News Details

ArcBest^® Announces Fourth Quarter 2018 And Full Year 2018 Results

 

• Fourth quarter 2018 revenue of $774.3 million, and net income of $15.3 million, or $0.57 per diluted share.  On a non-GAAP¹ basis, fourth quarter 2018 net income was $26.9 million, or $1.01 per diluted share.
• Higher fourth quarter Asset-Based revenue and an 88 percent increase in Asset-Based operating income versus last year.
• For the first time, annual ArcBest consolidated revenue exceeded $3 billion; highest non-GAAP annual EPS in history.
• Five-year ABF labor agreement and successful pricing actions among additional 2018 highlights.

 

FORT SMITH, Arkansas, January 30, 2019 — ArcBest^® (Nasdaq: ARCB), a leading logistics company with creative problem solvers who deliver integrated solutions, today reported fourth quarter 2018 revenue of $774.3 million compared to fourth quarter 2017 revenue of $710.7 million.  Fourth quarter 2018 operating income was $37.2 million compared to operating income of $18.7 million last year.  Net income of $15.3 million, or $0.57 per diluted share compared to fourth quarter 2017 net income of $36.6 million, or $1.37 per diluted share.

Excluding certain items in both periods as identified in the attached reconciliation tables, non-GAAP operating income was $38.1 million in fourth quarter 2018 compared to fourth quarter 2017 operating income of $19.0 million.  On a non-GAAP basis, net income was $26.9 million, or $1.01 per diluted share, in fourth quarter 2018 compared to fourth quarter 2017 net income of $11.2 million, or $0.42 per diluted share.

“Strong fourth quarter results capped a year of significant achievements and financial performance at ArcBest including revenue topping $3 billion and the highest non-GAAP earnings per share in our history,” said Chairman, President & CEO Judy McReynolds.  “A thriving U.S. economy provided an excellent backdrop for us to proactively solve more of our customers’ supply chain needs through comprehensive logistics solutions. Careful account management and pricing initiatives to ensure we are compensated for the value we provide resulted in solid revenue growth and better account profitability in our Asset-Based business, and our Asset-Light business posted solid improvements in operating income.”

 

McReynolds stated that efforts to return to historic margins in the Asset-Based business gained momentum despite a tight labor market, even as U.S. unemployment reached record lows and driver shortages were the norm across the industry. “One of the major achievements of the year, a new five-year collective bargaining agreement with the International Brotherhood of Teamsters, provides us stability, low cost inflation and a strong foundation upon which to continue innovating on behalf of customers, and we are excited about the substantial growth opportunities that remain available to us across the organization,” McReynolds said.

 

 

 

 

 

 

 

1. U.S. Generally Accepted Accounting Principles

 

 

Asset-Based

Results of Operations

Fourth Quarter 2018 Versus Fourth Quarter 2017

• Revenue of $548.9 million compared to $497.0 million, a per-day increase of 10.4 percent.
• Tonnage per day increase of 2.8 percent, with a high-single digit percentage increase in LTL-rated freight.
• Shipments per day increase of 4.2 percent.  Though total average weight per shipment declined, the average LTL-rated weight per shipment increased.
• Total billed revenue per hundredweight increased 7.9 percent and was positively impacted by higher fuel surcharges.  Excluding fuel surcharge, the percentage increase on LTL-rated freight was in the mid-single digits.
• Operating income of $36.9 million and an operating ratio of 93.3 percent compared to operating income of $19.6 million and an operating ratio of 96.1 percent.   

 

During the fourth quarter, ArcBest’s Asset-Based business continued to benefit from the positive effects of improved pricing combined with prudent management of costs.  Increases in revenue per hundredweight and average revenue per shipment continued to highlight the benefits of yield management initiatives implemented throughout the year.  Higher fuel surcharges also positively impacted quarterly revenue totals.  For the first time in 2018, both shipments and freight tonnage moving through the Asset-Based network increased versus the prior period.  This improved business trend contributed to freight handling efficiencies and higher operating income.   Average length of haul was below the previous fourth quarter due to changes in freight mix.                     

Asset-Light^‡

Results of Operations

Fourth Quarter 2018 Versus Fourth Quarter 2017

• Revenue of $243.8 million compared to $222.2 million, a per-day increase of 9.7 percent.
• Operating income of $7.5 million compared to operating income of $5.5 million. On a non-GAAP basis, operating income of $7.8 million compared to $5.5 million.
• Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $11.3 million compared to Adjusted EBITDA of $9.3 million.

 

In the Asset-Light ArcBest segment, an increase in average revenue per shipment and significant growth in the offering of managed logistics solutions contributed to higher fourth quarter revenue.  Despite a reduction in shipment levels, improved operating income resulted from cost control combined with higher net revenue associated with yield management of truckload brokerage shipments and continued success in offering managed transportation solutions to ArcBest customers.  At FleetNet, while total events increased, operating income was flat versus the prior year quarter reflecting the impact of changes in customer mix on margin per event.

Full Year 2018 Results

ArcBest’s revenue totaled $3.1 billion, the first time in history that consolidated revenue exceeded the $3 billion level, compared to $2.8 billion in 2017.  Net income was $67.3 million, or $2.51 per diluted share, compared to net income of $59.7 million, or $2.25 per diluted share in 2017.  On a non-GAAP basis, ArcBest had 2018 net income of $103.0 million, or $3.86 per diluted share compared to net income of $35.5 million, or $1.34 per diluted share in 2017. 

During 2018, ArcBest increased shareholder returns through payment of an eight cent per share quarterly dividend and purchase of ArcBest shares valued at approximately $9.4 million.

Asset-Based

Results of Operations

Full Year 2018 Versus Full Year 2017

• Revenue of $2.2 billion, compared to $2.0 billion in 2017, an average daily increase of 8.9 percent.
• Tonnage per day was flat with 2017.
• Shipments per day decrease of 3.2 percent related to pricing initiatives that began in late 2017.
• Total billed revenue per hundredweight increased 9.2 percent and was impacted by pricing initiatives and higher fuel surcharges in 2018.  Excluding fuel surcharge, the percentage increase on LTL-rated freight was in the mid-single digits.
• Operating income of $103.9 million and an operating ratio of 95.2 percent compared to $57.9 million and an operating ratio of 97.1 percent in 2017.  On a non-GAAP basis, operating income of $141.8 million and an operating ratio of 93.5 percent compared to operating income of $58.2 million and an operating ratio of 97.1 percent in 2017.

Asset-Light^‡

Results of Operations

Full Year 2018 Versus Full Year 2017

• Revenue of $976.2 million compared to $863.0 million in 2017, an average daily increase of 12.9 percent.
• Operating income of $28.0 million compared to $23.0 million in 2017.  On a non-GAAP basis, operating income of $26.5 million compared to $23.7 million in 2017.
• Adjusted EBITDA of $43.4 million compared to $38.1 million in 2017.

Capital Expenditures

In 2018, total net capital expenditures, including equipment financed, equaled $134 million which was below previous expectations.  This included $90 million of revenue equipment, the majority of which was for ArcBest’s Asset-Based operation.  Depreciation and amortization costs on property, plant and equipment were $104 million.

For 2019, total net capital expenditures are estimated to range from $170 million to $180 million. This includes revenue equipment purchases of approximately $90 million primarily for ArcBest’s Asset-Based operation.  The increase in the 2019 capital expenditure estimate is primarily associated with real estate projects, dock equipment, including forklifts, and technology investments.  ArcBest’s depreciation and amortization costs on property, plant and equipment in 2019 are estimated to range from $110 million to $115 million.

Closing Comments

“We entered 2018 anticipating a strong operating environment and for the most part, economic activity exceeded our expectations,” McReynolds said. “Tighter capacity persisted throughout the year, leading customers to turn to ArcBest for the assured capacity we have available through our own assets, owner operators and contract carriers. Our strategy to meet all types of supply chain needs through a combination of offerings helped us significantly grow revenue and profitability.”

McReynolds added that many initiatives to improve operations and offer a best-in-class customer experience are continuing and accelerating in 2019 and will benefit the company in all environments.

“Investing in technology, people and processes to best meet our customer needs in a changing marketplace remains a top priority,” McReynolds said. “As trusted supply chain experts, we have seen more and more customers turn to us for managed transportation solutions, an encouraging development that reinforces the strategic decisions we have made to enhance our approach to the market as a fully integrated logistics company.”

 

Conference Call

ArcBest will host a conference call with company executives to discuss the 2018 fourth quarter and full year results. The call will be on Thursday, January 31st at 10:30 a.m. ET (9:30 a.m. CT). Interested parties are invited to listen by calling (877) 256-8248. Following the call, a recorded playback will be available through the end of the day on March 15, 2019. To listen to the playback, dial (800) 633-8284 or (402) 977-9140 (for international callers). The conference call ID for the playback is 21913746. The conference call and playback can also be accessed, through March 15, 2019, on ArcBest’s website at arcb.com.

 

Call participants can submit questions this afternoon prior to the conference call by emailing them to ir@arcb.com.  On the call, responses will be provided to as many questions as possible in the time available.

 

About ArcBest

ArcBest^® (Nasdaq: ARCB) is a leading logistics company with creative problem solvers who deliver integrated solutions.  We'll find a way to deliver knowledge, expertise and a can-do attitude with every shipment and supply chain solution, household move or vehicle repair.  At ArcBest, we’re More Than Logistics^SM.  For more information, visit arcb.com.

Forward-Looking Statements

Certain statements and information in this press release concerning results for the three and twelve months ended December 31, 2018 may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “intend,” “may,” “plan,” “predict,” “project,” “scheduled,” “should,” “would,” and similar expressions and the negatives of such terms are intended to identify forward-looking statements. These statements are based on management’s beliefs, assumptions, and expectations based on currently available information, are not guarantees of future performance, and involve certain risks and uncertainties (some of which are beyond our control). Although we believe that the expectations reflected in these forward-looking statements are reasonable as and when made, we cannot provide assurance that our expectations will prove to be correct. Actual outcomes and results could materially differ from what is expressed, implied, or forecasted in these statements due to a number of factors, including, but not limited to: a failure of our information systems, including disruptions or failures of services essential to our operations or upon which our information technology platforms rely, data breach, and/or cybersecurity incidents; relationships with employees, including unions, and our ability to attract and retain employees; unfavorable terms of, or the inability to reach agreement on, future collective bargaining agreements or a workforce stoppage by our employees covered under ABF Freight’s collective bargaining agreement; the loss or reduction of business from large customers; the cost, timing, and performance of growth initiatives; competitive initiatives and pricing pressures; general economic conditions and related shifts in market demand that impact the performance and needs of industries we serve and/or limit our customers’ access to adequate financial resources; greater than expected funding requirements for our nonunion defined benefit pension plan; availability and cost of reliable third-party services; our ability to secure independent owner operators and/or operational or regulatory issues related to our use of their services; governmental regulations; environmental laws and regulations, including emissions-control regulations; the cost, integration, and performance of any recent or future acquisitions; not achieving some or all of the expected financial and operating benefits of our corporate restructuring or incurring additional costs or operational inefficiencies as a result of the restructuring; union and nonunion employee wages and benefits, including changes in required contributions to multiemployer plans; litigation or claims asserted against us; the loss of key employees or the inability to execute succession planning strategies; default on covenants of financing arrangements and the availability and terms of future financing arrangements; timing and amount of capital expenditures; self-insurance claims and insurance premium costs; availability of fuel, the effect of volatility in fuel prices and the associated changes in fuel surcharges on securing increases in base freight rates, and the inability to collect fuel surcharges; increased prices for and decreased availability of new revenue equipment, decreases in value of used revenue equipment, and higher costs of equipment-related operating expenses such as maintenance and fuel and related taxes; potential impairment of goodwill and intangible assets; maintaining our intellectual property rights, brand, and corporate reputation; seasonal fluctuations and adverse weather conditions; regulatory, economic, and other risks arising from our international business; antiterrorism and safety measures; and other financial, operational, and legal risks and uncertainties detailed from time to time in ArcBest’s public filings with the Securities and Exchange Commission (“SEC”).

 

For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

 

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events, or otherwise.

NOTE

 ‡ - The ArcBest and FleetNet reportable segments, combined, represent Asset-Light operations.

Financial Data and Operating Statistics

The following tables show financial data and operating statistics on ArcBest^® and its reportable segments.

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 

		Three Months Ended						Year Ended
		December 31						December 31
		2018			2017			2018			2017
		(Unaudited)
		($ thousands, except share and per share data)
REVENUES		$	774,279		$	710,721		$	3,093,788		$	2,826,457
OPERATING EXPENSES (includes one-time charge)(1)(2)			737,117			691,982			2,984,690			2,765,109
OPERATING INCOME			37,162			18,739			109,098			61,348
OTHER INCOME (COSTS)
Interest and dividend income			1,554			388			3,914			1,293
Interest and other related financing costs			(2,926)			(1,932)			(9,468)			(6,342)
Other, net(2)(3)			(15,120)			(1,175)			(19,158)			(4,723)
			(16,492)			(2,719)			(24,712)			(9,772)
INCOME BEFORE INCOME TAXES			20,670			16,020			84,386			51,576
INCOME TAX PROVISION (BENEFIT)			5,371			(20,548)			17,124			(8,150)
NET INCOME		$	15,299		$	36,568		$	67,262		$	59,726
EARNINGS PER COMMON SHARE(4)
Basic		$	0.59		$	1.42		$	2.61		$	2.32
Diluted		$	0.57		$	1.37		$	2.51		$	2.25
AVERAGE COMMON SHARES OUTSTANDING
Basic			25,707,335			25,637,568			25,679,736			25,683,745
Diluted			26,682,262			26,540,716			26,698,831			26,424,389
CASH DIVIDENDS DECLARED PER COMMON SHARE		$	0.08		$	0.08		$	0.32		$	0.32

1. Includes a $37.9 million multiemployer pension fund withdrawal liability charge for the year ended December 31, 2018.
2. Effective January 1, 2018, the Company retrospectively adopted an amendment to ASC Topic 715, Compensation – Retirement Benefits, which requires changes to the financial statement presentation of certain components of net periodic benefit cost related to pension and other postretirement benefits accounted for under ASC Topic 715. As a result of adopting this amendment, the service cost component of net periodic benefit cost continues to be included in Operating Expenses, but the other components of net periodic benefit cost, including pension settlement expense, are presented in Other Income (Costs) for the three months and year ended December 31, 2018 and 2017. The detail of the Company’s net periodic benefit costs will be presented in Note I to the consolidated financial statements included in Part II, Item 8 of the Company’s 2018 Annual Report on Form 10-K.
3. Includes nonunion pension expense, including settlement, of $12.6 million and $18.2 million for the three months and year ended December 31, 2018, respectively, and $1.6 million and $6.1 million for the three months and year ended December 31, 2017, respectively. Pension settlements related to termination of the nonunion defined benefit pension plan began in fourth quarter 2018 and are expected to be complete in first quarter 2019.
4. ArcBest uses the two-class method for calculating earnings per share. This method requires an allocation of dividends paid and a portion of undistributed net income (but not losses) to unvested restricted stock for calculating per share amounts.

 

 

 

ARCBEST CORPORATION

CONSOLIDATED BALANCE SHEETS

 

		December 31			December 31
		2018			2017
		(Unaudited)			Note
		($ thousands, except share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	190,186		$	120,772
Short-term investments			106,806			56,401
Accounts receivable, less allowances (2018 - $7,380; 2017 - $7,657)			297,051			279,074
Other accounts receivable, less allowances (2018 - $806; 2017 - $921)			19,146			19,491
Prepaid expenses			25,304			22,183
Prepaid and refundable income taxes			1,726			12,296
Other			9,007			12,132
TOTAL CURRENT ASSETS			649,226			522,349
PROPERTY, PLANT AND EQUIPMENT
Land and structures			339,640			344,224
Revenue equipment			858,251			793,523
Service, office, and other equipment			199,230			179,950
Software			138,517			129,589
Leasehold improvements			9,365			8,888
			1,545,003			1,456,174
Less allowances for depreciation and amortization			913,815			865,010
			631,188			591,164
GOODWILL			108,320			108,320
INTANGIBLE ASSETS, NET			68,949			73,469
DEFERRED INCOME TAXES			7,468			5,965
OTHER LONG-TERM ASSETS			74,080			64,374
		$	1,539,231		$	1,365,641
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$	143,785		$	129,099
Income taxes payable			1,688			324
Accrued expenses			243,111			210,484
Current portion of long-term debt			54,075			61,930
Current portion of pension and postretirement liabilities			8,659			753
TOTAL CURRENT LIABILITIES			451,318			402,590
LONG-TERM DEBT, less current portion			237,600			206,989
PENSION AND POSTRETIREMENT LIABILITIES, less current portion			31,504			39,827
OTHER LONG-TERM LIABILITIES			44,686			15,616
DEFERRED INCOME TAXES			56,441			49,157
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2018: 28,684,779 shares; 2017: 28,495,628 shares			287			285
Additional paid-in capital			325,712			319,436
Retained earnings			501,389			438,379
Treasury stock, at cost, 2018: 3,097,634 shares; 2017: 2,851,578 shares			(95,468)			(86,064)
Accumulated other comprehensive loss			(14,238)			(20,574)
TOTAL STOCKHOLDERS’ EQUITY			717,682			651,462
		$	1,539,231		$	1,365,641

 

Note:  The balance sheet at December 31, 2017 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

 

ARCBEST CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		Year Ended
		December 31
		2018			2017
		Unaudited
		($ thousands)
OPERATING ACTIVITIES
Net income		$	67,262		$	59,726
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization			104,114			98,530
Amortization of intangibles			4,521			4,538
Pension settlement expense			12,925			4,156
Share-based compensation expense			8,413			6,958
Provision for losses on accounts receivable			2,336			4,081
Deferred income tax provision (benefit)			1,872			(10,213)
Gain on sale of property and equipment			(59)			(75)
Gain on sale of subsidiaries			(1,945)			(152)
Changes in operating assets and liabilities:
Receivables			(23,554)			(19,588)
Prepaid expenses			(2,988)			(64)
Other assets			(4,341)			(4,231)
Income taxes			12,169			(2,144)
Multiemployer pension fund withdrawal liability(1)			22,602			—
Accounts payable, accrued expenses, and other liabilities			52,020			10,393
NET CASH PROVIDED BY OPERATING ACTIVITIES			255,347			151,915
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net of financings			(43,992)			(65,781)
Proceeds from sale of property and equipment			4,256			4,279
Proceeds from sale of subsidiaries			4,680			2,490
Purchases of short-term investments			(108,495)			(73,459)
Proceeds from sale of short-term investments			58,698			73,842
Capitalization of internally developed software			(10,097)			(9,840)
NET CASH USED IN INVESTING ACTIVITIES			(94,950)			(68,469)
FINANCING ACTIVITIES
Borrowings under accounts receivable securitization program			—			10,000
Payments on long-term debt			(71,260)			(68,924)
Net change in book overdrafts			262			(502)
Deferred financing costs			(202)			(937)
Payment of common stock dividends			(8,244)			(8,264)
Purchases of treasury stock			(9,404)			(6,019)
Payments for tax withheld on share-based compensation			(2,135)			(3,270)
NET CASH USED IN FINANCING ACTIVITIES			(90,983)			(77,916)
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH			69,414			5,530
Cash and cash equivalents and restricted cash at beginning of period			120,772			115,242
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD		$	190,186		$	120,772
NONCASH INVESTING ACTIVITIES
Equipment financed		$	94,016		$	84,170
Accruals for equipment received		$	2,807		$	1,734

1. ABF Freight, Inc. recorded a one-time charge in second quarter 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund.

 

		Three Months Ended												Year Ended
		December 31												December 31
		2018						2017						2018						2017
		Unaudited
		($ thousands, except percentages)
REVENUES
Asset-Based		$	548,941					$	497,004					$	2,175,585					$	1,993,314
ArcBest			193,754						182,144						781,123						706,698
FleetNet			50,081						40,034						195,126						156,341
Total Asset-Light			243,835						222,178						976,249						863,039
Other and eliminations			(18,497)						(8,461)						(58,046)						(29,896)
Total consolidated revenues		$	774,279					$	710,721					$	3,093,788					$	2,826,457
OPERATING EXPENSES(1)
Asset-Based
Salaries, wages, and benefits		$	279,419		50.9	%		$	271,577		54.6	%		$	1,128,030		51.9	%		$	1,125,131		56.5	%
Fuel, supplies, and expenses			65,106		11.9				59,680		12.0				256,472		11.8				234,006		11.7
Operating taxes and licenses			12,865		2.4				12,041		2.4				48,792		2.2				47,767		2.4
Insurance			8,832		1.6				7,693		1.6				32,887		1.5				30,761		1.5
Communications and utilities			4,019		0.7				4,113		0.8				16,983		0.8				17,373		0.9
Depreciation and amortization			21,459		3.9				20,730		4.2				85,951		4.0				82,507		4.1
Rents and purchased transportation			61,920		11.3				51,461		10.4				242,252		11.1				206,457		10.4
Shared services(2)			57,504		10.5				47,545		9.6				218,290		10.0				185,257		9.3
Multiemployer pension fund withdrawal liability charge(3)			—		—				—		—				37,922		1.7				—		—
(Gain) loss on sale of property and equipment			112		—				(96)		—				(410)		—				(695)		—
Other			776		0.1				2,590		0.5				4,554		0.2				6,525		0.3
Restructuring costs(4)			—		—				76		—				—		—				344		—
Total Asset-Based			512,012		93.3	%			477,410		96.1	%			2,071,723		95.2	%			1,935,433		97.1	%
ArcBest
Purchased transportation			155,887		80.4	%			146,184		80.2	%			631,501		80.8	%			563,497		79.7	%
Supplies and expenses			3,039		1.6				3,822		2.1				13,329		1.7				15,087		2.1
Depreciation and amortization(5)			3,187		1.6				3,579		2.0				13,750		1.8				13,090		1.9
Shared services(2)			22,409		11.6				20,969		11.5				91,266		11.7				83,660		11.8
Other			2,170		1.1				2,924		1.6				9,143		1.2				11,116		1.6
Restructuring costs(4)			339		0.2				—		—				491		0.1				875		0.1
Gain on sale of subsidiaries(6)			—		—				—		—				(1,945)		(0.3)				(152)		—
			187,031		96.5	%			177,478		97.4	%			757,535		97.0	%			687,173		97.2	%
FleetNet			49,334		98.5	%			39,247		98.0	%			190,741		97.8	%			152,864		97.8	%
Total Asset-Light			236,365						216,725						948,276						840,037
Other and eliminations(7)			(11,260)						(2,153)						(35,309)						(10,361)
Total consolidated operating expenses		$	737,117		95.2	%		$	691,982		97.4	%		$	2,984,690		96.5	%		$	2,765,109		97.8	%
OPERATING INCOME(1)
Asset-Based		$	36,929					$	19,594					$	103,862					$	57,881
ArcBest			6,723						4,666						23,588						19,525
FleetNet			747						787						4,385						3,477
Total Asset-Light			7,470						5,453						27,973						23,002
Other and eliminations(7)			(7,237)						(6,308)						(22,737)						(19,535)
Total consolidated operating income		$	37,162					$	18,739					$	109,098					$	61,348

1. As previously discussed in the Financial Data and Operating Statistics to this press release, the components of net periodic benefit cost other than service cost are presented within Other Income (Costs) in the consolidated financial statements for all periods presented and, therefore, excluded from the presentation of operating segment data within this table.
2. Shared services represent costs incurred to support all segments, including sales, pricing, customer service, marketing, capacity sourcing functions, human resources, financial services, information technology, legal, and other company-wide services.
3. ABF Freight, Inc. recorded a one-time charge in second quarter 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement it entered into with the New England Teamsters and Trucking Industry Pension Fund.
4. Restructuring charges relate to the realignment of the Company’s organizational structure as announced on November 3, 2016.
5. Depreciation and amortization consists primarily of amortization of intangibles, including customer relationships, and software associated with acquired businesses.
6. Gains recognized for the year ended December 31, 2018 and 2017 relate to the sale of the ArcBest segment’s military moving businesses in December 2017 and 2016, respectively.
7. “Other” corporate costs include restructuring charges of $0.6 million and $0.2 million for the three months ended December 31, 2018 and 2017, respectively, and $1.2 million and $1.8 million for the year ended December 31, 2018 and 2017, respectively. (See Segment Operating Income Reconciliations of GAAP to Non-GAAP Financial Measures table.) “Other and eliminations” 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, and other investments in ArcBest technology and innovations.