Freightmaster1
TB Legend
- Credits
- 607
David Humphrey
All right. Did you record for the annual union profit-sharing bonus in the second quarter. If so, how much did you record?
David Cobb
David, let me take that again. In the 8-K we released yesterday afternoon with our earnings release, we provided some additional details and information on how this mechanism will work. And I would reiterate some of that information, starting with that the payout could be from 1% to 3% of annual earnings for qualifying union employees. And in estimating that impact, remember to understand that 1% of ABF Freight's annual union employee earnings would equal approximately $5 million to $6 million of bonus -- of union bonus expense. But we internally project a payout of this bonus, we would accrue for that expected annual expense throughout the year and it will be included in our quarterly results. However, as you all know, we don't provide public updates on our projected operating ratio, and so we won't be commenting on our expectations for paying the union bonus. However, if your financial models reflect an operating ratio that meets the bonus payout ratio, then we would encourage you to include expenses for the union bonus in your quarterly and annual earnings projections of our company. And just as a reminder, our Asset-Based operating ratio in the first half of the year was 95.3%.
and
David Humphrey
Okay, we've got a question about whether there was any update from Washington, D.C. on multiemployer pension reform. Judy, you want to take that one?
Judy McReynolds
Sure. Thanks on the number of conversations that we've had with other interested parties, after passing in the house, we believe the likelihood that the Butch Lewis Act will be passed in the Senate is low. We're continuing to work with those other interested parties to explore both the Butch Lewis approach and alternative approaches to address the impending insolvency of many of these pension plans. And we certainly remain hopeful that some solution will be found to address this problem. But we do stay close to these issues, we stay involved in the process and we'll continue to provide updates as we have them.
All right. Did you record for the annual union profit-sharing bonus in the second quarter. If so, how much did you record?
David Cobb
David, let me take that again. In the 8-K we released yesterday afternoon with our earnings release, we provided some additional details and information on how this mechanism will work. And I would reiterate some of that information, starting with that the payout could be from 1% to 3% of annual earnings for qualifying union employees. And in estimating that impact, remember to understand that 1% of ABF Freight's annual union employee earnings would equal approximately $5 million to $6 million of bonus -- of union bonus expense. But we internally project a payout of this bonus, we would accrue for that expected annual expense throughout the year and it will be included in our quarterly results. However, as you all know, we don't provide public updates on our projected operating ratio, and so we won't be commenting on our expectations for paying the union bonus. However, if your financial models reflect an operating ratio that meets the bonus payout ratio, then we would encourage you to include expenses for the union bonus in your quarterly and annual earnings projections of our company. And just as a reminder, our Asset-Based operating ratio in the first half of the year was 95.3%.
and
David Humphrey
Okay, we've got a question about whether there was any update from Washington, D.C. on multiemployer pension reform. Judy, you want to take that one?
Judy McReynolds
Sure. Thanks on the number of conversations that we've had with other interested parties, after passing in the house, we believe the likelihood that the Butch Lewis Act will be passed in the Senate is low. We're continuing to work with those other interested parties to explore both the Butch Lewis approach and alternative approaches to address the impending insolvency of many of these pension plans. And we certainly remain hopeful that some solution will be found to address this problem. But we do stay close to these issues, we stay involved in the process and we'll continue to provide updates as we have them.
