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 revenues, operating expense categories, operating ratios, operating income, and key operating statistics to evaluate performance and allocate resources to the Company’s operations.

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. Certain overhead costs are not attributable to any segment and remain unallocated in “Other and eliminations.” Included in unallocated costs are expenses related to investor relations, legal, the ArcBest Board of Directors, and certain technology investments. Shared services costs attributable to the operating segments are predominantly allocated based upon estimated and planned resource utilization-related metrics such as estimated shipment levels, number of pricing proposals, or number of personnel supported. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual incidence of cost incurred by the operating segments. Management believes the methods used to allocate expenses are reasonable.

The Company’s reportable operating segments are impacted by seasonal fluctuations which affect tonnage, shipment or service event levels, and demand for services, as described below; therefore, operating results for the interim periods presented may not necessarily be indicative of the results for the fiscal year.

Freight shipments and operating costs of the Asset-Based segment can be adversely affected by inclement weather conditions. 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 freight tonnage levels.

ArcBest segment operations are influenced by seasonal fluctuations that impact customers’ supply chains. The second and third calendar quarters of each year usually have the highest shipment levels while the first quarter generally has the lowest, although other factors, including the state of the U.S. and global economies and available capacity in the market, may impact quarterly business levels. Shipments of the ArcBest segment may decline during winter months because of post-holiday slowdowns, but expedite shipments can be subject to short-term increases depending on the impact of weather disruptions to customers’ supply chains. Plant shutdowns during summer months may affect shipments for automotive and manufacturing customers of the ArcBest segment, but severe weather events can result in higher demand for expedite services. Moving services of the ArcBest segment are impacted by seasonal fluctuations, generally resulting in higher business levels in the second and third quarters as the demand for moving services is typically stronger in the summer months.

Emergency roadside service events of the FleetNet segment are favorably impacted by extreme weather conditions that affect commercial vehicle operations, and the segment’s results of operations will be influenced by seasonal variations in service event volume.

The Company’s other business activities and operating segments that are not reportable include ArcBest Corporation and certain other subsidiaries. Certain costs incurred by the parent holding company and the Company’s shared services subsidiary are allocated to the reporting segments. The Company eliminates intercompany transactions in consolidation. However, the information used by the 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.

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

(2)	Restructuring costs relate to the realignment of the Company’s corporate structure as further described in Note N to the consolidated financial statements in Item 8 of the Company’s 2018 Annual Report on Form 10-K.


	Three Months Ended				Six Months Ended
	June 30				June 30
	2019		2018		2019		2018
	(in thousands)
OPERATING INCOME
Asset-Based	$	36,178	$	3,381	$	49,793	$	16,783
ArcBest		2,122		3,707		3,852		6,872
FleetNet		1,026		1,029		2,514		2,550
Other and eliminations		(4,126)		(4,961)		(12,368)		(10,324)
Total consolidated operating income	$	35,200	$	3,156	$	43,791	$	15,881

OTHER INCOME (COSTS)
Interest and dividend income	$	1,616	$	714	$	3,094	$	1,240
Interest and other related financing costs		(2,811)		(2,013)		(5,693)		(4,072)
Other, net⁽¹⁾		(445)		(1,123)		(1,036)		(3,324)
Total other income (costs)		(1,640)		(2,422)		(3,635)		(6,156)
INCOME BEFORE INCOME TAXES	$	33,560	$	734	$	40,156	$	9,725

(1)	Includes the components of net periodic benefit cost other than service cost related to the Company’s nonunion pension, SBP, and postretirement plans (see Note G) and proceeds and changes in cash surrender value of life insurance policies.

The following table presents operating expenses by category on a consolidated basis:


	Three Months Ended				Six Months Ended
	June 30				June 30
	2019		2018		2019		2018
	(in thousands)
OPERATING EXPENSES
Salaries, wages, and benefits	$	361,116	$	355,913	$	704,784	$	684,670
Rents, purchased transportation, and other costs of services		236,053		253,540		457,078		477,296
Fuel, supplies, and expenses		80,700		84,884		160,036		163,530
Depreciation and amortization⁽¹⁾		27,434		27,187		53,971		53,673
Other		30,987		30,408		63,669		59,663
Multiemployer pension fund withdrawal liability charge⁽²⁾		—		37,922		—		37,922
Restructuring costs⁽³⁾		—		340		—		716
	$	736,290	$	790,194	$	1,439,538	$	1,477,470

(1)	Includes amortization of intangible assets.

(2)	ABF Freight recorded a one-time charge in second quarter 2018 for the multiemployer pension plan withdrawal liability resulting from the transition agreement with the New England Teamsters and Trucking Industry Pension Fund.

(3)	Restructuring costs relate to the realignment of the Company’s corporate structure as further described in Note N to the consolidated financial statements in Item 8 of the Company’s 2018 Annual Report on Form 10-K.