquired relates to the acquisition of MoLo (see Note D). (2) Goodwill divested due to the sale of the labor services portion of the ArcBest segment’s moving business in second quarter 2021 was determined based on the relative fair value of the business sold to the total fair value of the reporting unit. (3) As noted in Note D, purchase accounting adjustments related to the MoLo acquisition represent adjustments to the acquired balance of working capital, and goodwill related to the November 1, 2021 acquisition of MoLo. The Company performs the annual impairment evaluation of the goodwill balance of its reporting units, each October 1. As of October 1, 2022, the Company’s assessment of qualitative factors, including performance of the reporting units compared to prior periods, macroeconomic factors, industry considerations, and the Company’s market capitalization, led to a conclusion that goodwill was not impaired. As of October 1, 2022 and 2021, the annual impairment evaluation determined there was no impairment of the goodwill balance. Intangible assets consisted of the following as of December 31: 2022 2021 Weighted-Average Accumulated Net Accumulated Net Amortization Period Cost Amortization Value Cost Amortization Value (in years) (in thousands) (in thousands) Finite-lived intangible assets Customer relationships 12 $ 100,321 $ 43,627 $ 56,694 $ 100,321 $ 35,072 $ 65,249 Other 8 30,471 5,669 24,802 30,335 1,304 29,031 11 130,792 49,296 81,496 130,656 36,376 94,280 Indefinite-lived intangible assets Trade name N/A 32,300 N/A 32,300 32,300 N/A 32,300 Total intangible assets N/A $ 163,092 $ 49,296 $ 113,796 $ 162,956 $ 36,376 $ 126,580 The annual impairment evaluation of indefinite-lived intangible assets was performed as of October 1, 2022 and 2021, and it was determined that there was no impairment of the recorded balances. As of December 31, 2022, the future amortization for intangible assets acquired through business acquisitions were as follows: Amortization of Intangible Assets (in thousands) 2023 $ 12,826 2024 12,793 2025 12,778 2026 8,671 2027 7,247 Thereafter 27,181 Total amortization $ 81,496 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | NOTE F – INCOME TAXES Significant components of the provision or benefit for income taxes for the years ended December 31 were as follows: 2022 2021 2020 (in thousands) Current provision: Federal $ 80,378 $ 56,451 $ 10,001 State 19,949 14,430 3,267 Foreign 869 341 413 101,196 71,222 13,681 Deferred provision (benefit): Federal (5,477) (6,098) 5,948 State (753) (1,554) 1,789 Foreign (20) 63 (22) (6,250) (7,589) 7,715 Total provision for income taxes $ 94,946 $ 63,633 $ 21,396 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Components of the deferred tax provision or benefit for the years ended December 31 were as follows: 2022 2021 2020 (in thousands) Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets (1) $ 4,186 $ 1,451 $ 4,975 Amortization of intangibles (2,973) (536) 183 Changes in reserves for workers’ compensation, third-party casualty, and cargo claims (3,713) (3,294) (182) Revenue recognition 13 (1,445) (1,481) Allowance for credit losses (391) 156 (652) Nonunion pension and other retirement plans (4) (3) 957 Multiemployer pension fund withdrawal 172 164 157 Federal and state net operating loss carryforwards utilized (generated) 899 (300) (259) State depreciation adjustments (915) 598 343 Share-based compensation 749 (984) (195) Valuation allowance increase (decrease) (489) 911 617 Other accrued expenses (3,104) (4,097) 1,663 Prepaid expenses (18) (788) 1,207 Operating lease right-of-use assets/liabilities – net (651) (228) (13) Other (11) 806 395 Deferred tax provision (benefit) $ (6,250) $ (7,589) $ 7,715 (1) The Tax Cuts and Jobs Act , enacted in December 2017, allowed first year bonus depreciation at 100% for assets placed into service between September 27, 2017 and January 1, 2023. Due to a decrease in the purchase of assets eligible for 100% depreciation, the deferred tax expense related to the tax depreciation expense in excess of book depreciation decreased over the two-year period from 2020 through 2021 but increased in 2022. Significant components of the deferred tax assets and liabilities at December 31 were as follows: 2022 2021 (in thousands) Deferred tax assets: Accrued expenses $ 53,997 $ 47,683 Operating lease right-of-use liabilities 46,056 30,590 Supplemental pension liabilities 81 97 Multiemployer pension fund withdrawal 5,063 5,247 Postretirement liabilities other than pensions 3,137 4,441 Share-based compensation 5,794 6,755 Federal and state net operating loss carryovers 753 1,652 Receivable allowances 3,052 2,778 Other 417 266 Total deferred tax assets 118,350 99,509 Valuation allowance (1,707) (2,196) Total deferred tax assets, net of valuation allowance 116,643 97,313 Deferred tax liabilities: Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets 117,586 114,999 Operating lease right-of-use assets 44,170 29,403 Intangibles 4,396 6,966 Prepaid expenses 5,424 5,368 Total deferred tax liabilities 171,576 156,736 Net deferred tax liabilities $ (54,933) $ (59,423) Reconciliation between the effective income tax rate, as computed on income before income taxes, and the statutory federal income tax rate for the years ended December 31 is presented in the following table: 2022 2021 2020 (in thousands, except percentages) Income tax provision at the statutory federal rate of 21.0% $ 82,562 $ 58,202 $ 19,424 Federal income tax effects of: State income taxes (4,031) (2,704) (1,062) Nondeductible expenses 5,607 3,596 1,395 Life insurance proceeds and changes in cash surrender value 575 (866) (488) Alternative fuel credit (2,449) — (1,261) Net increase (decrease) in valuation allowances (464) 887 617 Net increase (decrease) in uncertain tax positions — 854 (933) Settlement of share-based compensation (6,852) (6,140) 420 Foreign tax credits generated (849) (404) (391) Federal research and development tax credits 278 (2,044) (2,078) Other 524 (1,028) 306 Federal income tax provision 74,901 50,353 15,949 State income tax provision 19,196 12,876 5,056 Foreign income tax provision 849 404 391 Total provision for income taxes $ 94,946 $ 63,633 $ 21,396 Effective tax rate 24.1 % 23.0 % 23.1 % Income taxes paid, excluding income tax refunds, totaled $148.7 million, $77.5 million, and $28.6 million in 2022, 2021, and 2020, respectively. Income tax refunds totaled $42.3 million, $19.4 million, and $13.3 million in 2022, 2021, and 2020, respectively. Under Accounting Standards Codification Topic 718, Compensation – Stock Compensation At December 31, 2022, the Company had gross federal net operating loss carryforwards of $0.8 million. Due to taxable income, there is no need for a valuation allowance on these amounts at December 31, 2022 or 2021, and the related valuation allowance of $0.1 million was removed at December 31, 2021. At December 31, 2022, the Company had total gross state net operating losses of $9.9 million. Gross state net operating losses of $1.0 million are from the acquisition of Panther and relate to periods ending on or prior to June 15, 2012. State carryforward periods for the remaining Panther net operating losses vary from 10 As the Canadian tax rate is now higher than the U.S. tax rate, it is unlikely that foreign tax credit carryforwards will be useable, as U.S. taxes will be paid at a lower rate than the tax rates in Canada. Thus, the foreign tax credit carryover is fully reserved, resulting in valuation allowances of $1.0 million and $0.8 million at December 31, 2022 and 2021, respectively. Consolidated federal income tax returns filed for tax years through 2018 are closed by the applicable statute of limitations. The Company is not under examination by any federal or foreign taxing authorities at December 31, 2022. The Company is under examination by one state taxing authority at December 31, 2022. At December 31, 2022 and 2021, there was a reserve for uncertain tax positions of $0.9 million related to credits taken on federal returns. For 2022, 2021, and 2020, interest paid or accrued related to foreign and state income taxes was immaterial. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
LEASES | NOTE G – LEASES The Company leases, under finance and operating lease arrangements, certain facilities used primarily in the Asset-Based segment service center operations, certain revenue equipment used in the ArcBest segment operations, and certain other office equipment. Current operating leases have remaining terms of less than 11.3 years, some of which include one or more options to renew, with renewal option terms up to five years. There are no available termination options as of December 31, 2022. The right-of-use assets and lease liabilities as of December 31, 2022 and 2021, do not assume the option to early terminate any of the Company’s leases, and all renewal options that have been exercised or are reasonably certain to be exercised as of December 31, 2022 and 2021, are included in the right-of-use assets and lease liabilities. Variable lease cost for operating leases consists of subsequent changes in the consumer price index, rent payments that are based on usage, and other lease related payments which are subject to change and not considered fixed payments. All fixed lease and non-lease component payments are combined in determining the right-of-use asset and lease liability. The components of operating lease expense were as follows: Year Ended December 31 2022 2021 2020 (in thousands) Operating lease expense $ 31,790 $ 26,552 $ 24,559 Variable lease expense 4,188 4,128 3,152 Sublease income (391) (626) (398) Total operating lease expense (1) $ 35,587 $ 30,054 $ 27,313 (1) Operating lease expense excludes short-term leases with a term of 12 months or less. The operating cash flows from operating lease activity were as follows: Year Ended December 31 2022 2021 2020 (in thousands, except share and per share data) Noncash change in operating right-of-use assets $ 27,465 $ 24,023 $ 21,184 Change in operating lease liabilities (24,513) (23,400) (20,428) Operating right-of-use-assets and lease liabilities, net $ 2,952 $ 623 $ 756 Cash paid for amounts included in the measurement of operating lease liabilities $ (28,830) $ (25,909) $ (23,810) Supplemental balance sheet information related to operating leases was as follows: December 31, 2022 (in thousands, except lease term and discount rate) Land and Equipment Total Structures and Others Operating right-of-use assets (long-term) $ 166,515 $ 165,822 $ 693 Operating lease liabilities (current) $ 26,225 $ 25,824 $ 401 Operating lease liabilities (long-term) 147,828 147,534 294 Total operating lease liabilities $ 174,053 $ 173,358 $ 695 Weighted-average remaining lease term (in years) 7.6 Weighted-average discount rate 3.58% December 31, 2021 (in thousands, except lease term and discount rate) Land and Equipment Total Structures and Others Operating right-of-use assets (long-term) $ 106,686 $ 106,394 $ 292 Operating lease liabilities (current) $ 22,740 $ 22,477 $ 263 Operating lease liabilities (long-term) 88,835 88,810 25 Total operating lease liabilities $ 111,575 $ 111,287 $ 288 Weighted-average remaining lease term (in years) 6.9 Weighted-average discount rate 2.88% Maturities of operating lease liabilities at December 31, 2022 were as follows: Equipment Land and and Total Structures (1) Other (in thousands) 2023 $ 31,868 $ 31,446 $ 422 2024 30,762 30,464 298 2025 26,889 26,889 — 2026 24,442 24,442 — 2027 19,349 19,349 — Thereafter 67,474 67,474 — Total lease payments 200,784 200,064 720 Less imputed interest (26,731) (26,706) (25) Total $ 174,053 $ 173,358 $ 695 (1) Excludes future minimum lease payments for leases which were executed but had not yet commenced as of December 31, 2022, of $32.0 million which will be paid over approximately 10 years . |
LONG-TERM DEBT AND FINANCING AR
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | NOTE H – LONG-TERM DEBT AND FINANCING ARRANGEMENTS Long-Term Debt Obligations Long-term debt consisted of borrowings outstanding under the Company’s revolving credit facility, which is further described in Financing Arrangements within this Note, notes payable and finance lease obligations related to the financing of revenue equipment (tractors and trailers used primarily in Asset-Based segment operations), certain other equipment, and software as follows: December 31 December 31 2022 2021 (in thousands) Credit Facility (interest rate of 5.5% (1) $ 50,000 $ 50,000 Notes payable (weighted-average interest rate of 3.3% at December 31, 2022) 214,623 175,530 Finance lease obligations — 2 264,623 225,532 Less current portion 66,252 50,615 Long-term debt, less current portion $ 198,371 $ 174,917 (1) The interest rate swap mitigates interest rate risk by effectively converting the $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 1.55% and 3.12% based on the margin of the Credit Facility as of December 31, 2022 and 2021, respectively. Scheduled maturities of long term debt obligations as of December 31, 2022 were as follows: Credit Notes Total Facility (1) Payable (in thousands) 2023 $ 75,381 $ 3,045 $ 72,336 2024 67,456 2,008 65,448 2025 93,653 50,000 43,653 2026 31,798 — 31,798 2027 15,773 — 15,773 Thereafter 186 — 186 Total payments 284,247 55,053 229,194 Less amounts representing interest 19,624 5,053 14,571 Long-term debt $ 264,623 $ 50,000 $ 214,623 (1) The future interest payments included in the scheduled maturities due are calculated using variable interest rates based on the SOFR swap curve, plus the anticipated applicable margin, exclusive of payments on the interest rate swap. Assets securing notes payable or held under finance leases at December 31 were included in property, plant and equipment as follows: December 31 December 31 2022 2021 (in thousands) Revenue equipment $ 294,700 $ 241,892 Service, office, and other equipment 41,522 29,773 Total assets securing notes payable or held under finance leases 336,222 271,665 Less accumulated depreciation and amortization (1) 119,244 88,696 Net assets securing notes payable or held under finance leases $ 216,978 $ 182,969 (1) Amortization of assets held under finance leases and depreciation of assets securing notes payable are included in depreciation expense . The Company’s long-term debt obligations have a weighted-average interest rate of 3.0% at December 31, 2022. The Company paid interest of $7.1 million, $8.7 million, and $11.3 million in 2022, 2021, and 2020, respectively, net of capitalized interest which totaled $0.3 million, $0.5 million, and $0.3 million for 2022, 2021, and 2020, respectively. Financing Arrangements Credit Facility The Company has a revolving credit facility (the “Credit Facility”) under its Fourth Amended and Restated Credit Agreement (the “Credit Agreement”), which was amended and restated in October 2022. The amendment, among other things, increased the aggregate amount of the swing line facility from $25.0 million to $40.0 million, extended the scheduled maturity date from October 1, 2024 to October 7, 2027, replaced LIBOR-based interest pricing conventions with interest pricing based on the SOFR, released the liens on the assets of the Company and certain subsidiaries, and released pledges of equity interests in certain subsidiaries. As a result of the amendment, the Credit Facility is now an unsecured facility. However, the indebtedness under the Credit Agreement and certain other obligations owed to lenders or their affiliates are cross-guaranteed by the Company and certain subsidiaries. The Credit Facility has an initial maximum credit amount of $250.0 million, including a swing line facility in an aggregate amount of up to $40.0 million and a letter of credit sub-facility providing for the issuance of letters of credit up to an aggregate amount of $20.0 million. The Company may request additional revolving commitments or incremental term loans thereunder up to an aggregate amount of up to $125.0 million, subject to the satisfaction of certain additional conditions as provided in the Credit Agreement. The Company borrowed and repaid $58.0 million under the Credit Facility during 2022. As of December 31, 2022, the Company had available borrowing capacity of $200.0 million under the initial maximum credit amount of the Credit Facility. Principal payments under the Credit Facility are due upon maturity of the facility on October 7, 2027; however, borrowings may be repaid, at the Company’s discretion, in whole or in part at any time, without penalty, subject to required notice periods and compliance with minimum prepayment amounts. Borrowings under the Credit Agreement can either be, at the Company’s election: (i) at an Alternate Base Rate (as defined in the Credit Agreement) plus a spread ranging from 0.125% to 1.00%, and SOFR adjustment of 0.10% per annum; or (ii) the Adjusted Term SOFR Screen Rate (as defined in the Credit Agreement) plus a spread ranging from 1.125% to 2.00%. The applicable spread is dependent upon the Company’s Adjusted Leverage Ratio (as defined in the Credit Agreement). In addition, the Credit Facility requires the Company to pay a fee on unused commitments. The Credit Agreement contains conditions, representations and warranties, events of default, and indemnification provisions that are customary for financings of this type, including, but not limited to, a minimum interest coverage ratio, a maximum adjusted leverage ratio, and limitations on incurrence of debt, investments, liens on assets, certain sale and leaseback transactions, transactions with affiliates, mergers, consolidations, and sales of assets. The Company was in compliance with the covenants under the Credit Agreement at December 31, 2022. Interest Rate Swaps The Company has a $50.0 million notional amount interest rate swap agreement, which started on June 30, 2022 and will end on October 1, 2024. The interest rate swap agreement was amended in October 2022 to replace LIBOR-based interest pricing conventions with interest pricing based on the SOFR. Under the amended interest rate swap agreement, the Company will receive floating-rate interest amounts based on one-month SOFR in exchange for fixed-rate interest payments of 0.33% throughout the remaining term of the agreement. The amended interest rate swap agreement will effectively convert $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 1.55% based on the margin of the Credit Facility as of December 31, 2022. The fair value of the interest rate swap of $3.5 million and $0.9 million was recorded in other long-term assets at December 31, 2022 and 2021, respectively. The interest rate swap continues to qualify for cash flow hedge accounting through application of expedients provided for contracts affected by reference rate reform. Remeasurement at the modification date or reassessment from the previous accounting determination was not required. The Company also had an interest rate swap agreement with a $50.0 million notional amount which started on January 2, 2020 and matured on June 30, 2022. The fair value of the interest rate swap of $0.5 million was recorded in other long-term liabilities at December 31, 2021. The unrealized gain or loss on the interest rate swap instruments in effect at the balance sheet date was reported as a component of accumulated other comprehensive income, net of tax, in stockholders’ equity at December 31, 2022 and 2021, and the change in the unrealized gain or loss on the interest rate swaps for the years ended December 31, 2022 and 2021 was reported in other comprehensive income (loss), net of tax, in the consolidated statements of comprehensive income. The interest rate swaps are subject to certain customary provisions that could allow the counterparty to request immediate settlement of the fair value liability or asset upon violation of any or all of the provisions. The Company was in compliance with all provisions of the interest rate swap agreement at December 31, 2022. Accounts Receivable Securitization Program The Company’s accounts receivable securitization program, which matures on July 1, 2024, provides available cash proceeds of $50.0 million to be provided under the program and has an accordion feature allowing the Company to request additional borrowings up to $100.0 million, subject to certain conditions. In May 2022, the Company amended its accounts receivable securitization program to, among other things, increase certain ratios, including the delinquency, default, and accounts receivable turnover ratios, as defined in the agreement; add language addressing the potential inclusion of receivables originated by MoLo; and replace LIBOR-based interest pricing conventions with interest pricing based on the SOFR. The program ratios were adjusted to accommodate revenue growth and customer demand for integrated logistics solutions, which has resulted in an increased proportion of total revenues generated by the Company’s Asset-Light operations and, as a result, longer collection periods on the Company’s accounts receivable, as are typical for Asset-Light businesses. Under this program, certain subsidiaries of the Company continuously sell a designated pool of trade accounts receivables to a wholly owned subsidiary which, in turn, may borrow funds on a revolving basis. This wholly owned consolidated subsidiary is a separate bankruptcy-remote entity, and its assets would be available only to satisfy the claims related to the lender’s interest in the trade accounts receivables. Borrowings under the amended accounts receivable securitization program bear interest based upon SOFR, plus a margin, and an annual facility fee. The securitization agreement contains representations and warranties, affirmative and negative covenants, and events of default that are customary for financings of this type, including a maximum adjusted leverage ratio covenant. The Company was in compliance with the covenants under the accounts receivable securitization program at December 31, 2022. The accounts receivable securitization program includes a provision under which the Company may request and the letter of credit issuer may issue standby letters of credit, primarily in support of workers’ compensation and third-party casualty claims liabilities in various states in which the Company is self-insured. The outstanding standby letters of credit reduce the availability of borrowings under the program. As of December 31, 2022, standby letters of credit of $10.0 million have been issued under the program, which reduced the available borrowing capacity to $40.0 million. Letter of Credit Agreements and Surety Bond Programs As of both December 31, 2022 and 2021, the Company had letters of credit outstanding of $10.6 million (including $10.0 million issued under the accounts receivable securitization program). The Company has programs in place with multiple surety companies for the issuance of surety bonds in support of its self-insurance program. As of December 31, 2022 and 2021, surety bonds outstanding related to the self-insurance program totaled $62.6 million and $50.9 million, respectively. Notes Payable The Company has financed the purchase of certain revenue equipment, other equipment, and software through promissory note arrangements. During the year ended December 31, 2022 and 2021, the Company entered into notes payable arrangements, primarily for revenue equipment, of $82.4 million and $59.7 million, respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED EXPENSES. | |
ACCRUED EXPENSES | NOTE I – ACCRUED EXPENSES December 31 2022 2021 (in thousands) Workers’ compensation, third-party casualty, and loss and damage claims reserves $ 133,128 $ 116,535 Accrued vacation pay 58,874 52,746 Accrued compensation, including retirement benefits 122,057 110,755 Taxes other than income 12,443 10,225 Other 15,320 15,590 Total accrued expenses $ 341,822 $ 305,851 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2022 | |
POSTRETIREMENT BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | NOTE J – EMPLOYEE BENEFIT PLANS Supplemental Benefit and Postretirement Health Benefit Plans The Company has an unfunded supplemental benefit plan (the “SBP”) which was designed to supplement benefits under the Company’s legacy nonunion defined benefit pension plan (for which plan termination and liquidation was completed in 2019) for designated executive officers. The SBP was closed to new entrants, and a cap was placed on the maximum payment per participant in the SBP effective January 1, 2006. In place of the SBP, eligible officers of the Company appointed after 2005 participate in a long-term cash incentive plan (see Cash Long-Term Incentive Compensation Plan section within this Note). Effective December 31, 2009, the accrual of benefits for remaining participants under the SBP was frozen. With the exception of early retirement penalties that may apply in certain cases, the valuation inputs for calculating the frozen SBP benefits to be paid to participants, including final average salary and the interest rate, were frozen at December 31, 2009. As presented in the tables within this Note, pension settlement expense and a corresponding reduction in the net actuarial loss was recorded in 2020 related to lump-sum SBP benefit distributions. The SBP did not incur pension settlement expense in 2022 or 2021. The Company sponsors an insured postretirement health benefit plan that provides supplemental medical benefits and dental and vision benefits primarily to certain officers of the Company and certain subsidiaries. Effective January 1, 2011, retirees began paying a portion of the premiums under the plan according to age and coverage levels. The amendment to the plan to implement retiree premiums resulted in an unrecognized prior service credit which was recorded in accumulated other comprehensive loss and was amortized over approximately nine years. The prior service credit was fully amortized as of December 31, 2020. The following table discloses the changes in benefit obligations and plan assets of the Company’s nonunion defined benefit plans for years ended December 31, the measurement date of the plans: Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2022 2021 (in thousands) Change in benefit obligations Benefit obligations, beginning of year $ 381 $ 392 $ 16,992 $ 18,751 Service cost — — 156 192 Interest cost 7 4 441 427 Actuarial gain (1) (50) (15) (4,392) (1,736) Benefits paid — — (663) (642) Benefit obligations, end of year 338 381 12,534 16,992 Change in plan assets Fair value of plan asset, beginning of year — — — — Employer contributions — — 663 642 Benefits paid — — (663) (642) Fair value of plan assets, end of year — — — — Funded status at period end $ (338) $ (381) $ (12,534) $ (16,992) Accumulated benefit obligation $ 338 $ 381 $ 12,534 $ 16,992 (1) The increases in the actuarial gain on the postretirement health benefit plan for 2022 and 2021 are primarily related to increases in the discount rate used to remeasure the plan obligation at December 31, 2022 and 2021 versus December 31, 2021 and 2020, respectively. For 2021, the increase in the actuarial gain was also impacted by lower actual healthcare premium costs than the assumed trend rates. Amounts recognized in the consolidated balance sheets at December 31 consisted of the following: Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2022 2021 Current portion of pension and postretirement liabilities $ — $ — $ (676) $ (640) Pension and postretirement liabilities, less current portion (338) (381) (11,858) (16,352) Liabilities recognized $ (338) $ (381) $ (12,534) $ (16,992) The following is a summary of the components of net periodic benefit cost for the Company’s nonunion benefit plans for the years ended December 31: Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2020 2022 2021 2020 (in thousands) Service cost $ — $ — $ — $ 156 $ 192 $ 187 Interest cost 7 4 9 441 427 576 Amortization of prior service credit — — — — — (1) Pension settlement expense — — 89 — — — Amortization of net actuarial (gain) loss (1) 8 9 8 (765) (548) (597) Net periodic benefit cost (credit) $ 15 $ 13 $ 106 $ (168) $ 71 $ 165 (1) The Company amortizes actuarial gains and losses over the average remaining active service period of the plan participants and does not use a corridor approach. The following is a summary of the pension settlement distributions and pension settlement expense for the years ended December 31: Supplemental Benefit Plan 2022 2021 2020 (1) Pension settlement distributions $ — $ — $ 2,887 Pension settlement expense, pre-tax $ — $ — $ 89 Pension settlement expense per diluted share, net of taxes $ — $ — $ — (1) The 2020 SBP distributions include the portion of a benefit related to an officer retirement that occurred in 2019 which was delayed for six months after retirement in accordance with IRC Section 409A. Included in accumulated other comprehensive loss at December 31 were the following pre-tax amounts that have not yet been recognized in net periodic benefit cost: Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2022 2021 Unrecognized net actuarial (gain) loss $ (18) $ 40 $ (9,269) $ (5,642) The discount rate is determined by matching projected cash distributions with appropriate high-quality corporate bond yields in a yield curve analysis. Weighted-average assumptions used to determine nonunion benefit obligations at December 31 were as follows: Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2022 2021 Discount rate 4.6 % 1.8 % 5.0 % 2.7 % Weighted-average assumptions used to determine net periodic benefit cost for the Company’s nonunion benefit plans for the years ended December 31 were as follows: Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2020 2022 2021 2020 Discount rate 1.8 % 1.1 % 2.4 % 2.7 % 2.3 % 3.1 % The assumed health care cost trend rates for the Company’s postretirement health benefit plan at December 31 were as follows: 2022 2021 Health care cost trend rate assumed for next year (1) 7.0 % 7.0 % Rate to which the cost trend rate is assumed to decline 4.5 % 4.5 % Year that the rate reaches the cost trend assumed rate 2034 2033 (1) At each December 31 measurement date, health care cost rates for the following year are based on known premiums for the fully insured postretirement health benefit plan. Therefore, the first year of assumed health care cost trend rates presented as of December 31, 2022 and 2021 are for 2024 and 2023, respectively. Estimated future benefit payments from the Company’s SBP and postretirement health benefit plans, which reflect expected future service as appropriate, as of December 31, 2022 are as follows: Supplemental Postretirement Benefit Health Plan Benefit Plan 2023 $ — $ 676 2024 $ — $ 676 2025 $ — $ 729 2026 $ — $ 734 2027 $ — $ 740 2028-2032 $ 424 $ 3,705 Deferred Compensation Plans The Company has deferred salary agreements with certain executives for which liabilities of $1.3 million and $1.5 million were recorded as of December 31, 2022 and 2021, respectively. The deferred salary agreements include a provision that immediately vests all benefits and provides for a lump-sum payment upon a change in control of the Company that is followed by a termination of the executive. The deferred salary agreement program was closed to new entrants effective January 1, 2006. In place of the deferred salary agreement program, officers appointed after 2005 participate in the Long-Term Incentive Plan (see Long-Term Incentive Compensation Plan section within this Note). The Company maintains a Voluntary Savings Plan (“VSP”), a nonqualified deferred compensation program for the benefit of certain executives of the Company and certain subsidiaries. Eligible employees may defer receipt of a portion of their salary and incentive compensation into the VSP by making an election prior to the beginning of the year in which the salary compensation is payable and, for incentive compensation, by making an election at least six months prior to the end of the performance period to which the incentive relates. The Company credits participants’ accounts with applicable rates of return based on a portfolio selected by the participants from the investments available in the plan. The Company match related to the VSP was suspended beginning January 1, 2010. All deferrals, Company match, and investment earnings are considered part of the general assets of the Company until paid. Accordingly, the consolidated balance sheets reflect the fair value of the aggregate participant balances, based on quoted prices of the mutual fund investments, as both an asset and a liability of the Company. As of December 31, 2022 and 2021, VSP balances of $4.0 million and $3.8 million, respectively, were included in other long-term assets liabilities Defined Contribution Plans The Company and its subsidiaries have defined contribution 401(k) plans that cover substantially all nonunion employees. The plans permit participants to defer a portion of their salary up to a maximum of 69% as determined under Section 401(k) of the IRC. For certain participating subsidiaries, the Company matches 50% of nonunion participant contributions up to the first 6% of annual compensation. The Company’s matching expense for the nonunion 401(k) plans totaled $9.4 million, $7.7 million, and $4.6 million for 2022, 2021, and 2020, respectively. The Company’s matching expense for 2020 was impacted by the cost reduction actions implemented in April 2020 in response to the COVID-19 pandemic, which included suspension of the employer match on the nonunion 401(k) plans for the second quarter of 2020. The plans also allow for discretionary 401(k) Company contributions determined annually. The Company recognized expense of $19.1 million, $16.8 million, and $12.6 million in 2022, 2021, and 2020, respectively, related to its discretionary contributions to the nonunion defined contribution 401(k) plans. Participants are fully vested in the Company’s contributions under the defined contribution 401(k) plans after three years of service. Long-Term Incentive Compensation Plan The Company maintains a performance-based Long-Term Incentive Compensation Plan (“LTIP”) for certain officers of the Company or its subsidiaries. The LTIP incentive, which is earned over three years, is based, in part, upon a proportionate weighting of return on capital employed and shareholder returns compared to a peer group, as specifically defined in the plan document. As of December 31, 2022, 2021, and 2020, $29.5 million, $28.3 million, $14.2 million, respectively, were accrued for future payments under the plans. Other Plans Other long-term assets include $54.7 million and $57.2 million at December 31, 2022 and 2021, respectively, in the cash surrender value of life insurance policies. These policies are intended to provide funding for certain of the Company’s long-term nonunion benefit plans. A portion of the Company’s cash surrender value of variable life insurance policies have investments, through separate accounts, in equity and fixed income securities and, therefore, are subject to market volatility. The Company recognized a loss of $2.7 million for 2022, and a gain of $4.1 million and $2.3 million for 2021 and 2020, respectively, associated with changes in the cash surrender value and proceeds from life insurance policies. Multiemployer Plans ABF Freight System, Inc. and certain other subsidiaries reported in the Company’s Asset-Based operating segment (“ABF Freight”) contribute to multiemployer pension and health and welfare plans, which have been established pursuant to the Labor Management Relations Act of 1947 The multiemployer plans to which ABF Freight primarily contributes are jointly trusteed (half of the trustees of each plan are selected by the participating employers, the other half by the IBT) and cover collectively bargained employees of multiple unrelated employers. Due to the inherent nature of multiemployer plans, there are risks associated with participation in these plans that differ from single employer plans. Assets received by the plans are not segregated by employer, and contributions made by one employer can be and are used to provide benefits to current and former employees of other employers. If a participating employer in a multiemployer pension plan no longer contributes to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. If a participating employer in a multiemployer pension plan completely withdraws from the plan, it owes to the plan its proportionate share of the plan’s unfunded vested benefits, referred to as a withdrawal liability. A complete withdrawal generally occurs when the employer permanently ceases to have an obligation to contribute to the plan. Withdrawal liability is also owed in the event the employer withdraws from a plan in connection with a mass withdrawal, which generally occurs when all or substantially all employers withdraw from the plan pursuant to an agreement in a relatively short period of time. Were ABF Freight to completely withdraw from certain multiemployer pension plans, whether in connection with a mass withdrawal or otherwise, under current law, ABF Freight would have material liabilities for its share of the unfunded vested liabilities of each such plan. Pension Plans The 25 multiemployer pension plans to which ABF Freight contributes vary greatly in size and in funded status. Contributions to these plans are based generally on the time worked by ABF Freight’s contractual employees, at rates specified in the 2018 ABF NMFA, which will remain in effect through June 30, 2023. The funding obligations to the pension plans are intended to satisfy the requirements imposed by the Pension Protection Act of 2006 Multiemployer Pension Reform Act of 2014 Consolidated and Further Continuing Appropriations Act of 2015 The PPA requires that “endangered” (generally less than 80% funded and commonly called “yellow zone”) plans adopt “funding improvement plans” and that “critical” (generally less than 65% funded and commonly called “red zone”) plans adopt “rehabilitation plans” that are intended to improve the plan’s funded status over time. The Reform Act includes provisions to address the funding of multiemployer pension plans in “critical and declining” status, including certain of those in which ABF Freight participates. Critical and declining status is applicable to critical status plans that are projected to become insolvent anytime within the next 14 plan years, or if the plan is projected to become insolvent within the next 19 plan years and either the plan’s ratio of inactive participants to active participants exceeds two to one or the plan’s funded percentage is less than 80%. Provisions of the Reform Act include, among others, providing qualifying plans the ability to self - On March 11, 2021, H.R.1319, the American Rescue Plan Act of 2021 Butch Lewis Emergency Pension Plan Relief Act of 2021 On July 9, 2021, the PBGC announced an interim final rule implementing a Special Financial Assistance Program (the “SFA Program”) to administer funds to severely underfunded eligible multiemployer pension plans under the Pension Relief Act. Certain multiemployer pension plans to which ABF Freight contributes, including the Central States, Southeast and Southwest Areas Pension Plan (the “Central States Pension Plan”), have applied for or received funds under the SFA Program which could allow them to avoid insolvency and improve their funded status. Under the American Rescue Plan Act and in accordance with regulations of the PBGC, the plans receiving funding under the SFA Program are not permitted to reduce employer contributions to their funds. The Company will continue to evaluate the impact of the assistance provided by the SFA Program on ABF Freight’s multiemployer pension plan contributions. Through the term of the 2018 ABF NMFA, ABF Freight’s multiemployer pension contribution obligations generally will be satisfied by making the specified contributions when due. Future contribution rates will be determined through the negotiation process for contract periods following the term of the current collective bargaining agreement. While the Company cannot determine with any certainty the contributions that will be required under future collective bargaining agreements for ABF Freight’s contractual employees, management believes future contribution rates to multiemployer pension plans may be less likely to increase as a result of the provisions of the Pension Relief Act. Based on the most recent annual funding notices the Company has received, most of which are for plan year ended December 31, 2021 and prior to financial assistance from the SFA Program, approximately 56% of ABF Freight’s multiemployer pension plan contributions for the year ended December 31, 2022 were made to plans that are in “critical and declining status,” including the Central States Pension Plan discussed below; approximately 4% were made to plans that are in “critical status” but not “critical and declining status;” and approximately 4% were made to plans that are in “endangered status,” each as defined by the PPA. ABF Freight’s participation in multiemployer pension plans is summarized in the table below. The multiemployer pension plans listed separately in the table represent plans that are individually significant to the Asset-Based segment based on the amount of plan contributions. The Central States Pension Plan is the only fund individually listed in the table which received financial assistance from the SFA Program. The severity of a plan’s underfunded status considered in the analysis of individually significant funds to be separately disclosed was prior to financial assistance from the SFA Program. Significant multiemployer pension funds and key participation information were as follows: Pension FIP/RP Protection Act Status Contributions (d) EIN/Pension Zone Status (b) Pending/ (in thousands) Surcharge Legal Name of Plan Plan Number (a) 2022 2021 Implemented (c) 2022 2021 2020 Imposed (e) Central States, Southeast and Southwest Areas Pension Plan (1)(2) 36-6044243 Critical and Declining Critical and Declining Implemented (3) $ 75,306 $ 71,045 $ 68,704 No Western Conference of Teamsters Pension Plan (2) 91-6145047 Green Green No 28,051 25,861 23,633 No Central Pennsylvania Teamsters Defined Benefit Plan (1)(2) 23-6262789 Green Green No 14,421 13,931 13,485 No I. B. of T. Union Local No. 710 Pension Fund (5)(6) 36-2377656 Green (4) Green (4) No 9,838 9,553 9,885 No New England Teamsters Pension Fund (7)(8) 04-6372430 Critical and Declining (9) Critical and Declining (9) Implemented (10) 4,449 4,357 4,464 No All other plans in the aggregate 22,493 22,146 22,023 Total multiemployer pension contributions paid (11) $ 154,558 $ 146,893 $ 142,194 Table Heading Definitions (a) The “EIN/Pension Plan Number” column provides the Federal Employer Identification Number (“EIN”) and the three-digit plan number, if applicable. (b) Unless otherwise noted, the most recent PPA zone status available in 2022 and 2021 is for the plan’s year-end status at December 31, 2021 and 2020, respectively, and prior to financial assistance from the Pension Relief Act. The zone status is based on information received from the plan and was certified by the plan’s actuary. Green zone funds are those that are in neither endangered, critical, or critical and declining status and generally have a funded percentage of at least 80% . (c) The “FIP/RP Status Pending/Implemented” column indicates if a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”), if applicable, is pending or has been implemented. (d) Amounts reflect contributions made in the respective year and differ from amounts expensed during the year. (e) The surcharge column indicates if a surcharge was paid by ABF Freight to the plan. Table Footnotes (1) ABF Freight System, Inc. was listed by the plan as providing more than 5% of the total contributions to the plan for the plan years ended December 31, 2021 and 2020. (2) Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500 filed for the plan years ended December 31, 2021 and 2020. (3) Adopted a rehabilitation plan effective March 25, 2008 as updated. Utilized amortization extension granted by the IRS effective December 31, 2003. (4) PPA zone status relates to plan years February 1, 2021 – January 31, 2022 and February 1, 2020 – January 31, 2021. (5) The Company was listed by the plan as providing more than 5% of the total contributions to the plan for the plan year ended January 31, 2020. (6) Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500 filed for the plan years ended January 31, 2022 and 2021. (7) Contributions include $1.6 million each year for 2022, 2021, and 2020, related to the multiemployer pension fund withdrawal liability. ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund was restructured under a transition agreement effective on August 1, 2018, which triggered a withdrawal liability settlement to satisfy ABF Freight’s existing potential withdrawal liability obligation to the fund. ABF Freight recognized a one-time charge of $37.9 million (pre-tax) to record the withdrawal liability in second quarter 2018; partially settled the withdrawal liability through the initial lump sum cash payment of $15.1 million made in third quarter 2018; and will settle the remainder with monthly payments over a remaining period of 19 years . (8) Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500 filed for the plan years ended September 30, 2021 and 2020. (9) PPA zone status relates to plan years October 1, 2021 – September 30, 2022 and October 1, 2020 – September 30, 2021. (10) Adopted a rehabilitation plan effective January 1, 2009. (11) Contribution levels can be impacted by several factors such as changes in business levels and the related time worked by contractual employees, contractual rate increases for pension benefits, and the specific funding structure, which differs among funds. The 2018 ABF NMFA and the related supplemental agreements provided for contributions to multiemployer pension plans to be frozen at the current rates for each fund, although certain funds have imposed contribution increases under their rehabilitation or funding improvement plans. The year-over-year changes in multiemployer pension plan contributions presented above were influenced by changes in Asset-Based business levels. An increase in hours worked by ABF Freight’s contractual employees and additional contractual employees hired in 2022 to service higher shipment levels resulted in an increase in multiemployer pension contributions for 2022, compared to 2021. For 2022, 2021, and 2020, approximately one half of ABF Freight’s multiemployer pension contributions were made to the Central States Pension Plan. The funded percentages of the Central States Pension Plan, as set forth in information provided by the Central States Pension Plan, were 17.1%, and 19.5% as of January 1, 2021 and 2020, respectively. ABF Freight received a Notice of Critical and Declining Status for the Central States Pension Plan dated March 30, 2022, in which the plan’s actuary certified that, as of January 1, 2022, the plan is in critical and declining status, as defined by the Reform Act. The Central States Pension Plan was approved for assistance under the SFA Program during 2022 and received the funding in January 2023. The plan announced that the SFA Program funding will allow the Central States Pension Plan to avoid insolvency in 2025 and to reach full funding over time. Prior to 2020, the Company received notices that a reduction of benefits was authorized by the Treasury Department for the Western Pennsylvania Teamsters and Employers Pension Fund and the New York State Teamsters Conference Pension and Retirement Fund. The Company also previously received notice that the PBGC will provide financial assistance (by paying retiree benefits not to exceed the PBGC guarantee limits) to the Road Carriers Local 707 Pension Fund, which was declared insolvent. Approximately 1% of ABF Freight’s total multiemployer pension contributions for the year ended December 31, 2022 ABF Freight has not received any other notification of plan reorganization or plan insolvency with respect to any multiemployer pension plan to which it contributes. Health and Welfare Plans ABF Freight contributes to 38 multiemployer health and welfare plans which provide health care benefits for active employees and retirees covered under labor agreements. Contributions to multiemployer health and welfare plans totaled $194.4 million, $176.2 million, and $163.8 million, for the year ended December 31, 2022, 2021, and 2020, respectively. The benefit contribution rate for health and welfare benefits increased by an average of approximately 4.3% primarily on both August 1, 2022 and 2021, and approximately 4.0% primarily on August 1, 2020, under the ABF Freight’s collective bargaining agreement with the IBT. In 2022, more hours worked by ABF Freight’s contractual employees, as well as the hiring of additional contractual employees to service higher shipment levels resulted in an increase in contributions to multiemployer health and welfare plans in 2022, compared to 2021. Other than changes to benefit contribution rates and variances in rates and time worked, there have been no other significant items that affect the comparability of the Company’s 2022, 2021, and 2020 multiemployer health and welfare plan contributions. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE K – STOCKHOLDERS’ EQUITY Accumulated Other Comprehensive Income Components of accumulated other comprehensive income were as follows at December 31: 2022 2021 2020 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit credit $ 9,287 $ 5,602 $ 4,390 Interest rate swap 3,526 419 (1,622) Foreign currency translation (3,247) (1,044) (1,182) Total $ 9,566 $ 4,977 $ 1,586 After-tax amounts: Unrecognized net periodic benefit credit $ 6,896 $ 4,160 $ 3,260 Interest rate swap 2,604 309 (1,198) Foreign currency translation (2,397) (770) (872) Total $ 7,103 $ 3,699 $ 1,190 The following is a summary of the changes in accumulated other comprehensive income, net of tax, by component: Unrecognized Interest Foreign Net Periodic Rate Currency Total Benefit Credit Swap Translation (in thousands) Balances at December 31, 2020 $ 1,190 $ 3,260 $ (1,198) $ (872) Other comprehensive income before reclassifications 2,909 1,300 1,507 102 Amounts reclassified from accumulated other comprehensive income (400) (400) — — Net current-period other comprehensive income 2,509 900 1,507 102 Balances at December 31, 2021 $ 3,699 $ 4,160 $ 309 $ (770) Other comprehensive income (loss) before reclassifications 3,966 3,298 2,295 (1,627) Amounts reclassified from accumulated other comprehensive income (562) (562) — — Net current-period other comprehensive income (loss) 3,404 2,736 2,295 (1,627) Balances at December 31, 2022 $ 7,103 $ 6,896 $ 2,604 $ (2,397) The following is a summary of the significant reclassifications out of accumulated other comprehensive income by component for the years ended December 31: Unrecognized Net Periodic Benefit Credit (1)(2) 2022 2021 (in thousands) Amortization of net actuarial gain, pre-tax $ 757 $ 539 Tax expense (195) (139) Total, net of tax $ 562 $ 400 (1) Amounts in parentheses indicate increases in expense or loss. (2) These components of accumulated other comprehensive income are included in the computation of net periodic benefit cost (credit) (see Note J). Dividends on Common Stock The following table is a summary of dividends declared during the applicable quarter: 2022 2021 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ 0.08 $ 1,978 $ 0.08 $ 2,037 Second quarter $ 0.12 $ 2,949 $ 0.08 $ 2,058 Third quarter $ 0.12 $ 2,965 $ 0.08 $ 2,050 Fourth quarter $ 0.12 $ 2,938 $ 0.08 $ 1,994 On January 30, 2023, the Company’s Board of Directors declared a dividend of $0.12 per share to stockholders of record as of February 14, 2023. Treasury Stock The Company has a program to repurchase its common stock in the open market or in privately negotiated transactions (the “share repurchase program”). The share repurchase program has no expiration date but may be terminated at any time at the Board of Directors’ discretion. Repurchases may be made using the Company’s cash reserves or other available sources. On November 2, 2021, the Company entered into a fixed dollar accelerated share repurchase program (“ASR”) with a third-party financial institution to effect an accelerated repurchase of $100.0 million of the Company’s common stock, of which $75.0 million was repurchased during 2021. The remaining $25.0 million available under the ASR was recorded as an unsettled forward contract within stockholders’ equity as additional paid-in capital as of December 31, 2021. During 2022, the Company purchased 822,106 shares of its common stock for an aggregate cost of $65.0 million and purchased 214,763 shares to settle the remaining $25.0 million under the ASR. In April 2022, the Board of Directors reauthorized the share repurchase program and increased the total amount available for purchases of the Company’s common stock under the program to $75.0 million. The Company had $26.5 million remaining under its share repurchase program as of December 31, 2022. Treasury shares totaled 5,529,383 and 4,492,514 as of December 31, 2022 and 2021, respectively. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE L – SHARE-BASED COMPENSATION Stock Awards The Company had outstanding RSUs granted under the ArcBest Corporation Ownership Incentive Plan (the “Ownership Incentive Plan”) as of December 31, 2022 and 2021. The Ownership Incentive Plan provides for the granting of 4.9 million shares, which may be awarded as incentive and nonqualified stock options, stock appreciation rights, restricted stock, RSUs, or performance award units. Restricted Stock Units A summary of the Company’s RSU award program is presented below: Weighted-Average Grant Date Units Fair Value Outstanding – January 1, 2022 1,482,399 $ 29.25 Granted 164,739 $ 78.57 Vested (601,441) $ 26.08 Forfeited (1) (22,446) $ 39.74 Outstanding – December 31, 2022 1,023,251 $ 38.83 (1) Forfeitures are recognized as they occur. The Compensation Committee of the Company’s Board of Directors granted RSUs during the years ended December 31 as follows: k Weighted-Average Grant Date Units Fair Value 2022 164,739 $ 78.57 2021 136,295 $ 86.96 2020 579,660 $ 19.22 The fair value of restricted stock awards that vested in 2022, 2021, and 2020 was $48.1 million, $36.4 million, and $7.8 million, respectively. Unrecognized compensation cost related to restricted stock awards outstanding as of December 31, 2022 was $16.2 million, which is expected to be recognized over a weighted-average period of approximately 1.2 years. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE M – EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31: 2022 2021 2020 (in thousands, except share and per share data) Basic Numerator: Net income $ 298,209 $ 213,521 $ 71,100 Denominator: Weighted-average shares 24,585,205 25,471,939 25,410,232 Earnings per common share $ 12.13 $ 8.38 $ 2.80 Diluted Numerator: Net income $ 298,209 $ 213,521 $ 71,100 Denominator: Weighted-average shares 24,585,205 25,471,939 25,410,232 Effect of dilutive securities 919,303 1,300,187 1,012,291 Adjusted weighted-average shares and assumed conversions 25,504,508 26,772,126 26,422,523 Earnings per common share $ 11.69 $ 7.98 $ 2.69 |
OPERATING SEGMENT DATA
OPERATING SEGMENT DATA | 12 Months Ended |
Dec. 31, 2022 | |
OPERATING SEGMENT DATA | |
OPERATING SEGMENT DATA | NOTE N – 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’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 ArcBest segment, including 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, dedicated, intermodal, household goods moving, managed transportation, warehousing and distribution, and international freight transportation for air, ocean, and ground. The ArcBest segment provides services to the Asset-Based segment. ● 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. 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 reporting 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, 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 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 table reflects reportable operating segment information for the years ended December 31: 2022 2021 2020 (in thousands) REVENUES Asset-Based $ 3,010,900 $ 2,573,773 $ 2,092,031 ArcBest (1) 2,139,272 1,300,626 779,115 FleetNet 343,056 254,087 205,049 Other and eliminations (169,176) (148,419) (136,032) Total consolidated revenues $ 5,324,052 $ 3,980,067 $ 2,940,163 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 1,293,487 $ 1,198,253 $ 1,095,694 Fuel, supplies, and expenses 378,558 266,139 209,095 Operating taxes and licenses 52,290 49,461 49,300 Insurance 47,382 37,800 33,568 Communications and utilities 18,949 18,773 17,916 Depreciation and amortization 97,322 93,799 94,326 Rents and purchased transportation 441,167 364,345 250,159 Shared services 281,698 263,532 217,258 Gain on sale of property and equipment (2) (12,468) (8,676) (3,309) Innovative technology costs (3) 27,207 27,631 22,458 Other 4,175 2,009 6,701 Total Asset-Based 2,629,767 2,313,066 1,993,166 ArcBest (1) Purchased transportation 1,784,668 1,097,332 649,933 Supplies and expenses 15,815 10,531 9,627 Depreciation and amortization (4) 20,730 11,387 9,714 Shared services 218,133 132,137 90,983 Gain on sale of subsidiary (5) (402) (6,923) — Other (6) 47,603 9,765 9,203 Total ArcBest 2,086,547 1,254,229 769,460 FleetNet 337,231 249,543 201,682 Other and eliminations (128,762) (117,757) (122,423) Total consolidated operating expenses $ 4,924,783 $ 3,699,081 $ 2,841,885 OPERATING INCOME Asset-Based $ 381,133 $ 260,707 $ 98,865 ArcBest (1) 52,725 46,397 9,655 FleetNet 5,825 4,544 3,367 Other and eliminations (40,414) (30,662) (13,609) Total consolidated operating income $ 399,269 $ 280,986 $ 98,278 OTHER INCOME (COSTS) Interest and dividend income $ 3,957 $ 1,275 $ 3,616 Interest and other related financing costs (7,701) (8,904) (11,697) Other, net (7) (2,370) 3,797 2,299 Total other costs (6,114) (3,832) (5,782) INCOME BEFORE INCOME TAXES $ 393,155 $ 277,154 $ 92,496 (1) For 2022 and 2021, includes the operations of MoLo since the November 1, 2021 acquisition (see Note D). (2) For 2022, includes 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. For 2021, includes an $8.6 million gain on the sale of unutilized service center property. (3) Represents costs associated with the freight handling pilot test program at ABF Freight. (4) Depreciation and amortization includes amortization of intangibles associated with acquired businesses. (5) Gain recognized relates to the sale of the labor services portion of the ArcBest segment’s moving business in second quarter 2021, including the contingent amount recognized in second quarter 2022 when the funds were released from escrow. (6) For 2022 , includes the increase in fair value of the contingent earnout consideration of $18.3 million recorded for the MoLo acquisition (see Note D). (7) Includes the components of net periodic benefit cost other than service cost related to the Company’s SBP and postretirement plans (see Note J) and proceeds and changes in cash surrender value of life insurance policies. The following table reflects information about revenues from customers and intersegment revenues: 2022 2021 2020 (in thousands) Revenues from customers Asset-Based $ 2,896,284 $ 2,470,529 $ 1,998,549 ArcBest 2,128,394 1,291,679 770,560 FleetNet 295,043 213,882 166,654 Other 4,331 3,977 4,400 Total consolidated revenues $ 5,324,052 $ 3,980,067 $ 2,940,163 Intersegment revenues Asset-Based $ 114,616 $ 103,244 $ 93,482 ArcBest 10,878 8,947 8,555 FleetNet 48,013 40,205 38,395 Other and eliminations (173,507) (152,396) (140,432) Total intersegment revenues $ — $ — $ — Total segment revenues Asset-Based $ 3,010,900 2,573,773 $ 2,092,031 ArcBest (1) 2,139,272 1,300,626 779,115 FleetNet 343,056 254,087 205,049 Other and eliminations (169,176) (148,419) (136,032) Total consolidated revenues (1) $ 5,324,052 $ 3,980,067 $ 2,940,163 (1) For 2022 and 2021, includes the operations of MoLo since the November 1, 2021 acquisition (see Note D). The following table provides capital expenditure and depreciation and amortization information by reportable operating segment: For the year ended December 31 2022 2021 2020 (in thousands) CAPITAL EXPENDITURES, GROSS Asset-Based (1) $ 137,117 $ 96,180 $ 85,135 ArcBest 14,372 9,565 1,258 FleetNet 1,439 1,174 675 Other and eliminations (2)(3) 77,720 11,193 17,983 $ 230,648 $ 118,112 $ 105,051 For the year ended December 31 2022 2021 2020 (in thousands) DEPRECIATION AND AMORTIZATION EXPENSE (2) Asset-Based $ 97,322 $ 93,799 $ 94,326 ArcBest (4) 20,730 11,387 9,714 FleetNet (5) 1,880 1,661 1,622 Other and eliminations (2) 20,107 17,374 12,729 $ 140,039 $ 124,221 $ 118,391 (1) Includes assets acquired through notes payable of $79.0 million, $59.7 million, and $61.8 million in 2022, 2021, and 2020, respectively. (2) Other and eliminations includes certain assets held for the benefit of multiple segments, including information systems equipment. For 2022, also includes the purchase of a property for $37.5 million. 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 $3.4 million in 2022. (4) Includes amortization of intangibles of $12.9 million, $5.3 million, and $3.7 million in 2022, 2021, and 2020, respectively. (5) Includes amortization of intangibles which totaled less than $0.1 million in both 2022 and 2021, and $0.2 million in 2020. 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 Company incurred research and development costs of $40.8 million and $32.8 million for the year ended December 31, 2022 and 2021, respectively, related to innovative technology initiatives. The following table presents operating expenses by category on a consolidated basis: For the year ended December 31 2022 (1) 2021 (1) 2020 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 1,755,947 $ 1,550,859 $ 1,368,588 Rents, purchased transportation, and other costs of services 2,404,701 1,570,050 974,835 Fuel, supplies, and expenses 444,776 324,380 250,221 Depreciation and amortization (2) 140,039 124,221 118,391 Other (3) 179,320 129,571 129,850 $ 4,924,783 $ 3,699,081 $ 2,841,885 (1) For 2022 and 2021, includes the operations of MoLo since the November 1, 2021 acquisition (see Note D). (2) Includes amortization of intangibles assets. (3) For 2022 , includes the increase in fair value of the contingent earnout consideration of $18.3 million recorded by the ArcBest segment for the MoLo acquisition (see Note D). For 2021, includes a $6.9 million gain related to the sale of a subsidiary within the ArcBest segment and an $8.6 million gain related to the sale of an unutilized service center property within the Asset-Based segment. |
LEGAL PROCEEDINGS, ENVIRONMENTA
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | |
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | NOTE O – LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS The Company is involved in various legal actions arising in the ordinary course of business. The Company maintains liability insurance against certain risks arising out of the normal course of its business, subject to certain self-insured retention limits. The Company routinely establishes and reviews the adequacy of reserves for estimated legal, environmental, and self-insurance exposures. While management believes that amounts accrued in the consolidated financial statements are adequate, estimates of these liabilities may change as circumstances develop. Considering amounts recorded, routine legal matters are not expected to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Legal Proceedings In January 2023, the Company and MoLo were named as defendants in lawsuits related to an auto accident which involved a MoLo contract carrier. The accident occurred prior to the Company’s acquisition of MoLo on November 1, 2021. The Company intends to vigorously defend against these lawsuits. The Company believes that a loss related to this matter is reasonably possible. The Company cannot estimate the amount or a range of reasonably possible losses for this matter, if any, at this time; however, it is reasonably possible that such amounts could be material to the Company’s financial condition, results of operations, or cash flows. The Company will pursue recovery for its losses, if any, against all available sources, including, but not limited to, insurance and any potentially responsible third parties. Environmental Matters The Company’s subsidiaries store fuel for use in tractors and trucks in underground tanks at certain facilities. Maintenance of such tanks is regulated at the federal and, in most cases, state levels. The Company believes it is in substantial compliance with all such regulations. The Company’s underground storage tanks are required to have leak detection systems. The Company is not aware of any leaks from such tanks that could reasonably be expected to have a material adverse effect on the Company. The Company has received notices from the Environmental Protection Agency (the “EPA”) and others that it has been identified as a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act of 1980 , as amended, or other federal or state environmental statutes, at several hazardous waste sites. After investigating the Company’s involvement in waste disposal or waste generation at such sites, the Company has either agreed to de minimis settlements or determined that its obligations, other than those specifically accrued with respect to such sites, would involve immaterial monetary liability, although there can be no assurances in this regard. The Company maintains a reserve within accrued expenses for estimated environmental cleanup costs of properties currently or previously operated by the Company. Amounts accrued reflect management’s best estimate of the future undiscounted exposure related to identified properties based on current environmental regulations, management’s experience with similar environmental matters, and testing performed at certain sites. Certain Asset-Based service center facilities operate with no exposure certifications or stormwater permits under the federal Clean Water Act Other Events In February 2021, the Company received a Notice of Assessment from a state pertaining to uncollected sales and use tax, including interest and penalties, for the period September 1, 2016 to November 30, 2018. The Company does not agree with the basis of the assessment and filed an appeal in May 2021. The Company has previously accrued an amount related to this assessment consistent with applicable accounting guidance, but if the state prevails in its position, the Company may owe additional tax. Management does not believe the resolution of this matter will have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES ARCBEST CORPORATION Balances at Additions Balances at Beginning of Charged to Costs Charged to End of Description Period and Expenses Other Accounts Deductions Period (in thousands) Year Ended December 31, 2022 Deducted from asset accounts: Allowance for credit losses and revenue adjustments $ 13,226 $ 6,955 $ 2,837 (a) $ 8,846 (b) $ 14,172 Allowance for other accounts receivable $ 690 $ 23 (c) $ — $ — $ 713 Allowance for deferred tax assets $ 2,196 $ — $ — $ 489 (d) $ 1,707 Year Ended December 31, 2021 Deducted from asset accounts: Allowance for credit losses and revenue adjustments $ 7,851 $ 1,466 $ 7,788 (a)(e) $ 3,879 (b) $ 13,226 Allowance for other accounts receivable $ 660 $ 30 (c) $ — $ — $ 690 Allowance for deferred tax assets $ 1,284 $ — $ — $ (912) (d) $ 2,196 Year Ended December 31, 2020 Deducted from asset accounts: Allowance for credit losses and revenue adjustments $ 5,448 $ 4,327 $ 1,887 (a) $ 3,811 (b) $ 7,851 Allowance for other accounts receivable $ 476 $ (14) (c) $ 198 (f) $ — $ 660 Allowance for deferred tax assets $ 668 $ — $ — $ (616) (d) $ 1,284 (a) Change in allowance due to recoveries of amounts previously written off and revenue adjustments. (b) Includes uncollectible accounts written off and revenue adjustments. (c) Charged (credited) to workers’ compensation expense. (d) Change in allowance due to changes in expectations of realization of certain federal and state net operating losses and federal and state deferred tax assets. (e) Includes allowance assumed in the acquisition of MoLo Solutions, LLC. (See Note D to the Company’s consolidated financial statements included in Part II, Item 8 of the Annual Report on Form 10-K). (f) Charged to retained earnings as of January 1, 2020 due to the adoption of Accounting Standards Codification Topic 326, Financial Instruments – Credit Losses. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTING POLICIES | |
Consolidation | Consolidation: |
Segment Information | Segment Information: |
Use of Estimates | Use of Estimates: |
Cash, Cash Equivalents, and Short-Term Investments | Cash, Cash Equivalents, and Short-Term Investments: Certificates of deposit are valued at cost plus accrued interest, which approximates fair value. Held-to-maturity U.S. Treasury securities are recorded at amortized cost with interest and amortization of premiums and discounts included in interest income. Quarterly, the Company evaluates held-to-maturity securities for any other-than-temporary impairments related to any intention to sell or requirement to sell before its amortized costs are recovered. If a security is considered to be other-than-temporarily impaired, the difference between amortized cost and the amount that is determined to be recoverable is recorded in earnings. |
Concentration of Credit Risk | Concentration of Credit Risk: The Company’s services are provided primarily to customers throughout the United States and, to a lesser extent, Canada, Mexico, and other international locations. On a consolidated basis, the Company had no single customer representing more than 3% of its revenues in 2022, 2021, or 2020 or more than 7% of its accounts receivable balance at December 31, 2022 and 2021. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. Historically, credit losses have been within management’s expectations. |
Receivable Allowances | Receivable Allowances: |
Property, Plant and Equipment, Including Repairs and Maintenance | Property, Plant and Equipment, Including Repairs and Maintenance: |
Computer Software for Internal Use, Including Web Site Development and Cloud Computing Costs | Computer Software for Internal Use, Including Web Site Development and Cloud Computing Costs: |
Impairment Assessment of Long-Lived Assets | Impairment Assessment of Long-Lived Assets: . Assets to be disposed of are reclassified as assets held for sale at the lower of their carrying amount or fair value less cost to sell. Assets held for sale primarily represent Asset-Based segment nonoperating properties, older revenue equipment, and other equipment. Adjustments to write down assets to fair value less the amount of costs to sell are reported in operating income. Assets held for sale are expected to be disposed of by selling the assets within the next 12 months. Gains and losses on property and equipment are reported in operating income. Assets held for sale of $0.8 million and $0.6 million are reported within other noncurrent assets as of December 31, 2022 and 2021, respectively. |
Business Combinations | Business Combinations: |
Contingent Consideration | Contingent Consideration: |
Goodwill and Intangible Assets | Goodwill and Intangible Assets: Indefinite-lived intangible assets are also not amortized but rather are evaluated for impairment annually or more frequently if indicators of impairment exist. Consistent with goodwill, the Company assesses qualitative factors to determine if it is more likely than not that the fair value of indefinite-lived intangible assets is less than its carrying value and performs a quantitative analysis if it is determined it is more likely than not the indefinite-lived intangible is impaired. The Company amortizes finite-lived intangible assets over their respective estimated useful lives. |
Income Taxes | Income Taxes: Management applies considerable judgment in determining the consolidated income tax provision, including valuation allowances on deferred tax assets. The valuation allowance for deferred tax assets is determined by evaluating whether it is more likely than not that the benefits of deferred tax assets will be realized through future reversal of existing taxable temporary differences, taxable income in carryback years in jurisdictions in which they are allowable, projected future taxable income, or tax-planning strategies. Uncertain tax positions, which also require significant judgment, are measured to determine the amounts to be recognized in the financial statements. The income tax provision and valuation allowances are complicated by complex and frequently changing rules administered in multiple jurisdictions, including U.S. federal, state, and foreign governments. |
Long Term Investments | Long-Term Investments: |
Book Overdrafts | Book Overdrafts: |
Insurance Reserves | Insurance Reserves Liabilities for self-insured workers’ compensation and third-party casualty claims are based on the case reserve amounts plus an estimate of loss development and incurred but not reported (“IBNR”) claims, which is developed from an independent actuarial analysis. The process of determining reserve requirements utilizes historical trends and involves an evaluation of claim frequency and severity, claims management, and other factors. Case reserves are evaluated as loss experience develops and new information becomes available. Adjustments to previously estimated aggregate reserves are reflected in financial results in the periods in which they are made. Aggregate reserves represent an estimate of the costs of claims incurred, and it is possible that the ultimate liability may differ significantly from such estimates. The Company develops an estimate of self-insured cargo loss and damage claims liabilities based on historical trends and certain event-specific information. Claims liabilities are recorded in accrued expenses and are not offset by insurance receivables which are reported in other accounts receivable. |
Loss Contingencies | Loss Contingencies: |
Long-Term Debt | Long-Term Debt: |
Interest Rate Swap Derivative Instruments | Interest Rate Swap Derivative Instruments |
Leases | Leases: The Company elected the short-term lease exemption for all classes of assets to include real property, revenue equipment, and service, office, and other equipment. The Company adopted the policy election as a lessee for all classes of assets to account for each lease component and its related non-lease component(s) as a single lease component. In determining the discount rate, the Company uses ArcBest Corporation’s incremental borrowing rate unless the rate implicit in the lease is readily determinable when entering into a lease as a lessee. The incremental borrowing rate is determined by the price of a fully collateralized loan with similar terms based on current market rates. An assessment is made on or after the effective date of newly signed contracts as to whether the contract is, or contains, a lease at the inception of a contract. The assessment is based on: (1) whether the contract involves the use of a distinct identified asset; (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period; and (3) whether the Company has the right to direct the use of the asset. The operating right-of-use asset is measured as the initial amount of the operating lease liability, plus any initial direct costs incurred, less any prepayments prior to commencement or lease incentives received. The operating lease liability is initially measured at the present value of the lease payments, discounted using the Company’s secured incremental borrowing rate for the same term as the underlying lease unless the interest rate implicit in the lease is readily determined, then the implicit rate will be used. Lease payments included in the measurement of the lease liability are comprised of the following: (1) the fixed noncancelable lease payments, (2) payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and (3) payments for early termination options unless it is reasonably certain the lease will not be terminated early. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and included in the measurement of the initial lease liability. Additional payments based on the change in an index or rate are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability. |
Nonunion Defined Benefit Pension, Supplemental Benefit, and Postretirement Health Benefit Plans | Supplemental Benefit and Postretirement Health Benefit Plans: The Company has not incurred service cost under the SBP since the accrual of benefits under the plan was frozen on December 31, 2009, however, the Company incurs service cost under the postretirement health benefit plan which is reported within operating expenses in the consolidated statements of operations. The other components of net periodic benefit cost (credit) of the SBP (including pension settlement expense), and the postretirement health benefit plan are reported within the other line item of other income (costs). The expense and liability related to the postretirement health benefit plan are measured based upon a number of assumptions and using the services of a third-party actuary. Assumptions are made regarding the discount rate, expected retirement age, mortality, employee turnover, and future increases in health care costs. The discount rates used to discount the SBP and postretirement health benefit plan obligations are determined by matching projected cash distributions with appropriate high-quality corporate bond yields in a yield curve analysis. The assumptions used directly impact the net periodic benefit cost (credit) for a particular year. An actuarial gain or loss results when actual experience varies from the assumptions or when there are changes in actuarial assumptions. Actuarial gains and losses are not included in net periodic benefit cost (credit) in the period when they arise but are recognized as a component of other comprehensive income or loss and subsequently amortized as a component of net periodic benefit cost (credit). The Company uses December 31 as the measurement date for the SBP and postretirement health benefit plan. Plan obligations are also remeasured upon curtailment and upon settlement. Benefit distributions under the SBP individually exceed the annual interest cost of the plan, and the Company records the related settlement expense when the amount of the benefit to be distributed is fixed, which is generally upon an employee’s termination of employment. Pension settlement expense for the SBP is presented in Note J. |
Revenue Recognition | Revenue Recognition: adjustments occur due to rating or other billing adjustments. The Company also estimates revenue adjustments based on historical information and current trends, and revenue is recognized accordingly. Asset-Based Segment Asset-Based segment revenues consist primarily of less-than-truckload freight delivery. Performance obligations are satisfied upon final delivery of the freight to the specified destination. Revenue is recognized based on the relative transit time in each reporting period with expenses recognized as incurred. A bill-by-bill analysis is used to establish estimates of revenue in transit for recognition in the appropriate period. Because the bill-by-bill methodology utilizes the approximate location of the shipment in the delivery process to determine the revenue to recognize, management believes it to be a reliable method. Certain contracts may provide for volume-based or other discounts which are accounted for as variable consideration. The Company estimates these amounts based on a historical expectation of discounts to be earned by customers, and revenue is recognized based on the estimates. Management believes that actual amounts will not vary significantly from estimates of variable consideration. Revenue, purchased transportation expense, and third-party service expenses are reported on a gross basis for certain shipments and services where the Company utilizes a third-party carrier for pickup, linehaul, delivery of freight, or performance of services but remains primarily responsible for fulfilling delivery to the customer and maintains discretion in setting the price for the services. ArcBest Segment ArcBest segment revenues consist primarily of asset-light logistics services using third-party vendors to provide transportation services. ArcBest segment revenue is generally recognized based on the relative transit time in each reporting period using estimated standard delivery times for freight in transit at the end of the reporting period. Purchased transportation expense is recognized as incurred consistent with the recognition of revenue. Revenue and purchased transportation expense are reported on a gross basis for shipments and services where the Company utilizes a third-party carrier for pickup and delivery but remains primarily responsible to the customer for delivery and maintains discretion in setting the price for the service. FleetNet Segment FleetNet segment revenues consist of service fee revenue, roadside repair revenue and routine maintenance services revenue. Service fee revenue for the FleetNet segment is recognized upon response to the service event. Repair and routine maintenance service revenue for the FleetNet segment is recognized upon completion of the service by third-party vendors. Revenue and expense from repair and maintenance services performed by third-party vendors are reported on a gross basis as FleetNet controls the services prior to transfer to the customer and remains primarily responsible to the customer for completion of the services. Other Recognition and Disclosure Payment terms with customers may vary depending on the service provided, location or specific agreement with the customer. The term between invoicing and when payment is due is not significant. For certain services, payment is required before the services are provided to the customer. The Company expenses sales commissions when incurred because the amortization period is one year or less. The Company has elected not to disclose the value of unsatisfied performance obligations for contracts with an original length of one year or less or contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed. |
Comprehensive Income or Loss | Comprehensive Income or Loss: in Note K. The changes in accumulated other comprehensive income or loss, net of tax, and the significant reclassifications out of accumulated other comprehensive income or loss are disclosed, by component, in Note K. |
Accelerated Share Repurchase | Accelerated Share Repurchase: |
Earnings Per Share | Earnings Per Share: |
Share-Based Compensation | Share-Based Compensation: one-third Share-based awards are amortized to compensation expense on a straight-line basis over the vesting period of awards or over the period to which the recipient first becomes eligible for retirement, whichever is shorter, with vesting accelerated upon death or disability. The Company recognizes forfeitures as they occur, and the income tax effects of awards are recognized in the statement of operations when awards vest or are settled. |
Fair Value Measurements | Fair Value Measurements: ● Level 1 – Quoted prices for identical assets and liabilities in active markets. ● Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. ● Level 3 – Unobservable inputs (Company’s market assumptions) that are significant to the valuation model. |
Environmental Matters | Environmental Matters: |
Exit or Disposal Activities | Exit or Disposal Activities: |
Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted Management believes there is no new accounting guidance issued but not yet effective that would have a material impact to the Company’s current financial statements. |
FINANCIAL INSTRUMENTS AND FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
Schedule components of cash and cash equivalents, short term investments, and restricted funds | December 31 December 31 2022 2021 (in thousands) Cash and cash equivalents Cash deposits (1) $ 137,355 $ 72,790 Variable rate demand notes (1)(2) 9,285 230 Money market funds (3) 11,732 3,600 Total cash and cash equivalents $ 158,372 $ 76,620 Short-term investments Certificates of deposit (1) $ 88,851 $ 48,339 U.S. Treasury securities (4) 78,811 — Total short-term investments $ 167,662 $ 48,339 (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 | 2022 2021 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ 50,000 $ 50,000 $ 50,000 $ 50,000 Notes payable (2) 214,623 207,778 175,530 175,937 New England Pension Fund withdrawal liability (3) 20,100 18,911 20,769 23,521 $ 284,723 $ 276,689 $ 246,299 $ 249,458 (1) The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on London Inter-Bank Offered Rate (“LIBOR”), plus a margin, for the year ended December 31, 2021 through October 7, 2022, and effective October 7, 2022, Secured Overnight Financing Rate (“SOFR”), plus a margin, is considered to be 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 5.3% and 3.1% at December 31, 2022 and 2021, respectively, determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). As of December 31, 2022, the outstanding withdrawal liability totaled $20.1 million, of which $0.7 million and $19.4 million were recorded in accrued expenses and other long-term liabilities, respectively. |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | 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 December 31, 2021 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) $ 3,600 $ 3,600 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 3,848 3,848 — — Interest rate swap (3) 874 — 874 — $ 8,322 $ 7,448 $ 874 $ — Liabilities: Interest rate swap (3) $ 455 $ — $ 455 $ — Contingent consideration (4) 93,700 — — 93,700 $ 94,155 $ — $ 455 $ 93,700 (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 or other long-term liabilities. The fair values of the interest rate swaps were 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 December 31, 2022 and 2021, and considers the interest rate swap valuations in Level 2 of the fair value hierarchy. (4) Included in other long-term liabilities, based on when expected payouts become due. The estimated fair value of contingent consideration for the earnout agreement related to the November 2021 acquisition of MoLo was 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 14.0% and 9.0% as of December 2022 and 2021, respectively. Changes in the significant unobservable inputs might result in a significantly higher or lower fair value at the reporting date. |
Schedule of changes in fair value of liabilities measured at fair value using inputs categorized in Level 3 | Contingent Consideration (in thousands) Balances at December 31, 2021 $ 93,700 Change in fair value included in operating income 18,300 Balances at December 31, 2022 $ 112,000 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACQUISITION. | |
Schedule of purchase consideration and estimated fair values of the acquired assets and liabilities | Purchase Consideration (in thousands) Net cash consideration, including post-closing adjustments $ 237,101 Contingent consideration 93,700 Total purchase consideration $ 330,801 Purchase Allocation (in thousands) Accounts receivable $ 131,378 Prepaid expenses 468 Property and equipment 1,533 Operating lease right-of-use assets 844 Intangible assets 76,900 Other assets 170 Total identifiable assets acquired 211,293 Accounts payable 94,053 Accrued expenses and other current liabilities 4,470 Operating lease liabilities 983 Total liabilities 99,506 Total identifiable net assets 111,787 Goodwill 219,014 Net assets acquired $ 330,801 |
Schedule of pro forma supplemental information | Year Ended December 31 2021 2020 (Unaudited) (in thousands, except per share data) Revenues $ 4,488,564 $ 3,213,722 Income before income taxes $ 266,866 $ 63,622 Net income $ 205,728 $ 48,290 Diluted EPS $ 7.68 $ 1.83 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of goodwill by reportable operating segment | Total ArcBest FleetNet (in thousands) Balances at December 31, 2020 $ 88,320 $ 87,690 $ 630 Goodwill acquired (1) 213,969 213,969 — Goodwill divested (2) (1,952) (1,952) — Balances at December 31, 2021 $ 300,337 $ 299,707 $ 630 Purchase accounting adjustments (3) 5,045 5,045 — Balances at December 31, 2022 $ 305,382 $ 304,752 $ 630 Accumulated impairment at December 31, 2022 and 2021 $ (20,000) $ (20,000) $ — (1) Goodwill acquired relates to the acquisition of MoLo (see Note D). (2) Goodwill divested due to the sale of the labor services portion of the ArcBest segment’s moving business in second quarter 2021 was determined based on the relative fair value of the business sold to the total fair value of the reporting unit. (3) As noted in Note D, purchase accounting adjustments related to the MoLo acquisition represent adjustments to the acquired balance of working capital, and goodwill related to the November 1, 2021 acquisition of MoLo. |
Schedule of intangible assets | 2022 2021 Weighted-Average Accumulated Net Accumulated Net Amortization Period Cost Amortization Value Cost Amortization Value (in years) (in thousands) (in thousands) Finite-lived intangible assets Customer relationships 12 $ 100,321 $ 43,627 $ 56,694 $ 100,321 $ 35,072 $ 65,249 Other 8 30,471 5,669 24,802 30,335 1,304 29,031 11 130,792 49,296 81,496 130,656 36,376 94,280 Indefinite-lived intangible assets Trade name N/A 32,300 N/A 32,300 32,300 N/A 32,300 Total intangible assets N/A $ 163,092 $ 49,296 $ 113,796 $ 162,956 $ 36,376 $ 126,580 |
Schedule of future amortization for intangible assets | Amortization of Intangible Assets (in thousands) 2023 $ 12,826 2024 12,793 2025 12,778 2026 8,671 2027 7,247 Thereafter 27,181 Total amortization $ 81,496 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of significant components of the provision or benefit for income taxes | Significant components of the provision or benefit for income taxes for the years ended December 31 were as follows: 2022 2021 2020 (in thousands) Current provision: Federal $ 80,378 $ 56,451 $ 10,001 State 19,949 14,430 3,267 Foreign 869 341 413 101,196 71,222 13,681 Deferred provision (benefit): Federal (5,477) (6,098) 5,948 State (753) (1,554) 1,789 Foreign (20) 63 (22) (6,250) (7,589) 7,715 Total provision for income taxes $ 94,946 $ 63,633 $ 21,396 |
Schedule of components of the deferred tax provision or benefit | 2022 2021 2020 (in thousands) Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets (1) $ 4,186 $ 1,451 $ 4,975 Amortization of intangibles (2,973) (536) 183 Changes in reserves for workers’ compensation, third-party casualty, and cargo claims (3,713) (3,294) (182) Revenue recognition 13 (1,445) (1,481) Allowance for credit losses (391) 156 (652) Nonunion pension and other retirement plans (4) (3) 957 Multiemployer pension fund withdrawal 172 164 157 Federal and state net operating loss carryforwards utilized (generated) 899 (300) (259) State depreciation adjustments (915) 598 343 Share-based compensation 749 (984) (195) Valuation allowance increase (decrease) (489) 911 617 Other accrued expenses (3,104) (4,097) 1,663 Prepaid expenses (18) (788) 1,207 Operating lease right-of-use assets/liabilities – net (651) (228) (13) Other (11) 806 395 Deferred tax provision (benefit) $ (6,250) $ (7,589) $ 7,715 (1) The Tax Cuts and Jobs Act , enacted in December 2017, allowed first year bonus depreciation at 100% for assets placed into service between September 27, 2017 and January 1, 2023. Due to a decrease in the purchase of assets eligible for 100% depreciation, the deferred tax expense related to the tax depreciation expense in excess of book depreciation decreased over the two-year period from 2020 through 2021 but increased in 2022. |
Schedule of significant components of deferred tax assets and liabilities | Significant components of the deferred tax assets and liabilities at December 31 were as follows: 2022 2021 (in thousands) Deferred tax assets: Accrued expenses $ 53,997 $ 47,683 Operating lease right-of-use liabilities 46,056 30,590 Supplemental pension liabilities 81 97 Multiemployer pension fund withdrawal 5,063 5,247 Postretirement liabilities other than pensions 3,137 4,441 Share-based compensation 5,794 6,755 Federal and state net operating loss carryovers 753 1,652 Receivable allowances 3,052 2,778 Other 417 266 Total deferred tax assets 118,350 99,509 Valuation allowance (1,707) (2,196) Total deferred tax assets, net of valuation allowance 116,643 97,313 Deferred tax liabilities: Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets 117,586 114,999 Operating lease right-of-use assets 44,170 29,403 Intangibles 4,396 6,966 Prepaid expenses 5,424 5,368 Total deferred tax liabilities 171,576 156,736 Net deferred tax liabilities $ (54,933) $ (59,423) |
Reconciliation between the effective income tax rate, as computed on income or loss before income taxes, and the statutory federal income tax rate | Reconciliation between the effective income tax rate, as computed on income before income taxes, and the statutory federal income tax rate for the years ended December 31 is presented in the following table: 2022 2021 2020 (in thousands, except percentages) Income tax provision at the statutory federal rate of 21.0% $ 82,562 $ 58,202 $ 19,424 Federal income tax effects of: State income taxes (4,031) (2,704) (1,062) Nondeductible expenses 5,607 3,596 1,395 Life insurance proceeds and changes in cash surrender value 575 (866) (488) Alternative fuel credit (2,449) — (1,261) Net increase (decrease) in valuation allowances (464) 887 617 Net increase (decrease) in uncertain tax positions — 854 (933) Settlement of share-based compensation (6,852) (6,140) 420 Foreign tax credits generated (849) (404) (391) Federal research and development tax credits 278 (2,044) (2,078) Other 524 (1,028) 306 Federal income tax provision 74,901 50,353 15,949 State income tax provision 19,196 12,876 5,056 Foreign income tax provision 849 404 391 Total provision for income taxes $ 94,946 $ 63,633 $ 21,396 Effective tax rate 24.1 % 23.0 % 23.1 % |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Schedule of components of lease expense | Year Ended December 31 2022 2021 2020 (in thousands) Operating lease expense $ 31,790 $ 26,552 $ 24,559 Variable lease expense 4,188 4,128 3,152 Sublease income (391) (626) (398) Total operating lease expense (1) $ 35,587 $ 30,054 $ 27,313 (1) Operating lease expense excludes short-term leases with a term of 12 months or less. |
Schedule of operating cash flows from operating lease activity | Year Ended December 31 2022 2021 2020 (in thousands, except share and per share data) Noncash change in operating right-of-use assets $ 27,465 $ 24,023 $ 21,184 Change in operating lease liabilities (24,513) (23,400) (20,428) Operating right-of-use-assets and lease liabilities, net $ 2,952 $ 623 $ 756 Cash paid for amounts included in the measurement of operating lease liabilities $ (28,830) $ (25,909) $ (23,810) |
Schedule of supplemental balance sheet information related to lease liabilities | December 31, 2022 (in thousands, except lease term and discount rate) Land and Equipment Total Structures and Others Operating right-of-use assets (long-term) $ 166,515 $ 165,822 $ 693 Operating lease liabilities (current) $ 26,225 $ 25,824 $ 401 Operating lease liabilities (long-term) 147,828 147,534 294 Total operating lease liabilities $ 174,053 $ 173,358 $ 695 Weighted-average remaining lease term (in years) 7.6 Weighted-average discount rate 3.58% December 31, 2021 (in thousands, except lease term and discount rate) Land and Equipment Total Structures and Others Operating right-of-use assets (long-term) $ 106,686 $ 106,394 $ 292 Operating lease liabilities (current) $ 22,740 $ 22,477 $ 263 Operating lease liabilities (long-term) 88,835 88,810 25 Total operating lease liabilities $ 111,575 $ 111,287 $ 288 Weighted-average remaining lease term (in years) 6.9 Weighted-average discount rate 2.88% |
Schedule of maturities of operating lease liabilities | Equipment Land and and Total Structures (1) Other (in thousands) 2023 $ 31,868 $ 31,446 $ 422 2024 30,762 30,464 298 2025 26,889 26,889 — 2026 24,442 24,442 — 2027 19,349 19,349 — Thereafter 67,474 67,474 — Total lease payments 200,784 200,064 720 Less imputed interest (26,731) (26,706) (25) Total $ 174,053 $ 173,358 $ 695 (1) Excludes future minimum lease payments for leases which were executed but had not yet commenced as of December 31, 2022, of $32.0 million which will be paid over approximately 10 years . |
LONG-TERM DEBT AND FINANCING _2
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
Schedule of long-term debt | December 31 December 31 2022 2021 (in thousands) Credit Facility (interest rate of 5.5% (1) $ 50,000 $ 50,000 Notes payable (weighted-average interest rate of 3.3% at December 31, 2022) 214,623 175,530 Finance lease obligations — 2 264,623 225,532 Less current portion 66,252 50,615 Long-term debt, less current portion $ 198,371 $ 174,917 (1) The interest rate swap mitigates interest rate risk by effectively converting the $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 1.55% and 3.12% based on the margin of the Credit Facility as of December 31, 2022 and 2021, respectively. |
Scheduled maturities of long-term debt obligations | Scheduled maturities of long term debt obligations as of December 31, 2022 were as follows: Credit Notes Total Facility (1) Payable (in thousands) 2023 $ 75,381 $ 3,045 $ 72,336 2024 67,456 2,008 65,448 2025 93,653 50,000 43,653 2026 31,798 — 31,798 2027 15,773 — 15,773 Thereafter 186 — 186 Total payments 284,247 55,053 229,194 Less amounts representing interest 19,624 5,053 14,571 Long-term debt $ 264,623 $ 50,000 $ 214,623 (1) The future interest payments included in the scheduled maturities due are calculated using variable interest rates based on the SOFR swap curve, plus the anticipated applicable margin, exclusive of payments on the interest rate swap. |
Schedule of assets securing notes payable or held under capital leases | Assets securing notes payable or held under finance leases at December 31 were included in property, plant and equipment as follows: December 31 December 31 2022 2021 (in thousands) Revenue equipment $ 294,700 $ 241,892 Service, office, and other equipment 41,522 29,773 Total assets securing notes payable or held under finance leases 336,222 271,665 Less accumulated depreciation and amortization (1) 119,244 88,696 Net assets securing notes payable or held under finance leases $ 216,978 $ 182,969 (1) Amortization of assets held under finance leases and depreciation of assets securing notes payable are included in depreciation expense . |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED EXPENSES. | |
Schedule of accrued expenses | December 31 2022 2021 (in thousands) Workers’ compensation, third-party casualty, and loss and damage claims reserves $ 133,128 $ 116,535 Accrued vacation pay 58,874 52,746 Accrued compensation, including retirement benefits 122,057 110,755 Taxes other than income 12,443 10,225 Other 15,320 15,590 Total accrued expenses $ 341,822 $ 305,851 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
POSTRETIREMENT BENEFIT PLANS | |
Schedule of changes in benefit obligations and plan assets and disclosure of funded status and accumulated benefit obligation of nonunion defined benefit plans | Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2022 2021 (in thousands) Change in benefit obligations Benefit obligations, beginning of year $ 381 $ 392 $ 16,992 $ 18,751 Service cost — — 156 192 Interest cost 7 4 441 427 Actuarial gain (1) (50) (15) (4,392) (1,736) Benefits paid — — (663) (642) Benefit obligations, end of year 338 381 12,534 16,992 Change in plan assets Fair value of plan asset, beginning of year — — — — Employer contributions — — 663 642 Benefits paid — — (663) (642) Fair value of plan assets, end of year — — — — Funded status at period end $ (338) $ (381) $ (12,534) $ (16,992) Accumulated benefit obligation $ 338 $ 381 $ 12,534 $ 16,992 (1) The increases in the actuarial gain on the postretirement health benefit plan for 2022 and 2021 are primarily related to increases in the discount rate used to remeasure the plan obligation at December 31, 2022 and 2021 versus December 31, 2021 and 2020, respectively. For 2021, the increase in the actuarial gain was also impacted by lower actual healthcare premium costs than the assumed trend rates. |
Schedule of amounts recognized in the consolidated balance sheets related to nonunion defined benefit plans | Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2022 2021 Current portion of pension and postretirement liabilities $ — $ — $ (676) $ (640) Pension and postretirement liabilities, less current portion (338) (381) (11,858) (16,352) Liabilities recognized $ (338) $ (381) $ (12,534) $ (16,992) |
Summary of the components of net periodic benefit cost (credit) | Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2020 2022 2021 2020 (in thousands) Service cost $ — $ — $ — $ 156 $ 192 $ 187 Interest cost 7 4 9 441 427 576 Amortization of prior service credit — — — — — (1) Pension settlement expense — — 89 — — — Amortization of net actuarial (gain) loss (1) 8 9 8 (765) (548) (597) Net periodic benefit cost (credit) $ 15 $ 13 $ 106 $ (168) $ 71 $ 165 (1) The Company amortizes actuarial gains and losses over the average remaining active service period of the plan participants and does not use a corridor approach. |
Summary of pension settlement distributions and settlement expense | Supplemental Benefit Plan 2022 2021 2020 (1) Pension settlement distributions $ — $ — $ 2,887 Pension settlement expense, pre-tax $ — $ — $ 89 Pension settlement expense per diluted share, net of taxes $ — $ — $ — (1) The 2020 SBP distributions include the portion of a benefit related to an officer retirement that occurred in 2019 which was delayed for six months after retirement in accordance with IRC Section 409A. |
Pre-tax amounts included in accumulated other comprehensive loss that have not yet been recognized in net periodic benefit cost | Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2022 2021 Unrecognized net actuarial (gain) loss $ (18) $ 40 $ (9,269) $ (5,642) |
Weighted-average assumptions used to determine benefit obligations and net periodic benefit cost for nonunion defined benefit plans | Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2022 2021 Discount rate 4.6 % 1.8 % 5.0 % 2.7 % Supplemental Postretirement Benefit Plan Health Benefit Plan 2022 2021 2020 2022 2021 2020 Discount rate 1.8 % 1.1 % 2.4 % 2.7 % 2.3 % 3.1 % |
Schedule of the assumed health care cost trend rates for the postretirement health benefit plan | 2022 2021 Health care cost trend rate assumed for next year (1) 7.0 % 7.0 % Rate to which the cost trend rate is assumed to decline 4.5 % 4.5 % Year that the rate reaches the cost trend assumed rate 2034 2033 (1) At each December 31 measurement date, health care cost rates for the following year are based on known premiums for the fully insured postretirement health benefit plan. Therefore, the first year of assumed health care cost trend rates presented as of December 31, 2022 and 2021 are for 2024 and 2023, respectively. |
Schedule of estimated future benefit payments for nonunion defined benefit plans | Supplemental Postretirement Benefit Health Plan Benefit Plan 2023 $ — $ 676 2024 $ — $ 676 2025 $ — $ 729 2026 $ — $ 734 2027 $ — $ 740 2028-2032 $ 424 $ 3,705 |
Schedule of multiemployer pension funds and key participation information | Pension FIP/RP Protection Act Status Contributions (d) EIN/Pension Zone Status (b) Pending/ (in thousands) Surcharge Legal Name of Plan Plan Number (a) 2022 2021 Implemented (c) 2022 2021 2020 Imposed (e) Central States, Southeast and Southwest Areas Pension Plan (1)(2) 36-6044243 Critical and Declining Critical and Declining Implemented (3) $ 75,306 $ 71,045 $ 68,704 No Western Conference of Teamsters Pension Plan (2) 91-6145047 Green Green No 28,051 25,861 23,633 No Central Pennsylvania Teamsters Defined Benefit Plan (1)(2) 23-6262789 Green Green No 14,421 13,931 13,485 No I. B. of T. Union Local No. 710 Pension Fund (5)(6) 36-2377656 Green (4) Green (4) No 9,838 9,553 9,885 No New England Teamsters Pension Fund (7)(8) 04-6372430 Critical and Declining (9) Critical and Declining (9) Implemented (10) 4,449 4,357 4,464 No All other plans in the aggregate 22,493 22,146 22,023 Total multiemployer pension contributions paid (11) $ 154,558 $ 146,893 $ 142,194 Table Heading Definitions (a) The “EIN/Pension Plan Number” column provides the Federal Employer Identification Number (“EIN”) and the three-digit plan number, if applicable. (b) Unless otherwise noted, the most recent PPA zone status available in 2022 and 2021 is for the plan’s year-end status at December 31, 2021 and 2020, respectively, and prior to financial assistance from the Pension Relief Act. The zone status is based on information received from the plan and was certified by the plan’s actuary. Green zone funds are those that are in neither endangered, critical, or critical and declining status and generally have a funded percentage of at least 80% . (c) The “FIP/RP Status Pending/Implemented” column indicates if a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”), if applicable, is pending or has been implemented. (d) Amounts reflect contributions made in the respective year and differ from amounts expensed during the year. (e) The surcharge column indicates if a surcharge was paid by ABF Freight to the plan. Table Footnotes (1) ABF Freight System, Inc. was listed by the plan as providing more than 5% of the total contributions to the plan for the plan years ended December 31, 2021 and 2020. (2) Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500 filed for the plan years ended December 31, 2021 and 2020. (3) Adopted a rehabilitation plan effective March 25, 2008 as updated. Utilized amortization extension granted by the IRS effective December 31, 2003. (4) PPA zone status relates to plan years February 1, 2021 – January 31, 2022 and February 1, 2020 – January 31, 2021. (5) The Company was listed by the plan as providing more than 5% of the total contributions to the plan for the plan year ended January 31, 2020. (6) Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500 filed for the plan years ended January 31, 2022 and 2021. (7) Contributions include $1.6 million each year for 2022, 2021, and 2020, related to the multiemployer pension fund withdrawal liability. ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund was restructured under a transition agreement effective on August 1, 2018, which triggered a withdrawal liability settlement to satisfy ABF Freight’s existing potential withdrawal liability obligation to the fund. ABF Freight recognized a one-time charge of $37.9 million (pre-tax) to record the withdrawal liability in second quarter 2018; partially settled the withdrawal liability through the initial lump sum cash payment of $15.1 million made in third quarter 2018; and will settle the remainder with monthly payments over a remaining period of 19 years . (8) Information for this fund was obtained from the annual funding notice, other notices received from the plan, and the Form 5500 filed for the plan years ended September 30, 2021 and 2020. (9) PPA zone status relates to plan years October 1, 2021 – September 30, 2022 and October 1, 2020 – September 30, 2021. (10) Adopted a rehabilitation plan effective January 1, 2009. (11) Contribution levels can be impacted by several factors such as changes in business levels and the related time worked by contractual employees, contractual rate increases for pension benefits, and the specific funding structure, which differs among funds. The 2018 ABF NMFA and the related supplemental agreements provided for contributions to multiemployer pension plans to be frozen at the current rates for each fund, although certain funds have imposed contribution increases under their rehabilitation or funding improvement plans. The year-over-year changes in multiemployer pension plan contributions presented above were influenced by changes in Asset-Based business levels. An increase in hours worked by ABF Freight’s contractual employees and additional contractual employees hired in 2022 to service higher shipment levels resulted in an increase in multiemployer pension contributions for 2022, compared to 2021. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS' EQUITY | |
Components of accumulated other comprehensive income | 2022 2021 2020 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit credit $ 9,287 $ 5,602 $ 4,390 Interest rate swap 3,526 419 (1,622) Foreign currency translation (3,247) (1,044) (1,182) Total $ 9,566 $ 4,977 $ 1,586 After-tax amounts: Unrecognized net periodic benefit credit $ 6,896 $ 4,160 $ 3,260 Interest rate swap 2,604 309 (1,198) Foreign currency translation (2,397) (770) (872) Total $ 7,103 $ 3,699 $ 1,190 |
Summary of changes in accumulated other comprehensive income, net of tax, by component | Unrecognized Interest Foreign Net Periodic Rate Currency Total Benefit Credit Swap Translation (in thousands) Balances at December 31, 2020 $ 1,190 $ 3,260 $ (1,198) $ (872) Other comprehensive income before reclassifications 2,909 1,300 1,507 102 Amounts reclassified from accumulated other comprehensive income (400) (400) — — Net current-period other comprehensive income 2,509 900 1,507 102 Balances at December 31, 2021 $ 3,699 $ 4,160 $ 309 $ (770) Other comprehensive income (loss) before reclassifications 3,966 3,298 2,295 (1,627) Amounts reclassified from accumulated other comprehensive income (562) (562) — — Net current-period other comprehensive income (loss) 3,404 2,736 2,295 (1,627) Balances at December 31, 2022 $ 7,103 $ 6,896 $ 2,604 $ (2,397) |
Summary of the significant reclassifications out of accumulated other comprehensive income (loss) by component | Unrecognized Net Periodic Benefit Credit (1)(2) 2022 2021 (in thousands) Amortization of net actuarial gain, pre-tax $ 757 $ 539 Tax expense (195) (139) Total, net of tax $ 562 $ 400 (1) Amounts in parentheses indicate increases in expense or loss. (2) These components of accumulated other comprehensive income are included in the computation of net periodic benefit cost (credit) (see Note J). |
Summary of dividends declared | 2022 2021 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ 0.08 $ 1,978 $ 0.08 $ 2,037 Second quarter $ 0.12 $ 2,949 $ 0.08 $ 2,058 Third quarter $ 0.12 $ 2,965 $ 0.08 $ 2,050 Fourth quarter $ 0.12 $ 2,938 $ 0.08 $ 1,994 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SHARE-BASED COMPENSATION | |
Summary of the Company's restricted stock unit award program | Weighted-Average Grant Date Units Fair Value Outstanding – January 1, 2022 1,482,399 $ 29.25 Granted 164,739 $ 78.57 Vested (601,441) $ 26.08 Forfeited (1) (22,446) $ 39.74 Outstanding – December 31, 2022 1,023,251 $ 38.83 (1) Forfeitures are recognized as they occur. |
Schedule of restricted stock units granted during the year | The Compensation Committee of the Company’s Board of Directors granted RSUs during the years ended December 31 as follows: k Weighted-Average Grant Date Units Fair Value 2022 164,739 $ 78.57 2021 136,295 $ 86.96 2020 579,660 $ 19.22 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earnings (loss) per share | 2022 2021 2020 (in thousands, except share and per share data) Basic Numerator: Net income $ 298,209 $ 213,521 $ 71,100 Denominator: Weighted-average shares 24,585,205 25,471,939 25,410,232 Earnings per common share $ 12.13 $ 8.38 $ 2.80 Diluted Numerator: Net income $ 298,209 $ 213,521 $ 71,100 Denominator: Weighted-average shares 24,585,205 25,471,939 25,410,232 Effect of dilutive securities 919,303 1,300,187 1,012,291 Adjusted weighted-average shares and assumed conversions 25,504,508 26,772,126 26,422,523 Earnings per common share $ 11.69 $ 7.98 $ 2.69 |
OPERATING SEGMENT DATA (Tables)
OPERATING SEGMENT DATA (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
OPERATING SEGMENT DATA | |
Schedule of reportable operating segment information | 2022 2021 2020 (in thousands) REVENUES Asset-Based $ 3,010,900 $ 2,573,773 $ 2,092,031 ArcBest (1) 2,139,272 1,300,626 779,115 FleetNet 343,056 254,087 205,049 Other and eliminations (169,176) (148,419) (136,032) Total consolidated revenues $ 5,324,052 $ 3,980,067 $ 2,940,163 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 1,293,487 $ 1,198,253 $ 1,095,694 Fuel, supplies, and expenses 378,558 266,139 209,095 Operating taxes and licenses 52,290 49,461 49,300 Insurance 47,382 37,800 33,568 Communications and utilities 18,949 18,773 17,916 Depreciation and amortization 97,322 93,799 94,326 Rents and purchased transportation 441,167 364,345 250,159 Shared services 281,698 263,532 217,258 Gain on sale of property and equipment (2) (12,468) (8,676) (3,309) Innovative technology costs (3) 27,207 27,631 22,458 Other 4,175 2,009 6,701 Total Asset-Based 2,629,767 2,313,066 1,993,166 ArcBest (1) Purchased transportation 1,784,668 1,097,332 649,933 Supplies and expenses 15,815 10,531 9,627 Depreciation and amortization (4) 20,730 11,387 9,714 Shared services 218,133 132,137 90,983 Gain on sale of subsidiary (5) (402) (6,923) — Other (6) 47,603 9,765 9,203 Total ArcBest 2,086,547 1,254,229 769,460 FleetNet 337,231 249,543 201,682 Other and eliminations (128,762) (117,757) (122,423) Total consolidated operating expenses $ 4,924,783 $ 3,699,081 $ 2,841,885 OPERATING INCOME Asset-Based $ 381,133 $ 260,707 $ 98,865 ArcBest (1) 52,725 46,397 9,655 FleetNet 5,825 4,544 3,367 Other and eliminations (40,414) (30,662) (13,609) Total consolidated operating income $ 399,269 $ 280,986 $ 98,278 OTHER INCOME (COSTS) Interest and dividend income $ 3,957 $ 1,275 $ 3,616 Interest and other related financing costs (7,701) (8,904) (11,697) Other, net (7) (2,370) 3,797 2,299 Total other costs (6,114) (3,832) (5,782) INCOME BEFORE INCOME TAXES $ 393,155 $ 277,154 $ 92,496 (1) For 2022 and 2021, includes the operations of MoLo since the November 1, 2021 acquisition (see Note D). (2) For 2022, includes 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. For 2021, includes an $8.6 million gain on the sale of unutilized service center property. (3) Represents costs associated with the freight handling pilot test program at ABF Freight. (4) Depreciation and amortization includes amortization of intangibles associated with acquired businesses. (5) Gain recognized relates to the sale of the labor services portion of the ArcBest segment’s moving business in second quarter 2021, including the contingent amount recognized in second quarter 2022 when the funds were released from escrow. (6) For 2022 , includes the increase in fair value of the contingent earnout consideration of $18.3 million recorded for the MoLo acquisition (see Note D). (7) Includes the components of net periodic benefit cost other than service cost related to the Company’s SBP and postretirement plans (see Note J) and proceeds and changes in cash surrender value of life insurance policies. For the year ended December 31 2022 2021 2020 (in thousands) CAPITAL EXPENDITURES, GROSS Asset-Based (1) $ 137,117 $ 96,180 $ 85,135 ArcBest 14,372 9,565 1,258 FleetNet 1,439 1,174 675 Other and eliminations (2)(3) 77,720 11,193 17,983 $ 230,648 $ 118,112 $ 105,051 For the year ended December 31 2022 2021 2020 (in thousands) DEPRECIATION AND AMORTIZATION EXPENSE (2) Asset-Based $ 97,322 $ 93,799 $ 94,326 ArcBest (4) 20,730 11,387 9,714 FleetNet (5) 1,880 1,661 1,622 Other and eliminations (2) 20,107 17,374 12,729 $ 140,039 $ 124,221 $ 118,391 (1) Includes assets acquired through notes payable of $79.0 million, $59.7 million, and $61.8 million in 2022, 2021, and 2020, respectively. (2) Other and eliminations includes certain assets held for the benefit of multiple segments, including information systems equipment. For 2022, also includes the purchase of a property for $37.5 million. 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 $3.4 million in 2022. (4) Includes amortization of intangibles of $12.9 million, $5.3 million, and $3.7 million in 2022, 2021, and 2020, respectively. (5) Includes amortization of intangibles which totaled less than $0.1 million in both 2022 and 2021, and $0.2 million in 2020. For the year ended December 31 2022 (1) 2021 (1) 2020 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 1,755,947 $ 1,550,859 $ 1,368,588 Rents, purchased transportation, and other costs of services 2,404,701 1,570,050 974,835 Fuel, supplies, and expenses 444,776 324,380 250,221 Depreciation and amortization (2) 140,039 124,221 118,391 Other (3) 179,320 129,571 129,850 $ 4,924,783 $ 3,699,081 $ 2,841,885 (1) For 2022 and 2021, includes the operations of MoLo since the November 1, 2021 acquisition (see Note D). (2) Includes amortization of intangibles assets. (3) For 2022 , includes the increase in fair value of the contingent earnout consideration of $18.3 million recorded by the ArcBest segment for the MoLo acquisition (see Note D). For 2021, includes a $6.9 million gain related to the sale of a subsidiary within the ArcBest segment and an $8.6 million gain related to the sale of an unutilized service center property within the Asset-Based segment. |
Schedule of revenues from customers and intersegment revenues | 2022 2021 2020 (in thousands) Revenues from customers Asset-Based $ 2,896,284 $ 2,470,529 $ 1,998,549 ArcBest 2,128,394 1,291,679 770,560 FleetNet 295,043 213,882 166,654 Other 4,331 3,977 4,400 Total consolidated revenues $ 5,324,052 $ 3,980,067 $ 2,940,163 Intersegment revenues Asset-Based $ 114,616 $ 103,244 $ 93,482 ArcBest 10,878 8,947 8,555 FleetNet 48,013 40,205 38,395 Other and eliminations (173,507) (152,396) (140,432) Total intersegment revenues $ — $ — $ — Total segment revenues Asset-Based $ 3,010,900 2,573,773 $ 2,092,031 ArcBest (1) 2,139,272 1,300,626 779,115 FleetNet 343,056 254,087 205,049 Other and eliminations (169,176) (148,419) (136,032) Total consolidated revenues (1) $ 5,324,052 $ 3,980,067 $ 2,940,163 (1) For 2022 and 2021, includes the operations of MoLo since the November 1, 2021 acquisition (see Note D). |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION - Organization (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
Organization and description of business | |
Number of reportable operating segments | 3 |
Asset Based | |
Organization and description of business | |
Percentage of the Company's revenues, before other revenues and intercompany eliminations, represented by the Asset-Based segment | 55% |
Asset Based | Unionized employees concentration risk | Number of employees | |
Organization and description of business | |
Percentage of Asset-Based segment employees covered under collective bargaining agreement with the IBT | 82% |
ACCOUNTING POLICIES - Concentra
ACCOUNTING POLICIES - Concentration (Details) - Minimum | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | Customer concentration risk | |||
Concentrations | |||
Percentage for concentration of credit risk disclosure | 3% | 3% | 3% |
Accounts receivable | Credit concentration risk | |||
Concentrations | |||
Percentage for concentration of credit risk disclosure | 7% | 7% |
ACCOUNTING POLICIES - Allowance
ACCOUNTING POLICIES - Allowances (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Allowances | ||
Allowance for credit losses on trade accounts receivable | $ 9.4 | $ 8.8 |
Increase in amount of allowance for credit losses, including allowance assumed in business acquisition | 6.9 | |
Write-offs, net of recoveries | $ 6.3 |
ACCOUNTING POLICIES - Property
ACCOUNTING POLICIES - Property (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Held-for-sale | Other long-term assets | ||
Property, Plant and Equipment | ||
Assets held for sale | $ 0.8 | $ 0.6 |
Structures | Minimum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 15 years | |
Structures | Maximum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 60 years | |
Revenue equipment | Minimum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 3 years | |
Revenue equipment | Maximum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 22 years | |
Service, office, and other equipment | Minimum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 2 years | |
Service, office, and other equipment | Maximum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 16 years | |
Software | Minimum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 2 years | |
Software | Maximum | ||
Property, Plant and Equipment | ||
Depreciation/amortization period | 7 years |
ACCOUNTING POLICIES - Long Term
ACCOUNTING POLICIES - Long Term Investments (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
ACCOUNTING POLICIES | ||
Carrying value of equity securities without readily determinable fair value | $ 25 | $ 25 |
ACCOUNTING POLICIES - Book Over
ACCOUNTING POLICIES - Book Overdrafts (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts Payable | ||
Book Overdrafts | ||
Amount of book overdrafts | $ 31 | $ 22.6 |
ACCOUNTING POLICIES - Other Rec
ACCOUNTING POLICIES - Other Recognition and Disclosure (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Other Recognition and Disclosure | |
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract | true |
Revenue, Practical Expedient, Remaining Performance Obligation | true |
ACCOUNTING POLICIES - Accelerat
ACCOUNTING POLICIES - Accelerated Share Repurchase (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Nov. 02, 2021 | Jan. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity | |||||
Cost of repurchased shares | $ 65,002 | $ 83,100 | $ 6,595 | ||
Accelerated Share Repurchase Agreement ("ASR") | |||||
Equity | |||||
Amount paid in accelerated repurchase | $ 100,000 | ||||
Number of shares repurchased during the period | 709,287 | 214,763 | 214,763 | ||
Cost of repurchased shares | $ 75,000 | $ 25,000 | 75,000 | ||
Amount of unsettled forward contract classified within stockholders' equity as additional paid in capital. | $ 25,000 |
ACCOUNTING POLICIES - Share-Bas
ACCOUNTING POLICIES - Share-Based Compensation (Details) - Restricted Stock Units | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee | ||||||
Share-Based Compensation | ||||||
Vesting period | 3 years | 3 years | 4 years | 4 years | 4 years | 5 years |
Percentage of stock awards vesting each year. | 33.30% | |||||
Nonemployee Director | ||||||
Share-Based Compensation | ||||||
Vesting period | 1 year |
FINANCIAL INSTRUMENTS AND FAI_3
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Cash and Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair value disclosure | ||
Cash and cash equivalents | $ 158,372 | $ 76,620 |
Short-term investments | 167,662 | 48,339 |
Concentrations of Credit Risk of Financial Instruments | ||
Cash, cash equivalents and short-term investments not FDIC-insured | 99,400 | 42,600 |
Cash deposits | ||
Fair value disclosure | ||
Cash and cash equivalents | 137,355 | 72,790 |
Variable rate demand notes | ||
Fair value disclosure | ||
Cash and cash equivalents | 9,285 | 230 |
Money market funds | ||
Fair value disclosure | ||
Cash and cash equivalents | 11,732 | 3,600 |
Certificates of deposit | ||
Fair value disclosure | ||
Short-term investments | 88,851 | $ 48,339 |
U.S. Treasury securities | ||
Fair value disclosure | ||
Short-term investments | $ 78,811 |
FINANCIAL INSTRUMENTS AND FAI_4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Debt (Details) $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Carrying value | ||
Fair value disclosure | ||
Financial instruments | $ 284,723 | $ 246,299 |
Fair value disclosure | ||
Fair value disclosure | ||
Financial instruments | 276,689 | 249,458 |
Credit Facility | Carrying value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 50,000 | 50,000 |
Credit Facility | Fair value disclosure | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 50,000 | 50,000 |
Notes payable | Carrying value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 214,623 | 175,530 |
Notes payable | Fair value disclosure | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 207,778 | $ 175,937 |
New England Pension Fund withdrawal liability | ||
Fair value disclosure | ||
Outstanding withdrawal liability | 20,100 | |
New England Pension Fund withdrawal liability | Accrued expenses | ||
Fair value disclosure | ||
Outstanding withdrawal liability | 700 | |
New England Pension Fund withdrawal liability | Other long-term liabilities | ||
Fair value disclosure | ||
Outstanding withdrawal liability | $ 19,400 | |
New England Pension Fund withdrawal liability | Discount Rate | ||
Fair value disclosure | ||
Measurement input | 0.053 | 0.031 |
New England Pension Fund withdrawal liability | Carrying value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | $ 20,100 | $ 20,769 |
New England Pension Fund withdrawal liability | Fair value disclosure | Level 2 | ||
Fair value disclosure | ||
Financial instruments | $ 18,911 | $ 23,521 |
FINANCIAL INSTRUMENTS AND FAI_5
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Assets and Liabilities (Details) $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Discount Rate | Valuation Technique, Discounted Cash Flow | ||
Liabilities: | ||
Measurement input | 0.140 | 0.090 |
Recurring basis | ||
Assets: | ||
Assets | $ 19,240 | $ 8,322 |
Liabilities: | ||
Liabilities | 112,000 | 94,155 |
Recurring basis | Cash and cash equivalents | ||
Assets: | ||
Money market funds | 11,732 | 3,600 |
Recurring basis | Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 3,982 | 3,848 |
Interest rate swap | 3,526 | 874 |
Recurring basis | Other long-term liabilities | ||
Liabilities: | ||
Interest rate swap | 455 | |
Contingent consideration | 112,000 | 93,700 |
Recurring basis | Level 1 | ||
Assets: | ||
Assets | 15,714 | 7,448 |
Recurring basis | Level 1 | Cash and cash equivalents | ||
Assets: | ||
Money market funds | 11,732 | 3,600 |
Recurring basis | Level 1 | Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 3,982 | 3,848 |
Recurring basis | Level 2 | ||
Assets: | ||
Assets | 3,526 | 874 |
Liabilities: | ||
Liabilities | 455 | |
Recurring basis | Level 2 | Other long-term assets | ||
Assets: | ||
Interest rate swap | 3,526 | 874 |
Recurring basis | Level 2 | Other long-term liabilities | ||
Liabilities: | ||
Interest rate swap | 455 | |
Recurring basis | Level 3 | ||
Liabilities: | ||
Liabilities | 112,000 | 93,700 |
Recurring basis | Level 3 | Other long-term liabilities | ||
Liabilities: | ||
Contingent consideration | $ 112,000 | $ 93,700 |
FINANCIAL INSTRUMENTS AND FAI_6
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Nonrecurring (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Nonrecurring basis | ||
Fair value measurement | ||
Assets | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS AND FAI_7
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Changes in Fair Value of Liabilities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Changes in fair value | |
Beginning Balances | $ 93,700 |
Change in fair value included in operating income | $ 18,300 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income | Operating income |
Ending Balances | $ 112,000 |
ACQUISITION - MoLo (Details)
ACQUISITION - MoLo (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Oct. 31, 2022 | Dec. 31, 2021 | Nov. 01, 2021 | |
Purchase Consideration | ||||
Net cash consideration, including post-closing adjustments | $ (2,279) | $ 239,380 | ||
MoLo Solutions, LLC | ||||
Purchase Consideration | ||||
Net cash consideration, including post-closing adjustments | $ (2,300) | $ 237,101 | ||
Contingent consideration | 93,700 | |||
Total purchase consideration | $ 330,801 | |||
MoLo Solutions, LLC | 100% of target | ||||
Business Acquisition | ||||
Adjusted EBITDA target percentage | 100% | |||
Contingent consideration, target | $ 215,000 | |||
MoLo Solutions, LLC | 80% of target | ||||
Business Acquisition | ||||
Adjusted EBITDA target percentage | 80% | |||
Contingent consideration, low range | $ 95,000 | |||
MoLo Solutions, LLC | 300% of target | ||||
Business Acquisition | ||||
Adjusted EBITDA target percentage | 300% | |||
Contingent consideration, high range | $ 455,000 |
ACQUISITION - Estimated Fair Va
ACQUISITION - Estimated Fair Values of Acquired Assets and Liabilities (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2022 | Oct. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 01, 2021 | |
Purchase Allocation | ||||||
Goodwill | $ 300,337 | $ 305,382 | $ 300,337 | $ 88,320 | ||
Purchase accounting adjustment | 5,045 | |||||
Operating revenues | 5,324,052 | 3,980,067 | 2,940,163 | |||
Operating income (loss) | $ 399,269 | 280,986 | $ 98,278 | |||
MoLo Solutions, LLC | ||||||
Purchase Allocation | ||||||
Accounts receivable | $ 131,378 | |||||
Prepaid expenses | 468 | |||||
Property and equipment | 1,533 | |||||
Operating lease right-of use assets | 844 | |||||
Intangible assets | 76,900 | |||||
Other assets | 170 | |||||
Total identifiable assets acquired | 211,293 | |||||
Accounts payable | 94,053 | |||||
Accrued expenses and other current liabilities | 4,470 | |||||
Operating lease liabilities | 983 | |||||
Total liabilities | 99,506 | |||||
Total identifiable net assets | 111,787 | |||||
Goodwill | 219,014 | |||||
Net assets acquired | $ 330,801 | |||||
Purchase accounting adjustment | $ 5,000 | |||||
Operating revenues | 120,300 | |||||
Operating income (loss) | $ (1,200) | |||||
Acquisition related costs | $ 6,000 |
ACQUISITION - Proforma Suppleme
ACQUISITION - Proforma Supplemental Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Pro forma supplemental information | ||
Revenues | $ 4,488,564 | $ 3,213,722 |
Income before income taxes | 266,866 | 63,622 |
Net income | $ 205,728 | $ 48,290 |
Diluted EPS | $ 7.68 | $ 1.83 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Oct. 01, 2022 | Oct. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill by reportable operating segment | ||||
Balance at the beginning of the period | $ 300,337 | $ 88,320 | ||
Goodwill acquired | 213,969 | |||
Goodwill divested | (1,952) | |||
Purchase accounting adjustment | 5,045 | |||
Balance at the end of the period | 305,382 | 300,337 | ||
Accumulated impairment | (20,000) | (20,000) | ||
Goodwill impairment | $ 0 | $ 0 | ||
ArcBest | ||||
Goodwill by reportable operating segment | ||||
Balance at the beginning of the period | 299,707 | 87,690 | ||
Goodwill acquired | 213,969 | |||
Goodwill divested | (1,952) | |||
Purchase accounting adjustment | 5,045 | |||
Balance at the end of the period | 304,752 | 299,707 | ||
Accumulated impairment | (20,000) | (20,000) | ||
FleetNet | ||||
Goodwill by reportable operating segment | ||||
Balance at the beginning of the period | 630 | 630 | ||
Balance at the end of the period | $ 630 | $ 630 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Oct. 01, 2022 | Oct. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-lived intangible assets | ||||
Weighted Average Amortization Period | 11 years | |||
Cost | $ 130,792 | $ 130,656 | ||
Accumulated Amortization | 49,296 | 36,376 | ||
Net Value | 81,496 | 94,280 | ||
Total intangible assets | ||||
Cost | 163,092 | 162,956 | ||
Net Value | 113,796 | 126,580 | ||
Impairment Assessment of Intangible Assets | ||||
Impairment of indefinite-lived intangible assets | $ 0 | $ 0 | ||
Trade name | ||||
Indefinite-lived intangible assets | ||||
Net Value | $ 32,300 | 32,300 | ||
Customer relationships | ||||
Finite-lived intangible assets | ||||
Weighted Average Amortization Period | 12 years | |||
Cost | $ 100,321 | 100,321 | ||
Accumulated Amortization | 43,627 | 35,072 | ||
Net Value | $ 56,694 | 65,249 | ||
Other intangible assets | ||||
Finite-lived intangible assets | ||||
Weighted Average Amortization Period | 8 years | |||
Cost | $ 30,471 | 30,335 | ||
Accumulated Amortization | 5,669 | 1,304 | ||
Net Value | $ 24,802 | $ 29,031 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Future amortization for intangible assets | ||
2023 | $ 12,826 | |
2024 | 12,793 | |
2025 | 12,778 | |
2026 | 8,671 | |
2027 | 7,247 | |
Thereafter | 27,181 | |
Net Value | $ 81,496 | $ 94,280 |
INCOME TAXES - Provision (Detai
INCOME TAXES - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current provision: | |||
Federal | $ 80,378 | $ 56,451 | $ 10,001 |
State | 19,949 | 14,430 | 3,267 |
Foreign | 869 | 341 | 413 |
Current tax provision | 101,196 | 71,222 | 13,681 |
Deferred provision (benefit): | |||
Federal | (5,477) | (6,098) | 5,948 |
State | (753) | (1,554) | 1,789 |
Foreign | (20) | 63 | (22) |
Deferred tax provision (benefit) | (6,250) | (7,589) | 7,715 |
Total provision for income taxes | $ 94,946 | $ 63,633 | $ 21,396 |
INCOME TAXES - Deferred income
INCOME TAXES - Deferred income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Components of the deferred tax provision or benefit | |||
Amortization, depreciation, and basis differences for property, plant and equipment and other long-lived assets | $ 4,186 | $ 1,451 | $ 4,975 |
Amortization of intangibles and impairment | (2,973) | (536) | 183 |
Changes in reserves for workers' compensation, third-party casualty, and cargo claims | (3,713) | (3,294) | (182) |
Revenue recognition | 13 | (1,445) | (1,481) |
Allowance for credit losses | (391) | 156 | (652) |
Nonunion pension and other retirement plans | (4) | (3) | 957 |
Multiemployer pension fund withdrawal | 172 | 164 | 157 |
Federal and state net operating loss carryforwards utilized (generated) | 899 | (300) | (259) |
State depreciation adjustments | (915) | 598 | 343 |
Share-based compensation | 749 | (984) | (195) |
Valuation allowance increase | (489) | 911 | 617 |
Other accrued expenses | (3,104) | (4,097) | 1,663 |
Prepaid expenses | (18) | (788) | 1,207 |
Operating lease right-of-use assets/liabilities - net | (651) | (228) | (13) |
Other | (11) | 806 | 395 |
Deferred tax provision (benefit) | $ (6,250) | $ (7,589) | $ 7,715 |
INCOME TAXES - Deferred (Detail
INCOME TAXES - Deferred (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Accrued expenses | $ 53,997 | $ 47,683 |
Operating lease right-of-use liabilities | 46,056 | 30,590 |
Supplemental pension liabilities | 81 | 97 |
Multiemployer pension fund withdrawal | 5,063 | 5,247 |
Postretirement liabilities other than pensions | 3,137 | 4,441 |
Share-based compensation | 5,794 | 6,755 |
Federal and state net operating loss carryforwards | 753 | 1,652 |
Receivable allowances | 3,052 | 2,778 |
Other | 417 | 266 |
Total deferred tax assets | 118,350 | 99,509 |
Valuation allowance | (1,707) | (2,196) |
Total deferred tax assets, net of valuation allowance | 116,643 | 97,313 |
Deferred tax liabilities: | ||
Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets | 117,586 | 114,999 |
Operating lease right-of-use assets | 44,170 | 29,403 |
Intangibles | 4,396 | 6,966 |
Prepaid expenses | 5,424 | 5,368 |
Total deferred tax liabilities | 171,576 | 156,736 |
Net deferred tax liabilities | $ (54,933) | $ (59,423) |
INCOME TAXES - Rate Reconciliat
INCOME TAXES - Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation between the effective income tax rate, as computed on income (loss) before income taxes, and the statutory federal income tax rate | |||
Statutory federal rate (as a percent) | 21% | 21% | 21% |
Income tax provision at the statutory federal rate | $ 82,562 | $ 58,202 | $ 19,424 |
Federal income tax effects of: | |||
State income taxes | (4,031) | (2,704) | (1,062) |
Nondeductible expenses | 5,607 | 3,596 | 1,395 |
Life insurance proceeds and changes in cash surrender value | 575 | (866) | (488) |
Alternative fuel tax credit | (2,449) | (1,261) | |
Net increase (decrease) in valuation allowances | (464) | 887 | 617 |
Net increase (decrease) in uncertain tax positions | 854 | (933) | |
Settlement of share-based compensation | (6,852) | (6,140) | 420 |
Foreign tax credits generated | (849) | (404) | (391) |
Federal research and development tax credits | 278 | (2,044) | (2,078) |
Other | 524 | (1,028) | 306 |
Federal income tax provision | 74,901 | 50,353 | 15,949 |
State income tax provision | 19,196 | 12,876 | 5,056 |
Foreign income tax provision | 849 | 404 | 391 |
Total provision for income taxes | $ 94,946 | $ 63,633 | $ 21,396 |
Effective tax (benefit) rate (as a percent) | 24.10% | 23% | 23.10% |
Income taxes paid, excluding income tax refunds | $ 148,700 | $ 77,500 | $ 28,600 |
Income tax refunds | $ 42,300 | $ 19,400 | $ 13,300 |
INCOME TAXES - Stock Compensati
INCOME TAXES - Stock Compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Pronouncements | |||
Tax (benefit) expense for settlement of stock awards (as a percent) | (2.10%) | (2.80%) | 0.50% |
Maximum | |||
Accounting Pronouncements | |||
Tax benefit realized from dividends on share-based payment awards | $ 0.1 | $ 0.1 | $ 0.1 |
INCOME TAXES - NOL (Details)
INCOME TAXES - NOL (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 USD ($) Y | Dec. 31, 2021 USD ($) | |
State | ||
Operating loss carryforwards | ||
Operating loss carryforwards | $ 9.9 | |
Valuation allowance, NOLs | 0.4 | $ 1.1 |
State tax department of Panther | ||
Operating loss carryforwards | ||
Operating loss carryforwards | 1 | |
State tax department of other subsidiaries | ||
Operating loss carryforwards | ||
Operating loss carryforwards | $ 7.3 | |
Number of prior years with taxable losses | Y | 3 | |
Federal | ||
Operating loss carryforwards | ||
Operating loss carryforwards | $ 0.8 | |
Removal of operating loss valuation allowance | $ 0.1 | |
Minimum | State tax department of Panther | ||
Operating loss carryforwards | ||
Carryforward expiration period | 10 years | |
Maximum | State tax department of Panther | ||
Operating loss carryforwards | ||
Carryforward expiration period | 15 years |
INCOME TAXES - Tax Credit Carry
INCOME TAXES - Tax Credit Carryforward (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Foreign | ||
Tax credit carryforwards | ||
Valuation allowance, tax credit carryforwards | $ 1 | $ 0.8 |
Research and development | State | ||
Tax credit carryforwards | ||
Valuation allowance, tax credit carryforwards | 0.2 | 0.2 |
Interest expense carryforwards | State | Maximum | ||
Tax credit carryforwards | ||
Valuation allowance, tax credit carryforwards | $ 0.1 | $ 0.1 |
INCOME TAXES - Uncertain Tax Po
INCOME TAXES - Uncertain Tax Positions (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
INCOME TAXES | ||
Reserve for uncertain tax positions | $ 0.9 | $ 0.9 |
LEASES - Lease terms (Details)
LEASES - Lease terms (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Operating leases | |
Lessor, Operating Lease, Existence of Option to Terminate | false |
Maximum | |
Operating leases | |
Remaining lease term | 11 years 3 months 18 days |
Operating lease, renewal term | 5 years |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
LEASES | |||
Operating lease expense | $ 31,790 | $ 26,552 | $ 24,559 |
Variable lease expense | 4,188 | 4,128 | 3,152 |
Sublease income | (391) | (626) | (398) |
Total operating lease expense | $ 35,587 | $ 30,054 | $ 27,313 |
LEASES - Cash Flows (Details)
LEASES - Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating leases | |||
Noncash change in operating right-of-use assets | $ 27,465 | $ 24,023 | $ 21,184 |
Change in operating lease liabilities | (24,513) | (23,400) | (20,428) |
Operating right-of-use assets and lease liabilities, net | 2,952 | 623 | 756 |
Cash paid for amounts included in the measurement of operating lease liabilities | $ (28,830) | $ (25,909) | $ (23,810) |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating leases | ||
Operating right-of-use assets (long-term) | $ 166,515 | $ 106,686 |
Operating lease liabilities (current) | 26,225 | 22,740 |
Operating lease liabilities (long-term) | 147,828 | 88,835 |
Total operating lease liabilities | $ 174,053 | $ 111,575 |
Operating Lease, Liability, Statement of Financial Position | Operating lease liabilities (current), Operating lease liabilities (long-term) | Operating lease liabilities (current), Operating lease liabilities (long-term) |
Weighted average remaining lease term (in years) | 7 years 7 months 6 days | 6 years 10 months 24 days |
Weighted average discount rate | 3.58% | 2.88% |
Land and Structures | ||
Operating leases | ||
Operating right-of-use assets (long-term) | $ 165,822 | $ 106,394 |
Operating lease liabilities (current) | 25,824 | 22,477 |
Operating lease liabilities (long-term) | 147,534 | 88,810 |
Total operating lease liabilities | 173,358 | 111,287 |
Equipment and Others | ||
Operating leases | ||
Operating right-of-use assets (long-term) | 693 | 292 |
Operating lease liabilities (current) | 401 | 263 |
Operating lease liabilities (long-term) | 294 | 25 |
Total operating lease liabilities | $ 695 | $ 288 |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Maturities of operating lease liabilities | ||
2023 | $ 31,868 | |
2024 | 30,762 | |
2025 | 26,889 | |
2026 | 24,442 | |
2027 | 19,349 | |
Thereafter | 67,474 | |
Total lease payments | 200,784 | |
Less imputed interest | (26,731) | |
Total operating lease liabilities | $ 174,053 | $ 111,575 |
Operating Lease, Liability, Statement of Financial Position | Operating lease liabilities (current), Operating lease liabilities (long-term) | Operating lease liabilities (current), Operating lease liabilities (long-term) |
Future minimum payments for leases that have not yet commenced | $ 32,000 | |
Lease term for lease commitments that have not yet commenced | 10 years | |
Land and Structures | ||
Maturities of operating lease liabilities | ||
2023 | $ 31,446 | |
2024 | 30,464 | |
2025 | 26,889 | |
2026 | 24,442 | |
2027 | 19,349 | |
Thereafter | 67,474 | |
Total lease payments | 200,064 | |
Less imputed interest | (26,706) | |
Total operating lease liabilities | 173,358 | $ 111,287 |
Equipment and Others | ||
Maturities of operating lease liabilities | ||
2023 | 422 | |
2024 | 298 | |
Total lease payments | 720 | |
Less imputed interest | (25) | |
Total operating lease liabilities | $ 695 | $ 288 |
LONG-TERM DEBT AND FINANCING _3
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Long-term debt obligations | ||
Long-term debt | $ 264,623 | $ 225,532 |
Less current portion | 66,252 | 50,615 |
Long-term debt, less current portion | $ 198,371 | 174,917 |
Weighted-average interest rate (as a percent) | 3% | |
Credit Facility | ||
Long-term debt obligations | ||
Long-term debt | $ 50,000 | $ 50,000 |
Interest rate (as a percent) | 5.50% | |
Credit Facility | Interest rate swap agreement | ||
Long-term debt obligations | ||
Amount of borrowings covered by the interest rate swap | $ 50,000 | |
Effective fixed interest rate on hedged borrowings (as a percent) | 1.55% | 3.12% |
Notes payable | ||
Long-term debt obligations | ||
Long-term debt | $ 214,623 | $ 175,530 |
Weighted-average interest rate (as a percent) | 3.30% | |
Finance lease obligations | ||
Long-term debt obligations | ||
Long-term debt | $ 2 |
LONG-TERM DEBT AND FINANCING _4
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Maturities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Maturities of long-term debt obligations | |
2023 | $ 75,381 |
2024 | 67,456 |
2025 | 93,653 |
2026 | 31,798 |
2027 | 15,773 |
Thereafter | 186 |
Total payments | 284,247 |
Less amounts representing interest | 19,624 |
Long-term debt | 264,623 |
Credit Facility | |
Maturities of long-term debt obligations | |
2023 | 3,045 |
2024 | 2,008 |
2025 | 50,000 |
Total payments | 55,053 |
Less amounts representing interest | 5,053 |
Long-term debt | 50,000 |
Notes payable | |
Maturities of long-term debt obligations | |
2023 | 72,336 |
2024 | 65,448 |
2025 | 43,653 |
2026 | 31,798 |
2027 | 15,773 |
Thereafter | 186 |
Total payments | 229,194 |
Less amounts representing interest | 14,571 |
Long-term debt | $ 214,623 |
LONG-TERM DEBT AND FINANCING _5
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Assets Securing Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Arrangements | |||
Total assets securing notes payable or held under finance leases | $ 336,222 | $ 271,665 | |
Less accumulated depreciation and amortization | 119,244 | 88,696 | |
Net assets securing notes payable or held under finance leases | $ 216,978 | 182,969 | |
Weighted-average interest rate (as a percent) | 3% | ||
Interest paid, net of capitalized interest | $ 7,100 | 8,700 | $ 11,300 |
Capitalized interest | 300 | 500 | $ 300 |
Revenue equipment | |||
Financing Arrangements | |||
Total assets securing notes payable or held under finance leases | 294,700 | 241,892 | |
Service, office, and other equipment | |||
Financing Arrangements | |||
Total assets securing notes payable or held under finance leases | $ 41,522 | $ 29,773 |
LONG-TERM DEBT AND FINANCING _6
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Credit Facility (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | |
Financing Arrangements | ||||
Borrowings under credit facilities | $ 58,000 | $ 50,000 | $ 180,000 | |
Repayment of debt | 115,540 | $ 171,915 | $ 326,098 | |
Outstanding letters of credit | 10,600 | |||
Credit Facility | ||||
Financing Arrangements | ||||
Maximum borrowing capacity | 250,000 | |||
Additional borrowing capacity that may be requested | 125,000 | |||
Borrowings under credit facilities | 58,000 | |||
Repayment of debt | 58,000 | |||
Remaining borrowing capacity | $ 200,000 | |||
Credit Facility | Alternate Base Rate | Minimum | ||||
Financing Arrangements | ||||
Basis spread (as a percent) | 0.125% | |||
Credit Facility | Alternate Base Rate | Maximum | ||||
Financing Arrangements | ||||
Basis spread (as a percent) | 1% | |||
Credit Facility | Adjusted Term SOFR Screen Rate | ||||
Financing Arrangements | ||||
Variable rate adjustment (as a percent) | 0.10% | |||
Credit Facility | Adjusted Term SOFR Screen Rate | Minimum | ||||
Financing Arrangements | ||||
Basis spread (as a percent) | 1.125% | |||
Credit Facility | Adjusted Term SOFR Screen Rate | Maximum | ||||
Financing Arrangements | ||||
Basis spread (as a percent) | 2% | |||
Swing Line Facility | ||||
Financing Arrangements | ||||
Maximum borrowing capacity | $ 40,000 | $ 25,000 | ||
Letters of Credit, Sub-Facility | ||||
Financing Arrangements | ||||
Maximum borrowing capacity | $ 20,000 |
LONG-TERM DEBT AND FINANCING _7
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Interest Rate Swaps (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Oct. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Jan. 02, 2020 |
Interest rate swap agreement | Credit Facility | |||||
Financing Arrangements | |||||
Amount of borrowings covered by the interest rate swap | $ 50 | ||||
Effective fixed interest rate on hedged borrowings (as a percent) | 1.55% | 3.12% | |||
Interest rate swap agreement, maturing on June 30, 2022 | |||||
Financing Arrangements | |||||
Notional amount | $ 50 | ||||
Interest rate swap agreement, maturing on June 30, 2022 | Other long-term liabilities | |||||
Financing Arrangements | |||||
Fair value of interest rate swap, liability | $ 0.5 | ||||
Interest rate swap agreement, maturing on October 1, 2024 | |||||
Financing Arrangements | |||||
Notional amount | $ 50 | ||||
Fixed interest rate payments (as a percent) | 0.33% | ||||
Interest rate swap agreement, maturing on October 1, 2024 | Other long-term assets | |||||
Financing Arrangements | |||||
Fair value of interest rate swap, asset | $ 3.5 | $ 0.9 | |||
Interest rate swap agreement, maturing on October 1, 2024 | Credit Facility | |||||
Financing Arrangements | |||||
Amount of borrowings covered by the interest rate swap | $ 50 | ||||
Effective fixed interest rate on hedged borrowings (as a percent) | 1.55% |
LONG-TERM DEBT AND FINANCING _8
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Securitization Program (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Financing Arrangements | |
Outstanding letters of credit | $ 10.6 |
Accounts receivable securitization program | |
Financing Arrangements | |
Maximum borrowing capacity | 50 |
Additional borrowing capacity that may be requested | 100 |
Outstanding letters of credit | 10 |
Remaining borrowing capacity | $ 40 |
LONG-TERM DEBT AND FINANCING _9
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Letters of Credit & Surety Bonds (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Arrangements | ||
Outstanding letters of credit | $ 10.6 | |
Accounts receivable securitization program | ||
Financing Arrangements | ||
Outstanding letters of credit | 10 | |
Surety bonds | ||
Financing Arrangements | ||
Outstanding surety bonds under uncollateralized bond programs | $ 62.6 | $ 50.9 |
LONG-TERM DEBT AND FINANCING_10
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Notes Payable (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Notes payable | Revenue equipment and software | ||
Financing Arrangements | ||
Assets financed during the period under promissory note arrangements | $ 82.4 | $ 59.7 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ACCRUED EXPENSES. | ||
Workers' compensation, third-party casualty, and loss and damage claims reserves | $ 133,128 | $ 116,535 |
Accrued vacation pay | 58,874 | 52,746 |
Accrued compensation, including retirement benefits | 122,057 | 110,755 |
Taxes other than income | 12,443 | 10,225 |
Other | 15,320 | 15,590 |
Total accrued expenses | $ 341,822 | $ 305,851 |
EMPLOYEE BENEFIT PLANS - Plan s
EMPLOYEE BENEFIT PLANS - Plan summary (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Postretirement Health Benefit Plan | |
Postretirement benefit plans | |
Unrecognized prior service credit, amortization period | 9 years |
EMPLOYEE BENEFIT PLANS - Funded
EMPLOYEE BENEFIT PLANS - Funded status (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental Benefit Plan | |||
Change in benefit obligations | |||
Benefit obligations at beginning of period | $ 381 | $ 392 | |
Interest cost | 7 | 4 | $ 9 |
Actuarial (gain) loss | (50) | (15) | |
Benefit obligations at end of period | 338 | 381 | 392 |
Change in plan assets | |||
Funded status at period end | (338) | (381) | |
Accumulated benefit obligation | 338 | 381 | |
Postretirement Health Benefit Plan | |||
Change in benefit obligations | |||
Benefit obligations at beginning of period | 16,992 | 18,751 | |
Service cost | 156 | 192 | 187 |
Interest cost | 441 | 427 | 576 |
Actuarial (gain) loss | (4,392) | (1,736) | |
Benefits paid | (663) | (642) | |
Benefit obligations at end of period | 12,534 | 16,992 | $ 18,751 |
Change in plan assets | |||
Employer contributions | 663 | 642 | |
Benefits paid | (663) | (642) | |
Funded status at period end | (12,534) | (16,992) | |
Accumulated benefit obligation | $ 12,534 | $ 16,992 |
EMPLOYEE BENEFIT PLANS - Recogn
EMPLOYEE BENEFIT PLANS - Recognized in Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Amounts recognized in the consolidated balance sheets | ||
Pension and postretirement liabilities, less current portion | $ (12,196) | $ (16,733) |
Supplemental Benefit Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Pension and postretirement liabilities, less current portion | (338) | (381) |
Liabilities recognized | (338) | (381) |
Postretirement Health Benefit Plan | ||
Amounts recognized in the consolidated balance sheets | ||
Current portion of pension and postretirement liabilities | (676) | (640) |
Pension and postretirement liabilities, less current portion | (11,858) | (16,352) |
Liabilities recognized | $ (12,534) | $ (16,992) |
EMPLOYEE BENEFIT PLANS - Compon
EMPLOYEE BENEFIT PLANS - Components of Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Components of net periodic benefit cost (credit) | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income | Other, net | Other, net | Other, net |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income | Other, net | Other, net | Other, net |
Pension settlement expense | $ 89 | ||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Settlement Gain (Loss), Statement of Income or Comprehensive Income | Other, net | Other, net | Other, net |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Amortization of Gain (Loss), Statement of Income or Comprehensive Income | Other, net | Other, net | Other, net |
Supplemental Benefit Plan | |||
Components of net periodic benefit cost (credit) | |||
Interest cost | $ 7 | $ 4 | $ 9 |
Pension settlement expense | 89 | ||
Amortization of net actuarial (gain) loss | 8 | 9 | 8 |
Net periodic benefit cost (credit) | 15 | 13 | 106 |
Postretirement Health Benefit Plan | |||
Components of net periodic benefit cost (credit) | |||
Service cost | 156 | 192 | 187 |
Interest cost | 441 | 427 | 576 |
Amortization of prior service credit | (1) | ||
Amortization of net actuarial (gain) loss | (765) | (548) | (597) |
Net periodic benefit cost (credit) | $ (168) | $ 71 | $ 165 |
EMPLOYEE BENEFIT PLANS - Settle
EMPLOYEE BENEFIT PLANS - Settlement distributions and expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020 USD ($) | |
Distributions and pension settlement expense | |
Pension settlement expense, pre-tax | $ 89 |
Supplemental Benefit Plan | |
Distributions and pension settlement expense | |
Pension settlement distributions | 2,887 |
Pension settlement expense, pre-tax | $ 89 |
Period of delay for pension settlement distribution to key employees | 6 months |
EMPLOYEE BENEFIT PLANS - Includ
EMPLOYEE BENEFIT PLANS - Included in AOCI (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Supplemental Benefit Plan | ||
Pre-tax amounts included in accumulated other comprehensive loss that have not yet been recognized in net periodic benefit cost | ||
Unrecognized net actuarial (gain) loss | $ (18) | $ 40 |
Postretirement Health Benefit Plan | ||
Pre-tax amounts included in accumulated other comprehensive loss that have not yet been recognized in net periodic benefit cost | ||
Unrecognized net actuarial (gain) loss | $ (9,269) | $ (5,642) |
EMPLOYEE BENEFIT PLANS - Discou
EMPLOYEE BENEFIT PLANS - Discount rate and assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental Benefit Plan | |||
Weighted-average assumptions used to determine nonunion benefit obligations | |||
Discount rate (as a percent) | 4.60% | 1.80% | |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount rate (as a percent) | 1.80% | 1.10% | 2.40% |
Postretirement Health Benefit Plan | |||
Weighted-average assumptions used to determine nonunion benefit obligations | |||
Discount rate (as a percent) | 5% | 2.70% | |
Weighted-average assumptions used to determine net periodic benefit cost | |||
Discount rate (as a percent) | 2.70% | 2.30% | 3.10% |
EMPLOYEE BENEFIT PLANS - Health
EMPLOYEE BENEFIT PLANS - Health care trend rates (Details) - Postretirement Health Benefit Plan | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Assumed health care cost trend rates | ||
Health care cost trend rate assumed for next year (as a percent) | 7% | 7% |
Rate to which the cost trend rate is assumed to decline (as a percent) | 4.50% | 4.50% |
Year that the rate reaches the cost trend assumed rate | 2034 | 2033 |
EMPLOYEE BENEFIT PLANS - Future
EMPLOYEE BENEFIT PLANS - Future benefit payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Supplemental Benefit Plan | |
Estimated future benefit payments | |
2028-2032 | $ 424 |
Postretirement Health Benefit Plan | |
Estimated future benefit payments | |
2023 | 676 |
2024 | 676 |
2025 | 729 |
2026 | 734 |
2027 | 740 |
2028-2032 | $ 3,705 |
EMPLOYEE BENEFIT PLANS - Deferr
EMPLOYEE BENEFIT PLANS - Deferred Comp Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred salary agreements | ||
Deferred Compensation Plans | ||
Recorded liabilities | $ 1.3 | $ 1.5 |
Voluntary Savings Plan - mutual funds held in trust | ||
Deferred Compensation Plans | ||
Minimum period for election to defer receipt of a portion of salary and incentive compensation | 6 months | |
Voluntary Savings Plan - mutual funds held in trust | Other long-term assets | ||
Deferred Compensation Plans | ||
VSP assets | $ 4 | 3.8 |
Voluntary Savings Plan - mutual funds held in trust | Other long-term liabilities | ||
Deferred Compensation Plans | ||
VSP liabilities | $ 4 | $ 3.8 |
EMPLOYEE BENEFIT PLANS - Define
EMPLOYEE BENEFIT PLANS - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Long-Term Incentive Compensation Plan | |||
Earning period of Long-term cash incentive plan | 3 years | ||
Incentive payments accrued for Long-Term Cash Incentive Plan | $ 29.5 | $ 28.3 | $ 14.2 |
Other Plans | |||
Cash surrender value of life insurance policies | 54.7 | 57.2 | |
Recognized (losses) gains associated with changes in the cash surrender value and proceeds from life insurance policies | $ (2.7) | 4.1 | 2.3 |
401(k) Plan | |||
Defined Contribution Plans | |||
Maximum percentage of salary permitted to be deferred by plan participants | 69% | ||
Rate of employer match on participant contributions | 50% | ||
Maximum percentage of participants compensation that is eligible for 50% matching contribution | 6% | ||
Expense for employer contribution to defined contribution plan | $ 9.4 | 7.7 | 4.6 |
Defined Contribution Plan | |||
Defined Contribution Plans | |||
Expense for employer contribution to defined contribution plan | $ 19.1 | $ 16.8 | $ 12.6 |
Period of service for participants' full vesting in the employer's contributions | 3 years |
EMPLOYEE BENEFIT PLANS - Multie
EMPLOYEE BENEFIT PLANS - Multiemployer Plans (Details) - Asset Based $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Aug. 01, 2022 | Aug. 01, 2021 | Aug. 01, 2020 | Sep. 30, 2018 USD ($) | Jun. 30, 2018 USD ($) | Dec. 31, 2022 USD ($) plan | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jan. 01, 2021 | Jan. 01, 2020 | |
Multiemployer Plans | ||||||||||
Minimum funded percentage of plans in green zone | 80% | |||||||||
Pension Plans | ||||||||||
Multiemployer Plans | ||||||||||
Number of multiemployer plans to which ABF Freight currently contributes | plan | 25 | |||||||||
Maximum funded percentage of plans in yellow zone | 80% | |||||||||
Maximum funded percentage of plans in red zone | 65% | |||||||||
Maximum projected time to insolvency for plans in "critical and declining" status | 14 years | |||||||||
Maximum projected time to insolvency for plans in "critical and declining" status if additional criteria apply | 19 years | |||||||||
Threshold ratio of inactive to active participants for greater insolvency period to determine "critical and declining" status | 2 | |||||||||
Threshold funded percentage for greater insolvency period to determine "critical and declining" status | 80% | |||||||||
Percentage of contributions to the multiemployer pension plans that are in critical and declining status | 56% | |||||||||
Percentage of contributions to the multiemployer pension plans that are in critical status | 4% | |||||||||
Percentage of contributions to the multiemployer pension plans that are in endangered status | 4% | |||||||||
Total multiemployer pension contributions paid | $ 154,558 | $ 146,893 | $ 142,194 | |||||||
Pension Plans | Central States Pension Plan and Central Pennsylvania Teamsters Pension Plan | ||||||||||
Multiemployer Plans | ||||||||||
Threshold percentage of the entity's contributions relative to total fund contributions, which was exceeded during the period | 5% | 5% | ||||||||
Pension Plans | Central States Pension Plan | ||||||||||
Multiemployer Plans | ||||||||||
Multiemployer pension contributions paid, individually significant | $ 75,306 | $ 71,045 | $ 68,704 | |||||||
Percentage of contributions to multiemployer pension plan | 50% | 50% | 50% | |||||||
Actuarially certified projected funded percentage of multiemployer pension plan | 17.10% | 19.50% | ||||||||
Pension Plans | Western Conference Of Teamsters Pension Plan | ||||||||||
Multiemployer Plans | ||||||||||
Multiemployer pension contributions paid, individually significant | $ 28,051 | $ 25,861 | $ 23,633 | |||||||
Pension Plans | Central Pennsylvania Teamsters Pension Plan | ||||||||||
Multiemployer Plans | ||||||||||
Multiemployer pension contributions paid, individually significant | 14,421 | 13,931 | 13,485 | |||||||
Pension Plans | Local 710 Pension Fund | ||||||||||
Multiemployer Plans | ||||||||||
Multiemployer pension contributions paid, individually significant | 9,838 | 9,553 | $ 9,885 | |||||||
Threshold percentage of the entity's contributions relative to total fund contributions, which was exceeded during the period | 5% | |||||||||
Pension Plans | New England Teamsters and Trucking Industry Pension Fund | ||||||||||
Multiemployer Plans | ||||||||||
Multiemployer pension contributions paid, individually significant | 4,449 | 4,357 | $ 4,464 | |||||||
Contributions to multiemployer plans related to pension fund withdrawal liability | 1,600 | 1,600 | 1,600 | |||||||
Multiemployer pension fund withdrawal liability charge (pre-tax) | $ 37,900 | |||||||||
Initial lump sum payment of withdrawal liability | $ 15,100 | |||||||||
Withdrawal liability monthly payments period (in years) | 19 years | |||||||||
Pension Plans | Other Pension Plans | ||||||||||
Multiemployer Plans | ||||||||||
Multiemployer pension contributions paid, individually insignificant | $ 22,493 | 22,146 | 22,023 | |||||||
Pension Plans | Western Pennsylvania Teamsters And Employers Pension Fund | ||||||||||
Multiemployer Plans | ||||||||||
Percentage of contributions to individually insignificant multiemployer pension plan | 1% | |||||||||
Pension Plans | New York State Teamsters Conference Pension and Retirement Fund | ||||||||||
Multiemployer Plans | ||||||||||
Percentage of contributions to individually insignificant multiemployer pension plan | 1% | |||||||||
Pension Plans | North Jersey Welfare Fund | ||||||||||
Multiemployer Plans | ||||||||||
Percentage of contributions to individually insignificant multiemployer pension plan | 2% | |||||||||
Health And Welfare Plans | ||||||||||
Multiemployer Plans | ||||||||||
Number of multiemployer plans to which ABF Freight currently contributes | plan | 38 | |||||||||
Total multiemployer pension contributions paid | $ 194,400 | $ 176,200 | $ 163,800 | |||||||
Percentage increase in contribution rate for time worked related to benefit costs | 4.30% | 4.30% | 4% |
STOCKHOLDERS' EQUITY - AOCI (De
STOCKHOLDERS' EQUITY - AOCI (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accumulated Other Comprehensive Income | ||||
Total after-tax amount | $ 1,151,401 | $ 929,067 | $ 828,593 | $ 763,043 |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income | ||||
Total pre-tax amount | 9,566 | 4,977 | 1,586 | |
Total after-tax amount | 7,103 | 3,699 | 1,190 | $ 203 |
Unrecognized Net Periodic Benefit Credit | ||||
Accumulated Other Comprehensive Income | ||||
Total pre-tax amount | 9,287 | 5,602 | 4,390 | |
Total after-tax amount | 6,896 | 4,160 | 3,260 | |
Interest Rate Swap | ||||
Accumulated Other Comprehensive Income | ||||
Total pre-tax amount | 3,526 | 419 | (1,622) | |
Total after-tax amount | 2,604 | 309 | (1,198) | |
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income | ||||
Total pre-tax amount | (3,247) | (1,044) | (1,182) | |
Total after-tax amount | $ (2,397) | $ (770) | $ (872) |
STOCKHOLDERS' EQUITY - AOCI Com
STOCKHOLDERS' EQUITY - AOCI Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in accumulated other comprehensive income, net of tax, by component | |||
Balances | $ 929,067 | $ 828,593 | $ 763,043 |
OTHER COMPREHENSIVE INCOME, net of tax | 3,404 | 2,509 | 987 |
Balances | 1,151,401 | 929,067 | 828,593 |
Accumulated Other Comprehensive Income (Loss) | |||
Changes in accumulated other comprehensive income, net of tax, by component | |||
Balances | 3,699 | 1,190 | 203 |
Other comprehensive income (loss) before reclassifications | 3,966 | 2,909 | |
Amounts reclassified from accumulated other comprehensive income | (562) | (400) | |
OTHER COMPREHENSIVE INCOME, net of tax | 3,404 | 2,509 | 987 |
Balances | 7,103 | 3,699 | 1,190 |
Unrecognized Net Periodic Benefit Credit | |||
Changes in accumulated other comprehensive income, net of tax, by component | |||
Balances | 4,160 | 3,260 | |
Other comprehensive income (loss) before reclassifications | 3,298 | 1,300 | |
Amounts reclassified from accumulated other comprehensive income | (562) | (400) | |
OTHER COMPREHENSIVE INCOME, net of tax | 2,736 | 900 | |
Balances | 6,896 | 4,160 | 3,260 |
Interest Rate Swap | |||
Changes in accumulated other comprehensive income, net of tax, by component | |||
Balances | 309 | (1,198) | |
Other comprehensive income (loss) before reclassifications | 2,295 | 1,507 | |
OTHER COMPREHENSIVE INCOME, net of tax | 2,295 | 1,507 | |
Balances | 2,604 | 309 | (1,198) |
Foreign Currency Translation | |||
Changes in accumulated other comprehensive income, net of tax, by component | |||
Balances | (770) | (872) | |
Other comprehensive income (loss) before reclassifications | (1,627) | 102 | |
OTHER COMPREHENSIVE INCOME, net of tax | (1,627) | 102 | |
Balances | $ (2,397) | $ (770) | $ (872) |
STOCKHOLDERS' EQUITY - Reclass
STOCKHOLDERS' EQUITY - Reclass (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Unrecognized Net Periodic Benefit Credit | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Tax expense | $ (195) | $ (139) |
Total, net of tax | 562 | 400 |
Amortization of net actuarial gain | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ 757 | $ 539 |
STOCKHOLDERS' EQUITY - Dividend
STOCKHOLDERS' EQUITY - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Jan. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Dividends on Common Stock | ||||||||||||
Dividends declared (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | ||||
Dividend Amount | $ 2,938 | $ 2,965 | $ 2,949 | $ 1,978 | $ 1,994 | $ 2,050 | $ 2,058 | $ 2,037 | $ 10,830 | $ 8,139 | $ 8,157 | |
Subsequent Event | ||||||||||||
Dividends on Common Stock | ||||||||||||
Dividends declared (in dollars per share) | $ 0.12 |
STOCKHOLDERS' EQUITY - Treasury
STOCKHOLDERS' EQUITY - Treasury Stock (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Nov. 02, 2021 | Jan. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 30, 2022 | |
Treasury Stock | ||||||
Purchases of treasury stock | $ (65,002) | $ (83,100) | $ (6,595) | |||
Cost of repurchased shares | $ 65,002 | 83,100 | $ 6,595 | |||
Forward contract for accelerated share repurchase | $ (25,000) | |||||
Treasury stock, at cost, shares | 5,529,383 | 4,492,514 | ||||
Existing Share Repurchase Program and ASR | ||||||
Treasury Stock | ||||||
Number of shares repurchased during the period | 822,106 | |||||
Cost of repurchased shares | $ 65,000 | |||||
Existing Share Repurchase Program | ||||||
Treasury Stock | ||||||
Amount of stock repurchases authorized | $ 75,000 | |||||
Amount available for repurchase | $ 26,500 | |||||
Accelerated Share Repurchase Agreement ("ASR") | ||||||
Treasury Stock | ||||||
Amount paid in accelerated repurchase | $ 100,000 | |||||
Number of shares repurchased during the period | 709,287 | 214,763 | 214,763 | |||
Cost of repurchased shares | $ 75,000 | $ 25,000 | $ 75,000 | |||
Amount of unsettled forward contract classified within stockholders' equity as additional paid in capital. | $ 25,000 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based compensation | |||
Number of shares authorized | 4,900,000 | ||
Restricted Stock Units | |||
Award activity | |||
Outstanding at the beginning of the period (in shares) | 1,482,399 | ||
Granted (in shares) | 164,739 | 136,295 | 579,660 |
Vested (in shares) | (601,441) | ||
Forfeited (in shares) | (22,446) | ||
Outstanding at the end of the period (in shares) | 1,023,251 | 1,482,399 | |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 29.25 | ||
Granted (in dollars per share) | 78.57 | $ 86.96 | $ 19.22 |
Vested (in dollars per share) | 26.08 | ||
Forfeited (in dollars per share) | 39.74 | ||
Outstanding at the end of the period (in dollars per share) | $ 38.83 | $ 29.25 | |
Other disclosure | |||
Fair value of restricted stock awards vested | $ 48.1 | $ 36.4 | $ 7.8 |
Unrecognized compensation cost | $ 16.2 | ||
Weighted-average period of recognition of unrecognized compensation cost | 1 year 2 months 12 days |
EARNINGS PER SHARE - Basic And
EARNINGS PER SHARE - Basic And Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic, numerator: | |||
Net income, Basic | $ 298,209 | $ 213,521 | $ 71,100 |
Basic, denominator: | |||
Weighted-average shares | 24,585,205 | 25,471,939 | 25,410,232 |
Earnings per common share (in dollars per share) | $ 12.13 | $ 8.38 | $ 2.80 |
Diluted, numerator: | |||
Net income, Diluted | $ 298,209 | $ 213,521 | $ 71,100 |
Diluted, denominator: | |||
Weighted-average shares | 24,585,205 | 25,471,939 | 25,410,232 |
Effect of dilutive securities | 919,303 | 1,300,187 | 1,012,291 |
Adjusted weighted-average shares and assumed conversions | 25,504,508 | 26,772,126 | 26,422,523 |
Earnings per common share (in dollars per share) | $ 11.69 | $ 7.98 | $ 2.69 |
OPERATING SEGMENT DATA - Revenu
OPERATING SEGMENT DATA - Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | |||
Operating revenues | $ 5,324,052 | $ 3,980,067 | $ 2,940,163 |
Asset Based | |||
Revenues | |||
Operating revenues | 2,896,284 | 2,470,529 | 1,998,549 |
ArcBest | |||
Revenues | |||
Operating revenues | 2,128,394 | 1,291,679 | 770,560 |
FleetNet | |||
Revenues | |||
Operating revenues | 295,043 | 213,882 | 166,654 |
Operating Segments | Asset Based | |||
Revenues | |||
Operating revenues | 3,010,900 | 2,573,773 | 2,092,031 |
Operating Segments | ArcBest | |||
Revenues | |||
Operating revenues | 2,139,272 | 1,300,626 | 779,115 |
Operating Segments | FleetNet | |||
Revenues | |||
Operating revenues | 343,056 | 254,087 | 205,049 |
Other and eliminations | |||
Revenues | |||
Operating revenues | $ (169,176) | $ (148,419) | $ (136,032) |
OPERATING SEGMENT DATA - Operat
OPERATING SEGMENT DATA - Operating Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING EXPENSES | |||
Salaries, wages, and benefits | $ 1,755,947 | $ 1,550,859 | $ 1,368,588 |
Fuel, supplies, and expenses | 444,776 | 324,380 | 250,221 |
Depreciation and amortization | 140,039 | 124,221 | 118,391 |
Gain on sale of subsidiary | (402) | (6,923) | |
Gain on sale of property and equipment | (11,650) | (8,520) | (2,376) |
Other | 179,320 | 129,571 | 129,850 |
Total consolidated operating expenses | 4,924,783 | 3,699,081 | 2,841,885 |
Change in fair value included in operating income | $ 18,300 | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income | Operating income | ||
Operating Segments | Asset Based | |||
OPERATING EXPENSES | |||
Salaries, wages, and benefits | $ 1,293,487 | 1,198,253 | 1,095,694 |
Fuel, supplies, and expenses | 378,558 | 266,139 | 209,095 |
Operating taxes and licenses | 52,290 | 49,461 | 49,300 |
Insurance | 47,382 | 37,800 | 33,568 |
Communications and utilities | 18,949 | 18,773 | 17,916 |
Depreciation and amortization | 97,322 | 93,799 | 94,326 |
Rents and purchased transportation | 441,167 | 364,345 | 250,159 |
Shared services | 281,698 | 263,532 | 217,258 |
Gain on sale of property and equipment | (12,468) | (8,676) | (3,309) |
Innovative technology costs | 27,207 | 27,631 | 22,458 |
Other | 4,175 | 2,009 | 6,701 |
Total consolidated operating expenses | 2,629,767 | 2,313,066 | 1,993,166 |
Operating Segments | Asset Based | Land and structures | |||
OPERATING EXPENSES | |||
Gain on sale of property and equipment | (8,600) | ||
Noncash gain on a like-kind property exchange of a service center | (4,300) | ||
Operating Segments | ArcBest | |||
OPERATING EXPENSES | |||
Purchased transportation | 1,784,668 | 1,097,332 | 649,933 |
Supplies and expenses | 15,815 | 10,531 | 9,627 |
Depreciation and amortization | 20,730 | 11,387 | 9,714 |
Shared services | 218,133 | 132,137 | 90,983 |
Gain on sale of subsidiary | (402) | (6,923) | |
Other | 47,603 | 9,765 | 9,203 |
Total consolidated operating expenses | 2,086,547 | 1,254,229 | 769,460 |
Change in fair value included in operating income | $ 18,300 | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income | Operating income | ||
Operating Segments | FleetNet | |||
OPERATING EXPENSES | |||
Depreciation and amortization | $ 1,880 | 1,661 | 1,622 |
Total consolidated operating expenses | 337,231 | 249,543 | 201,682 |
Other and eliminations | |||
OPERATING EXPENSES | |||
Depreciation and amortization | 20,107 | 17,374 | 12,729 |
Total consolidated operating expenses | $ (128,762) | $ (117,757) | $ (122,423) |
OPERATING SEGMENT DATA - Income
OPERATING SEGMENT DATA - Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING INCOME | |||
Operating income | $ 399,269 | $ 280,986 | $ 98,278 |
OTHER INCOME (COSTS) | |||
Interest and dividend income | 3,957 | 1,275 | 3,616 |
Interest and other related financing costs | (7,701) | (8,904) | (11,697) |
Other, net | (2,370) | 3,797 | 2,299 |
TOTAL OTHER INCOME (COSTS) | (6,114) | (3,832) | (5,782) |
INCOME BEFORE INCOME TAXES | 393,155 | 277,154 | 92,496 |
Operating Segments | Asset Based | |||
OPERATING INCOME | |||
Operating income | 381,133 | 260,707 | 98,865 |
Operating Segments | ArcBest | |||
OPERATING INCOME | |||
Operating income | 52,725 | 46,397 | 9,655 |
Operating Segments | FleetNet | |||
OPERATING INCOME | |||
Operating income | 5,825 | 4,544 | 3,367 |
Other and eliminations | |||
OPERATING INCOME | |||
Operating income | $ (40,414) | $ (30,662) | $ (13,609) |
OPERATING SEGMENT DATA - Reve_2
OPERATING SEGMENT DATA - Revenue from Customers (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | |||
Operating revenues | $ 5,324,052 | $ 3,980,067 | $ 2,940,163 |
Asset Based | |||
Revenues | |||
Operating revenues | 2,896,284 | 2,470,529 | 1,998,549 |
ArcBest | |||
Revenues | |||
Operating revenues | 2,128,394 | 1,291,679 | 770,560 |
FleetNet | |||
Revenues | |||
Operating revenues | 295,043 | 213,882 | 166,654 |
Corporate and Other | |||
Revenues | |||
Operating revenues | 4,331 | 3,977 | 4,400 |
Operating Segments | Asset Based | |||
Revenues | |||
Operating revenues | 3,010,900 | 2,573,773 | 2,092,031 |
Operating Segments | ArcBest | |||
Revenues | |||
Operating revenues | 2,139,272 | 1,300,626 | 779,115 |
Operating Segments | FleetNet | |||
Revenues | |||
Operating revenues | 343,056 | 254,087 | 205,049 |
Intersegment revenues | |||
Revenues | |||
Operating revenues | (173,507) | (152,396) | (140,432) |
Intersegment revenues | Asset Based | |||
Revenues | |||
Operating revenues | 114,616 | 103,244 | 93,482 |
Intersegment revenues | ArcBest | |||
Revenues | |||
Operating revenues | 10,878 | 8,947 | 8,555 |
Intersegment revenues | FleetNet | |||
Revenues | |||
Operating revenues | 48,013 | 40,205 | 38,395 |
Other and eliminations | |||
Revenues | |||
Operating revenues | $ (169,176) | $ (148,419) | $ (136,032) |
OPERATING SEGMENT DATA - Capita
OPERATING SEGMENT DATA - Capital expenditures, depreciation and amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
OPERATING SEGMENT DATA | ||||
Purchases of property, plant and equipment, net of financings | $ 148,223 | $ 58,412 | $ 43,248 | |
CAPITAL EXPENDITURES, GROSS | 230,648 | 118,112 | 105,051 | |
DEPRECIATION AND AMORTIZATION EXPENSE | 140,039 | 124,221 | 118,391 | |
Amortization of intangibles | 12,920 | 5,357 | 4,012 | |
Research and development costs | 40,800 | 32,800 | ||
Other and eliminations | ||||
OPERATING SEGMENT DATA | ||||
CAPITAL EXPENDITURES, GROSS | 77,720 | 11,193 | 17,983 | |
DEPRECIATION AND AMORTIZATION EXPENSE | 20,107 | 17,374 | 12,729 | |
Assets acquired through notes payable | 3,400 | |||
Asset Based | Operating Segments | ||||
OPERATING SEGMENT DATA | ||||
CAPITAL EXPENDITURES, GROSS | 137,117 | 96,180 | 85,135 | |
DEPRECIATION AND AMORTIZATION EXPENSE | 97,322 | 93,799 | 94,326 | |
Assets acquired through notes payable | 79,000 | 59,700 | 61,800 | |
ArcBest | Operating Segments | ||||
OPERATING SEGMENT DATA | ||||
CAPITAL EXPENDITURES, GROSS | 14,372 | 9,565 | 1,258 | |
DEPRECIATION AND AMORTIZATION EXPENSE | 20,730 | 11,387 | 9,714 | |
Amortization of intangibles | 12,900 | 5,300 | $ 3,700 | |
FleetNet | Operating Segments | ||||
OPERATING SEGMENT DATA | ||||
CAPITAL EXPENDITURES, GROSS | 1,439 | 1,174 | 675 | |
DEPRECIATION AND AMORTIZATION EXPENSE | 1,880 | 1,661 | 1,622 | |
Amortization of intangibles | $ 200 | |||
FleetNet | Operating Segments | Maximum | ||||
OPERATING SEGMENT DATA | ||||
Amortization of intangibles | 100 | $ 100 | ||
Other and eliminations | Operating Segments | Service center | ||||
OPERATING SEGMENT DATA | ||||
Purchases of property, plant and equipment, net of financings | $ 37,500 |
OPERATING SEGMENT DATA - Oper_2
OPERATING SEGMENT DATA - Operating Expenses by Category (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING EXPENSES | |||
Salaries, wages, and benefits | $ 1,755,947 | $ 1,550,859 | $ 1,368,588 |
Rents, purchased transportation, and other costs of services | 2,404,701 | 1,570,050 | 974,835 |
Fuel, supplies, and expenses | 444,776 | 324,380 | 250,221 |
Depreciation and amortization | 140,039 | 124,221 | 118,391 |
Other | 179,320 | 129,571 | 129,850 |
Total consolidated operating expenses | 4,924,783 | 3,699,081 | 2,841,885 |
Change in fair value included in operating income | $ 18,300 | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income | Operating income | ||
Gain on sale of subsidiaries | $ 402 | 6,923 | |
Gain on sale of property and equipment | 11,650 | 8,520 | 2,376 |
Operating Segments | Asset Based | |||
OPERATING EXPENSES | |||
Salaries, wages, and benefits | 1,293,487 | 1,198,253 | 1,095,694 |
Fuel, supplies, and expenses | 378,558 | 266,139 | 209,095 |
Depreciation and amortization | 97,322 | 93,799 | 94,326 |
Other | 4,175 | 2,009 | 6,701 |
Total consolidated operating expenses | 2,629,767 | 2,313,066 | 1,993,166 |
Gain on sale of property and equipment | 12,468 | 8,676 | 3,309 |
Operating Segments | Asset Based | Land and structures | |||
OPERATING EXPENSES | |||
Gain on sale of property and equipment | 8,600 | ||
Operating Segments | ArcBest | |||
OPERATING EXPENSES | |||
Depreciation and amortization | 20,730 | 11,387 | 9,714 |
Other | 47,603 | 9,765 | 9,203 |
Total consolidated operating expenses | 2,086,547 | 1,254,229 | 769,460 |
Change in fair value included in operating income | $ 18,300 | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income | Operating income | ||
Gain on sale of subsidiaries | $ 402 | 6,923 | |
Operating Segments | FleetNet | |||
OPERATING EXPENSES | |||
Depreciation and amortization | 1,880 | 1,661 | 1,622 |
Total consolidated operating expenses | 337,231 | 249,543 | 201,682 |
Other and eliminations | |||
OPERATING EXPENSES | |||
Depreciation and amortization | 20,107 | 17,374 | 12,729 |
Total consolidated operating expenses | $ (128,762) | $ (117,757) | $ (122,423) |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for doubtful accounts receivable and revenue adjustments | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | $ 13,226 | $ 7,851 | $ 5,448 |
Additions, Charged to Costs and Expenses | 6,955 | 1,466 | 4,327 |
Additions, Charged to Other Accounts | 2,837 | 7,788 | 1,887 |
Deductions | 8,846 | 3,879 | 3,811 |
Balance at End of Period | 14,172 | 13,226 | 7,851 |
Allowance for other accounts receivable | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | 690 | 660 | 476 |
Additions, Charged to Costs and Expenses | 23 | 30 | (14) |
Additions, Charged to Other Accounts | 198 | ||
Balance at End of Period | 713 | 690 | 660 |
Allowance for deferred tax assets | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | 2,196 | 1,284 | 668 |
Deductions | 489 | (912) | (616) |
Balance at End of Period | $ 1,707 | $ 2,196 | $ 1,284 |