OPERATING SEGMENT DATA

3 Months Ended

Mar. 31, 2012

OPERATING SEGMENT DATA

OPERATING SEGMENT DATA

NOTE I — OPERATING SEGMENT DATA

The Company uses the “management approach” to determine its reportable operating segments, as well as to determine the basis of reporting the operating segment information. The management approach focuses on financial information that the Company’s management uses to make operating decisions. Management uses operating revenues, operating expense categories, operating ratios, operating income and key operating statistics to evaluate performance and allocate resources to the Company’s operations.

Certain reclassifications have been made to the prior year’s operating segment data to conform to the current year presentation of the Company’s operating segments. There was no impact on consolidated total assets, operating income or loss, or net income or loss attributable to the Company as a result of these reclassifications.

The Company’s reportable operating segments are as follows:

·Freight Transportation, the Company’s principal operating segment, consists of ABF and ABF’s self-move service operations provided by U-Pack Moving®. Freight Transportation was reported as the ABF operating segment for the three months ended March 31, 2011.

ABF is impacted by seasonal fluctuations which affect tonnage and shipment levels and, consequently, revenues and operating results. The second and third calendar quarters of each year usually have the highest tonnage levels while the first quarter generally has the lowest, although other factors, including the state of the U.S. and global economies, may influence quarterly tonnage levels. Operating results for the interim periods presented may not necessarily be indicative of the results for the fiscal year.

·Truck Brokerage and Management represents the Company’s transportation brokerage services subsidiary, FreightValue, Inc. The results of Truck Brokerage and Management were managed through and included in the ABF operating segment for the three months ended March 31, 2011. Prior year amounts related to this segment have been reclassified from Freight Transportation to conform to the current year’s presentation.

·Emergency and Preventative Maintenance represents FleetNet America, Inc., the subsidiary of the Company which provides roadside assistance and equipment services for commercial vehicles through a network of third-party service providers. Prior year results of this segment have been reclassified from the Company’s operations other than ABF to conform to the current year’s presentation.

Emergency roadside services are impacted by weather conditions that affect commercial vehicle operations, and the segment’s results of operations will be influenced by seasonal variations in business levels.

·Special Services Logistics includes Albert Companies, Inc. and Moving Solutions, Inc., the Company’s subsidiaries which provide transportation, warehousing and delivery services to the consumer, corporate and military household goods moving markets. These subsidiaries were reported in the Company’s operations other than ABF for the three months ended March 31, 2011. Prior year amounts related to this segment have been reclassified to conform to the current year’s presentation. Certain costs incurred by Special Services Logistics in support of ABF Freight System, Inc.’s self-move services are allocated to Freight Transportation at cost. The segment revenue and expense associated with these allocations are eliminated in consolidation.

Operations of the Special Services Logistics segments are impacted by seasonal fluctuations, resulting in higher business levels in second and third quarters as the demand for moving services are typically higher in the summer months.

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

Further classifications of operations or revenues by geographic location are impracticable and, therefore, are not provided. The Company’s foreign operations are not significant.

The following table reflects reportable operating segment information for the three months ended March 31:

	2012			2011
	($ thousands)
OPERATING REVENUES
Freight Transportation	$	400,555		$	397,272
Truck Brokerage and Management	8,039			5,100
Emergency and Preventative Maintenance	22,378			22,277
Special Services Logistics	15,052			15,871
Other and eliminations	(5,157		)	(5,589		)
Total consolidated operating revenues	$	440,867		$	434,931
OPERATING EXPENSES AND COSTS
Freight Transportation
Salaries, wages and benefits	$	265,517		$	262,300
Fuel, supplies and expenses	80,765			79,117
Operating taxes and licenses	10,801			11,421
Insurance	4,884			6,480
Communications and utilities	3,804			3,974
Depreciation and amortization	18,581			17,201
Rents and purchased transportation	36,758			38,355
Gain on sale of property and equipment	(282		)	(99		)
Other	1,704			1,581
Total Freight Transportation operating expenses and costs	422,532			420,330
Truck Brokerage and Management	7,645			4,715
Emergency and Preventative Maintenance	22,515			21,355
Special Services Logistics	15,844			15,734
Other and eliminations	(4,682		)	(5,211		)
Total consolidated operating expenses and costs	$	463,854		$	456,923
OPERATING INCOME (LOSS)
Freight Transportation	$	(21,977	)	$	(23,058	)
Truck Brokerage and Management	394			385
Emergency and Preventative Maintenance	(137		)	922
Special Services Logistics	(792		)	137
Other and eliminations	(475		)	(378		)
Total consolidated operating loss	$	(22,987	)	$	(21,992	)
OTHER INCOME (EXPENSE)
Interest and dividend income	$	253		$	243
Interest expense and other related financing costs	(1,142		)	(994		)
Other, net(1)	1,340			2,610
	451			1,859
LOSS BEFORE INCOME TAXES	$	(22,536	)	$	(20,133	)

(1)Other, net includes gains on cash surrender value and proceeds of life insurance policies.