ARCB 10-K & 10-Q changes, risk factors and insider trading

Our business is subject to a variety of material risks about whichthat we arehave awareidentified and could also be affected by additional risks and uncertainties that are not currently known to us or that we currently deem to be immaterial. This Risk Factors section discusses the material risks relating to our business activities, including those affecting the transportation industry and our Company that are largely out of our control. If any of these risks or circumstances actually occur, it could materially harm our business, results of operations, financial condition, and cash flows; impair our ability to implement business plans or complete development activities as scheduled; and/or result in a decline in the market price of our common stock.

WeAn dependinterruption, onfailure, ourperceived or actual data breach, or cybersecurity incident in the Information Technology (“IT”) systems asthat wellwe asdepend on, including software programs and applications provided by third parties, and a systems failure, perceived or actual data privacy breach, or cybersecurity incident could have a material adverse effect on our business, results of operations, and financial condition.

We depend on the proper functioning, availability, and security of our IT systems, including communications, data processing, financial, and operating systems, as well as proprietary software programs and certain software applications provided by third parties that are integral to our business operations. Such third parties may host, store, transmit data or have access by means of connected IT systems to information about our business, customers, employees, and vendors. Our IT systems and third-party applications that we utilize are vulnerable to interruption by adverse weather conditions or; natural disasters; powerpower, loss;internet, or telecommunications failuresoutages; terrorist attacks; internet failures and other disruptions to technology, including computer viruses; and cybersecurity incidents such as denial of service, intentional or inadvertent acts by employees or vendors with access to our systems or data, phishing, disruption by malware, attacksartificial enabledintelligence by(“AI”)-enabled AI,attacks, or other security or data breachbreaches; andas well as other events beyond our control. Any significantA failure or other disruption in critical IT systemssystems, that impactsincluding the availability,applications reliability,provided speed,by accuracy,third or other proper functioning of these systems or that results in proprietary information or sensitive or confidential data, including information of customers, employees and others, being compromisedparties, could interruptadversely or delayaffect our operations, damage our reputation, result in a loss of customers, cause errors or delays in financial reporting, result in violation of privacy laws, expose us to potential loss or litigation, and/or cause us to incur significant time and expense to remedy such an event. New or enhanced technology that we develop and implement may also be subject to cybersecurity attacks and may be more prone to related incidents.

A portion of our employee population operates under remote and hybrid work arrangements, which has increased demand for IT resources and our exposure to cybersecurity risks, including an increased risk of unauthorized access to proprietary information or sensitive or confidential data and cybersecurity incidents, such as phishing. As AI capabilities improve and are increasingly adopted, including generative AI, we may see cybersecurity attacks perpetrated through AI, including an increase in the speed, scale, sophistication, and automation of such attacks. While we maintain property and cyber insurance, losses arising from a significant disaster or cyber incident may exceed our insurance coverage and could have a material adverse impact on our results of operations and financial condition. Although we have implemented measures to mitigate our exposure to the heightened risks of cybersecurity incidents, we cannot be certain that such measures will be effective to prevent a cybersecurity incident from materializing. Additionally, it may be more difficult to defend against such attacks.

If we are unable to timely and effectively develop and implement new or enhanced technology or processes, or if we fail to realize the potential benefits thereof, we may suffer competitive disadvantage,disadvantages, loss of customers, or other consequences that could negatively impact our business, results of operations, and financial condition.

The transportation industry hasis experienced, and will likely continue to experience,experiencing rapid changes in technology, includingdriven by the development and implementation of new technology; the deployment ofand emerging technology,technologies, such asincluding generative AI and machine learning;learning, and enhancements in existing technology. With industry advancements in technology, our customers may find alternatives to our services to meet their freight transportation and logistics needs. New entrants to the market, including technology-centric or technology-enabled start-ups and emerging business models, have also expanded the field of competition and increased pressure for innovation in the industry. Our customers may find alternatives to our services to meet their freight transportation and logistics needs.

Technology and new market entrants may also disrupt the way we, and our competitors, operate to provide freight logistics services. We expect our customers will continue to demand more sophisticated technology-driven solutions from their suppliers,solutions, including advancements in processes, equipment, and facilities to build automation and address concerns over business efficiency, supply chain effectiveness, and climatesustainability. change. To improve efficiencies and meet our customers’ needs, weWe have made, and continue to make, significant investments in thetechnology, enhancementincluding ofenhancements to existing technology and in the development of new and innovative solutions, such as software and physical assets that are in various stages of development and implementation. Our investments in technology are further described in “Technology” within Part I, Item 1 (Business) of this Annual Report on Form 10-K. A number of factors are involved in determining proof of concept, and there can be no assurance that our technology implementations will be successful.

Our efforts and investments in technology innovation, including the development, adoption and use of generative AI technologies, may continue to require significant ongoing research and development and implementation costs and may involve new or unforeseen risks and challenges, including heightened risks forregarding data and information security, privacy, protection, and copyright infringement and, in the case of generative AI, potential compliance gaps in an emerging but fragmented regulatory environment. The success of our approach to technology innovation depends on market acceptance of our solutions and other factors, including our ability to:

We are still in the early stages of developing and deploying generative AI, a process that is particularly complex.complex Thisdue complexity arises fromto the use of sensitive, proprietary, and confidential data that could be leaked, as well as the potential flaws in algorithms and models, which may include biases, errors, and limitations in handling certain data types or scenarios, ultimately affecting the reliability of outputs. If we do not pursue technological advances or engage in innovation; if we fail to successfully or timely develop and deploy enhanced or new technology; if any enhanced or new technology does not yield the results we expect, or is developed by others; or if the decisions are made by us or our customers based on flawed AI or model outputs, we may be placed at a competitive disadvantage; lose customers; be led to make decisions that could bias certain individuals or classes of individuals and adversely impact their rights; incur higher than anticipated costs, including the possible impact of asset impairment or the write-off of software development costs; or fail to meet the goals of our internal growth strategy, any one of which could materially adversely impact our financial condition and results of operations.

The loss of or reduction in business from one or moremultiple large customers,customers or an overall reduction in our customer base,base could have a material adverse effect on our business, results of operations, financial condition, and cash flows.

We do not have a significant customer concentration. However, our customer relationships are generally not subject to long-term contractual obligations or minimum volume commitments, and we cannot ensure that our current customer relationships will continue at the same business levels or at all. If we were to lose all or a portion of the business of some of our large customers to our competitors or if our customers were to demand pricing concessions for our services, require us to provide enhanced services at lower prices, or develop their own shipping and distribution capabilities, our business, results of operations, and cash flows could be materially adversely impacted. A reduction in our customer base or difficulty in collecting, or the inability to collect, payments from our customers due to pricing changes, economic hardship, or other factors could have a material adverse effect on our business, results of operations, financial condition, and cash flows.

Our initiatives to grow our business operations or to manage our cost structure to business levels may take longer than anticipatedanticipated, may not generate adequate returns, or may not be successful.

DevelopingGrowing our service offerings requires ongoing investment in personnel and infrastructure, including operating and management information systems. Depending upon the timing and level of revenues generated from our growth initiatives, the related results of operations and cash flows we anticipate from these initiatives and additional service offerings may not be achieved.

Our growth plans place significant demandsdemand on our management and operating personnel, and we may not be able to hire, train, upskill, and retain the appropriate personnel to manage and grow our services. We have incurred increased costs associated with long-term investment in the development of our owner-operator fleet and contract carrier capacity for our Asset-Light segment. As we focus on market opportunities for our asset-light solutions, we may also encounter difficulties in adapting our corporate structure or in developing and maintaining effective partnerships among our operating segments, which could hinder our operational, financial, and strategic objectives. Furthermore, we may invest significant resources to enter or expand our services in markets with established competitors and new competitive challenges, and we may not be able to successfully gain market share.

We may be unsuccessful in realizing all or any part of the anticipated benefits of acquisitionsfuture within the expected time period or at all.acquisitions. The cost, integration, and performance of any such acquisition may disrupt or adversely affect our business, results of operations, financial condition, and cash flows.

We evaluate acquisition candidates and may pursue opportunities to acquire assets and businesses that we believe will complement our existing assets and business or enhance our service offerings. However, we may be unable to generate sufficient revenue or earnings from the operations of MoLo, which we acquired on November 1, 2021, or any future acquired business,business to offset our acquisition or investment costs, and the acquired business may otherwise fail to meet our operational or strategic expectations. DifficultiesWe encounteredmay inencounter combiningdifficulties operations,integrating the assets, workforce, systems, and operations of acquired companies, including underestimation ofunderestimating the resources requiredneeded to support an acquisition, which could prevent us from realizing the full anticipated benefits,benefits andof the acquisition, including within the anticipated timeframe, andor could adversely impactinhibit our business,ability resultsto ofprovide operations,consistent, andhigh-quality financialservice condition.to customers. If acquired operations fail to generate sufficient cash flows, we may incur impairments of goodwill, intangibles, and other assets in the future.

WeDue continuediligence toprocedures evaluateperformed acquisition candidates and may acquire assets and businesses that we believe complement our existing assets and business or enhance our service offerings. The complex and time-consuming processes ofin evaluating acquisitions andmay performingnot dueidentify diligence procedures includeall risks that may adversely impact the success of our selection of candidates, pricing of the transaction, and ability to integrate critical functional areas of the acquired business.transactions. Future acquisitions, if any,acquisitions may require substantial capital or the incurrence of substantial indebtedness or may involve the dilutive issuance of equity securities, which maycould negatively impact our capitalization and financial position. Further, we may not be able to acquire businesses or assets in the future, or acquire them on terms favorable to us,future even though we may have incurred expenses in evaluating and pursuing strategic transactions.

Unsolicited takeover proposals, proxy contestscontests, and other proposals or actions by activist investors may adversely affect our business and our stock price.

We could become subject to unfavorable advances by investor activists or receive unsolicited takeover proposals at an undervalued stock price. In the event that a third party makes an unsolicited takeover proposal or otherwise attempts to gain control of our Company, our review and consideration of such proposals may be a significant distraction forrequire our management and may require us to expend significant time and resources away from our primary operations. Such proposals may disrupt our businessbusiness, byincluding causing uncertainty among current and potential employees, customers, and other stakeholders, which could negatively impact our business, results of operations, and financial condition. Any perceived uncertainties as to our future direction also may adversely affect the market price and lead to pronounced volatility in the price of our common stock.

Our business depends, in part, on our ability to maintain the image of our brands. Service, performance, and safety issues, whether actual or perceived, and whether as a result of our actions or those of our third-party service providers, could adversely impact our customers’the image of our brands, including ArcBest, ABF Freight, Panther, MoLo, and U-Pack, and result in the loss of business or impede our growth initiatives.Vaux. Adverse publicity regarding labor relations, legal matters, cybersecurity and data privacy concerns, social and sustainability issues, and similar matters, whether or not justified, could also have a negative impact on our reputation and may result in the loss of customers and our inability to secure new customer relationships.reputation. Despite our efforts to adapt to and address these concerns, our efforts may be insufficient.insufficient Additionally,and could result in the implementationloss of initiatives,business, including ourloss sustainabilityof initiatives,customers, may increaseaffect our costs.ability to secure new customer relationships, and otherwise impede our growth initiatives. It is difficult to predict how our efforts with respect to sustainability mattersefforts, which may increase costs, will be evaluated by current and prospective investors or by our customers or business partners,partners. and ourOur industry may be generally disfavored by the investing community at large.large despite our sustainability efforts.

Our business is increasingly dependent on the internet for attracting and securing customers,customers. and theThe possibility that fraudulent behavior may confuse or deceive customers, including through usethe misuse of generative AI, which can produce inaccurate, biased, or misleading content, heightens the risk of damagereputational to our reputationharm and increasescould increase the time and expense required to protect and maintain the integrity of our brands. With the increased use of social media outlets, adverse publicity, even when based upon incorrect information or false statements, can be disseminated quickly and broadly, making it increasingly difficult for us to effectively respond. Damage to our reputation and loss of brand equity could reduce demand for our services and, thus, have an adverse effect on our business, results of operations, financial condition, and the market price of our stock, as well as require additional resources to rebuild our reputation and restore the value of our brands.

We have registered or are pursuing registration of various marks and designs as trademarks in the United States. ForWe some marks, wehave also have registered or are pursuing registration in certain other countries.countries for some trademarks. At times, competitors may adopt service or trade names, logos, or designs similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. We have obtained or are pursuing patent protection on internally developed and certain purchased technology, including equipment and process patents in connection with Vaux. Competitors or other third parties could attempt to reproduce or reverse-engineer our patented technologies, or we could be subject to third-party claims of infringement. Any of our intellectual property rights related to trademarks, trade secrets, domain names, copyrights, patents, or other intellectual property, whether owned or licensed, could be challenged, invalidated, misappropriated, or infringed upon by third parties. Our efforts to obtain, enforce, or protect our proprietary rights, or to defend against third-party infringement claims, may be ineffective and could result in substantial costs and diversion of resources and could adversely impact our corporate reputation, business, results of operations, and financial condition.

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal controls over financial reporting, even if effective, only provide reasonable, not absolute, assurance with respect to the preparation and fair presentation of financial statements and may not prevent or detect misstatements because of their inherent limitations, including the possibility of human error, failure or interruption of information technology systems, the circumvention or overriding of controls, or fraud. If we are unable to establish adequate internal controls or if our internal controls do not consistently operate as designed, our business, operating results, and reputation could be harmed, and we could fail to meet our financial reporting and other obligations.

ADisruptions nationwidein domestic or global disruptionmanufacturing activity, supply chains, and related changes in theproducer supplyand chainconsumer spending could increasematerially volatilityreduce inour freight volumes and materiallyadversely impactaffect our business.

In recent years, original equipment manufacturers (“OEMs”) have significantly raised the prices of equipment, including new revenue equipment, due to supply chain disruptions and other challenges beyond our control, including, but not limited to geopolitical conflicts; increased costs of materials and labor, above normal inflation levels; and high interest rates, which impact equipment financing. Manufacturers have also raised prices, in part, to offset their costs of compliance with new tractor engine and emissions system design requirements intended to reduce emissions, which have been mandated by the EPA, the NHTSA, and various state agencies as described in “Environmental and Other Government Regulations” within Part I, Item 1 (Business) of this Annual Report on Form 10-K. GHGState-mandated emissionsemission-control regulationsrequirements are likely to continue to impact the design of and cost of equipment utilized in our operations as well as fuel costs. Additional state-mandated emission‑control requirements couldand increase equipment and fuel costs for entire fleets that operate in interstate commerce. IfIncreased prices of new equipment prices increase more than anticipated, we could incurlead to higher depreciation and rental expenses than anticipated. Our third-party capacity providers, including owner-operators for portions of our Asset-Light segment operations, are also subject to increased regulations and higher equipment and fuel prices, which will, in turn, increase our costs for utilizing their services or may cause certain providers to exit the industry, which could lead to or exacerbate a capacity shortage and further increase our costs of securing third-party services. If we are unable to fully offset any such increases in expenses with freight rate increases and/or improved fuel economy, our results of operations could be adversely affected.

We depend on suppliers for equipment, parts, and services that are critical to our operations, which may be difficult to procure in the event of decreased supply or other supply chain disruptions. From time to time, some OEMs of tractors and trailers may reduce their manufacturing output due to, for example, lower demand for their products in economic downturns or a shortage of component parts. Component suppliers may either reduce production or be unable to increase production to meet OEM demand, creating periodic difficulty for OEMs to react in a timely manner to increased demand for new equipment and/or increased demand for replacement components as economic conditions change, as experienced through the first half of 2023 due to significant shortages of semiconductor chips, which forced manufacturers to curtail or suspend their production, leading to lower supply of tractors and trailers, higher prices and lengthened trade cycles. We have in the past and may continue toagain face reduced supply levels and/or increased acquisition costs for new tractors or trailers, as well as related parts and services, for our Asset-Based operations.

The transportation industry is dependent upon the availability of adequate fuel supplies. Fuel represents a significant operating expense for us, and we do not have any long-term fuel purchase contracts or hedging arrangements to protect against fuel price increases. The supply and price of fuel fluctuates greatly due to factors beyond our control, such as global supply and demand for crude oil and diesel, political events, legislation and regulation, military conflicts, price and supply decisions by oil producing countries and cartels, terrorist activities, and natural or man-made disasters. SignificantA disruption in our fuel supply or significant increases in fuel prices or fuel taxes resulting from these or other economic or regulatory changes that are not offset by base freight rate increases or fuel surcharges or a disruption in our fuel supply could have a material adverse impact on our results of operations.

We also pay independent contractor drivers a fuel surcharge that increases with the increase in fuel prices in our Asset-LightAsset‑Light segment. A significant increase or rapid fluctuation in fuel prices could cause the fuel surcharge we pay to independent contractors to be higher than the revenue we receive under our customer fuel surcharge programs, which could adversely impact our results of operations.

Our Asset-Based segment and certain operations of our Asset-Light segment assess a fuel surcharge based on an index of national diesel fuel prices. When fuel surcharges constitute a higher proportion of the total freight rate paid, our customers are less receptive to increases in base freight rates. Prolonged periods of inadequate base rate improvements could adversely impact operating results as elements of costs, including contractual wage rates, continue to increase. In periods of declining fuel prices, fuel surcharge percentages also decrease, which negatively impacts the total billed revenue per hundredweight or revenue per shipment measure and, consequently, our revenues, and the revenue decline may be disproportionate to the corresponding decline in our fuel costs, as experienced in 2023.costs.

In certain markets, we continue to experience challenges with hiring an adequate number of qualified drivers and freight‑handlers.freight-handlers. Although these hiring difficulties were tempered by the shutdown of a large LTL competitor in 2023, theThe available pool of drivers hasis beenexpected declining in recent years and mayto continue to decline,decline whichas hasretirements caused and mayaccelerate in the futurecurrent causedriver difficulty in retainingworkforce and hiringrecruitment qualifiedand drivers.retention Governmentmay be further impacted by government regulations or legislative actionsactions, thatsuch resultas inthe shortagesrecent ofEnglish qualifiedproficiency driversand coulddomicile also impact our ability to grow.mandates. The expansion of flexible work options in recent years has also provided more employment opportunities for those in professional roles, including our IT roles, making attraction and retention more complex. If wage inflation continues for noncontractual professional roles, our labor costs will increase. If we encounter difficulty in attracting, retaining,attracting and upskillingretaining employees, including qualified drivers, freight-handlers, and professional personnel, we could incur higher recruiting expenses or a loss of business, and our profitability and ability to grow could be adversely affected. If AI and other technological innovations accelerate the need for upskilling of employees or increase the resources necessary to carry out such training, we could incur higher training-related costs, and our profitability and ability to grow could be negatively impacted.

A significant portion of the employees in our Asset-Based segment are covered under the collective bargaining agreement between ABF Freight and the IBT. If we are unable to effectively manage our relationship with the IBT, we could be less effective in ongoing relations and future negotiations, which could lead to operational inefficiencies and increased operating costs. There can be no assurance that our future collective bargaining agreementswe will be renewed on terms favorable to us. The terms of any future collective bargaining agreements or the inabilityable to agree on acceptable terms for the next contract period or, if agreed upon, that those terms will be favorable to us in future collective bargaining agreements, which may also result in higher labor costs, insufficient operational flexibility, a work stoppage, the loss of customers, or other events that could have a material adverse effect on our business. We could also experience a loss of customers or a reduction in our potential share of business in the markets we serve if shippers limit their use of unionized freight transportation service providers because of the risk of work stoppages.

ABF Freight contributes to multiemployer pension and health and welfare plans to provide benefits for its contractual employees. These multiemployer plans, established pursuant to the Taft-Hartley Act, are jointly trusteed and cover collectively bargained employees of multiple unrelated employers. Due to the inherent nature of multiemployer pension plans, there are risks associated with participation in these plans that differ from single‑employersingle-employer plans. Assets received by the plans are not segregated by employer, and contributions made by one employer can be and are used to provide benefits to current and former employees of other employers. If a participating employer in a multiemployer pension plan no longer contributes to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. If a participating employer in a multiemployer pension plan completely withdraws from the plan, it owes to the plan its proportionate share of the plan’s unfunded vested benefits, referred to as withdrawal liability. A complete withdrawal generally occurs when the employer permanently ceases to have an obligation to contribute to the plan. Withdrawal liability is also owed in the event the employer withdraws from a plan in connection with a mass withdrawal, which generally occurs when all or substantially all employers withdraw from the plan in a relatively short period of time pursuant to an agreement. Were ABF Freight to completely withdraw from certain multiemployer pension plans, whether in connection with a mass withdrawal or otherwise, under current law, we would have material liabilities for our share of the unfunded vested liabilities of each such plan.

The multiemployer pension plans to which ABF Freight contributes vary greatly in size and in funded status. ABF Freight’s obligations to these plans are generally specified in the 2023 ABF NMFA and other related supplemental agreements, as further discussed in Note JI to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. These pension plans provide the best retirement benefits in the industry. However, when compared to competitors, ABF Freight pays some of the highest benefit contribution rates in the industry and continues to address the effect of the Asset-Based segment’s wage and benefit cost structure on its operating results in discussions with the IBT. Through the term of its current collective bargaining agreement, ABF Freight’s multiemployer pension obligations generally will be satisfied by making the specified contributions when due. Future contribution rates will be determined through the negotiation process for contract periods following the term of the current collective bargaining agreement.

Certain legislative actions that became effective in recent years include provisions to improve funding for multiemployer pension plans, as further discussed in Note JI to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. However, despite such legislative actions, we may still trigger withdrawal liability through, among other things, mergers and other fundamental corporate transactions and as a result of operational changes, site closures and job losses. We continue to monitor the impact theseof legislative actions have on the funding status of the multiemployer pension plans to which ABF Freight contributes; however, we cannot determine with any certainty the minimum contributions that will be required under future collective bargaining agreements or the impact they will have on our results of operations and financial condition.

A reduction in the availability of rail services or services provided by third-party capacity providers to meet customer requirements; higher prices, including fuel surcharges; as well as higher utilization of third-party agents to maintain service levels in periods of tonnage growth or higher shipment levels, could increase purchased transportation costs which we may be unable to pass along to our customers. If a disruption or reduction in transportation services from our rail or other third‑partythird-party service providers were to occur, we could be faced with business interruptions that could cause us to fail to meet the needs of our customers,customers which couldand result in loss of business or customer loyalty. In addition, third-party providers can be expected to increase their prices based on market conditions or to cover increases in their operating expenses. If we are unable to correspondingly increase the prices we charge to our customers,customers in response, or if we are unable to secure sufficient third-party services to expand our capacity, add additional routes, or meet our commitments to our customers, there could be a material adverse impact on our operations, revenues, profitability and customer relationships.

Our ability to secure the services of third-party service providers is affected by many risks beyond our control, including unfavorable pricing conditions; the shortage of quality third-party providers, including owner-operators and drivers of contracted carriers for our Asset-Light segment; shortages in available cargo capacity of third parties; equipment shortages in the transportation industry, particularly among contracted truckload carriers; changes in government regulations affecting the transportation industry and their related impact on operations, such as hours-of-service rulesrules, the electronic logging device (“ELD”) mandate, and therecent ELDfederal mandateexecutive orders relating to English language proficiency, commercial driver licenses, and domicile requirements; labor disputes; or a significant interruption in service or stoppage in third-party transportation services. Each of these risks could have a material adverse effect on the operating results of our Asset-Light segment.

In addition, we may be subject to claims arising from services provided by third parties, particularly in connection with the operations of our Asset-Light segment, which are dependent on third-party contract carriers. From time to time, the drivers who are owner-operators, independent contractors, or employees working for third-party carriers that we contract with are involved in accidents or incidents that may result in cargo loss or damage, other property damage, or serious personal injuries including death.death, As a result, claimswhich may beresult in claims asserted against us for actions by such drivers or for our actions in contracting with them initially or retaining them over time.us. We or our subsidiaries could be held directly responsible for these third-party claims and, regardless of ultimate liability, may incur significant costs and expenses in defending these claims or through settlements, even in cases where we believe we have meritorious claims or defenses. Our third-party contract carriers and other vendors may not agree to bear responsibility for such claims, or we may become responsible if they are unable to pay the claims, for example, due to bankruptcy proceedings, and such claims may exceed the amount of our insurance coverage or may not be covered by insurance at all.

The driver fleet for portions of our Asset-Light segment is made up of independent owner-operators and individuals. We face intense competition in attracting and retaining qualified owner-operators from the available pool of drivers and fleets, and we may be required to increase owner-operator compensation or take other measures to remain an attractive option for owner-operators. If we are not able to maintain our delivery schedules due to a shortage of drivers or if we are required to increase our rates to offset increases in owner-operator compensation, our services may be less competitive. Furthermore, as these independent owner-operators and individuals are third-party service providers, rather than our employees, they may decline loads of freight from time to time, which may impede our ability to deliver freight in a timely manner or result in increased expenses to do so.

Class actions and other lawsuits have arisen in the transportation and logistics industry seeking to reclassify independent contractor drivers as employees for a variety of purposes, including workers’ compensation, wage‑and‑hour,wage-and-hour, and health care coverage. Many states have enacted restrictive laws that make it difficult to successfully prove independent-contractor status, and all states have enforcement programs to evaluate the classification of independent contractors. In the event of such reclassification of our owner-operators, we could be exposed to various liabilities and additional costs, for both future and prior periods, under federal, state, and local tax laws, and workers’ compensation, unemployment benefits, labor, and employment laws, as well as potential liability for penalties and interest and under vicarious liability principles.

The nature of our businessbusiness, including both our Asset-Based and Asset-Light segments, exposes us to the potential for various claims and litigation, including class-action litigation and other legal proceedings brought by customers, suppliers, employees, or other parties, related to labor and employment, including wage and hour claims; competitive matters; personal injury; property damage; cargo claims; safety and contract compliance; environmental liability; and other matters, such as the matters, if any, described in Item 3 (Legal Proceedings) included in Part I of, or otherwise disclosed in, this Annual Report on Form 10-K. We are subject to risk and uncertainties related to liabilities, including damages, fines, penalties, and substantial legal and related costs, that may result from these claims and litigation.litigation Somearising orfrom alleither segment of our expenditures to defend, settle, or litigate these matters may not be covered by insurance or could impact our cost of, and ability to obtain, insurance in the future. Litigation can be disruptive to normal business operations and could require a substantial amount of time and effort from our management team. Further, because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we believe that we have meritorious claims or defenses. Any material litigation or a catastrophic accident or series of accidents could have a material adverse effect on our business, results of operations, and financial condition. Our business reputation and our relationship with our customers, suppliers, and employees may also be adversely impacted by our involvement in legal proceedings.business.

We are also subject to stringent and changing privacy laws, regulations and standards as well as policies, contracts, and other obligations related to data privacy, including customer and employee data. As a provider of worldwide transportation and logistics services, we collect and process significant amounts of customer data on a daily basis.daily. In recent years, there have been global efforts by governments and consumer groups have called for increased transparency in how customer data is utilized and how customers and employees can control the use and storage of their data. Complying with existing or new data protection laws and regulations may increase our compliance costs or require us to modify our data handling practices. Non-compliance could result in governmental or consumer actions against usus, and even perceived non-compliance may otherwise adversely impact our reputation, operating results and financial condition. The uncertainty of the interpretation and enforcement of these laws, and their increasing scope and complexity, create regulatory risks that will likely increase over time. Additionally, if third parties or others violate obligations and restrictions with respect to data privacy and security, such violations may also put our customers’ or employees’ information at risk and could in turn have a material and adverse effect on our business.

At certain facilities of ourOur Asset-Based operations, we store fuel and oil in underground and aboveground tanks and other containers. In connection with these operations, wefacilities are subject to federal, state and local environmental laws and regulations relating to, among other areas: underground and aboveground storage tanks,tanks for fuel and oil storage, stormwater pollution prevention, contingency planning for spills of petroleum products, and disposal of waste oil. We may be subject to substantial fines, civil penalties, or litigation if we fail to obtain proper certifications or permits or if we do not comply with required environmental inspections, testing provisions, and consent decrees. Under certain environmental laws, we could be subject to strict liability for any clean-up costs relating to contamination at our past or present facilities, including those occurring prior to ownership or use of such facilities, and at third-party waste disposal sites.

We routinely transport or arrange for the transportation of hazardous materials and explosives.explosives, The transportation of hazardous materials or explosives alsowhich involves the risks of,such among others,as leakage, environmental damage, a spill or accident involving hazardous substances, and hazardous waste disposal, as well as costs associated with the environmental clean-up of fuel spillage from our vehicles. In addition, if any damage or injury occurs as a result of these operations, weWe may also be subject to claims from third parties and bear liability for suchany damage or injury.injury that occurs as a result of these operations.

Although we have instituted programs to monitor and control environmental risks and promote and maintain compliance with applicable environmental laws and regulations, violations of applicable laws or regulations may subject us to clean‑upclean-up costs and liabilities not covered by insurance or in excess of our applicable insurance coverage, including substantial fines, civil penalties, or civil and criminal liability, as well as bans on making future shipments in particular geographic areas, any of which could adversely affect our business.

Concern over climate change, including the impact of global warming,change has led to significantincreased legislative and regulatory efforts to limit carbon and other GHG emissions,emissions in certain states and some form of federal, state, and/or regional climate changeadditional legislation is possible in the future. Emission-related regulatory actions have historically resulted in increased costs of revenue equipment, diesel fuel, and equipment maintenance, and future legislation, if enacted, could impose substantial costs on us that may adversely impact our results of operations. Such regulatory actionsand may require changes in our operating practices, impair equipment productivity, or require additional reporting disclosures. Compliance with such laws and regulations related to climate risk may also increase our exposure to litigation or governmental investigations or proceedings. We may also encounter difficulties in collecting and managing data that impact timely compliance or incur significant costs to comply with increased regulation regarding environmental monitoring and financial reporting disclosure requirements, including those described in “Environmental and Other Government Regulations” within Part I, Item 1 (Business) of this Annual Report on Form 10-K. We are subject to increasing investor and customer sensitivity to sustainability issues, and we may be subject to additional requirementsrequirements, which could result in increased costs, related to shareholder proposals, customer-led initiatives, or our customers’ efforts to comply with environmental programs. UntilAlthough we cannot predict the timing, scope, and extenteffect of any future regulation or customer requirements, our compliance with such requirements becomecould known,have wean cannotadverse predict their effectimpact on our cost structure, business, or results of operations.

We are affected by the instability in the financial and credit markets, which from time to time has created volatility in various interest rates and returns on invested assets. We are subject to market risk due to variable interest rates on borrowings on our accounts receivable securitization program (“A/R Securitization”) and the revolving credit facility (“Credit Facility”) under our FourthFifth Amended and Restated Credit Agreement (the “Credit Agreement”). Changes in interest rates may increase our financing costs related to future borrowings under our Credit Facility, future borrowings against our A/R Securitization, new notes payable or finance lease arrangements, or additional sources of financing. Interest rates are highly sensitive to many factors, including inflation, governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control. Furthermore, future financial market disruptions may adversely affect our ability to refinance, maintain our letter of credit arrangements or, if needed, secure alternative sources of financing. If any of the financial institutions that have extended credit commitments to us are adversely affected by economic conditions, disruption to the capital and credit markets, or increased regulation, they may become unable to fund borrowings under their credit commitments or otherwise fulfill their obligations to us, which could have an adverse impact on our ability to borrow additional funds, and thus have an adverse effect on our operations and financial condition. See Note HG to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further discussion of our financing arrangements.

ArcBest Corporation™ (together with its subsidiaries, the “Company,” “ArcBest®,” “we,” “us,” and “our”) is a multibillion-dollarmultibillion‑dollar integrated logistics company that leverages technology and a full suite of solutions across multiple modes of transportation to meet our customers’ supply chain needs. Our operations are conducted through two reportable operating segments:

For more information, see additional segment descriptions in Part I, Item 1 (Business) and in Note NM to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

On February 28, 2023, the Company sold FleetNet America, Inc. (“FleetNet”), a wholly owned subsidiary of the Company, for an aggregate adjusted cash purchase price of $100.9 million, including post-closing adjustments. Following the sale, FleetNet® was reported as discontinued operations. As such, historical results of FleetNet have been excluded from both continuing operations and segment results for all periods presented. Unless otherwise indicated, all amounts in this Annual Report on Form 10-K refer to continuing operations, including comparisons to the prior year. For more information on our discontinued operations, see Note D to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

This Results of Operations section of MD&A generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K10‑K can be found in the Results of Operations section of MD&A in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.2024.

Our consolidated revenues, which totaled $4.2$4.0 billion for 2024,2025, decreased 5.6%4.0% compared to 2023.2024. The revenue decline is primarily attributable to lower market rates and shipment levels for our Asset-Light shipping and logistics services in a soft market environmentenvironment, andwhich resulted in a decrease in ourAsset-Light Asset-Basedrevenues dailyof tonnage9.4%. levels.Lower The lower tonnage levels are primarily due to lower weightrevenue per shipment, comparedpartially offset by higher shipment levels in our Asset-Based segment, resulted in a 0.6% decrease in Asset-Based revenues and contributed to the prior-year period, despite an increase in demand for LTL-rated shipments following market disruption in 2023, as further discussed below. The year-over-year decrease in consolidated revenues for 2024 reflects a 4.2% decrease in our Asset-Based revenues and a 7.6% decrease in our Asset-Light revenues.2025. The elimination of intersegment revenues reported within the “Other and eliminations” line of consolidated revenues increased 1.6%6.7% for 2024,2025, compared to 2023,2024, reflecting year-over-year changes in intersegment business levels among our operating segments.

The decrease in revenues of our Asset-Light segment for 2024,2025, compared to 2023,2024, was impacted by a 12.8%7.4% decline in revenue per shipment associated with soft market conditions and changes in business mix, including a higher mix of managed transportation business, whichas haswell smaller shipment sizes and lower revenue per shipment metrics, partially offset byas a 5.5%1.8% increasedecrease in shipments per day. Our Asset-Light segment generated approximately 36%34% and 37%36% of total revenues before other revenues and intercompany eliminations for 20242025 and 2023,2024, respectively.

Consolidated operating income increaseddecreased by $71.8$154.1 million year-over-year to an operating income of $90.3 million in 2025, reflecting the $90.3revenue milliondecline, increases in Asset-Based segment salaries, wages and benefits; and the reduction in the contingent earnout consideration accrual during 20242024, andoffset a decrease in operating expenses due toby lower purchased transportation costs in both of our operating segments and lower employee costs in the Asset-Light segment from continued alignment of costs to the market environment, offset partially by lower revenues in both the Asset-Light and Asset-Based segments and higher employee costs in the Asset-Based segment due to union wage and benefit rate increases.segment. Segment operating expenses are further described in the Asset-Based Segment Results and Asset-Light Segment Results sections of Results of Operations. In addition to the results of our operating segments, the year-over-year comparison of consolidated operating income was also impacted by items described in the following paragraphs.

The liability for contingent earnout consideration recorded for the MoLo® acquisition iswas remeasured at each quarterly reporting date, and any change in fair value as a result of the recurring assessments iswas recognized in operating income. Consolidated operating results increased by $2.7 million (pre-tax), or $2.0 million (after-tax) and $0.09 per diluted share for 2025 and by $90.3 million (pre-tax), or $67.9 million (after-tax) and $2.85 per diluted share, for 2024 and by $19.1 million (pre-tax), or $14.4 million (after-tax) and $0.58 per diluted share for 2023,2024, in each case due to quarterly remeasurementsremeasurements, which resulted in a lower liability of the contingent earnout consideration. During 2025, the liability was reduced to zero as the earnout calculation did not meet the threshold for an earnout payment based on adjusted earnings before interest, taxes, depreciation and amortization, for 2025. Remeasurement ofcalculations related to the prior year contingent earnout consideration isare further discussed in Note C to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

The Company recognized noncash asset impairment charges during fourth quarter 2025 related to the indefinite-lived Panther trade name within the Asset-Light segment and the write-off of certain obsolete assets utilized in our Vaux suite, which reduced operating results by $12.0 million (pre-tax), or $9.1 million (after-tax) and $0.40 per diluted share for the year ended December 31, 2025. Asset impairment charges were recognized during fourth quarter 2024 for certain revenue equipment and software during the fourth quarter of 2024 as part of a strategic decision to adjust capacity within Asset-Light’s operations.operations, These asset impairment chargeswhich reduced operating results by $1.7 million (pre-tax), or $1.3 million (after-tax) and $0.05 per diluted share, for the year ended December 31, 2024. The Company recognized lease-related impairment charges during the third quarter of 2023 for a freight handling pilot facility, an Asset-Based service center, and certain Asset-Light office spaces that were made available for sublease, as further described within Note G to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Asset impairment charges reduced operating results by $30.2 million (pre-tax), or $22.6 million (after-tax) and $0.92 per diluted share for the year ended December 31, 2023. Remeasurement of the intangible and long-lived assets, operating right-of-use assets, and leasehold improvements is further discussed within Note C to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

During 2024, consolidated net income and earnings per share were impacted by a one-time, noncash impairment charge of $28.7 million (pre-tax), or $21.6 million (after-tax) and $0.91 per diluted share, to write off our equity investment in Phantom Auto, a provider of human-centeredhuman‑centered remote operation software, which ceased operations during the first quarter of 2024. WeThe recordedcharge an adjustment to the fair value of our equity investment in Phantom Auto based on an observable price change during 2023, which increased consolidated net income by $3.7 million (pre-tax), or $2.8 million (after-tax) and $0.11 per diluted share, for 2023. These charges werewas recognized in “Other, net” within “Other income (costs).” The write-off of our equity investment is further described within Note C to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

In addition to the above items, the year-over-year changes in consolidated net income and earnings per share were impacted by changes in the cash surrender value of variable life insurance policies, tax benefitseffects 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 and in Note FE to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. 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 consolidated net income by $3.3 million and $0.15 per diluted share in 2025, and $3.3 million and $0.14 per diluted share in 2024, and $4.6 million and $0.19 per diluted share in 2023.2024. The vesting of restricted stock units resulted in a tax expense of $1.0 million and $0.04 per diluted share for 2025, compared to a tax benefit of $11.3 million and $0.47 per diluted share for 2024, compared to a tax benefit of $5.3 million and $0.21 per diluted share in 2023.2024.

We report our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP performance measures and ratios, such as Adjusted EBITDA, utilized for internal analysisanalysis, provide analysts, investors, and others the same information that we use internally for purposes of assessing our core operating performance. These measures provide meaningful comparisons between current and prior period results, as well as important information regarding performance trends. Accordingly, using these measures improves comparability inbetween analyzingcurrent and prior results and provides important information to our analysis of performance trends 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 performance 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 segment, changes in the fair value of contingent earnout consideration and our equity investment, asset impairment charges, and certain legal settlement expenses of the Asset-Light segment, and gain on sale of subsidiary, which are significant expenses or gains resulting from strategic decisions or other factors rather than core daily operations. Additionally, Adjusted EBITDA is a primary component of the financial covenants contained in our Fourth Amended and Restated Credit Agreement (see Note H to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K). Other companies may calculate Adjusted EBITDA differently; therefore, ourOur calculation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.companies as other companies may calculate Adjusted EBITDA differently. 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, net income (loss),income, or earnings per share, as determined under GAAP. The following table presents a reconciliation of Adjusted EBITDA to our net income, which is the most directly comparable GAAP measure for the periods presented.

The Asset-Based segment consists of ABF Freight System, Inc., a wholly owned subsidiary of ArcBest Corporation, and certain other subsidiaries. Our Asset-Based segment provides freight transportation services throughFreight, one of North America’s largest less-than-truckload (“LTL”) carriers.carriers and a wholly owned subsidiary of the Company, and certain other subsidiaries. Our customers trust the LTL solutions ABF Freight has provided for over a century and rely on our unwavering commitment to quality, safety, and customer service to solve their transportation challengeschallenges, including through market disruptions and rapidly changing economic conditions. We are strategically investing in our Asset-Based operations to utilize technology to drive efficiency and productivity. We are also committed to our deepening customer relationships to navigate challenges now and in the future.

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 this Annual Report on Form 10-K. See Note NM to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a description of the Asset-Based segment and additional segment information, including revenues, operating expenses, and operating income for the years ended December 31, 2025, 2024, 2023, and 2022.2023.

TheIn addition to the overall customer demand for Asset-Based transportation services, including the impact of economic factors, key indicatorsindicators, necessary to understand the operating results of our Asset-Based segment areas outlined below. These key indicatorsbelow, 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:

The industry pricing environment, another key factor impactingaffecting our Asset-Based results, influences the ability to obtain appropriate margins and implement price increasesadjustments onacross our customer accounts. Generally,base. LTL freight is rated byunder a classclassification system, which isframework established by the National Motor Freight Traffic Association, Inc. Light,(“NMFTA”). bulkyIn freightJuly typically2025, hasNMFTA updates accelerated the transition from the previous commodity-based model toward a higherdensity-based classmodel that places greater emphasis on measured density, handling characteristics, stowability, and isliability pricedinstead atof afixed highercommodity revenue per hundredweight than dense, heavy freight.classes. Changes in the ratedfreight class and packaging of the freight,packaging, along with changes in other freight profile factors, such as average shipment size; average length of haul; freight density; and customer and geographic mix, can affect the average billed revenue per hundredweight measure. Light, bulky freight generally results in higher classes and generates higher revenue per hundredweight while dense freight is usually assigned lower classes. As classification increasingly relies on density, pricing has become more sensitive to accurate dimensional data and other freight attributes.

Approximately 20%17% of our Asset-Based business is subject to base LTL tariffs, which are affected by general rate increases, subject to individually negotiated discounts. Rates on the remaining Asset-Based business, including business priced in the spot market, are subject to individual pricing arrangements negotiated at various times throughout the year. The majorityMost of the business that is subject to negotiated pricing arrangements is associated with larger customer accounts with annually negotiatedannual pricing arrangements. The remaining business is priced on an individual shipment basis considering eachshipment shipment’s unique profile, value provided to the customer,characteristics, network capacity, and current market conditions. Since most pricing is established individually by account, the Asset-BasedAsset‑Based segment focuses on individual account profitability rather than a single measure of billed revenue per hundredweight when considering customer account or market evaluations.

We allow shippers with established accounts and without negotiated published rates, instantrates access to competitive LTL rates through an online portal and application programming interface (“API”) connectivity, matching their shipping needs with ABF Freight’s capacity availableoptions inthrough thea ABFdynamic Freightpricing network at the time of the quote.option. The market has been receptive to this dynamic pricing option for transactional LTL shipments, and this program has been beneficial in optimizing our business levels by improving capacity utilization in the Asset-BasedAsset‑Based network. InOur dynamic pricing option allows us to strategically fill excess capacity, including during the current soft market environment, our dynamic pricing option has allowed us to strategically fill empty capacity, enabling us to reduceimprove theutilization needof forour employeeinternal furloughs or layoffsresources and be better positioned for a market rebound of higher freight demand, as well as provide a more sustainable service offering by reducing “empty miles” (or the number of miles we move empty or near-empty equipment for repositioning purposes). Although we continually evaluate our business mix to ensure revenue optimization, any resulting increase in revenues could be offset partially or entirely by the related increase in expenses needed to service higher shipment volumes.

We also utilize a space-based pricing approach for shipments subject to LTL tariffs to alignbetter ourreflect pricingcapacity withusage and freight shipping trends in the industry, including the overall growth and ongoing profile shift to bulkier, yet often lighter, shipments across the supply chain, the acceleration in e-commerce, and the unique requirements of many shipping and logistics solutions, such as accommodating for smaller LTL shipments. An increasing percentage of freight is taking up more space in trailers without a corresponding increase in weight. Traditional LTL pricing is generally weight-based, while our linehaul costs are generally space-based (i.e., costs are impacted by the volume of space required for each shipment). Space-based pricing involves the use of freight dimensions (length, width, and height) to determine applicable cubic minimum charges (“CMC”) that supplement weight-based metrics when appropriate. We believe space-based pricing better aligns our pricing mechanisms with the metrics which affect our resources and, therefore, our costs to provide logistics services. The recent move by the NMFTA to density-driven class brackets reflects this shift in LTL pricing practices from traditional LTL pricing. We seek to provide logistics solutions to our customers’ businesses and the unique shipment characteristics of their various products and commodities, and we believe that we are particularly experienced in handling freight that is generally considered difficult to handle. CMC is an additional pricing mechanism to better capture the value we provide in transporting these shipments.

The transportation industry is dependent upon the availability of adequate fuel supplies. The Asset-Based segment assesses a fuel surcharge based on the index of national on-highway average diesel fuel prices published weekly by the U.S. Department of Energy. ToFuel surcharges apply across our Asset-Based network; however, to better align fuel surcharges to fuel- and energy-related expenses and provide more stability to account profitability as fuel prices change, we may, from time to time,time revise our standard fuel surcharge program, which impacts approximately one-third of Asset-Based shipments and primarily affects noncontractual customers.customers representing a portion of Asset-Based shipments. While fuel surcharge revenue generally more than offsets the increase in direct diesel fuel costs when applied, the total impact of energy prices on other nonfuel-related expenses is difficult to ascertain. Management cannot predict, with reasonable certainty, future fuel price fluctuations, the impact of energy prices on other cost elements, recoverability of fuel costs through fuel surcharges, and the effect of fuel surcharges on the overall rate structure or the total price that the segment will receive from its customers. While the fuel surcharge is one of several components in the overall rate structure, the actual rate paid by customers is governed by market forces and the overall value of services provided to the customer.

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. Fuel prices have fluctuated significantly in recent years. Whether fuel prices fluctuate or remain constant, operating results may be adversely affected if competitive pressures limit our ability to recover fuel surcharges. Throughout 2024,2025, the fuel surcharge mechanism generally continued to have market acceptance among customers; however, certain nonstandard pricing arrangements have limited the amount of fuel surcharge recovered. The negative impact on operating margins of capped fuel surcharge revenue during periods of increasing fuel costs is more evident when fuel prices remain above the maximum levels recovered through the fuel surcharge mechanism on certain accounts. In periods of declining fuel prices, as experienced in 2025, compared to 2024, 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 our fuel costs. Asset-Based revenues for 2024, compared to 2023, were negatively impacted by lower fuel surcharge revenue due to a decrease in the nominal fuel surcharge rate,revenues, while total fuel costs also decreased. The segment’s operating results will continue to be impacted by further changes in fuel prices and the related fuel surcharges.

Our Asset-Based labor costs, including retirement and healthcare benefits for contractual employees that are provided by a number of multiemployer plans (see Note JI to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K), are impacted by contractual obligations under the 2023 ABF National Master Freight Agreement (“2023 ABF NMFA”), the collective bargaining agreement and other related supplemental agreements with the International Brotherhood of Teamsters (the “IBT”), which will remain in effect through June 30, 2028, and other related supplemental agreements.2028. Total salaries, wages, and benefits, amounted to 50.5%52.2% for 2025 and 48.1%50.5% of revenues for 2024 and 2023, respectively.2024. Changes in salaries, wages, and benefits expense and shared services expenses, which include labor costs related to ABF Freight’s portion of company-widecompany‑wide functions, as a percentage of revenues are discussed in the Asset‑BasedAsset-Based Segment Results section.

ABF Freight operates in a highly competitive industry comprised primarily of nonunion motor carriers. Nonunion competitors have a lower fringe benefit cost structure and less stringent labor work rules, and certain carriers also have lower wage rates for their freight-handling and driving personnel. ABF Freight has continued to address with the IBT the effect of the segment’s wage and benefit cost structure on its operating results. As of December 2024,2025, approximately 82%81% of our Asset-Based segment’s employees were covered under the 2023 ABF NMFA. The terms of the 2023 ABF NMFA continue to provide some of the best wages and benefits in the industry to our contractual employees. The combined contractual wage and benefits top hourly rate is estimated to increase approximately 4.2% on a compounded annual basis throughover the endterm of the agreement, with potential profit-sharing bonuses representing additional costs under the 2023 ABF NMFA.

Under the 2023 ABF NMFA, ABF Freight continues to pay some of the highest benefit contribution rates in the industry, and through this contract, ABF Freight mayhas the ability to implement location-specific wage increases in areas where hiring has beenis challenging. ABF Freight’s benefit contributions for its contractual employees include contributions to multiemployer plans. These contributionsContributions to multiemployer pension plans and health and welfare plans totaled $164.1 million and $219.9 million, respectively, in 2025, and $157.9 million and $218.5 million, respectively, in 2024, and $162.5 million and $215.6 million, respectively, in 2023.2024. ABF Freight’s latest labor agreement with the IBT requires wage rates and health, welfare, and pension contribution rates for most plans to increase annually in accordance with the terms of the 2023 ABF NMFA. Union wages increased 13.0% effective July 1, 2023 related to contractualContractual wage and mileage rate increases under the 2023 ABF NMFA, the contractual wage raterates increased effective July 1, 2024,2024 and theJuly health,1, 2025. Health, welfare, and pension benefit contribution raterates increased effective primarily on August 1, 2024,2024 resultingand August 1, 2025. These rate adjustments resulted in a combined contractual wage and benefits top hourly rate increase of approximately 2.7%.2.9% in 2025 and 2.7% in 2024.

Through the term of the 2023 ABF NMFA, which extends through June 30, 2028, ABF Freight’s multiemployer pension contribution obligations generally will be satisfied by making the specified contributions when due. Future contribution rates will be determined through the negotiation process for contract periods following the term of the current collective bargaining agreement. While we cannot determine with any certainty the contributions that will be required under future collective bargaining agreements for ABF Freight’s contractual employees,employees our future contribution rates to multiemployer pension plans maycannot be lesspredicted likelywith to increase as a result ofcertainty, legislation in recent years that has provided funding relief to many underfunded plans which may reduce the likelihood of future contribution rate increases (see Note JI to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K). If ABF Freight were to completely withdraw from certain multiemployer pension plans, under current law, ABF Freight would have material liabilities for its share of the unfunded vested liabilities of each such plan. Further, ABF Freight could also trigger complete or partial withdrawal liability from certain multiemployer pension plans through, among other things, mergers and other fundamental corporate transactions and as a result of operational changes, site closures and job losses, which could result in material liabilities.

Asset-Based segment revenues totaled $2.8 billion and $2.9$2.7 billion for the yearsyear ended December 31, 20242025 and 2023,$2.8 respectively.billion for the prior‑year period. The decrease in revenue compared to the prior year primarily reflects alower decreasebilled in tonnagerevenue per dayhundredweight and weight per shipment. BilledAn revenue (as describedincrease in thedaily Asset-Basedtonnage Segment Overview section) decreased 4.3% on a per-day basis in 2024, compareddue to 2023,higher primarilyshipment reflecting a 14.3% decrease in tonnage per day,volumes partially offset bythese a 11.7% increase in billed revenue per hundredweight, including fuel surcharges.impacts. There was one moreless workday in 20242025 versus 2023.2024.

The increasedecrease in total billed revenue per hundredweight for 2024, including fuel surcharges, compared to 2023,year-over-year was driven by the lowershift weightin perfreight shipment, which generally increases revenue per hundredweight,profile and pricing increases, offset partially by lower fuel surcharge revenue associated with lower fuel prices, compared to 2023.2024, partially offset by lower weight per shipment, which generally increases revenue per hundredweight. The pricing environment for LTL shipments continues to be rational. Excluding the impact of fuel surcharges, the percentage increasedecrease in billed revenue per hundredweight on our traditional LTL-rated freight was in the low-single digits for 2024,2025, compared to 2023.2024. Prices on accounts subject to deferred pricing agreements and annually negotiated contracts whichthat were renewed during 20242025 increased an average of 4.9%, compared to the prior year.4.6%. The Asset-Based segment implemented nominal general rate increases on its LTL base rate tariffs of 5.9% effective on August 4, 2025, and September 9, 2024, October 2, 2023, and November 7, 2022, although the rate changes vary by lane and shipment characteristics.

Labor costs, which are reported in operating expenses as salaries, wages, and benefits, amounted to 50.5% and 48.1% of Asset-Based segment revenues for 2024 and 2023, respectively. Salaries, wages, and benefits increased $7.7$40.7 million for 2024,2025, compared to 2023,2024, primarily due to contract rate increases under the 2023 ABF NMFA, as previously discussed in the Asset-Based RevenuesSegment section.Overview section, an increase in headcount to align with higher shipment levels and increased tonnage, and the effect of rising healthcare costs. Wage rates increased 2.4% on July 1, 2025 and 2.5% on July 1, 2024, and health, welfare and benefits rates increased 3.6% on August 1, 2025 and 2.9% on August 1, 2024, for a blended increase of 2.9% in 2025 and 2.7% in 2024. WageLower rates increased 13.1% on July 1, 2023, and the health, welfare and benefits rates increased 4.0% on August 1, 2023,accruals for a blended increase of 9.1% in 2023. The increases in salaries, wages and benefits from the union contract rates were offset in part, byincentives, improved productivity, as measured by shipments per DSY hour, a decrease in headcount to align with lower shipment levels, and by lowerhigher utilization of purchased transportationtransportation, as discussed later in this section.section, partially offset the increase in salaries, wages and benefits.

The Asset-Based segment manages costs with shipment levels; however, a number of factors impact DSY productivity, including the effect of freight profile and mix changes, utilization of local delivery agents, and efficiency of personnel. Shipments per DSY hour improved 4.5%0.1% for 2024,2025, compared to 2023,2024, primarily due to Citycontinued Routeinvestments Optimizationin technology implementedand in 2023, the separation of city operations from certain distribution centers in late 2023, andongoing training and development at certain key locations,locations as the ABF Freight processContinuous complianceImprovement teamTeam continues to reinforce operational best practices throughout the Asset-Based network. Pounds per mile decreasedincreased 4.0%1.3% for 2024,2025, compared to 2023,2024, reflecting lower weight per shipment, partially offset by an improvement in linehaul productivityefficiency and an increase in the average lengthutilization of haul.purchased transportation, partially offset by lower weight per shipment.

InsuranceDepreciation and amortization as a percentage of revenue increased 0.8 percentage pointpoints in 2024,2025, compared to 2023,2024, primarily due to anrecent increaseservice center renovations and higher purchase prices for new revenue equipment, which has resulted in the severity of third-party casualty claims, including an increase in thedepreciation numberexpense ofper large claims in recent years and higher retention limits.unit.

As supply chains become more complex, most shippers use a mix of modes to keep their supply chains moving, and our managed transportation solutions seamlessly connectsconnect these modes to build better supply chains. We continue to develop our managed transportation solutions as part of our strategic efforts to cross-sell our service offerings and meet the demand for these services that increase operational efficiencies, reduce costs, and give better insights into their supply chain. We expect to benefit from these and other strategic initiatives as we continue to deliver innovative solutions to customers.

Our Asset-Light operations are affected by general economic conditions, as well as several other competitive factors that are more fully described in Part I, Item 1 (Business) and in Part I, Item 1A (Risk Factors) of this Annual Report on Form 10-K. See Note NM to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for descriptions of the Asset-Light segment and additional segment information, including revenues, operating expenses, and operating income (loss) for the years ended December 31, 2025, 2024, 2023, and 2022.2023.

TheKey keyindicators, indicators necessary to understand our Asset-Light segment operating results areas outlined below. These key indicatorsbelow, are used by management to evaluate segment operating performance and measure the effectiveness of strategic initiatives in the results of our Asset-Light 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-LightAsset‑Light segment:

ArcBest Corporation™ (together with its subsidiaries, the “Company,” “ArcBest®,” “we,” “us,” and “our”) is a multibillion-dollar integrated logistics company that leverages technology and a full suite of shipping and logistics solutions across multiple modes of transportation to meet our customers’ supply chain needs. Our operations are conducted through two reportable operating segments: Asset-Based, which consists of ABF Freight System, Inc. and certain other subsidiaries (“ABF Freight”);, and Asset-Light, which includes MoLo Solutions, LLC (“MoLo”), Panther Premium Logistics®, and certain other subsidiaries. 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.

Our consolidated revenues increased 3.3%15.9% for the three months ended MarchJune 31,30, 2026 and 9.8% for the six months ended June 30, 2026, compared to the same priorprior-year year period.periods. The revenue improvementincrease is primarily attributable to higher shipmentfuel levels,prices, whichimproved resultedmarket in increases in Asset‑Light revenues of 6.1%rates, and Asset-Basedfor our Asset-Light segment, higher shipment levels. Consolidated revenues of 1.3% for the three months ended MarchJune 31,30, 2026,2026 were positively impacted by increases in Asset-Light revenues of 28.3% and Asset-Based revenues of 9.9%, compared to the same period of 2025,2025. offsettingFor the impactsix ofmonths lowerended June 30, 2026, Asset-Light revenues increased 17.0% while Asset-Based revenues increased 5.8%, compared to the corresponding prior-year periods. Asset-Based billed revenue per day increased 9.3% for the three months ended June 30, 2026 and 6.1% for the six months ended June 30, 2026, primarily due to increases in billed revenue per hundredweight, including fuel surcharges, and weight per shipment in ourboth Asset-Lightperiods segmentof and2026 lowerwhen billedcompared revenueto perthe hundredweightsame inperiods ourof Asset-Based segment.2025. The elimination of intersegment revenues reported in the “Other and eliminations” line of consolidated revenues decreasedincreased 3.3%15.6% for the threethree-month monthsperiod ended MarchJune 31,30, 2026 and 5.8% for the six-month period ended June 30, 2026, compared to the same periodperiods of 2025, reflecting year-over-year changes in intersegment business levels among operating segments.

Asset-Based tonnage per day increased for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods of 2025, supported by higher dailyweight shipmentper volumes.shipment. This tonnage growth occurred despite risinglower fueldaily prices,shipment continued geopolitical conflicts,volumes and ongoing uncertainty associated with geopolitical conflicts and tariff volatility. Billed revenue per hundredweight, including fuel surcharges, decreasedincreased 3.9%4.2% for the three months ended MarchJune 31,30, 2026 and 0.3% for the six months ended June 30, 2026, compared to the same prior year period.periods. TheThese decreaseincreases waswere primarily driven by higher fuel surcharge revenue resulting from increased fuel prices during the three- and six-month periods ended June 30, 2026, partially offset by a shift in freight profile,profile includingtoward heavier shipments, offsetwhich bygenerally thereduces increase in fuel surchargebilled revenue associatedper with higher fuel prices during the three months ended March 31, 2026.hundredweight.

Higher shipment volumes and an increase in average revenue per shipment in our Asset-Light segment for the three and six months ended MarchJune 31,30, 2026, compared to the same prior-year period,periods, contributed to increased segment revenues;revenues. however,Improved averagerates revenueassociated perwith shipmenttightening declinedcapacity asand higher fuel cost more than offset a higher mix of managed transportation business, which typically carries smaller shipment sizes and lower revenue per shipment, more than offset the improved rates associated with tightening capacity and higher fuel costs.shipment. Our Asset-Light segment generated approximately 37%36% of total revenues before other revenues and intercompany eliminations for the three and six months ended MarchJune 31,30, 2026, compared to 36%32% and 34% for the same periodrespective periods of 2025.

We report financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP financial measures and ratios, such as Adjusted EBITDA, utilized internally to assess core performance offer analysts, investors, and others insights into performance trends by excluding items from operating results that management believes do not reflect our core operating performance. Adjusted EBITDA is used for business planning and as a key performance measure, particularly because it excludes certain significant expenses resulting from strategic decisions or other factors rather than core daily operations, such as amortization of acquired intangibles and software of the Asset-Light segment.segment, asset impairment charges, and changes in the fair value of contingent consideration. Our calculation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies as other companies may calculate Adjusted EBITDA differently. Non‑GAAPNon-GAAP financial measures should be viewed in addition to, and not as an alternative for or better measurement than net income (loss), as determined under GAAP, which is the most directly comparable GAAP measure for the periods presented. The following table presents a reconciliation of Adjusted EBITDA to our net income (loss).

The Asset-Based segment consists of ABF Freight, one of North America’s largest less-than-truckload (“LTL”) carriers and a wholly owned subsidiary of the Company, and certain other subsidiaries. Our customers have relied on ABF Freight’s LTL solutions for over a century, trusting our unwavering commitment to quality, safety, and customer service to solve their transportation challenges, including through market disruptions and rapidly changing economic conditions. We are strategically investing in our Asset-Based operations to leverage technology that enhances efficiency and productivity, along with significant capital investments renovatingto renovate and modernizingmodernize our service centers to strengthen our network infrastructure and support our operations.

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 Part I, Items 1 and 1A of our 2025 Annual Report on Form 10-K. See Note I to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a description of the Asset-Based segment and additional segment information, including revenues, operating expenses, and operating income for the three and six months ended MarchJune 31,30, 2026 and 2025.

As of MarchJune 2026, approximately 81% of our Asset-Based segment’s employees were covered under the ABF National Master Freight Agreement (“2023 ABF NMFA”), the collective bargaining agreement and other related supplemental agreements with the International Brotherhood of Teamsters (the “IBT”),IBT, which will remain in effect through June 30, 2028. The terms of the 2023 ABF NMFA continue to provide some of the best wages and benefits in the industry to our contractual employees. The combined contractual wage and benefits top hourly rate is estimated to increase approximately 4.2% on a compounded annual basis over the term of the agreement, with potential profit-sharing bonuses representing additional costs under the 2023 ABF NMFA. The contractual wage rate under the 2023 ABF NMFA increased effective July 1, 2025, and the health, welfare, and pension benefit contribution rate increased, effective primarily on August 1, 2025, resulting in a combined contractual wage and benefits top hourly rate increase of approximately 2.9%.

Billed revenue per hundredweight decreased for the three months ended March 31, 2026, compared to the same prior year period driven by the shift in freight profile and higher weight per shipment. This decline occurred despite higher fuel surcharge revenue from increased fuel prices. The pricing environment remainsremained rational. Excluding the impact of fuel surcharges, billed revenue per hundredweight decreased in the low-to-mid-singlelow-single digits for the threesix months ended MarchJune 31,30, 2026, compared to the same period of 2025 but remained consistent when comparing second quarter 2026 to second quarter 2025. Prices on accounts subject to deferred pricing agreements and annually negotiated contracts that were renewed during the three and six months ended MarchJune 31,30, 2026, increased an average of 6.3%.5.8% and 6.1%, respectively. The Asset-Based segment implemented nominal general rate increases on its LTL base rate tariffs of 5.9% effective on August 4, 2025,2025 and June 22, 2026, although the rate changes vary by lane and shipment characteristics.

The Asset-Based segment’s average nominal fuel surcharge rate increased by approximately 418 percentage points onfor anthe absolutesecond basisquarter of 2026 and 11 percentage points in the three-monthfirst periodhalf ended March 31,of 2026, compared to the same periodperiods of 2025. The segment’s operating results are impacted by changes in fuel prices and related fuel surcharges. Operating results may be adversely affected if competitive pressures limit our ability to recover fuel surcharges. During periods of changing diesel fuel prices, the fuel surcharge and associated direct diesel fuel costs vary by differing degrees. 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, which could impact operating margins.

The Asset-Based segment generated operating income of $17.5$74.3 million forin the threesecond monthsquarter ended March 31,of 2026, compared to $26.4$51.0 million forin the prior-year quarter, and $91.7 million in the six months ended June 30, 2026, compared to $77.4 million in the same periodprior-year of 2025.period. The Asset-Based segment’s operating ratio for the three and six months ended MarchJune 31,30, 2026 was impacted byreflected the totalbenefit increaseof in operating expenses, partially offset by the increase inincreased billed revenue per shipment, partially offset by higher operating expenses, compared to the respective 2025 period.periods.

Labor costs, which are reported in operating expenses as salaries, wages, and benefits, amounted to 54.2% of Asset-Based segment revenues for the three-month period ended March 31, 2026, compared to 53.2% for the same period of 2025. Salaries, wages, and benefits increased $11.0$8.2 million for the three months ended MarchJune 31,30, 2026 and $19.2 million for the six months ended June 30, 2026, compared to the samecorresponding period2025 of 2025,periods, primarily reflecting contract rate increases under the 2023 ABF NMFA, including a 2.4% wage ratesrate increase oneffective July 1, 2025, and a 3.6% increase in health, welfare and benefitspension rates increase oneffective August 1, 2025, for a blended increase of 2.9%, and increases in headcount to align with higher dailytonnage. shipmentLabor levelscosts anddecreased tonnage.as a percentage of revenue in both 2026 periods, compared to the corresponding 2025 periods, primarily due to higher revenues.

Fuel, supplies, and expenses increased $18.0 million, or 1.2 percentage points as a percentage of revenuerevenue, increasedin 0.5the second quarter of 2026 and $21.9 million, or 0.8 percentage pointspoints, forin the threefirst six months ended March 31,of 2026, compared to the same priorprior-year year period,periods, as the segment’s average fuel price per gallon (excluding taxes) increased approximately 12%68% and 40% during the three-monththree- periodand six-month periods ended MarchJune 31,30, 2026, respectively, compared to the same periodperiods of 2025. Lower city tractor age contributed to a decrease in costs to repair and maintain revenue equipment during the three months ended March 31, 2026, compared to the same prior year period, partially offsetting the fuel expense increase.

DepreciationRents and amortizationpurchased transportation as a percentage of revenue increased 0.8 percentage points for the three months ended MarchJune 31,30, 2026 and 0.4 percentage points for the six months ended June 30, 2026, compared to the same periodperiods of 2025, primarily due to increaseshigher rail fuel surcharge cost per mile from increased utilization of rail and linehaul purchased transportation. Rail miles increased approximately 3% in revenuethe equipmentsecond depreciation expense per unit as a resultquarter of increased equipment costs2026 and due1% in the first half of 2026, compared to recentthe servicesame center2025 renovations.periods.

As supply chains become more complex, shippers increasingly rely on multimodal solutions, and our managed transportation solution efficiently connects these modes to help build resilient supply chains. The continued development of our managed transportation solution exemplifies our strategy to cross-sell services and meet the demand for services that improve operational efficiency, reduce costs, and enhance supply chain visibility. We expect these and other strategic initiatives to support future growth as we deliver innovative solutions to our customers.

Our Asset-Light operations are affected by general economic conditions, as well as several other competitive factors that are more fully described in Part I, Item 1 of our 2025 Annual Report on Form 10-K. See Note I to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for descriptions of the Asset-Light segment and additional segment information, including revenues, operating expenses, and operating income (loss) for the three and six months ended MarchJune 31,30, 2026 and 2025.

Asset-Light segment revenues increased 6.1%28.3% to $377.7$438.7 million for the three months ended MarchJune 31,30, 2026, comparedfrom $341.9 million in the prior-year period, and increased 17.0% to $356.0$816.5 million for the samesix periodmonths ofended 2025.June Current30, year2026, resultsfrom reflect$697.9 an increasemillion in the prior-year period. Revenue growth was driven by higher average daily shipments, partially offsetled by lowergrowth averagein managed solutions, and increased revenue per shipmentshipment. associated with a higher mix of managed transportation business, which typically has smaller shipment sizes. Although average revenueRevenue per shipment declinedimprovement year-over-year,was certaindriven Asset-Lightby service lines realized pricing improvements ashigher spot rates increased during first quarter 2026 due to higher fuel costs andamid tightening truckload capacity,capacity markingand rising fuel costs, reflecting a potential shift in the freight environment conditions following an extended period of freight market softness.

Asset-Light segment operating incomeloss totaled $0.2$31.3 million for the three months ended MarchJune 31,30, 2026, including $34.5 million of asset impairment charges and $0.7 million of restructuring charges recorded during second quarter 2026, compared to operating lossincome of $4.4$0.6 million for the prior-year period. Asset-Light segment operating loss totaled $31.1 million for the six months ended June 30, 2026, compared to $3.8 million for the same periodprior-year of 2025.period. The year-over-year improvementdecrease in operating results also reflects higher revenues, along with changes in operating expensesexpenses, discussed in the paragraphs below.below, including increased purchased transportation costs associated with higher shipment volumes.

Purchased transportation costs increased $90.7 million, or 2.1 percentage points as a percentage of revenue increased 0.6 percentage points for the three months ended MarchJune 31,30, 2026 and $111.8 million, or 1.3 percentage points as a percentage of revenue for six months ended June 30, 2026, compared to the same prior year period,periods. reflectingIncreases anprimarily increasereflect inhigher purchased transportation costs ofassociated $21.1with millionhigher year-over-year.fuel costs driven by rising diesel prices, as well as increased shipment volumes. Changes in market capacity, fuel cost, and freight mix impact the cost of purchased transportation and may not correspond to the timing of revisions to customer pricing and revenue per shipment. There can be no assurance that we will be able to secure prices from our customers that will allow ussufficient to maintain or improve our margins on the cost of sourcing carrier capacity.

Salaries, wages, and benefits decreased $2.8 million and as a percentage of revenue,revenue decreasedby 1.20.9 percentage points for both the three and six months ended June 30, 2026, compared with the same prior year periods, reflecting primarily the impact of higher revenues. Shipments per employee per day improved 35.3% for the three months ended MarchJune 31,30, 2026, and 30.6%, for the six months ended June 30, 2026, compared to the same prior year period,periods, as thea segmentresult alignedof efforts to align staffing levels with business levels and improvedimprove efficiencies. Shipments per employee per day improved for the three months ended March 31, 2026, compared to the same prior year period, as a result of these efforts,efficiencies, combined with changes in business mix and technology advancements from digital enhancements.

We report financial results in accordance with GAAP. However, management believes that certain non-GAAP financial measures and ratios, such as Asset-Light Adjusted EBITDA, utilized internally to assess core performance offer analysts, investors, and others insights into performance trends by excluding items from operating results that management believes do not reflect our core operating performance. Asset-Light Adjusted EBITDA is used for business planning and as a key performance measure, particularly because it excludes certain significant expenses resulting from strategic decisions or other factors rather than core daily operations, such as amortization of acquired intangibles and software.software, asset impairment charges and changes in the fair value of contingent consideration. Management also believes Asset-Light Adjusted EBITDA to be relevant and useful, as EBITDA is a standard measure commonly reported and widely used by analysts, investors, and others to measure financial performance of asset‑lightasset-light businesses. Our calculation of Asset-Light Adjusted EBITDA may not be comparable to similarly titled measures of other companies as other companies may calculate adjusted EBITDA differently. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for or better measurement than operating income (loss), as determined under GAAP.

The manufacturing sector, as measured by the Purchasing Managers’ Index, expanded in June 2026 for the sixth consecutive month after a period of nearly continuous contraction since November 2022. Although we secured increases on deferred pricing agreements and annually negotiated contracts during the threesix months ended MarchJune 31,30, 2026, there can be no assurance that the economic environment, including the impact of interest rates on consumer demand, or fluctuations in fuel costs, will be favorable for our freight services in future periods.

Given the uncertainties of current economic conditions,uncertainty, 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. Changes in fuel prices can significantly affect our operating expenses, and while we strive to offset these costs through fuel surcharges and pricing strategies, sustained increases may still impact our margins and overall financial performance. There can be no assurance that we will be able to secure adequate prices from new or existing customers to maintain or improve our operating results. Significant declines in our 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 noncash write-off of a significant portion of the goodwill and intangible assets of our Asset-Light segment, which would have an adverse effect on our financial condition and operating results. During second quarter 2026, we recorded an asset impairment charge related to our indefinite-lived Panther trade name within the Asset-Light reporting unit. See Notes B and C to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion of the impairment valuation.

Inflation remains above the Federal Reserve’s long-term target inflation rate of 2%. Elevated costs across a broad array of consumer goods continue to be driven by global supply chain volatility and labor and energy shortages, in addition to the impact of federal monetary policy. The consumer price index increased 3.3%,3.5%, before seasonal adjustment, year-over-year in MarchJune 2026 followingdespite a 0.9%0.4% risedecline from FebruaryMay 2026. Most of our expenses are affected by inflation. While an increase in inflation generally results in increased operating costs, the potential impact of inflationary conditions on our business, including demand for our transportation services, remains uncertain.

Generally, inflationary increases in labor and operating costs related to our Asset-Light operations have historically been offset through price increases and efficiency. Productivity improvements, as measured by shipments per employee per day, and disciplined cost management have helped mitigate the impact of rising operating costs. The pricing environment, however, generally becomes more competitive during economic downturns, which may, as it has in the past, affect the ability to obtain price increases from customers both during and following such periods. The pricing environment remains competitive, andalthough wemarket believeconditions thatimproved Asset-Light pricing has stabilized atduring the bottomfirst half of the truckload market cycle.2026. Tightening capacity in the truckload market during the first quarter of 2026 ledcontributed to higher spot rates as carriers continuecontinued to slowly exit the market drivenfollowing a prolonged period of economic pressure. While freight demand showed signs of improvement, market conditions remained influenced by prolongedsupply-driven economiccapacity pressures. However, demand remains weaktightening, and brokerage margins thin.remained below historical levels.

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,spills, 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.

Our primary sources of liquidity are cash, cash equivalents and short-term investments; cash generated by operations; and available borrowing capacity under our revolving credit facility (“Credit Facility”) or our accounts receivable securitization program (“A/R Securitization”).

Cash, cash equivalents and short-term investments decreasedincreased $37.8$44.2 million from December 31, 2025 to MarchJune 31,30, 2026, primarily due to cash generated from operating activities, partially offset by payments of long-term debt; payments for certain performance-based incentive plans and contributions to our defined contribution plan which were accrued at December 31, 2025; continued efforts to return capital to shareholders through share repurchases and dividends; and planned capital expenditures.

Cash provided by operating activities was $8.5$138.3 million during the threesix months ended MarchJune 31,30, 2026, compared to $23.4$85.0 million of cash usedprovided inby operating activities in the same prior yearprior-year period, anprimarily improvementdue to improved operating performance before noncash asset impairment charges, as discussed further in the Results of $31.9Operations million.section. Changes in operating assets and liabilities, excluding income taxes, decreasedreduced operating cash providedflow by operating activities by $37.2$15.0 million during the threesix months ended MarchJune 31,30, 20262026, driven primarily by anhigher increasebusiness inlevels accounts receivable due tothat increased businessreceivables, levels,partially offset partially by increases in accounts payable and accrued expenses. ChangesIn comparison, changes in operating assets and liabilities,liabilities excludingreduced incomeoperating taxes,cash hadflow aby larger negative impact of $70.5$38.7 million forduring the threesix months ended MarchJune 31,30, 2025, whichprimarily contributeddue to thedecreases improvedin cashaccounts flowpayable year-over-year.and accrued expenses and operating right-of-use assets and lease liabilities, net.

Cash used in investing activities during the three-monthsix periodmonths ended MarchJune 31,30, 2026 wasprimarily impactedreflected by $7.9$16.3 million of capital expenditures, including renovations of properties for our Asset-Based network, net of proceeds from asset sales and financings, includingalong thewith renovation$7.3 million in capitalization of propertiesinternally fordeveloped our Asset-Based network.software. See Capital Expenditures below for estimated annual expenditure amounts for 2026.

Cash used in financing activities was impacted byincluded promissory note payments of $22.3$52.7 million during the threesix months ended MarchJune 31,30, 2026. During the threesix months ended MarchJune 31,30, 2026, we repurchased 85,01192,488 shares of our common stock under our share repurchase program for an aggregate cost of $7.4$8.2 million.million Weand also continued to returnreturned capital to our shareholders with our quarterly dividend payments,payments whichtotaling totaled$5.4 $2.7 million during the three months ended March 31, 2026.million. Our dividends and share repurchase program are further discussed in Other Liquidity below.

We financed the purchase of $22.1$44.4 million of revenue equipment through notes payable during the threesix months ended MarchJune 31,30, 2026. Future payments due under notes payable totaled $238.5$229.2 million, including interest, as of MarchJune 31,30, 2026, a decrease of $1.3$10.6 million from December 31, 2025.

As of MarchJune 31,30, 2026, standby letters of credit of $26.4$25.9 million havewere been issued, including $26.1 million issuedoutstanding under our Credit Facility during the three months ended March 31, 2026 and $0.3 million under our A/R Securitization, which reduced our available borrowing capacity under eachthe program to $223.9$224.1 millionmillion. andIn $49.7May million,2026, respectively.we Ourterminated A/Rour Securitizationaccounts maturesreceivable onsecuritization program prior to the scheduled maturity date of July 1, 2026.

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, service contracts, and other items for which amounts were not accrued in the consolidated balance sheet as of MarchJune 31,30, 2026. These purchase obligations totaled $120.0$93.9 million as of MarchJune 31,30, 2026, with $102.6$76.8 million expected to be paid within the next year, providedsubject thatto vendorsvendor completeperformance of their commitments to us.commitments. As of MarchJune 31,30, 2026, the amount of our purchase obligations increaseddecreased $14.2$11.9 million from December 31, 2025, primarily related to receipt of ABF Freight revenue equipment.

There have been no other material changes in the contractual obligations disclosed in our 2025 Annual Report on Form 10-K during the threesix months ended MarchJune 31,30, 2026. 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 our executive officers or directors.

For 2026, our total capital expenditures, including amounts financed, are estimated to range from $150.0$140.0 million to $170.0$160.0 million, net of proceeds from asset sales. These 2026 estimated net capital expenditures include revenue equipment purchases of $75.0 million to $80.0 million, primarily for our Asset-Based operations and $35.0$25.0 million to $45.0$35.0 million of investments in real estate and facility upgrades to support our growth plans, in addition to other investments across the enterprise, such as technology-related items and miscellaneous dock equipment upgrades and enhancements. We have the flexibility to adjust certain planned 2026 capital expenditures as business levels dictate. Depreciation and amortization expense, excluding amortization of intangibles, is estimated to be approximately $180.0$175.0 million in 2026. The amortization of intangible assets is estimated to be $8.7 million in 2026, primarily related to purchase accounting amortization associated with business acquisitions in our Asset-Light segment.