FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2022

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Schedule components of cash and cash equivalents, short term investments, and restricted funds


	March 31		December 31
	2022		2021

	(in thousands)
Cash and cash equivalents
Cash deposits⁽¹⁾	$	63,578	$	72,790
Variable rate demand notes⁽¹⁾⁽²⁾		230		230
Money market funds⁽³⁾		300		3,600
Total cash and cash equivalents	$	64,108	$	76,620

Short-term investments
Certificates of deposit⁽¹⁾	$	37,024	$	48,339

(1)	Recorded at cost plus accrued interest, which approximates fair value.

(2)	Amounts may be redeemed on a daily basis with the original issuer.

(3)	Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note).

Schedule of fair value and carrying value disclosures of financial instruments


	March 31				December 31
	2022				2021

	(in thousands)
		Carrying		Fair		Carrying		Fair
		Value		Value		Value		Value
Credit Facility⁽¹⁾	$	88,000	$	88,000	$	50,000	$	50,000
Notes payable⁽²⁾		170,678		169,268		175,530		175,937
New England Pension Fund withdrawal liability⁽³⁾		20,604		22,022		20,769		23,521
	$	279,282	$	279,290	$	246,299	$	249,458

(1)	The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on LIBOR, plus a margin, that is considered to be priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy).

(2)	Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy).

(3)

ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund (the “New England Pension Fund”) was restructured under a transition agreement effective on August 1, 2018, which resulted in a related withdrawal liability. The fair value of the outstanding withdrawal liability is equal to the present value of the future withdrawal liability payments, discounted at an interest rate of 3.7% and 3.1% at March 31, 2022 and December 31, 2021, respectively, determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). As of March 31, 2022, the outstanding withdrawal liability totaled $20.6 million, of which $0.7 million and $19.9 million was recorded in accrued expenses and the other long-term liabilities, respectively.

Schedule of financial assets and liabilities measured at fair value on a recurring basis

March 31, 2022

Fair Value Measurements Using

Quoted Prices

Significant

In Active

Observable

Unobservable

Markets

Inputs

Total

(Level 1)

(Level 2)

(Level 3)

(in thousands)

Assets:

Money market funds⁽¹⁾

300

—

Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan⁽²⁾

4,012

—

Interest rate swaps⁽³⁾

2,548

—

2,548

—

6,860

4,312

2,548

—

Liabilities:

Interest rate swaps⁽³⁾

154

—

154

—

Contingent consideration⁽⁴⁾

94,510

—

94,510

94,664

—

154

94,510


	December 31, 2021
			Fair Value Measurements Using
			Quoted Prices		Significant		Significant
			In Active		Observable		Unobservable
			Markets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)

	(in thousands)
Assets:
Money market funds⁽¹⁾	$	3,600	$	3,600	$	—	$	—
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan⁽²⁾		3,848		3,848		—		—
Interest rate swaps⁽³⁾		874		—		874		—
	$	8,322	$	7,448	$	874	$	—
Liabilities:
Interest rate swaps⁽³⁾	$	455	$	—	$	455	$	—
Contingent consideration⁽⁴⁾		93,700		—		—		93,700
	$	94,155	$	—	$	455	$	93,700

(1)	Included in cash and cash equivalents.

(2)

Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third-party brokerage firm. Included in other long-term assets, with a corresponding liability reported within other long-term liabilities.

(3)

Included in other long-term assets or other long-term liabilities. The fair values of the interest rate swaps were determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are generally considered to be in Level 3 of the fair value hierarchy. However, the Company assessed Level 3 inputs as insignificant to the valuation at March 31, 2022 and December 31, 2021 and considers the interest rate swap valuations in Level 2 of the fair value hierarchy.

(4)

Included in other long-term liabilities, based on when expected payouts become due. The estimated fair value of contingent consideration for the earn-out agreement related to the November 2021 acquisition of MoLo was determined by assessing Level 3 inputs. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues and earnings before interest, taxes, depreciation and amortization to be achieved for the applicable performance periods, volatility factors applied to the simulations, and the discount rate applied, which was 10.2% and 9.0% as of March 2022 and December 31, 2021, respectively. Changes in the significant unobservable inputs might result in a significantly higher or lower fair value at the reporting date.

Schedule of changes in fair value of liabilities measured at fair value using inputs categorized in Level 3


	Contingent Consideration
	(in thousands)
Balances at December 31, 2021	$	93,700
Change in fair value included in operating income		810
Balances at March 31, 2022	$	94,510