| OPERATING SEGMENT DATA |
NOTE I – OPERATING SEGMENT DATA The Company’s reportable operating segments are as follows: | ● | The Asset-Based segment includes the results of operations of ABF Freight. The segment operations include national, inter-regional, and regional transportation of general commodities through standard, expedited, and guaranteed less-than-truckload 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, managed transportation, ground expedite, intermodal, household goods moving, 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. Historically, the second and third calendar quarters of each year usually have the highest tonnage and shipment levels. In contrast, the first quarter generally has the lowest tonnage and shipment levels, although other factors, including the state of the U.S. and global economies; available capacity in the market; yield initiatives; and external events or conditions, such as the modification or implementation of new tariffs or trade policy, may influence quarterly business levels. The Company’s yield initiatives, along with increased technology-driven intelligence and visibility with respect to demand, have allowed for shipment optimization in non-peak times, reducing the Company’s susceptibility to seasonal fluctuations in recent years. The Company's President and Chief Executive Officer is the Chief Operating Decision Maker (“CODM”) who makes decisions about resources to be acquired, allocated and utilized in each operating segment. The CODM uses segment revenues, operating expense categories, operating ratios, operating income (loss), and key operating statistics to evaluate performance and allocate resources to the Company’s operations. The Company’s two reportable segments and the measures used by the CODM to assess performance are consistent with those described in the Company's 2025 Annual Report on Form 10-K, as are the impacts of seasonal fluctuations on the Company's reportable operating segments. Further classifications of operations or revenues by geographic location are impracticable and, therefore, are not provided. The Company’s foreign operations are not significant. The following tables reflect the Company’s reportable operating segment information: | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | June 30 | | June 30 | | | | 2026 | | 2025 | | 2026 | | 2025 | | | | | (in thousands) | | REVENUES | | | | | | | | | | | | | | Asset-Based | | $ | 783,671 | | $ | 713,312 | | $ | 1,438,678 | | $ | 1,359,606 | | Asset-Light | | | 438,705 | | | 341,922 | | | 816,451 | | | 697,934 | | Other and eliminations | | | (37,843) | | | (32,978) | | | (71,810) | | | (68,207) | | Total consolidated revenues | | $ | 1,184,533 | | $ | 1,022,256 | | $ | 2,183,319 | | $ | 1,989,333 | | | | | | | | | | | | | | | | OPERATING EXPENSES | | | | | | | | | | | | | | Asset-Based | | | | | | | | | | | | | | Salaries, wages, and benefits | | $ | 374,101 | | $ | 365,929 | | $ | 729,240 | | $ | 710,070 | | Fuel, supplies, and expenses | | | 97,832 | | | 79,834 | | | 179,417 | | | 157,476 | | Operating taxes and licenses | | | 14,136 | | | 13,845 | | | 28,604 | | | 26,957 | | Insurance | | | 16,505 | | | 17,653 | | | 32,574 | | | 35,616 | | Communications and utilities | | | 5,270 | | | 5,150 | | | 11,029 | | | 10,960 | | Depreciation and amortization | | | 36,632 | | | 31,664 | | | 72,843 | | | 62,254 | | Rents and purchased transportation | | | 90,112 | | | 76,198 | | | 158,772 | | | 143,359 | | Shared services | | | 74,352 | | | 69,868 | | | 133,516 | | | 132,311 | | Restructuring charges(1) | | | 953 | | | — | | | 953 | | | — | | Gain on sale of property and equipment(2) | | | (2,496) | | | (159) | | | (2,352) | | | (136) | | Other | | | 2,022 | | | 2,301 | | | 2,353 | | | 3,293 | | Total Asset-Based | | | 709,419 | | | 662,283 | | | 1,346,949 | | | 1,282,160 | | | | | | | | | | | | | | | | Asset-Light | | | | | | | | | | | | | | Purchased transportation | | | 379,313 | | | 288,580 | | | 704,984 | | | 593,194 | | Salaries, wages, and benefits | | | 29,095 | | | 25,629 | | | 51,840 | | | 51,178 | | Supplies and expenses | | | 1,670 | | | 1,739 | | | 3,119 | | | 3,478 | | Depreciation and amortization(3) | | | 3,881 | | | 4,605 | | | 7,891 | | | 9,223 | | Shared services | | | 13,925 | | | 18,594 | | | 32,694 | | | 36,575 | | Asset impairment charges(4) | | | 34,503 | | | — | | | 34,503 | | | — | | Restructuring charges(1) | | | 712 | | | — | | | 712 | | | — | | Contingent consideration(5) | | | — | | | (2,650) | | | — | | | (2,650) | | Other | | | 6,954 | | | 4,834 | | | 11,825 | | | 10,725 | | Total Asset-Light | | | 470,053 | | | 341,331 | | | 847,568 | | | 701,723 | | | | | | | | | | | | | | | | Other and eliminations(6) | | | 25,684 | | | (18,667) | | | 5,995 | | | (38,489) | | Total consolidated operating expenses | | $ | 1,205,156 | | $ | 984,947 | | $ | 2,200,512 | | $ | 1,945,394 | |
| (1) | Restructuring charges relate to realignment of the Company’s organizational structure as previously described in Note A. |
| (2) | The 2026 periods include $2.9 million gain on the sale of a service center during second quarter 2026. |
| (3) | Depreciation and amortization includes amortization of intangibles associated with acquired businesses. |
| (4) | Represents noncash asset impairment charges of $25.7 million to write off the Panther trade name in connection with a strategic brand consolidation decision within Asset-Light’s operations and $8.8 million associated with the probable sublease of a portion of leased office space. |
| (5) | Represents the change in fair value of the contingent earnout consideration related to the MoLo acquisition. The Company reduced the contingent consideration for the MoLo acquisition to zero in second quarter 2025, reflecting the probability of no earnout payment based on projections of adjusted earnings before interest, taxes, depreciation, and amortization for 2025. |
| (6) | The 2026 periods include $50.8 million in asset impairment charges related to the write-off of certain equipment and other assets associated with the discontinuance of the Vaux Freight Movement System and $0.5 million in restructuring charges in connection with the previously described restructuring plan. “Other” also includes corporate costs for certain unallocated shared service costs which are not attributable to any segment, additional investments to offer comprehensive transportation and logistics services across multiple operating segments, costs related to the customer offering of Vaux, and other investments in ArcBest technology and innovations. |
| | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | June 30 | | June 30 | | | 2026 | | 2025 | | 2026 | | 2025 | | | | (in thousands) | OPERATING INCOME (LOSS) | | | | | | | | | | | | | Asset-Based | | $ | 74,252 | | $ | 51,029 | | $ | 91,729 | | $ | 77,446 | Asset-Light(1) | | | (31,348) | | | 591 | | | (31,117) | | | (3,789) | Other and eliminations(2) | | | (63,527) | | | (14,311) | | | (77,805) | | | (29,718) | Total consolidated operating income (loss) | | $ | (20,623) | | $ | 37,309 | | $ | (17,193) | | $ | 43,939 | OTHER INCOME (COSTS) | | | | | | | | | | | | | Interest and dividend income | | $ | 906 | | $ | 1,037 | | $ | 1,582 | | $ | 2,187 | Interest and other related financing costs | | | (3,391) | | | (2,956) | | | (7,679) | | | (5,711) | Other, net | | | 2,152 | | | 578 | | | 1,000 | | | (273) | Total other income (costs) | | | (333) | | | (1,341) | | | (5,097) | | | (3,797) | INCOME (LOSS) BEFORE INCOME TAXES | | $ | (20,956) | | $ | 35,968 | | $ | (22,290) | | $ | 40,142 |
| (1) | The 2026 periods include noncash asset impairment charges of $25.7 million to write off the Panther trade name in connection with a strategic brand consolidation decision within Asset-Light’s operations and $8.8 million associated with the probable sublease of a portion of leased office space. |
| (2) | The 2026 periods include $50.8 million in asset impairment charges related to the write-off of certain equipment and other assets associated with the discontinuance of the Vaux Freight Movement System and $0.5 million in restructuring charges in connection with the previously described restructuring plan. |
The following table presents operating expenses by category on a consolidated basis: | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | June 30 | | June 30 | | | | 2026 | | 2025 | | 2026 | | 2025 | | | | | (in thousands) | | OPERATING EXPENSES | | | | | | | | | | | | | | Salaries, wages, and benefits | | $ | 470,613 | | $ | 458,115 | | $ | 909,134 | | $ | 890,003 | | Rents, purchased transportation, and other costs of services | | | 428,297 | | | 328,570 | | | 785,920 | | | 662,341 | | Fuel, supplies, and expenses | | | 125,914 | | | 110,530 | | | 233,962 | | | 216,476 | | Depreciation and amortization(1) | | | 44,681 | | | 40,926 | | | 88,985 | | | 80,890 | | Asset impairment charges(2) | | | 85,266 | | | — | | | 85,266 | | | — | | Restructuring charges(3) | | | 2,173 | | | — | | | 2,173 | | | — | | Contingent consideration(4) | | | — | | | (2,650) | | | — | | | (2,650) | | Other | | | 48,212 | | | 49,456 | | | 95,072 | | | 98,334 | | | | $ | 1,205,156 | | $ | 984,947 | | $ | 2,200,512 | | $ | 1,945,394 | |
| (1) | Includes amortization of intangible assets. |
| (2) | The 2026 periods include noncash asset impairment charges of $50.8 million related to the write-off of certain equipment and other assets associated with the discontinuance of the Vaux Freight Movement System, $25.7 million to write off the remaining carrying value of the Panther trade name, and $8.8 million associated with the probable sublease of a portion of leased office space, as previously described. |
| (3) | Represents restructuring charges for the realignment of the Company organizational structure, as previously described. |
| (4) | Represents the change in fair value of the contingent consideration recorded for the MoLo acquisition, as further discussed in the Asset-Light Operating Expenses section below. |
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