ARCBEST: DE / DISCUSSION AND ANALYSIS BY THE DEPARTMENT OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

0

General

ArcBest CorporationTM (together with its subsidiaries, the "Company," "we,"
"us," and "our") provides a comprehensive suite of freight transportation and
integrated logistics services to deliver innovative solutions. Our operations
are conducted through our three reportable operating segments: Asset-Based,
which consists of ABF Freight System, Inc. and certain other subsidiaries ("ABF
Freight"); ArcBest, our asset-light logistics operation; and FleetNet. The
ArcBest and the FleetNet reportable segments combined represent our Asset-Light
operations. References to the Company, including "we," "us," and "our," in this
Quarterly Report on Form 10-Q are primarily to the Company and its subsidiaries
on a consolidated basis.



The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those
estimates.



Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") is provided to assist readers in understanding our financial
performance during the periods presented and significant trends which may impact
our future performance, including the principal factors affecting our results of
operations, liquidity and capital resources, and critical accounting policies.
This discussion should be read in conjunction with the accompanying quarterly
unaudited consolidated financial statements and the related notes thereto
included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our
Annual Report on Form 10-K for the year ended December 31, 2020. Our 2020 Annual
Report on Form 10-K includes additional information about significant accounting
policies, practices, and the transactions that underlie our financial results,
as well as a detailed discussion of the most significant risks and uncertainties
to which our financial and operating results are subject.



Results of Operations



Consolidated Results


                                         Three Months Ended            Six Months Ended
                                               June 30                      June 30
                                          2021          2020          2021           2020

                                               (in thousands, except per share data)
REVENUES
Asset-Based                            $  652,832    $  460,070    $ 1,209,124    $   975,783

ArcBest                                   270,748       151,467        523,084        316,242
FleetNet                                   59,547        46,440        118,710         98,879
Total Asset-Light                         330,295       197,907        641,794        415,121

Other and eliminations                   (34,154)      (30,607)       (72,732)       (62,135)
Total consolidated revenues            $  948,973    $  627,370    $ 1,778,186    $ 1,328,769

OPERATING INCOME
Asset-Based                            $   63,911    $   21,036    $    93,966    $    34,276

ArcBest                                    15,127         1,303         23,392          (106)
FleetNet                                    1,138           782          2,161          1,822
Total Asset-Light                          16,265         2,085         25,553          1,716

Other and eliminations                    (5,877)       (2,696)       (13,029)        (7,748)
Total consolidated operating income    $   74,299    $   20,425    $   106,490    $    28,244

NET INCOME                             $   60,981    $   15,880    $    84,342    $    17,782

DILUTED EARNINGS PER SHARE             $     2.27    $     0.61    $      3.13    $      0.68


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Our consolidated revenues, which totaled $949.0 million and $1,778.2 million for
the three and six months ended June 30, 2021, respectively, increased 51.3% and
33.8%, respectively, compared to the same prior-year periods. The revenue growth
was attributable to increased demand and higher pricing for shipping and
logistics services in an improving economic environment. Our revenues during the
six-month period ended June 30, 2020 were negatively impacted by the COVID-19
pandemic which disrupted businesses and the economy. The year-over-year changes
in consolidated revenues for the three and six months ended June 30, 2021
reflect an increase in our Asset-Based revenues of 41.9% and 23.9%,
respectively, and an increase in revenues of our Asset-Light operations
(representing the combined operations of our ArcBest and FleetNet segments) of
66.9% and 54.6%, respectively. The increased elimination of revenue amounts
reported in the "Other and eliminations" line of consolidated revenues for the
three and six months ended June 30, 2021, compared to the same period of 2020,
includes the impact of increased intersegment business levels among our
operating segments, reflecting continued integration of our logistics services.



Our Asset-Based revenue improvement reflects an increase in billed revenue per
hundredweight, including fuel surcharges, of 15.4% and 12.4% for the three and
six months ended June 30, 2021, compared to the same periods of 2020, with
per-day increases in tonnage of 22.7% and 11.7%, respectively, and shipments of
13.5% and 7.8%, respectively, for the three and six months ended June 30, 2021,
compared to the same prior-year periods. The increase in revenues of our
Asset-Light operations for the three and six months ended June 30, 2021
primarily reflects increases in revenue per shipment of 32.9% and 29.5%,
respectively, and shipments per day of 39.0% and 30.4%, respectively, for the
ArcBest segment, compared to the same period of 2020. An increase in roadside
and maintenance service event volumes and higher revenue per event for FleetNet
also contributed to the year-over-year revenue improvement. On a combined basis,
the Asset-Light operating segments generated approximately 34% and 35% of our
total revenues before other revenues and intercompany eliminations for the three
and six months ended June 30, 2021, respectively, and 30% for the same periods
of 2020.


Consolidated operating income totaled $74.3 million and $106.5 million for the
three and six months ended June 30, 2021, respectively, compared to
$20.4 million and $28.2 million for the same periods of 2020. The $53.9 million
and $78.3 million increase in consolidated operating income for the three and
six months ended June 30, 2021, respectively, is primarily due to the results of
our operating segments (further described within the Asset-Based Segment Results
and the Asset-Light Results sections of MD&A). The year-over-year comparisons of
consolidated operating income were also impacted by items described in the
following paragraphs, including cost reduction actions taken in second quarter
2020, costs related to investments in innovative technology, a gain on the sale
of a subsidiary, certain nonunion performance-based incentive plans, certain
other nonunion fringe benefits, and, for the six-month period, gains on the
sales of property and equipment.



The comparisons of our consolidated operating income for the three and six
months ended June 30, 2021 to the same prior-year periods are impacted by
numerous actions we implemented, primarily in the second quarter of 2020, in
response to the COVID-19 pandemic in anticipation of lower business levels. In
April 2020, we implemented cost reduction actions which included a 15% reduction
in the salaries of officers and nonunion employees and similar compensation
adjustments for hourly nonunion employees; a 15% reduction in fees paid to
members and committee chairpersons of ArcBest's Board of Directors;
implementation of a hiring freeze; suspension of the employer match on our
nonunion 401(k) plan; and reduction of advertising, training, travel, and other
costs to better align with current business levels. These compensation
reductions lowered consolidated operating expenses by approximately $15 million
in second quarter 2020. We also made workforce reductions in our Asset-Based
network to better align resources with business levels during second quarter
2020. We reversed our cost reductions beginning in the third quarter of 2020,
including officer and nonunion employee salaries, the employer match on our
nonunion 401(k) plan, and fees for our Board of Directors.



Innovative technology costs related to the freight handling pilot test program
at ABF Freight impacted consolidated results by $7.4 million (pre-tax), or $5.6
million (after-tax) and $0.21 per diluted share, for second quarter 2021,
compared to $4.7 million (pre-tax), or $3.6 million (after-tax) and $0.14 per
diluted share, for second quarter 2020. For the six months ended June 30, 2021,
these costs impacted consolidated results by $14.3 million (pre-tax), or
$10.9 million (after-tax) and $0.40 per diluted share, compared to $9.3 million
(pre-tax), or $7.2 million (after-tax) and $0.27 per diluted share, for the same
period of 2020. The freight handling pilot test program is discussed in the
Asset-Based Operating Income section of Asset-Based Segment Results within
Asset-Based Operations.



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Consolidated operating results for the three and six months ended June 30, 2021
also benefited from the sale of a portion of our ArcBest segment's moving labor
services business in second quarter 2021 which resulted in a gain of
$6.9 million (pre-tax), or $5.4 million (after-tax) and $0.20 per diluted share.



For the three and six months ended June 30, 2021, compared to the same periods
of 2020, expenses for certain nonunion performance-based incentive plans,
including long-term incentive plans impacted by shareholder returns relative to
peers, increased $14.0 million and $22.5 million, respectively. Nonunion
healthcare expenses increased $3.4 million and $4.5 million for the three and
six months ended June 30, 2020, respectively, versus the same prior-year
periods. For the six months ended June 30, 2021, consolidated operating income
also benefited from gains on the sale of property and equipment, which increased
$5.3 million compared to the same period of 2020.



The loss reported in the "Other and eliminations" line, which totaled
$5.9 million and $13.0 million for the three and six months ended June 30, 2021,
respectively, compared to $2.7 million and $7.7 million for the same periods of
2020, includes expenses related to investments to develop and design various
ArcBest technology and innovations as well as expenses related to shared
services for the delivery of comprehensive transportation and logistics services
to ArcBest's customers. The $3.2 million and $5.3 million increase in the loss
reported in "Other and eliminations" for the three and six months ended June 30,
2021, respectively, primarily reflects higher expenses compared to the same
periods of 2020, due to the previously discussed cost reductions during the
second quarter of 2020 in response to the COVID-19 pandemic and increases in
shared service personnel expenses related to higher business levels in the 2021
periods compared to the weaker economic environment experienced in the
prior-year periods. We expect the loss reported in "Other and eliminations" for
third quarter and full-year 2021 to approximate $5 million and $24 million,
respectively.



In addition to the above items, consolidated net income and earnings per share
were impacted by changes in the cash surrender value of variable life insurance
policies, tax benefits from the vesting of share-based compensation awards,

and

other changes in the effective tax rate as described within the Income Taxes
section of MD&A. A portion of our variable life insurance policies have
investments, through separate accounts, in equity and fixed income securities
and, therefore, are subject to market volatility. Changes in the cash surrender
value of life insurance policies, which are reported below the operating income
line in the consolidated statements of operations, increased net income by
$1.2 million, or $0.05 per diluted share, and $2.5 million, or $0.09 per diluted
share, for the three and six months ended June 30, 2021, respectively, compared
to an increase in net income of $2.6 million, or $0.10 per diluted share, and a
decrease of  $1.2 million, or $0.05 per diluted share, respectively, for the
same prior-year periods. The vesting of restricted stock units, which primarily
occurs in the second quarter of each year, resulted in a tax benefit of $6.8
million, or $0.25 per diluted share, and $6.9 million, or $0.26 per diluted
share, for the three and six months ended June 30, 2021, respectively, compared
to tax expense of $0.7 million, or $0.03 per diluted share, for each of the
same
periods of 2020.


Consolidated adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”)

We report our financial results in accordance with generally accepted accounting
principles ("GAAP"). However, management believes that certain non-GAAP
performance measures and ratios, such as Adjusted EBITDA, utilized for internal
analysis provide analysts, investors, and others the same information that we
use internally for purposes of assessing our core operating performance and
provides meaningful comparisons between current and prior period results, as
well as important information regarding performance trends. Accordingly, using
these measures improves comparability in analyzing our performance because it
removes the impact of items from operating results that, in management's
opinion, do not reflect our core operating performance. Management uses Adjusted
EBITDA as a key measure of performance and for business planning. The measure is
particularly meaningful for analysis of our operating performance, because it
excludes amortization of acquired intangibles and software of the Asset-Light
businesses, which are significant expenses resulting from strategic decisions
rather than core daily operations. Additionally, Adjusted EBITDA is a primary
component of the financial covenants contained in our Third Amended and Restated
Credit Agreement (see Note F to our consolidated financial statements included
in Part I, Item 1 of this Quarterly Report on Form 10-Q). Other companies may
calculate Adjusted EBITDA differently; therefore, our calculation of Adjusted
EBITDA may not be comparable to similarly titled measures of other companies.
Non-GAAP financial measures should be viewed in addition to, and not as an
alternative for, our reported results. Adjusted EBITDA should not be construed
as a better measurement than operating income, operating cash flow, net income,
or earnings per share, as determined under GAAP.



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Consolidated Adjusted EBITDA




                                                        Three Months Ended         Six Months Ended
                                                              June 30                   June 30
                                                         2021          2020        2021         2020

                                                                       (in thousands)
Net income                                            $    60,981    $ 15,880    $  84,342    $ 17,782
Interest and other related financing costs                  2,274       3,378        4,702       6,325
Income tax provision                                       12,477       4,854       20,463       5,337
Depreciation and amortization                              30,282      29,086       60,636      58,099
Amortization of share-based compensation                    3,324       2,890        5,678       5,071
Amortization of net actuarial gains of benefit
plans and pension settlement expense(1)                     (134)       (148)        (269)       (204)
Consolidated Adjusted EBITDA                          $   109,204    $ 

55 940 $ 175,552 $ 92,410

(1) The six months ended June 30, 2020 include pre-tax pension settlement costs

    of $0.1 million related to our supplemental benefit plan.








Asset-Based Operations



Asset-Based Segment Overview



The Asset-Based segment consists of ABF Freight System, Inc., a wholly owned
subsidiary of ArcBest Corporation, and certain other subsidiaries ("ABF
Freight"). Our Asset-Based operations are affected by general economic
conditions, as well as a number of other competitive factors that are more fully
described in Item 1 (Business) and in Item 1A (Risk Factors) of Part I of our
2020 Annual Report on Form 10-K. The key indicators necessary to understand the
operating results of our Asset-Based segment, which are more fully described in
the Asset-Based Segment Overview within the Asset-Based Operations section of
Results of Operations in Item 7 (MD&A) of Part II of our 2020 Annual Report on
Form 10-K, are outlined below. These key indicators are used by management to
evaluate segment operating performance and measure the effectiveness of
strategic initiatives in the results of our Asset-Based segment. We quantify
certain key indicators using key operating statistics which are important
measures in analyzing segment operating results from period to period. These
statistics are defined within the key indicators below and referred to
throughout the discussion of the results of our Asset-Based segment:



? Aggregate customer demand for asset-based transportation services, including

   impact of economic factors.



Volume of transport services provided and processed through our network

? which influences operating leverage such as tonnage level and number of

   shipments vary, primarily measured by:



Pounds or tonnage – total weight of shipments processed during the period in
we books or we tons.

Pounds per day or tonnage per day (average daily weight of the shipment) – pounds or tonnage divided by the number of working days in the period.

Shipments Per Day – the total number of shipments passing through the asset-based freight network during the period divided by the number of working days in the period.

Pounds per shipment (weight per shipment) – total pounds divided by the number of shipments during the period.

Average Trip Length (miles) – total number of miles between origin and destination service centers for all shipments (including shipments moved with transport purchased) during the period, with miles weighted according to the size of the shipments.



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? Prices obtained for services, including fuel surcharges, primarily measured by:




Billed revenue per hundredweight, including fuel surcharges (yield) - revenue
per every 100 pounds of shipment weight, including surcharges related to fuel,
systematically calculated as shipments are processed in the Asset-Based freight
network. Revenue for undelivered freight is deferred for financial statement
purposes in accordance with the Company's revenue recognition policy. Billed
revenue used for calculating revenue per hundredweight measurements is not
adjusted for the portion of revenue deferred for financial statement purposes.



? Ability to manage the cost structure, mainly in the area of ​​salaries, wages and

   benefits ("labor"), with the total cost structure primarily measured by:



Operating ratio – the percentage of operating expenses relative to revenue levels.



We also quantify certain key operating statistics which are used by management
to evaluate productivity of operations within the Asset-Based freight network
and to measure the effectiveness of strategic initiatives to manage the
segment's cost structure from period to period. These measures are defined below
and further discussed in the Asset-Based Operating Expenses section within
Asset-Based Segment Results:



DSY shipments per hour – total shipments (including shipments processed by

transport agents purchased) divided by wharf, street and yard (“DSY”)

? hours. This metric is used to measure the efficiency of the workforce in the local sector of the segment.

operations. The DSY shipments per hour metric will generally increase when more

   purchased transportation is used; however, the labor efficiency may be
   partially offset by increased purchase transportation expense.



Pounds per mile – total number of pounds divided by the total number of miles traveled during the period

(including books and miles moved with purchased transport). This metric

? is used to measure the labor efficiency of line haul operations, although it is

influenced by other factors including freight density, loading efficiency,

   average length of haul, and the degree to which purchased transportation
   (including rail service) is used.




Other companies within our industry may present different key performance
indicators or operating statistics, or they may calculate their measures
differently; therefore, our key performance indicators or operating statistics
may not be comparable to similarly titled measures of other companies. Key
performance indicators or operating statistics should be viewed in addition to,
and not as an alternative for, our reported results. Our key performance
indicators or operating statistics should not be construed as better
measurements of our results than operating income, operating cash flow, net
income, or earnings per share, as determined under GAAP.



As of June 2021, approximately 82% of our Asset-Based segment's employees were
covered under the ABF National Master Freight Agreement (the "2018 ABF NMFA"),
the collective bargaining agreement with the International Brotherhood of
Teamsters (the "IBT"), which will remain in effect through June 30, 2023. Under
the 2018 ABF NMFA, the contractual wage and benefits costs, including the
ratification bonuses and vacation restoration, are estimated to increase
approximately 2.0% on a compounded annual basis through the end of the
agreement. Profit-sharing bonuses based on the Asset-Based segment's annual
operating ratios for any full calendar year under the contract represent an
additional increase in costs under the 2018 ABF NMFA. The contractual wage rate
under the 2018 ABF NMFA increased

1.7% effective July 1, 2021, and the average contribution rate for health, welfare and pension benefits is expected to increase

about 2.5% effective mainly on August 1, 2021.


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Asset Based Segment Results

The following table presents a summary of operating expenses and operating revenues as a percentage of asset-based segment revenues:



                                                      Three Months Ended         Six Months Ended
                                                            June 30                   June 30
                                                      2021          2020         2021         2020
Asset-Based Operating Expenses (Operating Ratio)
Salaries, wages, and benefits                           46.3 %         54.1 %      48.6 %       54.6 %
Fuel, supplies, and expenses                             9.9            9.9        10.4         11.0
Operating taxes and licenses                             1.9            2.5         2.0          2.5
Insurance                                                1.4            1.8         1.5          1.6
Communications and utilities                             0.7            1.0         0.8          0.9
Depreciation and amortization                            3.6            5.1         3.9          4.8
Rents and purchased transportation                      14.6           10.0        14.1         10.4
Shared services                                         10.6            9.9        10.4          9.7
Gain on sale of property and equipment                     -          (0.2)       (0.7)        (0.3)
Innovative technology costs(1)                           1.2            1.0
        1.2          1.0
Other                                                      -            0.3           -          0.3
                                                        90.2 %         95.4 %      92.2 %       96.5 %

Asset-Based Operating Income                             9.8 %          4.6 %       7.8 %        3.5 %

(1) Represents costs associated with the cargo handling pilot test program at

    ABF Freight.





The following table provides a comparison of key operating statistics for the Asset-Based segment, as previously defined in the Asset-Based Overview:




                                       Three Months Ended                                   Six Months Ended
                                             June 30                                             June 30
                               2021               2020          % Change           2021               2020          % Change
Workdays(1)                          63.5               63.5                            126.5              127.5
Billed revenue per
hundredweight,
including fuel
surcharges                $         38.87    $         33.69        15.4 %    $         37.54    $         33.41        12.4 %
Pounds                      1,701,634,637      1,386,384,302        22.7 %      3,258,464,543      2,939,320,599        10.9 %
Pounds per day                 26,797,396         21,832,824        22.7 %         25,758,613         23,053,495        11.7 %
Shipments per day                  19,713             17,372        13.5 %             19,504             18,090         7.8 %
Shipments per DSY hour              0.450              0.463       (2.8) %              0.452              0.450         0.4 %
Pounds per shipment                 1,359              1,257         8.1 %              1,321              1,274         3.7 %
Pounds per mile                     19.09              20.19       (5.4) %              19.14              20.02       (4.4) %
Average length of haul
(miles)                             1,107              1,084         2.1 %              1,099              1,062         3.5 %

(1) Working days represent the number of operating days during the period after

    adjusting for holidays and weekends.








Asset-Based Revenues

Asset-Based segment revenues for the three and six months ended June 30, 2021
totaled $652.8 million and $1,209.1 million, respectively, compared to
$460.1 million and $975.8 million, respectively, for the same periods of 2020.
The increase in revenues for the three and six months ended June 30, 2021
reflects improvement in business levels compared to the significant reduction in
demand experienced in second quarter 2020 as a result of the COVID-19 pandemic.
Billed revenue (as described in the Asset-Based Segment Overview) increased
41.6% and 25.6% on a per-day basis for the three and six months ended
June 30, 2021, respectively, compared to the same prior-year periods. For the
three and six months ended June 30, 2021, the increase in billed revenue
reflects a 22.7% and 11.7% increase in tonnage

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per day, respectively, and a 15.4% and 12.4% increase in total billed revenue
per hundredweight, including fuel surcharges, respectively, compared to the same
periods of 2020. The number of workdays was the same in second quarter 2021 and
fewer by one day in the first half of 2021, versus the same periods of 2020.



Tonnage per day increased 22.7% and 11.7% for the three and six months ended
June 30, 2021, respectively, compared to the same prior-year periods, due to
increases in weight per shipment on higher daily shipment levels. The
year-over-year increase in tonnage per day for the three months ended June 30,
2021 reflects double-digit percentage increases in both LTL-rated and
truckload-rated tonnage per day. For the six months ended June 30, 2021, tonnage
growth reflects a double-digit percentage increase in LTL-rated tonnage per day,
partially offset by a low-single-digit percentage decrease in truckload-rated
spot shipment tonnage moving in the Asset-Based network. Total shipments
increased 13.5% and 7.8% on a per-day basis for the three and six months ended
June 30, 2021, respectively, compared to the same periods of 2020, primarily
driven by increases in LTL-rated shipments reflecting strong customer demand.
Larger-sized LTL-rated shipments, including an increase in pieces per shipment,
impacted the growth in total weight per shipment for the three and six months
ended June 30, 2021. Truckload-rated tonnage was positively impacted by strong
demand for U-Pack household goods moving services in the three- and six-month
periods ended June 30, 2021. The total truckload-rated tonnage metrics for the
three and six month periods compared to the same prior-year periods were
impacted by reductions in spot-quoted shipments.



The 15.4% and 12.4% increase in total billed revenue per hundredweight,
including fuel surcharges, for the three and six months ended June 30, 2021,
respectively, compared to the same periods of 2020, was primarily due to a
strong pricing environment and changes in freight profile and business mix to
optimize revenue on shipments in the Asset-Based network. A higher mix of
LTL-rated shipments and an increase in U-Pack business, as well as a longer
average length of haul and higher fuel surcharge revenues associated with
increased fuel prices, positively impacted the total billed revenue per
hundredweight measure for the three and six months ended June 30, 2021, compared
to the same prior-year periods. On-going yield management initiatives, including
a general rate increase, also contributed to the year-over-year improvement in
billed revenue per hundredweight. Excluding the impact of fuel surcharges, the
increase in billed revenue per hundredweight on LTL-rated freight was in the
mid-single digits for the three and six months ended June 30, 2021,
respectively, compared to the same prior-year periods. Prices on accounts
subject to deferred pricing agreements and annually negotiated contracts which
were renewed during the three and six months ended June 30, 2021 increased
approximately 6.7% and 6.1%, respectively, compared to the same periods of 2020.
Pricing on contractual business reflected higher than historical average
increases primarily due to tight market capacity and increased customer business
levels. The Asset-Based segment implemented nominal general rate increases on
its LTL base rate tariffs of 5.95% and 5.9% effective January 25, 2021 and
February 24, 2020, respectively, although the rate changes vary by lane and
shipment characteristics.



The Asset-Based segment's average nominal fuel surcharge rate for the three and
six months ended June 30, 2021 increased approximately 440 and 220 basis points,
respectively, compared to the same periods of 2020. During periods of changing
diesel fuel prices, the fuel surcharge and associated direct diesel fuel costs
also vary by different degrees. Depending upon the rates of these changes and
the impact on costs in other fuel- and energy-related areas, operating margins
could be impacted. Whether fuel prices fluctuate or remain constant, operating
results may be adversely affected if competitive pressures limit our ability to
recover fuel surcharges. In periods of declining fuel prices, fuel surcharge
percentages also decrease, which negatively impacts the total billed revenue per
hundredweight measure and, consequently, revenues. The revenue decline may be
disproportionate to the change in our fuel costs. The segment's operating
results will continue to be impacted by further changes in fuel prices and
the
related fuel surcharges.



Asset-Based Operating Income

The Asset-Based segment generated operating income of $63.9 million and
$94.0 million for the three and six months ended June 30, 2021, respectively,
compared to $21.0 million and $34.3 million for the same periods of 2020. The
Asset-Based segment's operating ratio improved by 5.2 and 4.3 percentage points
for the three and six months ended June  30, 2021, respectively, compared to the
same prior-year periods, reflecting the increased revenues and management of
operating resources to higher shipment levels. Operating income for the six
months ended June 30, 2021 was also positively impacted by the sale of an
unutilized property which contributed to the $8.6 million of total gains on the
sale of property and equipment, compared to $3.3 million in the same prior-year
period.



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Innovative technology costs related to the freight handling pilot test program
at ABF Freight impacted operating results of the Asset-Based segment by
$7.5 million and $14.4 million for the three and six months ended June 30, 2021,
respectively, compared to $4.8 million and $9.3 million, respectively, for the
same periods of 2020. The pilot, which began in early 2019, is in the early
stages in a limited number of locations. While ArcBest believes the pilot has
potential to provide safer and improved freight handling, a number of factors
will be involved in determining proof of concept and there can be no assurances
that pilot testing will be successful or expand beyond current testing
locations. We anticipate innovative technology costs associated with the pilot
to impact our Asset-Based operating expenses by approximately $7.5 million in
third quarter 2021, compared to $6.2 million in third quarter 2020.



The segment’s operating ratio was also impacted by variations in operating expenses, as discussed in the following paragraphs.

Asset-based operating expenses

Labor costs, which are reported in operating expenses as salaries, wages, and
benefits, amounted to 46.3% and 48.6% of Asset-Based segment revenues for the
three and six-month period ended June 30, 2021, respectively, compared to 54.1%
54.6%, respectively, for the same periods of 2020. The decreases in salaries,
wages, and benefits as a percentage of revenue for the three and six months
ended June 30, 2021, compared to the same prior-year periods, were partially
offset by higher utilization of purchased transportation to meet customer demand
for increased shipment levels. The improvement in salaries, wages, and benefits
as a percentage of revenue was also influenced by the effect of higher revenues
including fuel surcharges, as a portion of operating costs are fixed in nature
and decrease as a percent of revenue with increases in revenue levels. Salaries,
wages, and benefits increased $53.4 million and $55.2 million for the three and
six months ended June 30, 2021, respectively, compared to the same periods of
2020, primarily due to the increase in business levels. The increase in expense
also reflects higher expense accruals for certain performance-based incentive
plans, year-over-year increases in contractual wage and benefit contribution
rates under the 2018 ABF NMFA, and higher nonunion wages and benefits versus the
prior-year periods when cost reductions were in place in response to the
COVID-19 pandemic, as previously discussed in the Consolidated Results section
of MD&A. The contractual wage rate under the 2018 ABF NMFA increased 1.6%
effective July 1, 2020, and the average health, welfare, and pension benefit
contribution rate increased approximately 2.2% effective primarily on August 1,
2020.



The Asset-Based segment manages costs with shipment levels; however, increased
shipment levels, freight profile changes, challenges with hiring an adequate
number of personnel, and equipment capacity constraints pressured the efficiency
of dock, street, and yard tasks during the second quarter of 2021. Shipments per
DSY hour declined 2.8% for the second quarter of 2021, compared to second
quarter 2020, primarily due to inefficiencies driven by equipment capacity
constraints related to the business growth and the effect of handling a higher
number of larger LTL-rated shipments, including an increase in pieces per
shipment. For the six months ended June 30, 2021, shipments per DSY hour
improved 0.4% compared to the same period of 2020. While the Asset-Based segment
has added employees to service the business growth, the segment had to
supplement resources with increased utilization of higher-cost purchased
transportation in certain locations to manage service levels. The decrease in
pounds per mile of 5.4% and 4.4% for the three and six months ended June 30,
2021, respectively, compared to the same period of 2020, was due to the higher
number of miles (including purchased transportation miles) incurred to service
the business growth and the increase in average length of haul resulting from
intended changes in business mix, which was compensated by an increase in billed
revenue per shipment.



Fuel, supplies, and expenses as a percentage of revenue for the second quarter
of 2021 was consistent with the second quarter of 2020. For the six months ended
June 30, 2021, fuel, supplies, and expenses as a percentage of revenue decreased
0.6 percentage points, compared to the same period of 2020. The changes in fuel,
supplies, and expenses as a percentage of revenue were influenced by the effect
of higher revenues including fuel surcharges, as a portion of operating costs
are fixed in nature and decrease as a percent of revenue with increases in
revenue levels. Fuel, supplies, and expenses increased $19.0 million and
$18.6 million for the three and six months ended June 30, 2021, respectively,
compared to the same prior-year period,  primarily due to higher fuel costs as
the Asset-Based segment's average fuel price per gallon (excluding taxes)
increased approximately 96% and 39% during the three and six months ended June
30, 2021, respectively, compared to the same period of 2020. More miles driven
as a result of the increase in business levels also contributed to the
year-over-year increases in fuel, supplies, and expenses. For the six months
ended June 30, 2021, fuel, supplies, and expenses was also impacted by higher
expenses associated with increased business levels and weather-related service
center

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charges resulting from severe winter storms in the first quarter of 2021, partially offset by lower costs related to repairs and maintenance of tractors and trailers.

Depreciation and amortization as a percentage of revenue decreased 1.5 and 0.9
percentage points for the three and six months ended June 30, 2021,
respectively, compared to the same periods of 2020; however, depreciation and
amortization expense was relatively consistent across the periods. The decrease
in depreciation and amortization as a percentage of revenue was influenced by
the effect of higher revenues, as a portion of operating costs are fixed in
nature and decrease as a percent of revenue with increases in revenue levels.



Rents and purchased transportation as a percentage of revenue increased 4.6 and
3.7 percentage points for the three and six months ended June 30, 2021,
respectively, compared to the same periods of 2020, primarily due to higher
utilization of rail, local delivery agents, and linehaul purchased
transportation necessary to serve the needs of our customers as freight demand
increased across the Asset-Based system during the first half of 2021. For the
three- and six-month periods ended June 30, 2021, rail miles increased
approximately 53% and 39%, respectively, compared to the same prior-year
periods.



Shared services as a percentage of revenue increased 0.7 percentage points for
each of the three- and six-month periods ended June 30, 2021, compared to the
same periods of 2020, primarily due to the cost reductions that were in place
during 2020 in response to the COVID-19 pandemic, as previously discussed in the
Consolidated Results section of MD&A. In addition, the increase in costs as a
percentage of revenue reflects higher expense accruals for certain
performance-based incentive plans, including long-term incentive plans impacted
by shareholder returns relative to peers, for which the timing of recognition
was impacted by the effect of the COVID-19 pandemic on operating results for the
first half of 2020. The business growth also resulted in higher shared service
expense allocations for the three and six months ended June 30, 2021, compared
to same prior-year periods.


Asset-based segment – July 2021

The year-over-year improvements in our Asset-Based business levels during the
first half of 2021 continued during July 2021 as the segment benefited from a
strong pricing environment and increased customer business levels. Although
statistics for July 2021 have not been finalized, preliminary Asset-Based billed
revenues increased approximately 25% on a per-day basis in July 2021, compared
to July 2020, reflecting an increase in average daily total tonnage of
approximately 5% and an increase in total billed revenue per hundredweight,
including fuel surcharges, of approximately 20%. Total shipments per day
increased approximately 3% in July 2021, compared to July 2020. Total weight per
shipment increased approximately 2% in July 2021, with the weight per shipment
on LTL-rated shipments up approximately 6%, versus the same prior-year period.



The first quarter of each year generally has the highest operating ratio of the
year, although other factors, including the current economic recovery, may
influence quarterly comparisons. Current economic conditions and the Asset-Based
segment's pricing approach (which is described in the Asset-Based Segment
Overview within the Results of Operations section of Item 7 (MD&A) of Part II of
our 2020 Annual Report on Form 10-K) will continue to impact our Asset-Based
segment's tonnage levels and the prices it receives for its services and, as
such, there can be no assurance that our Asset-Based segment will maintain or
achieve improvements in its current operating results. Our efforts to manage
operational costs in the Asset-Based network may not directly correspond to
significant changes in business levels and there can be no assurance that the
impact of the COVID-19 pandemic will not have an adverse effect on our operating
results in future periods. The marketplace pricing environment has been positive
and rational during our efforts to secure needed price increases; however, the
competitive environment could limit the Asset-Based segment from securing
adequate increases in base LTL freight rates and could limit the amount of fuel
surcharge revenue recovered in future periods.





Asset-Light Operations



Asset-Light Overview



The ArcBest and FleetNet reportable segments, combined, represent our
Asset-Light operations. Our Asset-Light operations are a key component of our
strategy to offer customers a single source of integrated logistics solutions,
designed to satisfy the complex supply chain and unique shipping requirements
customers encounter.

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Our Asset-Light operations are affected by general economic conditions, as well
as a number of other competitive factors that are more fully described in Item 1
(Business) and in Item 1A (Risk Factors) of Part I of our 2020 Annual Report on
Form 10-K. The key indicators necessary to understand our Asset-Light operating
results are outlined below. These key indicators are used by management to
evaluate segment operating performance and measure the effectiveness of
strategic initiatives in the results of our Asset-Light segments. We quantify
certain key indicators using key operating statistics which are important
measures in analyzing segment operating results from period to period. These
statistics are defined within the key indicators below and referred to
throughout the discussion of the results of our Asset-Light operations:



Customer demand for premium logistics and transportation services combined with

? economic factors that influence the number of shipments or service events used

   to measure changes in business levels, primarily measured by:




Shipments per day - total shipments (excluding managed transportation solutions
as discussed below) divided by the number of working days during the period,
compared to the same prior-year period, for the ArcBest segment.



Service Events – Roadside, Preventive Maintenance or Total Service Events during the period, compared to the same period last year, for the FleetNet segment.

? Prices obtained for services, mainly measured by:

Revenue by Shipment or Event – total segment revenue divided by the total segment shipments or events during the period (excluding transport solutions managed for the ArcBest as shown below), compared to the same period of the previous year.

Availability of market capacity and cost of transport purchased to fulfill

? shipments from customers of ArcBest segment, with a measure of purchases

transport cost expressed in:




Purchased transportation costs as a percentage of revenue - the expense incurred
for third-party transportation providers to haul or deliver freight during the
period, divided by segment revenues for the period, expressed as a percentage.



? Management of operating costs, mainly in the area of ​​purchasing

transport, the total cost structure being mainly measured by:

Operating ratio – the percentage of operating expenses relative to revenue levels.

Presentation and discussion of the key operating statistics of revenue per
shipment and shipments per day for the ArcBest segment exclude statistical data
of the managed transportation solutions transactions. Growth in managed
transportation solutions has increased the number of shipments for these
services to approximately one half of the ArcBest segment's total shipments,
while the business represents less than 20% of segment revenues for the three
and six months ended June 30, 2021. Due to the nature of our managed
transportation solutions which typically involve a larger number of shipments at
a significantly lower revenue per shipment level than the segment's other
service offerings, inclusion of the managed transportation solutions data would
result in key operating statistics which are not representative of the operating
results of the segment as a whole. As such, the key operating statistics
management uses to evaluate performance of the ArcBest segment exclude managed
transportation services transactions.



Other companies within our industry may present different key performance
indicators or they may calculate their key performance indicators differently;
therefore, our key performance indicators may not be comparable to similarly
titled measures of other companies. Key performance indicators should be viewed
in addition to, and not as an alternative for, our reported results. Our key
performance indicators should not be construed as better measurements of our
results than operating income, operating cash flow, net income, or earnings per
share, as determined under GAAP.



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Asset-Light Results


For the three and six months ended June 30, 2021, the combined revenues of our
Asset-Light operations totaled $330.3 million and $641.8 million, respectively,
compared to $197.9 million and $415.1 million, respectively, for the same
periods of 2020. The increase in revenues for the three and six months ended
June 30, 2021 reflects improvement in business levels compared to the
significant reduction in demand experienced in second quarter 2020 as a result
of the COVID-19 pandemic. The combined revenues of our Asset-Light operating
segments generated approximately 34% and 35% of our total revenues before other
revenues and intercompany eliminations for the three and six months ended
June 30, 2021, respectively, compared to approximately 30% for both the three
and six months ended June 30, 2020. Our Asset-Light combined operating income
for the three and six months ended June 30, 2021 improved to $16.3 million and
$25.6 million, respectively, compared to $2.1 million and $1.7 million,
respectively, for the same prior-year periods, primarily reflecting improved
demand and higher market prices resulting from tighter truckload market
capacity. The year-over-year operating income improvement also benefited from a
$6.9 million gain on the sale of the labor services subsidiary within the
segment's moving business during the second quarter of 2021.



ArcBest segment

The following table presents a summary of operating expenses and operating income as a percentage of operating income. ArcBest segment:



                                                         Three Months Ended         Six Months Ended
                                                               June 30                   June 30
                                                          2021         

2020 2021 2020 ArcBest segment operating expenses (operating ratio) Transport purchased

                                     83.7 %       82.6 %      83.6 %       82.9 %
Supplies and expenses                                         0.9          1.3         1.0          1.3
Depreciation and amortization                                 0.9          1.6         0.9          1.6
Shared services                                              10.7         12.4        10.5         12.8
Gain on sale of subsidiaries(1)                             (2.6)          
 -       (1.3)            -
Other                                                         0.8          1.2         0.8          1.4
                                                             94.4 %       99.1 %      95.5 %      100.0 %
ArcBest Segment Operating Income (Loss)                       5.6 %       

0.9% 4.5% -%

(1) Gain recognized for the three and six months ended June 30, 2021 relates to

    the sale of the labor services portion of the ArcBest segment's moving
    business in May 2021.




A comparison of key operating statistics for the ArcBest segment, as previously
defined in the Asset-Light Overview section, is presented in the following
table:




                               Year Over Year % Change
                      Three Months Ended       Six Months Ended
                         June 30, 2021           June 30, 2021

Revenue per shipment           32.9%                   29.5%

Shipments per day              39.0%                   30.4%



ArcBest segment revenues totaled $270.7 million and $523.1 million for the three
and six months ended June 30, 2021, respectively, compared to $151.5 million and
$316.2 million, respectively, for the same periods of 2020. The 78.8% and 65.4%
respective increases in revenues primarily reflect improved market demand
compared to the same periods of 2020, which were negatively impacted by the
COVID-19 pandemic. The revenue increases for the three and six months ended June
30, 2021, compared to the same periods of 2020, primarily reflect increases in
revenue per shipment of 32.9% and 29.5%, respectively, associated with higher
market prices resulting from tighter truckload capacity and increases in
shipments per day (excluding managed transportation shipments) of 39.0% and
30.4%, respectively, due to strong customer

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request. The growing customer need for comprehensive and managed logistics solutions and the growth of new accounts also contributed to the increase in year-over-year revenue.

Operating income totaled $15.1 million and $23.4 million for the three and six
months ended June 30, 2021, respectively, compared to operating income of
$1.3 million and an operating loss of $0.1 million for the same periods of 2020,
respectively, with the improvement primarily reflecting the increases in
revenues. Increased customer shipping levels combined with limited equipment
availability in the logistics marketplace positively impacted demand and pricing
for ground expedite services for the three and six months ended June 30, 2021
and contributed to the segment's operating income improvement, compared to the
prior-year periods. Operating results for the three and six months ended June
30, 2021 also benefited from a $6.9 million gain on the sale of a subsidiary
within the segment's moving business, as previously mentioned, which contributed
2.6 and 1.3 percentage points to the segment's operating ratio for the three and
six months ended June 30, 2021, respectively.



The segment's purchased transportation costs as a percentage of revenue
increased by 1.1 and 0.7 percentage points for the three and six months ended
June 30, 2021, respectively, compared to the same periods of 2020. Due to
changes in market conditions and freight mix, the prices paid for purchased
transportation increased by a higher percentage than the prices we secured from
customers, resulting in margin compression during the three and six months ended
June 30, 2021, compared to the same periods of 2020. Significant changes in
market capacity, such as those experienced during 2020 and  2021, impact the
cost of sourcing such capacity which may not correspond to the timing of
revisions to customer pricing and our revenue per shipment.



As previously discussed in the Consolidated Results section of MD&A, prior-year
operating expenses were lower due to corporate cost reductions in place during
the second quarter of 2020, in response to the COVID-19 pandemic. As cost
reductions were lifted, operating expenses returned to more normal levels,
resulting in increases when comparing to prior-year periods. Operating results
for the three and six months ended June 30, 2021 were also impacted by higher
operating expenses due to increased business levels and growth initiatives,
including investments in technology and increased wages and costs to manage
higher shipment volumes. These higher expenses contributed to the $10.2 million
and $14.6 million increase in shared service costs for the three and six months
ended June 30, 2021, respectively, compared to the same prior-year periods.
Shared service costs as a percentage of revenue decreased 1.7 and 2.3 percentage
points for the three and six months ended June 30, 2021, respectively, compared
to the same periods of 2020, due to the effect of higher revenues, as a portion
of these costs are fixed in nature and decrease as a percentage of revenue with
increases in revenue levels. Although the ArcBest segment manages costs with
shipment levels, portions of operating expenses are fixed in nature and cost
reductions can be limited as the segment strives to enhance capacity sources and
maintain customer service.



ArcBest Segment -July 2021

The year-over-year improvements in our ArcBest segment business levels during
the first half of 2021 continued during July 2021. Although statistics for July
2021 have not been finalized, preliminary revenues of our ArcBest segment on a
per-day basis in July 2021 were approximately 47% above the prior-year period,
reflecting increases in shipments per day and revenue per shipment, as the
segment benefited from continued customer demand in an improving economic
environment and higher market prices resulting from tighter truckload market
capacity. Current economic conditions will continue to impact business levels
and purchased transportation costs of our ArcBest segment and, as such, there
can be no assurance that the effect of the economic environment, including the
impact of the COVID-19 pandemic, will not have an adverse effect on the
operating results of our ArcBest segment in future periods.



FleetNet segment

FleetNet's revenues totaled $59.5 million and $118.7 million for the three and
six months ended June 30, 2021, respectively, compared to $46.4 million and
$98.9 million, respectively, for the same periods of 2020. The 28.2% and 20.1%
increases in revenues for the three and six months ended June 30, 2021,
respectively, compared to the same periods of 2020, were driven by higher event
volumes and increases in revenue per event for roadside and preventative
maintenance services. FleetNet's results reflect higher demand for its services
compared to the same periods of 2020, which were impacted by a reduction in
miles driven by customers as a result of the COVID-19 pandemic. The increase in
roadside service event volumes was also impacted by a higher number of events
from customers who experienced an increase in e-commerce business and, for the
six-month period, severe winter weather during the first quarter of 2021.



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FleetNet's operating income totaled $1.1 million and $2.2 million for the three
and six months ended June 30, 2021, respectively, compared to $0.8 million and
$1.8 million, respectively, for the same periods of 2020, primarily reflecting
the increases in revenues. FleetNet's operating income margins for the second
quarter of 2021 benefited from increases in revenue per event which outpaced the
increased costs to service events. For the six months ended June 30, 2021, the
impact of higher revenue per event on FleetNet's operating income margins was
offset by the effect of higher costs to service the increase in total events,
compared to the same period of 2020.



Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”)

We report our financial results in accordance with GAAP. However, management
believes that certain non-GAAP performance measures and ratios, such as Adjusted
EBITDA, utilized for internal analysis provide analysts, investors, and others
the same information that we use internally for purposes of assessing our core
operating performance and provides meaningful comparisons between current and
prior period results, as well as important information regarding performance
trends. The use of certain non-GAAP measures improves comparability in analyzing
our performance because it removes the impact of items from operating results
that, in management's opinion, do not reflect our core operating performance.
Management uses Adjusted EBITDA as a key measure of performance and for business
planning. The measure is particularly meaningful for analysis of our Asset-Light
businesses, because it excludes amortization of acquired intangibles and
software, which are significant expenses resulting from strategic decisions
rather than core daily operations. Management also believes Adjusted EBITDA to
be relevant and useful information, as EBITDA is a standard measure commonly
reported and widely used by analysts, investors, and others to measure financial
performance of asset-light businesses and the ability to service debt
obligations. Other companies may calculate Adjusted EBITDA differently;
therefore, our calculation of Adjusted EBITDA may not be comparable to similarly
titled measures of other companies. Non-GAAP financial measures should be viewed
in addition to, and not as an alternative for, our reported results. Adjusted
EBITDA should not be construed as a better measurement than operating income,
operating cash flow, net income, or earnings per share, as determined under
GAAP.





Asset-Light Adjusted EBITDA




                                      Three Months Ended        Six Months Ended
                                            June 30                  June 30
                                        2021         2020        2021        2020

                                                    (in thousands)
ArcBest Segment
Operating Income (Loss)(1)          $     15,127    $ 1,303    $   23,392   $ (106)
Depreciation and amortization(2)           2,366      2,449         4,752  
  4,919
Adjusted EBITDA                     $     17,493    $ 3,752   $    28,144   $ 4,813


FleetNet Segment
Operating Income(1)                 $      1,138    $   782    $    2,161   $ 1,822
Depreciation and amortization                413        402           828       793
Adjusted EBITDA                     $      1,551    $ 1,184   $     2,989   $ 2,615


Total Asset-Light
Operating Income(1)                 $     16,265    $ 2,085    $   25,553   $ 1,716
Depreciation and amortization              2,779      2,851         5,580     5,712
Adjusted EBITDA                     $     19,044    $ 4,936   $    31,133   $ 7,428

(1) The calculation of adjusted EBITDA as presented in this table begins with

    operating income (loss), as other income (costs), income taxes, and net
    income are reported at the consolidated level and not included in the
    operating segment financial information evaluated by management to make
    operating decisions. Consolidated Adjusted EBITDA is reconciled to

consolidated net income in the Consolidated results section of the

Operations.

(2) For the ArcBest segment, includes the amortization of intangible assets acquired from

    $1.0 million and $1.9 million for the three and six months ended
    June 30, 2021 and 2020, respectively.






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Current Economic Conditions



The COVID-19 pandemic negatively impacted the economy and challenged business
operations and supply chains during 2020, which resulted in declines in our
business levels and operating results primarily in the second quarter of 2020.
Economic conditions continued to improve during the first half of 2021. During
the first quarter of 2021, certain COVID-19 vaccines were approved by the U.S.
Food and Drug Administration for emergency use and a roll-out process began to
provide the vaccines to qualified individuals. Vaccinations and other health and
safety measures implemented in response to the pandemic slowed the spread of
COVID-19 in many geographical areas and lessened the severity of COVID-related
restrictions throughout portions of the United States. However, the Delta
variant, a highly contagious coronavirus strain which was first identified in
India in December 2020, spread to the United States in March 2021 and is now the
dominant variant of the virus. Cases have been rising in the United States since
early July, especially in certain geographic regions. In late-July 2021, the
Centers for Disease Control and Prevention updated their guidance to recommend
fully vaccinated people (along with unvaccinated people) should wear masks
indoors in public in areas of substantial or high transmission of COVID-19. The
recent surge in the Delta variant has increased the uncertainty of the future
impact of the COVID-19 pandemic on the economy and business operations.



We are encouraged by the growth in the U.S. real gross domestic product (the
"real GDP") since the second quarter of 2020, when the National Bureau of
Economic Research declared that a recession began in the United States in
February 2020, and the improvements in other recent economic measures, including
the Institute for Supply Management (ISM) Purchasing Managers' Index ("PMI") and
the Industrial Production Index issued by the Federal Reserve. According to the
advance estimate released by the Bureau of Economic Analysis on July 29, 2021,
real GDP increased at an annual rate of 6.5% for second quarter 2021. The
Industrial Production Index, while still below pre-pandemic levels, increased at
an annual rate of 5.5% for second quarter 2021. PMI, which is a leading
indicator for demand in the freight transportation and logistics industry, was
59.5% for July 2021, compared to 53.7% for July 2020 and 41.5% in April 2020,
which was the lowest monthly PMI during the pandemic. The improvement in PMI
reflects continued economic expansion in the manufacturing sector and growth in
the overall economy. Manufacturing and trade inventory levels remain well below
the range we consider optimal for businesses which is considered a positive for
freight demand; although there can be no assurance that the economic
environment, including the impact of the COVID-19 pandemic, will be favorable
for our freight services in future periods.



Given the uncertainties regarding the economic environment and the potential
impact of the COVID-19 pandemic on our business in future periods, there can be
no assurance that our estimates and assumptions regarding the pricing
environment and economic conditions, which are made for purposes of impairment
tests related to operating assets and deferred tax assets, will prove to be
accurate. Extended periods of economic disruption and resulting declines in
industrial production and manufacturing and consumer spending could negatively
impact demand for our services and have an adverse effect on our results of
operations, financial condition, and cash flows. Significant declines in
business levels or other changes in cash flow assumptions or other factors that
negatively impact the fair value of the operations of our reporting units could
result in impairment and a resulting non-cash write-off of a significant portion
of the goodwill and intangible assets of our ArcBest segment, which would have
an adverse effect on our financial condition and operating results.



Effects of Inflation


Most of our expenses are affected by inflation, which generally results in
increased operating costs. As such, there can be no assurances of the potential
impact of inflationary conditions on our business. Generally, inflationary
increases in labor, fuel costs, and other operating expenses as they relate to
our Asset-Based operations have historically been mostly offset through price
increases and fuel surcharges. In periods of increasing fuel prices, the effect
of higher associated fuel surcharges on the overall price to the customer
influences our ability to obtain increases in base freight rates. In addition,
certain nonstandard arrangements with some of our customers have limited the
amount of fuel surcharge recovered. The timing and extent of base price
increases on our Asset-Based revenues may not correspond with contractual
increases in wage rates and other inflationary increases in cost elements and,
as a result, could adversely impact our operating results.



Generally, inflationary increases in labor and operating costs regarding our
Asset-Light operations have historically been offset through price increases.
The pricing environment, however, generally becomes more competitive during
economic

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decreases, which may, as in the past, affect the ability to obtain price increases from customers during and after these periods.

Supply chain disruptions and component shortages due in part to closure of
suppliers' and manufacturers' operations during the COVID-19 pandemic as well as
strong demand in recent quarters have limited the availability and production of
certain revenue equipment and certain other equipment used in our business
operations. Consequently, prices for these items have also increased. Partly as
a result of inflationary pressures, our revenue equipment (tractors and
trailers) has been and will very likely continue to be replaced at higher per
unit costs, which could result in higher depreciation charges on a per-unit
basis. We consider these costs in setting our pricing policies, although the
overall freight rate structure is governed by market forces based on value
provided to the customer. The Asset-Based segment's ability to fully offset
inflationary and contractual cost increases can be challenging during periods of
recessionary and uncertain economic conditions.



In addition to the general effects of inflation, the trucking freight industry faces increasing costs associated with insurance claims and coverage and complying with government regulations on safety, design and operation. equipment maintenance, operator use, emissions and fuel economy.

Environmental and legal issues



We are subject to federal, state, and local environmental laws and regulations
relating to, among other things: emissions control, transportation or handling
of hazardous materials, underground and aboveground storage tanks, stormwater
pollution prevention, contingency planning for spills of petroleum products, and
disposal of waste oil. We may transport or arrange for the transportation of
hazardous materials and explosives, and we operate in industrial areas where
truck service centers and other industrial activities are located and where
groundwater or other forms of environmental contamination could occur. See
Note K to our consolidated financial statements included in Part I, Item 1 of
this Quarterly Report on Form 10-Q for further discussion of the environmental
matters to which we are subject.



We are involved in various legal actions, the majority of which arise in the
ordinary course of business. We maintain liability insurance against certain
risks arising out of the normal course of our business, subject to certain
self-insured retention limits. We routinely establish and review the adequacy of
reserves for estimated legal, environmental, and self-insurance exposures. While
management believes that amounts accrued in the consolidated financial
statements are adequate, estimates of these liabilities may change as
circumstances develop. Considering amounts recorded, routine legal matters are
not expected to have a material adverse effect on our financial condition,
results of operations, or cash flows. See Note K to our consolidated financial
statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further
discussion of legal matters in which we are currently involved.



Information technology and cybersecurity



We depend on the proper functioning, availability, and security of our
information systems, including communications, data processing, financial, and
operating systems, as well as proprietary software programs that are integral to
the efficient operation of our business. Any significant failure or other
disruption in our critical information systems, including ransomware attacks and
other cybersecurity attacks and other cyber incidents that impact the
availability, reliability, speed, accuracy, or other proper functioning of these
systems or that result in proprietary information or sensitive or confidential
data, including personal information of customers, employees and others, being
compromised could have a significant impact on our operations. Any new or
enhanced technology that we may develop and implement may also be subject to
cybersecurity attacks and may be more prone to related incidents. We also
utilize certain software applications provided by third parties; provide
underlying data to third parties; grant access to certain of our systems to
third parties who provide certain outsourced administrative functions or other
services; and increasingly store and transmit data with our customers and third
parties by means of connected information technology systems, any of which may
increase the risk of a cybersecurity incident. Although we strive to carefully
select our third-party vendors, we do not control their actions and any problems
caused by or impacting these third parties, including cyber attacks and security
breaches at a vendor, could result in claims, litigation, losses, and/or
liabilities and materially adversely affect our ability to provide service to
our customers and otherwise conduct our business.



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Our information technology systems are protected through physical and software
safeguards as well as backup systems considered appropriate by management.
However, these systems are vulnerable to interruption by adverse weather
conditions or natural disasters, power loss, telecommunications failures,
terrorist attacks, internet failures, computer viruses, and other events beyond
our control. It is not practicable to protect against the possibility of these
events or cybersecurity attacks and other cyber events in every potential
circumstance that may arise. To mitigate the potential for such occurrences at
our primary data center, we have implemented various systems, including
redundant telecommunication facilities; replication of critical data to an
offsite location; a fire suppression system to protect our on-site data center;
and electrical power protection and generation facilities. We also have a
catastrophic disaster recovery plan and alternate processing capability
available for our critical data processes in the event of a catastrophe that
renders one of our data centers unusable. In response to the health and safety
risks posed by the COVID-19 pandemic and in an effort to mitigate the spread of
COVID-19, we transitioned a significant portion of our office personnel to
remote work arrangements during 2020, and many of these employees are still
working remotely, which may increase our exposure to cybersecurity risks,
including an increased demand for information technology resources, an increased
risk of phishing, and an increased risk of other cybersecurity attacks. We
continue to implement physical and cybersecurity measures in an attempt to
safeguard our systems in order to serve our operational needs in a remote
working environment and to provide uninterrupted service to our customers.



Our property and cyber insurance would offset losses up to certain coverage
limits in the event of a catastrophe or certain cyber incidents, including
certain business interruption events related to these incidents; however, losses
arising from a catastrophe or significant cyber incident would likely exceed our
insurance coverage and could have a material adverse impact on our results of
operations and financial condition. We do not have insurance coverage specific
to losses resulting from a pandemic. A significant disruption in our information
technology systems or a significant cybersecurity incident, including denial of
service, system failure, security breach, intentional or inadvertent acts by
employees or vendors with access to our systems or data, disruption by malware,
or other damage, could interrupt or delay our operations, damage our reputation,
cause a loss of customers, cause errors or delays in financial reporting, expose
us to a risk of loss or litigation, and/or cause us to incur significant time
and expense to remedy such an event.



We have experienced incidents involving attempted denial of service attacks,
malware attacks, and other events intended to disrupt information systems,
wrongfully obtain valuable information, or cause other types of malicious events
that could have resulted in harm to our business. To our knowledge, the various
protections we have employed have been effective to date in identifying these
types of events at a point when the impact on our business could be minimized.
We must continuously monitor and develop our information technology networks and
infrastructure to prevent, detect, address, and mitigate the risk of
unauthorized access, misuse, computer viruses, and other events that could have
a security impact. We have made and continue to make significant financial
investments in technologies and processes to mitigate these risks. We also
provide employee awareness training around phishing, malware, and other cyber
risks. Despite our efforts, due to the increasing sophistication of cyber
criminals and the development of new techniques for attack, we may be unable to
anticipate or promptly detect, or implement adequate protective or remedial
measures against, the activities of perpetrators of cyber attacks. Management is
not aware of any cybersecurity incident that has had a material effect on our
operations, although there can be no assurances that a cyber incident that could
have a material impact to our operations could not occur.





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Liquidity and capital resources

Our primary sources of liquidity are cash, cash equivalents and short-term investments, cash generated from operations and borrowing capacity under our revolving credit facility or our receivables securitization program.

Cash flow and short-term investments



Components of cash and cash equivalents and short-term investments were as
follows:




                              June 30      December 31
                               2021           2020

                                   (in thousands)
Cash and cash equivalents(1) $ 362,619    $     303,954
Short-term investments(2)       59,967           65,408
Total(3)                     $ 422,586    $     369,362



(1) Cash equivalents are made up of money market funds and variable rate demand.

Remarks.

(2) Short-term investments consist of certificates of deposit and, in December

31, 2020, we Treasury securities.

(3) Cash, variable rate demand notes and certificates of deposit are registered at

cost plus accrued interest, which approximates fair value. Money market funds

are recognized at fair value on the basis of quoted prices. we Treasury securities

are recognized at amortized cost plus accrued interest. TO June 30, 2021 and

December 31, 2020, cash, cash equivalents and short-term investments

totaling $ 132.5 million and $ 156.4 million, respectively, were neither FDIC

    insured nor direct obligations of the U.S. government.



Cash, cash equivalents, and short-term investments increased $53.2 million from
December 31, 2020 to June 30, 2021. During the six-month period ended
June 30, 2021, cash on hand and cash provided by operations was used to repay
$54.6 million of long-term debt (including $20.0 million repaid on the Credit
Facility); fund $14.5 million of capital expenditures, net of proceeds from
asset sales (and an additional $8.1 million of certain Asset-Based revenue
equipment was financed with notes payable); fund $9.5 million of internally
developed software; purchase $8.1 million of treasury stock; and pay dividends
of $4.1 million on common stock.



The comparisons of our consolidated cash flows and liquidity for the six months
ended June 30, 2021 to the same period of 2020 are impacted by actions we
implemented during 2020 in response to the COVID-19 pandemic. In addition to the
cost reductions previously discussed in the Consolidated Results section of
MD&A, the following actions should be considered when analyzing our
year-over-year cash flows and liquidity for the six months ended June 30, 2021.
On March 26, 2020, we drew down the $180.0 million remaining available borrowing
capacity under the initial maximum credit amount of our revolving credit
facility (the "Credit Facility") under our Third Amended and Restated Credit
Agreement and borrowed $45.0 million under our accounts receivable
securitization program. These borrowings were a proactive measure to increase
our cash position and preserve financial flexibility in consideration of general
economic and financial market uncertainty and the potential for cash flow
disruption resulting from the COVID-19 outbreak. These funds supplemented our
already strong cash and short-term investments position and were repaid during
third quarter 2020. We also lowered our planned capital expenditures for 2020 by
30%, including a reduction in revenue equipment purchases of $18.0 million.



Cash provided by operating activities during the six months ended June 30, 2021
was $145.9 million compared to $82.1 million in the same prior-year period. Net
income increased $66.6 million for the six months ended June 30, 2021, compared
to the same period of 2020. The increase in net income includes a $6.9 million
gain on the sale of the labor services subsidiary of the ArcBest segment's
moving business during second quarter 2021 and a $4.8 million increase in gains
on the sale of property and equipment for the six months ended June 30, 2021,
compared to the same period of 2020, primarily related to the sale of an
unutilized property in the Asset-Based segment. Changes in operating assets and
liabilities contributed $9.7 million to the increase in cash provided by
operating activities during the six months ended June 30, 2021, compared to the
same period of 2020. The increases in accounts payable and accrued expenses for
the six months ended June 30, 2021 which were primarily due to the impact of
higher business levels, compared to the decreases in these accounts for the same
prior-year period, resulted in higher cash flows from operations. These cash
flows were partially offset by the business-driven increase in accounts
receivable for the six months ended June 30, 2021, versus a decrease in accounts
receivable for the same period of 2020. Cash provided by operating activities
also reflected federal

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and state income tax payments, net of refunds, of $15.2 million for the six
months ended June 30, 2021, compared to state and foreign income tax payments,
net of refunds of federal and state income taxes, of $1.9 million for the six
months ended June 30, 2020.



Financing Arrangements



In June 2021, we repaid $20.0 million of borrowings under our Credit Facility.
We had available borrowing capacity of $199.4 million under the initial maximum
credit amount of the Credit Facility, as of June 30, 2021.



We amended and restated our accounts receivable securitization program in June
2021. The amendment extended the maturity date of this program from
October 1, 2021 to July 1, 2024, decreased the amount of available cash proceeds
under the facility from $125.0 million to $50.0 million, and increased the
amount of additional borrowings we may request under the accordion feature of
the program from $25.0 million to $100.0 million, subject to certain conditions.
As of June 30, 2021, our available borrowing capacity under the accounts
receivable securitization program was $39.9 million, as reduced for standby
letters of credit issued under the program.



Our financing arrangements are further described in Note F to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.



Contractual Obligations



We have purchase obligations, consisting of authorizations to purchase and
binding agreements with vendors, relating to revenue equipment used in our
Asset-Based operations, other equipment, facility improvements, software,
certain service contracts, and other items for which amounts were not accrued in
the consolidated balance sheet as of June 30, 2021. These purchase obligations
totaled $138.3 million as of June 30, 2021, with $131.9 million estimated to be
paid within the next year, $6.1 million estimated to be paid in the following
two-year period, and $0.3 million to be paid within five years, provided that
vendors complete their commitments to us. As of June 30, 2021, the amount of our
purchase obligations has increased $93.7 million from December 31, 2020,
primarily related to revenue equipment, real estate projects, and technology
advancements which are included in our 2021 capital expenditure plan.



As of June 30, 2021, contractual obligations for operating lease liabilities,
primarily related to our Asset-Based service centers, totaled $127.7 million,
including imputed interest. The scheduled maturities of our operating lease
liabilities as of June 30, 2021 are disclosed in Note E to our consolidated
financial statements included in Part I, Item 1 of this Quarterly Report on
Form 10-Q.



Our contractual obligations related to our notes payable, which provide
financing for revenue equipment and software purchases, totaled $196.3 million,
including interest, as of June 30, 2021, for a decrease of $29.1 million from
December 31, 2020. The scheduled maturities of our long-term debt obligations as
of June 30, 2021 are disclosed in Note F to our consolidated financial
statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
There have been no other material changes in the contractual obligations
disclosed in our 2020 Annual Report on Form 10-K during the six months ended
June 30, 2021.



Our total capital expenditures for 2021, including amounts financed, are
estimated to range from $160.0 million to $170.0 million, net of asset sales,
reflecting a $10.0 million increase from our previously disclosed range related
to planned real estate investments in the second half of 2021. Our estimated net
capital expenditures for 2021 include revenue equipment purchases of
$100.0 million, primarily for our Asset-Based operations. The remainder of 2021
expected capital expenditures include real estate projects, dock equipment
upgrades and enhancements for our Asset-Based operations, and technology
investments across the enterprise. We have the flexibility to adjust certain
planned 2021 capital expenditures as business levels dictate. Depreciation and
amortization expense, excluding amortization of intangibles, is estimated to be
in the range of $115.0 million to $120.0 million in 2021. The amortization of
intangible assets is estimated to be approximately $4.0 million in 2021. As we
continue to make investments to provide assured capacity solutions to our
customers, we expect to increase our revenue equipment purchases in 2022 by an
estimated $50.0 million to $60.0 million from 2021 projected levels, and we
preliminarily expect to increase our annualized capital expenditures above
historical levels by an estimated $50.0 million to $75.0 million to upgrade and
expand our Asset-Based service centers.

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ABF Freight System, Inc. and certain other subsidiaries reported in our
Asset-Based operating segment contribute to multiemployer health, welfare, and
pension plans based generally on the time worked by their contractual employees,
as specified in the collective bargaining agreement and other supporting
supplemental agreements (see Note G to our consolidated financial statements
included in Part I, Item 1 of this Quarterly Report on Form 10-Q).



Other liquidity information

General economic conditions, including the effects of the COVID-19 pandemic in
future periods, along with competitive market factors and the related impact on
our business, primarily tonnage and shipment levels and the pricing that we
receive for our services in future periods, could affect our ability to generate
cash from operations and maintain cash, cash equivalents, and short-term
investments on hand as operating costs increase. Our Credit Facility and our
accounts receivable securitization program provide available sources of
liquidity with flexible borrowing and payment options. We had available
borrowing capacity under our Credit Facility and our accounts receivable
securitization program of $199.4 million and $39.9 million, respectively, at
June 30, 2021. We believe these agreements provide borrowing capacity options
necessary for growth of our businesses. We believe existing cash, cash
equivalents, short-term investments, cash generated by operations, and amounts
available under our Credit Facility or our accounts receivable securitization
program will be sufficient to finance our operating expenses, fund our ongoing
investments in technology, and repay amounts due under our financing
arrangements. Notes payable, finance leases, and other secured financing may
also be used to fund capital expenditures, provided that such arrangements are
available and the terms are acceptable to us.



On July 27, 2021, our Board of Directors declared a dividend of $0.08 per share
to stockholders of record as of August 11, 2021. We expect to continue to pay
quarterly dividends on our common stock in the foreseeable future, although
there can be no assurances in this regard since future dividends will be at the
discretion of the Board of Directors and are dependent upon our future earnings,
capital requirements, and financial condition; contractual restrictions applying
to the payment of dividends under our Credit Agreement; and other factors.



We have a program in place to repurchase our common stock in the open market or
in privately negotiated transactions. The program has no expiration date but may
be terminated at any time at the Board of Directors' discretion. Repurchases may
be made using cash reserves or other available sources. During the six months
ended June 30, 2021, we purchased 126,289 shares of our common stock for an
aggregate cost of $8.1 million, leaving $41.9 million available for repurchase
under the current buyback program.



Financial Instruments



We have not historically entered into financial instruments for trading
purposes, nor have we historically engaged in a program for fuel price hedging.
No such instruments were outstanding as of June 30, 2021. We have an interest
rate swap agreement in place which is discussed in Note F to our consolidated
financial statements included in Part I, Item 1 of this Quarterly Report on
Form 10-Q.



Balance Sheet Changes



Accounts Receivable

Accounts receivable increased $ 39.6 million of December 31, 2020 To June 30, 2021, reflecting higher activity levels in June 2021 compared to december 2020.



Accounts Payable

Increased accounts payable $ 33.2 million of December 31, 2020 To June 30, 2021, mainly due to the increase in activity levels in June 2021 compared to
december 2020.



Accrued Expenses

Accrued expenses increased $ 13.4 million of December 31, 2020 To
June 30, 2021, mainly due to the temporal effect on wages and vacation accumulated in the June 30, 2021, compared to December 31, 2020.


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Long-term Debt

The $46.5 million decrease in long-term debt, including current portion, from
December 31, 2020 to June 30, 2021 is primarily due to the $20.0 million
repayment of borrowings under our Credit Facility during second quarter 2021 and
payments on note payables during the six months ended June 30, 2021.



Off-balance sheet provisions



At June 30, 2021, our off-balance sheet arrangements for purchase obligations
totaled $138.3 million, as previously discussed in the Contractual Obligations
section of Liquidity and Capital Resources.



We have no investments, loans, or any other known contractual arrangements with
unconsolidated special-purpose entities, variable interest entities, or
financial partnerships and have no outstanding loans with executive officers or
directors.





Income Taxes



Our effective tax rate was 17.0% and 19.5% for the three and six months ended
June 30, 2021, respectively, compared to 23.4% and 23.1%, respectively, for the
same periods of 2020. The federal statutory tax rate is 21.0%, and the average
state tax rate, net of the associated federal deduction, is approximately 5%.
However, various factors and significant changes in nondeductible expenses, such
as cash surrender value of life insurance and the settlement of share-based
payment awards primarily vesting in the second quarter, may cause the full-year
2021 tax rate to vary significantly from the statutory rate.



The reconciliation between the effective tax rate, calculated on pre-tax profit, and the statutory federal tax rate is presented in the following table:



                                                Three Months Ended                          Six Months Ended
                                                      June 30                                    June 30
                                             2021                  2020                 2021                  2020

                                                               (in

thousands, except percentages)

Income tax provision at the
statutory federal rate                 $  15,426    21.0 %    $ 4,354    21.0 %   $  22,009    21.0 %    $ 4,855    21.0 %
Federal income tax effects of:
Alternative fuel credit                        -       - %      (247)   (1.2) %           -       - %      (698)   (3.0) %
Nondeductible expenses and other           1,012     1.4 %       (24)   

(0.1)% 1,493 1.4% 380 1.6% Increase in provisions for depreciation

              35       - %         41     0.2 %         127     0.1 %        235     1.0 %
Decrease in uncertain tax
positions(1)                                   -       - %          -       - %           -       - %      (933)   (4.0) %
Tax expense (benefit) from vested
RSUs                                     (6,796)   (9.2) %        659     3.1 %     (6,931)   (6.6) %        679     3.0 %
Federal research and development
tax credits                                (125)   (0.2) %      (193)   (0.9) %       (253)   (0.2) %      (443)   (1.9) %
Life insurance proceeds and changes
in cash surrender value                    (262)   (0.4) %      (537)   (2.6) %       (528)   (0.5) %        262     1.1 %
Federal income tax provision           $   9,290    12.6 %    $ 4,053    19.5 %   $  15,917    15.2 %    $ 4,337    18.8 %
State income tax provision                 3,187     4.4 %        801    

3.9% 4,546 4.3% 1,000 4.3% Total provision for taxes $ 12,477 17.0% $ 4,854 23.4% $ 20,463 19.5% $ 5,337 23.1%

(1) The limitation period expired in the first quarter of 2020 for the

federal tax refund for which the reserve for uncertain tax positions has been

    established in 2018.




At June 30, 2021, we had $58.5 million of net deferred tax liabilities after
valuation allowances. We evaluated the need for a valuation allowance for
deferred tax assets at June 30, 2021 by considering the future reversal of
existing taxable temporary differences, future taxable income, and available tax
planning strategies. Valuation allowances for deferred tax assets totaled
$1.4 million and $1.3 million at June 30, 2021 and December 31, 2020,
respectively. As of June 30, 2021, deferred tax liabilities which will reverse
in future years exceeded deferred tax assets.



Financial reporting income may differ significantly from taxable income because
of items such as revenue recognition, accelerated depreciation for tax purposes,
and a significant number of liabilities such as vacation pay, workers'

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indemnities and other debts which, for tax purposes, are generally only deductible when paid. For the three months ended June 30, 2021 and 2020, income determined under the income tax law exceeded income from financial reporting.



During the six months ended June 30, 2021, we made federal and state tax
payments of $15.3 million, and received refunds of less than $0.1 million of
federal and state income taxes that were paid in prior years. Management does
not expect the cash outlays for income taxes will materially exceed reported
income tax expense for the foreseeable future.





Critical Accounting Policies



The accounting policies that are "critical," or the most important, to
understand our financial condition and results of operations and that require
management to make the most difficult judgments are described in our 2020 Annual
Report on Form 10-K. There have been no updates to our critical accounting
policies during the six months ended June 30, 2021. Management believes that
there is no new accounting guidance issued but not yet effective that will
impact our critical accounting policies.



Forward-Looking Statements



Certain statements and information in this report 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: widespread outbreak of an illness or disease, including the COVID-19
pandemic and its effects, or any other public health crisis, as well as
regulatory measures implemented in response to such events; external events
which may adversely affect us or the third parties who provide services for us,
for which our business continuity plans may not adequately prepare us; 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; interruption or failure of
third-party software or information technology systems or licenses; untimely or
ineffective development and implementation of, or failure to realize potential
benefits associated with, new or enhanced technology or processes, including the
pilot test program at ABF Freight; the loss or reduction of business from large
customers; the ability to manage our cost structure, and the timing and
performance of growth initiatives; maintaining our corporate reputation and
intellectual property rights; competitive initiatives and pricing pressures;
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, fuel, and related
taxes; 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; relationships with
employees, including unions, and our ability to attract, retain, and develop
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; union employee
wages and benefits, including changes in required contributions to multiemployer
plans; 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; litigation or claims asserted against us;
governmental regulations; environmental laws and regulations, including
emissions-control regulations; default on covenants of financing arrangements
and the availability and terms of future financing arrangements; self-insurance
claims and insurance premium costs; potential impairment of goodwill and
intangible assets; 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; seasonal fluctuations and
adverse weather conditions; and other financial, operational, and legal risks
and uncertainties detailed from time to time in ArcBest Corporation's public
filings with the Securities and Exchange Commission (the "SEC").



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For additional information regarding known material factors that could cause our
actual results to differ from our projected results, please see our filings with
the 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.



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