OPERATING SEGMENT DATA

12 Months Ended

Dec. 31, 2024

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. Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the CODM in deciding how to allocate resources to an individual segment and in assessing performance. The Company's Chief Executive Officer and Chairman of the Board is the CODM who makes decisions about resources to be acquired, allocated and utilized in each operating segment. The CODM uses revenues, operating expense categories, operating ratios, operating income (loss), and key operating statistics to evaluate performance and allocate resources to the Company’s operations.

On February 28, 2023, the Company sold FleetNet, a wholly owned subsidiary and reportable operating segment of the Company. Following the sale, FleetNet is reported as discontinued operations. As such, historical results of FleetNet have been excluded from both continuing operations and segment results for all periods presented.

The Company’s reportable operating segments are as follows:

● The Asset-Based segment includes the results of operations of ABF Freight System, Inc. and certain other subsidiaries. The segment operations include national, inter-regional, and regional transportation of general commodities through standard, expedited, and guaranteed LTL services. The Asset-Based segment provides services to the Asset-Light segment, including freight transportation related to managed transportation solutions and other services.

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

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

Shared services represent costs incurred to support all segments, including sales, pricing, customer service, marketing, capacity sourcing functions, human resources, financial services, information technology, and other company-wide services. Certain overhead costs are not attributable to any segment and remain unallocated in “Other and eliminations.” Included in unallocated costs are expenses related to investor relations, legal, the Company’s Board of Directors, and certain technology investments. Shared services costs attributable to the reportable operating segments are predominantly allocated based upon estimated and planned resource utilization‑related metrics such as estimated shipment levels or number of personnel supported. The bases for such charges are modified and adjusted by management when necessary or appropriate to 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 tables reflect reportable operating segment information from continuing operations for the years ended December 31:

	2024		2023		2022
	(in thousands)
REVENUES
Asset-Based	$	2,750,134	$	2,871,004	$	3,010,900
Asset-Light		1,552,936		1,680,645		2,139,272
Other and eliminations		(124,051)		(124,206)		(121,164)
Total consolidated revenues	$	4,179,019	$	4,427,443	$	5,029,008
OPERATING EXPENSES
Asset-Based
Salaries, wages, and benefits	$	1,387,491	$	1,379,756	$	1,293,487
Fuel, supplies, and expenses		316,526		361,355		378,558
Operating taxes and licenses		54,056		55,918		52,290
Insurance		72,610		52,025		47,382
Communications and utilities		19,336		19,288		18,949
Depreciation and amortization		110,021		104,165		97,322
Rents and purchased transportation		274,312		338,575		441,167
Shared services		270,182		279,248		281,698
(Gain) loss on sale of property and equipment and asset impairment charges(1)		(803)		982		(12,468)
Innovative technology costs(2)		—		21,711		27,207
Other		3,800		4,829		4,175
Total Asset-Based		2,507,531		2,617,852		2,629,767
Asset-Light
Purchased transportation		1,339,783		1,435,604		1,784,668
Salaries, wages, and benefits(3)		118,983		129,083		150,694
Supplies and expenses		10,232		12,094		13,955
Depreciation and amortization(4)		20,062		20,370		20,730
Shared services(3)		68,346		65,308		67,439
Contingent consideration(5)		(90,250)		(19,100)		18,300
Asset impairment charges(6)		1,700		14,407		—
Legal settlement(7)		274		9,500		—
Gain on sale of subsidiary(8)		—		—		(402)
Other(3)		25,362		25,650		31,163
Total Asset-Light		1,494,492		1,692,916		2,086,547
Other and eliminations		(67,438)		(55,944)		(81,832)
Total consolidated operating expenses	$	3,934,585	$	4,254,824	$	4,634,482

(1) For 2023, includes a $0.7 million noncash lease-related impairment charge for an Asset-Based service center. 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.

(2) Represents costs associated with the freight handling pilot test program at ABF Freight, for which the decision was made to pause the pilot during third quarter 2023.

(3) For 2023, certain expenses have been reclassified to conform to the current year presentation, including amounts previously reported in “Shared services” that were reclassified to present “Salaries, wages, and benefits” expenses in a separate line item. Adjustments made are not material.

(4) Includes amortization of intangibles associated with acquired businesses.

(5) Represents the change in fair value of the contingent earnout consideration recorded for the MoLo acquisition (see Note C).

(6) For 2024, represents noncash asset impairment charges for certain revenue equipment and software recognized during fourth quarter 2024 as part of a strategic decision to adjust capacity within Asset-Light’s operations. For 2023, represents noncash lease-related impairment charges for certain office spaces that were made available for sublease.

(7) Represents settlement expenses related to the classification of certain Asset-Light employees under the Fair Labor Standards Act, which were paid during first quarter 2025.

(8) Represents the contingent amount recognized in second quarter 2022 when the funds from the gain on the sale of the labor services portion of the Asset-Light segment’s moving business were released from escrow.

	2024		2023		2022
	(in thousands)
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS
Asset-Based	$	242,603	$	253,152	$	381,133
Asset-Light(1)		58,444		(12,271)		52,725
Other and eliminations(2)		(56,613)		(68,262)		(39,332)
Total consolidated operating income	$	244,434	$	172,619	$	394,526
OTHER INCOME (COSTS) FROM CONTINUING OPERATIONS
Interest and dividend income	$	11,618	$	14,728	$	3,873
Interest and other related financing costs		(8,980)		(9,094)		(7,726)
Other, net(3)		(28,358)		8,662		(2,370)
Total other income (costs)		(25,720)		14,296		(6,223)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	$	218,714	$	186,915	$	388,303

(1) Includes the change in fair value of the contingent earnout consideration related to the MoLo acquisition (see Note C).

(2) For 2023, “Other and eliminations” includes $15.1 million of noncash lease-related impairment charges for a freight handling pilot facility.

(3) Includes the components of net periodic benefit cost (credit) 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 2024, includes a $28.7 million noncash impairment charge to write off the Company’s equity investment in Phantom Auto, as previously discussed. For 2023, includes a $3.7 million fair value increase related to the Company’s equity investment in Phantom Auto, based on an observable price change during second quarter 2023 (see Note C).

The following table reflects information about revenues from customers and intersegment revenues for the years ended December 31:

	2024		2023		2022
	(in thousands)
Revenues from customers
Asset-Based	$	2,626,408	$	2,749,803	$	2,896,284
Asset-Light		1,547,627		1,673,399		2,128,394
Other		4,984		4,241		4,330
Total consolidated revenues	$	4,179,019	$	4,427,443	$	5,029,008
Intersegment revenues
Asset-Based	$	123,726	$	121,201	$	114,616
Asset-Light		5,309		7,246		10,878
Other and eliminations		(129,035)		(128,447)		(125,494)
Total intersegment revenues	$	—	$	—	$	—
Total segment revenues
Asset-Based	$	2,750,134	$	2,871,004	$	3,010,900
Asset-Light		1,552,936		1,680,645		2,139,272
Other and eliminations		(124,051)		(124,206)		(121,164)
Total consolidated revenues	$	4,179,019	$	4,427,443	$	5,029,008

The following table provides capital expenditure and depreciation and amortization information by reportable operating segment from continuing operations for the years ended December 31:

	2024		2023		2022
	(in thousands)
CAPITAL EXPENDITURES, GROSS
Asset-Based(1)	$	239,842	$	207,072	$	137,117
Asset-Light		3,062		7,587		14,372
Other and eliminations(2)(3)		60,913		37,752		77,720
	$	303,817	$	252,411	$	229,209

	2024		2023		2022
	(in thousands)
DEPRECIATION AND AMORTIZATION EXPENSE(2)
Asset-Based	$	110,021	$	104,165	$	97,322
Asset-Light(4)		20,062		20,370		20,730
Other and eliminations(2)		19,004		20,814		20,107
	$	149,087	$	145,349	$	138,159

(1) Includes assets acquired through notes payable of $80.7 million, $33.5 million, and $79.0 million in 2024, 2023, and 2022, 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 $12.8 million, $12.8 million, and $12.9 million in 2024, 2023, and 2022, respectively.

A table of assets by reportable operating segment has not been presented as segment assets are not included in reports regularly provided to the CODM nor does the CODM consider segment assets for assessing segment operating performance or allocating resources.

The Company incurred research and development costs of $34.1 million, $52.4 million, and $40.8 million for the years ended December 31, 2024, 2023, and 2022, respectively, related to innovative technology initiatives.

The following table presents operating expenses by category on a consolidated basis for the years ended December 31:

	2024		2023		2022
	(in thousands)
OPERATING EXPENSES
Salaries, wages, and benefits	$	1,768,581	$	1,781,304	$	1,728,653
Rents, purchased transportation, and other costs of services		1,478,114		1,642,669		2,100,663
Fuel, supplies, and expenses		433,237		479,688		488,009
Depreciation and amortization(1)		149,087		145,349		138,159
Contingent consideration(2)		(90,250)		(19,100)		18,300
Asset impairment charges(3)		1,700		30,162		—
Other(4)		194,116		194,752		160,698
	$	3,934,585	$	4,254,824	$	4,634,482

(1) Includes amortization of intangibles assets.

(2) Represents the change in fair value of the contingent earnout consideration related to the MoLo acquisition (see Notes C).

(3) For 2024, represents noncash asset impairment charges for certain revenue equipment and software recognized during fourth quarter 2024 as part of a strategic decision to adjust capacity within Asset-Light’s operations. For 2023, represents noncash lease-related impairment charges for a freight handling pilot facility, a service center, and office spaces that were made available for sublease.

(4) For 2023, includes $9.5 million settlement expenses related to the classification of certain Asset-Light employees under the Fair Labor Standards Act, which were paid during first quarter 2025. For 2022, includes a $12.5 million gain related to the sale of property and equipment within the Asset-Based segment and the sale of replaced equipment and a like-kind exchange of a service center property in the prior year. Includes innovative technology costs of $34.1 million, $52.4 million, and $40.8 million, for 2024, 2023, and 2022, respectively, associated with costs related to the Company’s customer pilot offering of Vaux^TM and initiatives to

optimize performance through technological innovation. For 2023 and 2022, innovative technology costs were also incurred associated with the freight handling pilot program at ABF Freight, for which the decision was made to pause the pilot during third quarter 2023.