Delaware | 94-1444798 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
2211 Old Earhart Road, Suite 100, Ann Arbor, MI | 48105 |
(Address of principal executive offices) | (Zip code) |
1 |
CON-WAY INC. | |||||
FORM 10-Q | |||||
Quarter Ended June 30, 2012 | |||||
Table of Contents | |||||
Page | |||||
PART I. FINANCIAL INFORMATION | |||||
Item 1. | Financial Statements | ||||
Consolidated Balance Sheets - | |||||
June 30, 2012 and December 31, 2011 | |||||
Statements of Consolidated Income - | |||||
Three and Six Months Ended June 30, 2012 and 2011 | |||||
Statements of Consolidated Comprehensive Income - | |||||
Three and Six Months Ended June 30, 2012 and 2011 | |||||
Statements of Consolidated Cash Flows - | |||||
Six Months Ended June 30, 2012 and 2011 | |||||
Notes to Consolidated Financial Statements | |||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | ||||
Item 4. | Controls and Procedures | ||||
PART II. OTHER INFORMATION | |||||
Item 1. | Legal Proceedings | ||||
Item 1A. | Risk Factors | ||||
Item 6. | Exhibits | ||||
Signatures |
2 |
CON-WAY INC. | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Dollars in thousands) | |||||||
June 30, | December 31, | ||||||
ASSETS | 2012 | 2011 | |||||
(Unaudited) | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 454,989 | $ | 438,010 | |||
Marketable securities | 5,000 | 13,255 | |||||
Trade accounts receivable, net | 665,713 | 577,522 | |||||
Other accounts receivable | 52,087 | 43,849 | |||||
Operating supplies, at lower of average cost or market | 25,810 | 22,822 | |||||
Prepaid expenses | 47,773 | 48,369 | |||||
Deferred income taxes | 21,288 | 46,563 | |||||
Total Current Assets | 1,272,660 | 1,190,390 | |||||
Property, Plant and Equipment | |||||||
Land | 189,737 | 194,078 | |||||
Buildings and leasehold improvements | 825,669 | 827,910 | |||||
Revenue equipment | 1,697,720 | 1,613,806 | |||||
Other equipment | 322,611 | 318,313 | |||||
3,035,737 | 2,954,107 | ||||||
Accumulated depreciation | (1,500,166 | ) | (1,458,074 | ) | |||
Net Property, Plant and Equipment | 1,535,571 | 1,496,033 | |||||
Other Assets | |||||||
Deferred charges and other assets | 35,826 | 36,743 | |||||
Capitalized software, net | 19,272 | 19,829 | |||||
Marketable securities | 5,185 | 5,354 | |||||
Intangible assets, net | 12,327 | 13,951 | |||||
Goodwill | 337,820 | 337,716 | |||||
410,430 | 413,593 | ||||||
Total Assets | $ | 3,218,661 | $ | 3,100,016 | |||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
3 |
CON-WAY INC. | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Dollars in thousands except per share amounts) | |||||||
June 30, | December 31, | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | 2012 | 2011 | |||||
(Unaudited) | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 402,875 | $ | 345,489 | |||
Accrued liabilities | 256,605 | 235,146 | |||||
Self-insurance accruals | 101,740 | 104,328 | |||||
Short-term borrowings | 14,215 | 14,481 | |||||
Current maturities of long-term debt and capital leases | 21,531 | 24,026 | |||||
Total Current Liabilities | 796,966 | 723,470 | |||||
Long-Term Liabilities | |||||||
Long-term debt | 718,950 | 718,336 | |||||
Long-term obligations under capital leases | 44,190 | 51,902 | |||||
Self-insurance accruals | 150,530 | 158,889 | |||||
Employee benefits | 590,299 | 610,850 | |||||
Other liabilities and deferred credits | 37,032 | 39,120 | |||||
Deferred income taxes | 57,783 | 38,195 | |||||
Total Liabilities | 2,395,750 | 2,340,762 | |||||
Commitments and Contingencies (Note 8) | |||||||
Shareholders' Equity | |||||||
Common stock, $0.625 par value; authorized 100,000,000 shares; | |||||||
issued 63,475,232 and 63,065,931 shares, respectively | 39,645 | 39,394 | |||||
Additional paid-in capital, common stock | 606,861 | 595,992 | |||||
Retained earnings | 935,437 | 884,758 | |||||
Cost of repurchased common stock | |||||||
(7,569,248 and 7,468,869 shares, respectively) | (325,695 | ) | (322,454 | ) | |||
Accumulated other comprehensive loss | (433,337 | ) | (438,436 | ) | |||
Total Shareholders' Equity | 822,911 | 759,254 | |||||
Total Liabilities and Shareholders' Equity | $ | 3,218,661 | $ | 3,100,016 | |||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
4 |
CON-WAY INC. | |||||||||||||||
STATEMENTS OF CONSOLIDATED INCOME | |||||||||||||||
(Unaudited) | |||||||||||||||
(Dollars in thousands except per share amounts) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues | $ | 1,446,096 | $ | 1,348,549 | $ | 2,812,257 | $ | 2,594,176 | |||||||
Costs and Expenses | |||||||||||||||
Salaries, wages and employee benefits | 544,624 | 508,874 | 1,067,094 | 1,000,514 | |||||||||||
Purchased transportation | 400,200 | 348,526 | 768,251 | 665,516 | |||||||||||
Fuel and fuel-related taxes | 140,354 | 150,110 | 284,185 | 286,137 | |||||||||||
Other operating expenses | 138,529 | 142,018 | 275,044 | 272,700 | |||||||||||
Depreciation and amortization | 53,442 | 50,540 | 105,284 | 100,854 | |||||||||||
Maintenance | 32,671 | 32,509 | 64,581 | 61,981 | |||||||||||
Rents and leases | 28,242 | 28,730 | 56,942 | 56,521 | |||||||||||
Purchased labor | 27,891 | 27,077 | 55,043 | 53,092 | |||||||||||
1,365,953 | 1,288,384 | 2,676,424 | 2,497,315 | ||||||||||||
Operating Income | 80,143 | 60,165 | 135,833 | 96,861 | |||||||||||
Other Income (Expense) | |||||||||||||||
Investment income | 209 | 227 | 444 | 549 | |||||||||||
Interest expense | (13,738 | ) | (13,923 | ) | (27,532 | ) | (27,842 | ) | |||||||
Miscellaneous, net | (1,917 | ) | (1,025 | ) | (2,626 | ) | (2,763 | ) | |||||||
(15,446 | ) | (14,721 | ) | (29,714 | ) | (30,056 | ) | ||||||||
Income before Income Tax Provision | 64,697 | 45,444 | 106,119 | 66,805 | |||||||||||
Income Tax Provision | 22,897 | 16,022 | 38,673 | 30,461 | |||||||||||
Net Income | $ | 41,800 | $ | 29,422 | $ | 67,446 | $ | 36,344 | |||||||
Weighted-Average Common Shares Outstanding | |||||||||||||||
Basic | 55,809,358 | 55,413,243 | 55,756,540 | 55,227,528 | |||||||||||
Diluted | 56,439,845 | 56,136,065 | 56,377,198 | 55,939,330 | |||||||||||
Earnings per Common Share | |||||||||||||||
Basic | $ | 0.75 | $ | 0.53 | $ | 1.21 | $ | 0.66 | |||||||
Diluted | $ | 0.74 | $ | 0.52 | $ | 1.20 | $ | 0.65 | |||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
5 |
CON-WAY INC. | |||||||||||||||
STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME | |||||||||||||||
(Unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net Income | $ | 41,800 | $ | 29,422 | $ | 67,446 | $ | 36,344 | |||||||
Other Comprehensive Income (Loss): | |||||||||||||||
Foreign currency translation adjustment | (1,456 | ) | 709 | (726 | ) | 1,703 | |||||||||
Unrealized gain (loss) on available-for-sale security, | |||||||||||||||
net of deferred tax of $82, $10, $37 and $14, respectively | (127 | ) | (16 | ) | (57 | ) | 21 | ||||||||
Employee benefit plans | |||||||||||||||
Amortization of actuarial loss included in expense, net of | |||||||||||||||
deferred tax of $1,903, $941, $3,761 and $1,952, respectively | 2,931 | 1,472 | 5,882 | 3,054 | |||||||||||
1,348 | 2,165 | 5,099 | 4,778 | ||||||||||||
Comprehensive Income | $ | 43,148 | $ | 31,587 | $ | 72,545 | $ | 41,122 | |||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
6 |
CON-WAY INC. | |||||||
STATEMENTS OF CONSOLIDATED CASH FLOWS | |||||||
(Unaudited) | |||||||
(Dollars in thousands) | |||||||
Six Months Ended | |||||||
June 30, | |||||||
2012 | 2011 | ||||||
Cash and Cash Equivalents, Beginning of Period | $ | 438,010 | $ | 421,420 | |||
Operating Activities | |||||||
Net income | 67,446 | 36,344 | |||||
Adjustments to reconcile net income to net cash provided | |||||||
by operating activities: | |||||||
Depreciation and amortization, net of accretion | 104,785 | 100,364 | |||||
Non-cash compensation and employee benefits | 17,250 | 12,207 | |||||
Increase in deferred income taxes | 41,139 | 26,224 | |||||
Provision for uncollectible accounts | 2,426 | 3,159 | |||||
Gain from sales of property and equipment, net | (6,446 | ) | (1,632 | ) | |||
Changes in assets and liabilities: | |||||||
Receivables | (90,218 | ) | (96,076 | ) | |||
Prepaid expenses | 596 | 2,055 | |||||
Accounts payable | 51,792 | 63,386 | |||||
Accrued variable compensation | (14,251 | ) | (1,506 | ) | |||
Accrued liabilities, excluding accrued variable compensation | |||||||
and employee benefits | 35,496 | 25,000 | |||||
Self-insurance accruals | (10,947 | ) | (14,858 | ) | |||
Accrued income taxes | (7,676 | ) | 29,942 | ||||
Employee benefits | (20,337 | ) | 1,389 | ||||
Deferred charges and credits | (4,611 | ) | 1,699 | ||||
Other | (4,543 | ) | (1,751 | ) | |||
Net Cash Provided by Operating Activities | 161,901 | 185,946 | |||||
Investing Activities | |||||||
Capital expenditures | (148,669 | ) | (123,468 | ) | |||
Software expenditures | (3,076 | ) | (3,854 | ) | |||
Proceeds from sales of property and equipment | 15,721 | 4,525 | |||||
Purchases of marketable securities | (5,000 | ) | — | ||||
Proceeds from sales of marketable securities | 13,330 | 300 | |||||
Net Cash Used in Investing Activities | (127,694 | ) | (122,497 | ) | |||
Financing Activities | |||||||
Repayment of capital leases | (9,657 | ) | (9,272 | ) | |||
Net proceeds from (repayments of) short-term borrowings | (312 | ) | 245 | ||||
Proceeds from exercise of stock options | 2,396 | 4,087 | |||||
Excess tax benefit from share-based compensation | 1,510 | 544 | |||||
Payments of common dividends | (11,165 | ) | (11,060 | ) | |||
Net Cash Used in Financing Activities | (17,228 | ) | (15,456 | ) | |||
Increase in Cash and Cash Equivalents | 16,979 | 47,993 | |||||
Cash and Cash Equivalents, End of Period | $ | 454,989 | $ | 469,413 | |||
Supplemental Disclosure | |||||||
Cash paid (refunded) for income taxes, net | $ | 6,160 | $ | (28,881 | ) | ||
Cash paid for interest, net of amounts capitalized | $ | 27,012 | $ | 27,421 | |||
Non-cash Investing and Financing Activities | |||||||
Revenue equipment acquired through partial non-monetary exchanges | $ | 13,658 | $ | 15,366 | |||
Repurchased common stock issued under defined contribution plan | $ | — | $ | 17,307 | |||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
7 |
(Dollars in thousands except per share data) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Numerator: | |||||||||||||||
Net income | $ | 41,800 | $ | 29,422 | $ | 67,446 | $ | 36,344 | |||||||
Denominator: | |||||||||||||||
Weighted-average common shares outstanding | 55,809,358 | 55,413,243 | 55,756,540 | 55,227,528 | |||||||||||
Stock options and nonvested stock | 630,487 | 722,822 | 620,658 | 711,802 | |||||||||||
56,439,845 | 56,136,065 | 56,377,198 | 55,939,330 | ||||||||||||
Diluted Earnings per Share: | $ | 0.74 | $ | 0.52 | $ | 1.20 | $ | 0.65 | |||||||
Anti-dilutive securities excluded from the | |||||||||||||||
computation of diluted EPS | 1,721,576 | 2,004,579 | 1,813,188 | 2,004,579 |
8 |
(Dollars in thousands) | Logistics | Truckload | Other | Total | |||||||||||
Balance at December 31, 2010 | |||||||||||||||
Goodwill | $ | 55,374 | $ | 464,598 | $ | 727 | $ | 520,699 | |||||||
Accumulated impairment losses | (48,236 | ) | (134,813 | ) | — | (183,049 | ) | ||||||||
7,138 | 329,785 | 727 | 337,650 | ||||||||||||
Change in foreign currency exchange rates | 66 | — | — | 66 | |||||||||||
Balances at December 31, 2011 | |||||||||||||||
Goodwill | 55,440 | 464,598 | 727 | 520,765 | |||||||||||
Accumulated impairment losses | (48,236 | ) | (134,813 | ) | — | (183,049 | ) | ||||||||
7,204 | 329,785 | 727 | 337,716 | ||||||||||||
Change in foreign currency exchange rates | 104 | — | — | 104 | |||||||||||
Balances at June 30, 2012 | |||||||||||||||
Goodwill | 55,544 | 464,598 | 727 | 520,869 | |||||||||||
Accumulated impairment losses | (48,236 | ) | (134,813 | ) | — | (183,049 | ) | ||||||||
$ | 7,308 | $ | 329,785 | $ | 727 | $ | 337,820 |
June 30, 2012 | December 31, 2011 | ||||||||||||||
(Dollars in thousands) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||
Customer relationships | $ | 27,635 | $ | 15,308 | $ | 27,570 | $ | 13,619 |
(Dollars in thousands) | |||
Year ending December 31: | |||
Remaining six months of 2012 | $ | 1,330 | |
2013 | 2,356 | ||
2014 | 2,356 | ||
2015 | 2,356 | ||
2016 | 2,356 | ||
2017 | 1,571 |
9 |
• | Freight. The Freight segment consists of the operating results of the Con-way Freight business unit, which provides regional, inter-regional and transcontinental less-than-truckload freight services throughout North America. |
• | Logistics. The Logistics segment consists of the operating results of the Menlo Worldwide Logistics business unit, which develops contract-logistics solutions, including the management of complex distribution networks and supply-chain engineering and consulting, and also provides multimodal freight-brokerage services. |
• | Truckload. The Truckload segment consists of the operating results of the Con-way Truckload business unit, which provides asset-based full-truckload freight services throughout North America. |
• | Other. The Other reporting segment consists of the operating results of Road Systems, a trailer manufacturer, and certain corporate activities for which the related income or expense has not been allocated to other reporting segments. |
(Dollars in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues before Inter-segment Eliminations | |||||||||||||||
Freight | $ | 878,524 | $ | 839,829 | $ | 1,709,571 | $ | 1,607,570 | |||||||
Logistics | 448,029 | 394,012 | 867,175 | 763,987 | |||||||||||
Truckload | 162,920 | 155,451 | 320,243 | 300,666 | |||||||||||
Other | 14,636 | 12,297 | 28,927 | 24,294 | |||||||||||
Inter-segment Revenue Eliminations | (58,013 | ) | (53,040 | ) | (113,659 | ) | (102,341 | ) | |||||||
$ | 1,446,096 | $ | 1,348,549 | $ | 2,812,257 | $ | 2,594,176 | ||||||||
Inter-segment Revenue Eliminations | |||||||||||||||
Freight | $ | 13,466 | $ | 12,435 | $ | 25,872 | $ | 23,726 | |||||||
Logistics | 11,822 | 8,644 | 22,167 | 14,805 | |||||||||||
Truckload | 19,205 | 21,524 | 38,771 | 42,370 | |||||||||||
Other | 13,520 | 10,437 | 26,849 | 21,440 | |||||||||||
$ | 58,013 | $ | 53,040 | $ | 113,659 | $ | 102,341 | ||||||||
Revenues from External Customers | |||||||||||||||
Freight | $ | 865,058 | $ | 827,394 | $ | 1,683,699 | $ | 1,583,844 | |||||||
Logistics | 436,207 | 385,368 | 845,008 | 749,182 | |||||||||||
Truckload | 143,715 | 133,927 | 281,472 | 258,296 | |||||||||||
Other | 1,116 | 1,860 | 2,078 | 2,854 | |||||||||||
$ | 1,446,096 | $ | 1,348,549 | $ | 2,812,257 | $ | 2,594,176 | ||||||||
Operating Income (Loss) | |||||||||||||||
Freight | $ | 53,429 | $ | 39,155 | $ | 87,931 | $ | 59,499 | |||||||
Logistics | 12,688 | 12,095 | 24,982 | 20,741 | |||||||||||
Truckload | 14,619 | 10,323 | 25,169 | 17,406 | |||||||||||
Other | (593 | ) | (1,408 | ) | (2,249 | ) | (785 | ) | |||||||
$ | 80,143 | $ | 60,165 | $ | 135,833 | $ | 96,861 |
10 |
June 30, 2012 | |||||||||||||||
(Dollars in thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
Cash equivalents | $ | 424,049 | $ | 84,076 | $ | 339,973 | $ | — | |||||||
Current marketable securities | 5,000 | — | 5,000 | — | |||||||||||
Other marketable securities | 5,185 | — | — | 5,185 |
December 31, 2011 | |||||||||||||||
(Dollars in thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
Cash equivalents | $ | 398,450 | $ | 84,872 | $ | 313,578 | $ | — | |||||||
Current marketable securities | 13,255 | — | 13,255 | — | |||||||||||
Other marketable securities | 5,354 | — | — | 5,354 |
(Dollars in thousands) | Auction-rate security | ||
Balance at December 31, 2010 | $ | 6,039 | |
Unrealized loss | (10 | ) | |
Partial redemption | (675 | ) | |
Balance at December 31, 2011 | $ | 5,354 | |
Unrealized loss | (94 | ) | |
Partial redemption | (75 | ) | |
Balance at June 30, 2012 | $ | 5,185 |
11 |
Qualified Pension Plans | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(Dollars in thousands) | 2012 | 2011 | 2012 | 2011 | |||||||||||
Interest cost on benefit obligation | $ | 17,582 | $ | 17,685 | $ | 35,084 | $ | 35,655 | |||||||
Expected return on plan assets | (21,095 | ) | (21,426 | ) | (42,206 | ) | (42,968 | ) | |||||||
Amortization of net loss | 4,893 | 2,534 | 9,723 | 5,273 | |||||||||||
Net periodic benefit expense (income) | $ | 1,380 | $ | (1,207 | ) | $ | 2,601 | $ | (2,040 | ) | |||||
Non-Qualified Pension Plans | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(Dollars in thousands) | 2012 | 2011 | 2012 | 2011 | |||||||||||
Interest cost on benefit obligation | $ | 863 | $ | 957 | $ | 1,719 | $ | 1,894 | |||||||
Amortization of net loss | 242 | 182 | 523 | 339 | |||||||||||
Net periodic benefit expense | $ | 1,105 | $ | 1,139 | $ | 2,242 | $ | 2,233 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(Dollars in thousands) | 2012 | 2011 | 2012 | 2011 | |||||||||||
Service cost | $ | 417 | $ | 316 | $ | 840 | $ | 721 | |||||||
Interest cost on benefit obligation | 1,138 | 1,125 | 2,159 | 2,246 | |||||||||||
Amortization of prior service credit | (301 | ) | (303 | ) | (603 | ) | (606 | ) | |||||||
Net periodic benefit expense | $ | 1,254 | $ | 1,138 | $ | 2,396 | $ | 2,361 |
12 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(Dollars in thousands) | 2012 | 2011 | 2012 | 2011 | |||||||||||
Salaries, wages and employee benefits | $ | 4,767 | $ | 4,406 | $ | 9,829 | $ | 9,169 | |||||||
Deferred income tax benefit | (1,853 | ) | (1,732 | ) | (3,818 | ) | (3,576 | ) | |||||||
Net share-based compensation expense | $ | 2,914 | $ | 2,674 | $ | 6,011 | $ | 5,593 |
13 |
14 |
• | Overview of Business |
• | Results of Operations |
• | Liquidity and Capital Resources |
• | Critical Accounting Policies and Estimates |
• | Forward-Looking Statements |
• | Freight. The Freight segment consists of the operating results of the Con-way Freight business unit, which provides regional, inter-regional and transcontinental less-than-truckload freight services throughout North America. |
• | Logistics. The Logistics segment consists of the operating results of the Menlo Worldwide Logistics business unit, which develops contract-logistics solutions, including the management of complex distribution networks and supply-chain engineering and consulting, and also provides multimodal freight-brokerage services. |
• | Truckload. The Truckload segment consists of the operating results of the Con-way Truckload business unit, which provides asset-based full-truckload freight services throughout North America. |
• | Other. The Other reporting segment consists of the operating results of Road Systems, a trailer manufacturer, and certain corporate activities for which the related income or expense has not been allocated to other reporting segments. |
15 |
(Dollars in thousands except per share amounts) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues | $ | 1,446,096 | $ | 1,348,549 | $ | 2,812,257 | $ | 2,594,176 | |||||||
Operating expenses | 1,365,953 | 1,288,384 | 2,676,424 | 2,497,315 | |||||||||||
Operating income | 80,143 | 60,165 | 135,833 | 96,861 | |||||||||||
Other non-operating expense | 15,446 | 14,721 | 29,714 | 30,056 | |||||||||||
Income before income tax provision | 64,697 | 45,444 | 106,119 | 66,805 | |||||||||||
Income tax provision | 22,897 | 16,022 | 38,673 | 30,461 | |||||||||||
Net income | $ | 41,800 | $ | 29,422 | $ | 67,446 | $ | 36,344 | |||||||
Diluted earnings per share | $ | 0.74 | $ | 0.52 | $ | 1.20 | $ | 0.65 |
16 |
(Dollars in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenue before inter-segment eliminations | $ | 878,524 | $ | 839,829 | $ | 1,709,571 | $ | 1,607,570 | |||||||
Salaries, wages and employee benefits | 396,169 | 375,916 | 776,665 | 737,658 | |||||||||||
Purchased transportation | 148,987 | 136,718 | 287,262 | 258,241 | |||||||||||
Fuel and fuel-related taxes | 95,957 | 103,722 | 194,262 | 196,454 | |||||||||||
Other operating expenses | 111,524 | 115,748 | 220,895 | 223,495 | |||||||||||
Depreciation and amortization | 31,076 | 27,591 | 61,048 | 55,167 | |||||||||||
Maintenance | 24,245 | 23,935 | 47,841 | 45,233 | |||||||||||
Rents and leases | 12,014 | 11,913 | 24,110 | 22,775 | |||||||||||
Purchased labor | 5,123 | 5,131 | 9,557 | 9,048 | |||||||||||
Total operating expenses | 825,095 | 800,674 | 1,621,640 | 1,548,071 | |||||||||||
Operating income | $ | 53,429 | $ | 39,155 | $ | 87,931 | $ | 59,499 | |||||||
Operating margin | 6.1 | % | 4.7 | % | 5.1 | % | 3.7 | % | |||||||
2012 vs. 2011 | 2012 vs. 2011 | ||||||||||||||
Selected Operating Statistics | |||||||||||||||
Weight per day | +0.9 | % | +1.2 | % | |||||||||||
Revenue per hundredweight ("yield") | +3.2 | % | +4.6 | % | |||||||||||
Shipments per day ("volume") | -1.2 | % | -0.1 | % | |||||||||||
Weight per shipment | +2.2 | % | +1.3 | % |
17 |
(Dollars in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenue before inter-segment eliminations | $ | 448,029 | $ | 394,012 | $ | 867,175 | $ | 763,987 | |||||||
Purchased transportation expense | (286,191 | ) | (247,028 | ) | (549,614 | ) | (474,682 | ) | |||||||
Net revenue | 161,838 | 146,984 | 317,561 | 289,305 | |||||||||||
Salaries, wages and employee benefits | 66,776 | 56,621 | 129,798 | 109,970 | |||||||||||
Fuel and fuel-related taxes | 206 | 285 | 443 | 541 | |||||||||||
Other operating expenses | 41,413 | 37,520 | 80,128 | 76,979 | |||||||||||
Depreciation and amortization | 2,435 | 2,795 | 5,063 | 5,636 | |||||||||||
Maintenance | 627 | 719 | 1,603 | 1,421 | |||||||||||
Rents and leases | 15,636 | 15,679 | 31,483 | 31,387 | |||||||||||
Purchased labor | 22,057 | 21,270 | 44,061 | 42,630 | |||||||||||
Total operating expenses excluding purchased transportation | 149,150 | 134,889 | 292,579 | 268,564 | |||||||||||
Operating income | $ | 12,688 | $ | 12,095 | $ | 24,982 | $ | 20,741 | |||||||
Operating margin on revenue | 2.8 | % | 3.1 | % | 2.9 | % | 2.7 | % | |||||||
Operating margin on net revenue | 7.8 | % | 8.2 | % | 7.9 | % | 7.2 | % |
18 |
19 |
(Dollars in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Freight revenue | $ | 120,173 | $ | 113,965 | $ | 236,426 | $ | 224,578 | |||||||
Fuel-surcharge revenue | 38,015 | 37,152 | 74,421 | 67,469 | |||||||||||
Other revenue | 4,732 | 4,334 | 9,396 | 8,619 | |||||||||||
Revenue before inter-segment eliminations | 162,920 | 155,451 | 320,243 | 300,666 | |||||||||||
Salaries, wages and employee benefits | 53,682 | 52,053 | 106,592 | 102,420 | |||||||||||
Purchased transportation | 9,194 | 7,033 | 17,592 | 12,863 | |||||||||||
Fuel and fuel-related taxes | 44,059 | 45,971 | 89,223 | 88,965 | |||||||||||
Other operating expenses | 15,966 | 14,605 | 31,820 | 28,954 | |||||||||||
Depreciation and amortization | 17,096 | 17,145 | 33,691 | 33,829 | |||||||||||
Maintenance | 7,691 | 7,784 | 14,942 | 15,155 | |||||||||||
Rents and leases | 324 | 264 | 648 | 533 | |||||||||||
Purchased labor | 289 | 273 | 566 | 541 | |||||||||||
Total operating expenses | 148,301 | 145,128 | 295,074 | 283,260 | |||||||||||
Operating income | $ | 14,619 | $ | 10,323 | $ | 25,169 | $ | 17,406 | |||||||
Operating margin on revenue | 9.0 | % | 6.6 | % | 7.9 | % | 5.8 | % | |||||||
Operating margin on revenue | |||||||||||||||
excluding fuel-surcharge revenue | 11.7 | % | 8.7 | % | 10.2 | % | 7.5 | % | |||||||
2012 vs. 2011 | 2012 vs. 2011 | ||||||||||||||
Selected Operating Statistics | |||||||||||||||
Freight revenue per loaded mile | +3.0 | % | +3.1 | % | |||||||||||
Loaded miles | +2.4 | % | +2.1 | % |
20 |
(Dollars in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenue | |||||||||||||||
Road Systems | $ | 14,636 | $ | 12,297 | $ | 28,927 | $ | 24,294 | |||||||
Operating income (loss) | |||||||||||||||
Road Systems | $ | (49 | ) | $ | 6 | $ | (125 | ) | $ | (79 | ) | ||||
Con-way re-insurance activities | (209 | ) | (1,289 | ) | (1,428 | ) | 36 | ||||||||
Con-way corporate properties | (331 | ) | (371 | ) | (680 | ) | (730 | ) | |||||||
Other | (4 | ) | 246 | (16 | ) | (12 | ) | ||||||||
$ | (593 | ) | $ | (1,408 | ) | $ | (2,249 | ) | $ | (785 | ) |
21 |
(Dollars in thousands) | Six Months Ended June 30, | ||||||
2012 | 2011 | ||||||
Operating Activities | |||||||
Net income | $ | 67,446 | $ | 36,344 | |||
Non-cash adjustments (1) | 159,154 | 140,322 | |||||
Changes in assets and liabilities | (64,699 | ) | 9,280 | ||||
Net Cash Provided by Operating Activities | 161,901 | 185,946 | |||||
Net Cash Used in Investing Activities | (127,694 | ) | (122,497 | ) | |||
Net Cash Used in Financing Activities | (17,228 | ) | (15,456 | ) | |||
Increase in Cash and Cash Equivalents | $ | 16,979 | $ | 47,993 | |||
(1) “Non-cash adjustments” refer to depreciation, amortization, deferred income taxes, provision for uncollectible accounts, and other non-cash income and expenses. | |||||||
22 |
23 |
• | Defined Benefit Pension Plans |
• | Goodwill |
• | Income Taxes |
• | Property, Plant and Equipment and Other Long-Lived Assets |
• | Revenue Recognition |
• | Self-Insurance Accruals |
24 |
• | any projections of earnings, revenues, weight, yield, volumes, income or other financial or operating items; |
• | any statements of the plans, strategies, expectations or objectives of Con-way’s management for future operations or other future items; |
• | any statements concerning proposed new products or services; |
• | any statements regarding Con-way’s estimated future contributions to pension plans; |
• | any statements as to the adequacy of reserves; |
• | any statements regarding the outcome of any legal and other claims and proceedings that may be brought against Con-way; |
• | any statements regarding future economic conditions or performance; |
• | any statements regarding strategic acquisitions; and |
• | any statements of estimates or belief and any statements or assumptions underlying the foregoing. |
25 |
26 |
27 |
28 |
Exhibit No. | |||
(10) | Material Contracts: | ||
10.1 | Con-way Inc. 2012 Equity and Incentive Plan (Appendix A to Con-way's Proxy Statement filed on April 3, 2012). *# | ||
10.2 | Form of Restricted Stock Award Agreement for Non-Employee Directors.# | ||
10.3 | Consulting Agreement between Con-way Inc. and Herbert J. Schmidt dated June 26, 2012 (Exhibit 10.1 to Con-way's Report on Form 8-K filed on June 29, 2012*#). | ||
(31) | Certification of Officers pursuant to Section 302 of the Sarbanes-Oxley Act of 2002: | ||
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
(32) | Certification of Officers pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
(101) | The following financial statements from Con-way’s Form 10-Q for the quarter ended June 30, 2012, filed on August 3, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Statements of Consolidated Income, (iii) Statement of Consolidated Comprehensive Income, (iv) Statements of Consolidated Cash Flows, and (v) Notes to Consolidated Financial Statements. | ||
* Previously filed with the Securities and Exchange Commission and incorporated herein by reference. | |||
# Designates a contract or compensation plan for Management or Directors. |
29 |
Con-way Inc. | |
(Registrant) | |
August 3, 2012 | /s/ Stephen L. Bruffett |
Stephen L. Bruffett | |
Executive Vice President and | |
Chief Financial Officer |
30 |
1. | I have reviewed this quarterly report on Form 10-Q of Con-way Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
August 3, 2012 | /s/ Douglas W. Stotlar |
Douglas W. Stotlar | |
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Con-way Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
August 3, 2012 | /s/ Stephen L. Bruffett |
Stephen L. Bruffett | |
Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | August 3, 2012 |
/s/ Douglas W. Stotlar | |
Name: | Douglas W. Stotlar |
Title: | Chief Executive Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | August 3, 2012 |
/s/ Stephen L. Bruffett | |
Name: | Stephen L. Bruffett |
Title: | Chief Financial Officer |
1. | Restricted Stock Award. As of the date of this Agreement (the "Grant Date"), the Company has issued to Participant that number of shares of its Common Stock as set forth in the “Summary of Grant/Award” on the online award acceptance page of the Company's designated broker (hereinafter called the “Stock”) as a stock award ("Restricted Stock Award"). The Company shall document Participant's interest in the Stock by notifying the Company's transfer agent (“Transfer Agent”) and requesting that the Transfer Agent hold the Stock in book entry form in Participant's name with the applicable restrictions noted in the book entry system. Book entry adjustments shall be made as specified in Paragraph 5. Subject to the other provisions of this Agreement, Participant shall have all rights of a stockholder with respect thereto, including the right to vote, to receive dividends (including stock dividends), to participate in stock splits or other recapitalizations, and to exchange such shares in a merger, consolidation or other reorganization. Participant hereby acknowledges that Participant is acquiring the Stock issued hereunder for investment and not with a view to the distribution thereof, and that Participant does not intend to subdivide Participant's interest in the Stock with any other person. |
2. | Restrictions. |
3. | Lapse of Restrictions; Vesting. |
4. | Additional Securities. Any securities or other property (other than cash) received as the result of ownership of Restricted Securities (hereinafter called "Additional Securities"), including, but not by way of limitation, warrants and securities received as a stock dividend or stock split, or as a result of a recapitalization or reorganization, shall be handled by the Company in the same manner and subject to the same conditions as the Restricted Securities with respect to which they were issued. Participant shall be entitled to direct the Company or its designated agent to exercise any warrant or option received as Additional Securities upon supplying the funds necessary to do so, in which event the securities so purchased shall constitute Additional Securities, or Participant may direct the Company or its designated agent to sell any such warrant or option, in which event the proceeds thereof shall be remitted to Participant. In the event any Restricted Securities or Additional Securities consist of a security by its terms or otherwise convertible into or exchangeable for another security at the election of the holder thereof, Participant may exercise any such right of conversion or exchange in the event the failure to exercise or delay in exercising such right would result in its loss or diminution in value, and any securities so acquired shall be deemed Additional Securities. In the event of any change in the book entry form evidencing Restricted Securities or Additional Securities, issued by the Company pursuant to Paragraph 1 above, by reason of any recapitalization, reorganization or other transaction which results in the creation of Additional Securities, the Company may take any actions it determines appropriate to reflect the changes to such Restricted Securities or Additional Securities, which shall be deemed to be Additional Securities. Additional Securities shall be subject to the conditions imposed by Paragraphs 2 and 3 above in the same manner as the conditions thereunder are or would be applicable to the Restricted Securities with respect to which they were delivered. |
5. | Book Entry Adjustments. The Transfer Agent shall maintain a book entry account (the "Account") to indicate the number of Restricted Securities and Additional Securities held thereunder (the “Book-Entry Shares”) and, upon notification by the Company, shall make book entry adjustments to reflect releases of Book-Entry Shares to Participant pursuant to the terms of this Agreement. When Book-Entry Shares are to be transferred to Participant, the Transfer Agent shall make appropriate book entry adjustments to the accounts maintained by the Transfer Agent on behalf of Participant. The Transfer Agent shall advise the Company and Participant in writing of changes to the Account, and the Transfer Agent shall make the information contained in the Account, as it may be updated from time to time, available for inspection by the Company and Participant upon their reasonable request. |
6. | Taxes. Participant agrees to make appropriate arrangements for the satisfaction of any applicable federal, state or local income, employment or other tax withholding requirements applicable to the receipt of Stock hereunder or the lapse of forfeiture restrictions with respect thereto. |
7. | Distributions. Company shall transmit to Transfer Agent for the Account of Participant all dividends, interest and other distributions paid or made with respect to Restricted Securities and Additional Securities. Transfer Agent shall, upon receipt thereof, disburse forthwith to Participant, less any applicable federal or state withholding taxes, any dividends, interest or other distributions paid or made in cash on Restricted Securities or Additional Securities, and shall hold as Additional Securities subject to the provisions of this Agreement, any securities or other property so received. |
8. | Successors. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. |
9. | Notice. Any notice or other paper required to be given or sent pursuant to the terms of this Agreement shall be sufficiently given or served hereunder to any party when transmitted by registered or certified mail, postage prepaid, addressed to the party to be served as follows: |
Company: | Con-way Inc. |
Participant: | At Participant's home address as it appears most recently in the books and records of the Company |
10. | Amendment; Modification. This Agreement may not be modified or amended, except for a unilateral amendment by the Company that does not materially adversely affect the rights of Participant under this Agreement. No party to this agreement may unilaterally waive any provision hereof, except in writing. Any such modification, amendment or waiver signed by, or binding upon, Participant, shall be valid and binding upon any and all persons or entities who may, at any time, have or claim any rights under or pursuant to this Agreement. |
11. | Transferability. Restricted Stock Awards shall not be transferable by Participant except by will or the laws of descent and distribution or pursuant to a domestic relations order. Participant may designate a beneficiary for the shares of Stock that may be issuable in the event of Participant's death by completing the Company's approved beneficiary designation form and filing such form with the Company's Human Resources Department. The terms of this Agreement shall be binding upon Participant's executors, administrators, heirs, successors and transferees. |
12. | No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant's participation in the Plan, or Participant's acquisition or sale of the underlying shares of Stock. Participant is hereby advised to consult with Participant's own personal tax, legal and financial advisors regarding Participant's participation in the Plan before taking any action related to the Plan. |
13. | Severability. If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render invalid or unenforceable any other severable provision of this Agreement, and this Agreement shall be carried out as if such invalid or unenforceable provision were not contained herein. |
14. | Committee Decisions Conclusive. All decisions of the Committee upon any question arising under the Plan or under this Agreement shall be final and binding on all parties. |
15. | Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant's participation in the Plan, on the Restricted Stock Awards and on any shares of Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
16. | Counterparts. This Agreement may be executed in counterparts, all of which taken together shall be deemed one original. |
17. | No Rights to Continued Employment or Service. The Restricted Stock Award and Participant's participation in the Plan shall not create a right to employment or service, or be interpreted as forming an employment or service contract, with the Company or any Affiliate and shall not interfere with the ability of the Company or any Affiliate, as applicable, to terminate Participant's employment or service relationship (if any). |
18. | Governing Plan Document. This award is subject to all the provisions of the Plan, which hereby are incorporated herein, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Agreement and those of the Plan, the provisions of the Plan shall control. |
19. | Defined Terms. Except as otherwise indicated herein, all capitalized terms used in this Agreement without definition shall have the meanings given such terms in the Plan. |
20. | Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. |
21. | Governing Law. The interpretation, performance, and enforcement of the Agreement shall be governed by the laws of the State of Delaware, without regard to its principles of conflict of laws. |
Share-Based Compensation (Share-Based Compensation Arrangement Expenses Recognized) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Salaries, wages and employee benefits | $ 4,767 | $ 4,406 | $ 9,829 | $ 9,169 |
Deferred income tax benefit | (1,853) | (1,732) | (3,818) | (3,576) |
Net share-based compensation expense | $ 2,914 | $ 2,674 | $ 6,011 | $ 5,593 |
Goodwill And Intangible Assets (Schedule Of Intangible Assets) (Details) (USD $)
|
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
Customer Relationships [Member]
|
Dec. 31, 2011
Customer Relationships [Member]
|
|
Finite-Lived Intangible Assets [Line Items] | ||||||
Amortization expense | $ 800,000 | $ 800,000 | $ 1,600,000 | $ 1,600,000 | ||
Gross Carrying Amount | 27,635,000 | 27,570,000 | ||||
Accumulated Amortization | $ 15,308,000 | $ 13,619,000 |
Goodwill And Intangible Assets
|
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Jun. 30, 2012
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets | Goodwill and Intangible Assets Goodwill The following table shows the changes in the gross carrying amounts of goodwill attributable to each applicable segment:
Intangible Assets Definite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. In the second quarter and first six months of 2012, amortization expense related to intangible assets was $0.8 million and $1.6 million, respectively, compared to $0.8 million and $1.6 million in the same periods of 2011. Intangible assets consisted of the following:
Estimated amortization expense for the next five years is presented in the following table:
|