What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-21 compared with 2024-02-23 · 110 added, 63 removed, 729 unchanged (19% of the section changed)

82 unchanged sentences

Third Amended and Restated Management Incentive Plan (incorporated by reference from Exhibit 10.2 of the Company’s current report on Form 8-K, filed April 22, 2019)

Summary of Compensation Arrangements with Named Executive Officers for 2022 (incorporated by reference from Exhibit 99.1 of the Company’s current report on Form 8-K, filed January 24, 2022)

Summary of Compensation Arrangements with Named Executive Officers for 2023 (incorporated by reference from Exhibit 99.1 of the Company’s current report on Form 8-K, filed January 24, 2023)

Amended and Restated Credit Agreement and related documents (incorporated by reference from Exhibit 10.1 of the Company’s current report on Form 8-K, filed October 3, 2022)

Insider Trading Policy of J.B.

Hunt Transport Services, Inc.

Subsidiaries of J.B.

17 unchanged sentences

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Lowell, Arkansas, on the 23rd day of February 2024.

HUNT TRANSPORT SERVICES, INC.

Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on the 23rd day of February 2024, on behalf of the registrant and in the capacities indicated.

Chief Executive Officer,

Member of the Board of Directors

/s/ Shelley Simpson

Shelley Simpson

President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on the 21st day of February 2025, on behalf of the registrant and in the capacities indicated.

/s/ Shelley Simpson

President and Chief Executive Officer

Shelley Simpson

(Principal Executive Officer)

4 unchanged sentences

Chairman of the Board of Directors

Kirk Thompson

Member of the Board of Directors

2 unchanged sentences

Member of the Board of Directors

Wayne Garrison

Member of the Board of Directors

Bryan Hunt, Jr.

1 unchanged sentence

Persio Lisboa

Member of the Board of Directors

Patrick Ottensmeyer

* By /s/ Shelley Simpson

Shelley Simpson

As Attorney-in-Fact Pursuant to Powers of Attorney filed herewith

17 unchanged sentences

PricewaterhouseCoopers LLP’s report on internal control over financial reporting is included herein.

/s/ Shelley Simpson

/s/ John Kuhlow

Chief Executive Officer

Shelley Simpson

President and Chief Executive Officer

Chief Financial Officer,

5 unchanged sentences

Hunt Transport Services, Inc.

and its subsidiaries (the “Company”)

and its subsidiaries

Opinions on the Financial Statements and Internal Control over Financial Reporting

30 unchanged sentences

As described in Note 2 to the consolidated financial statements, the Company maintains insurance coverage for a portion of expenses related to employee injuries, vehicular collisions, accidents and cargo damage which include a level of self-insurance coverage applicable to each claim.

As of December 31, 2023, the Company’s claims accrual balance was $523 million, of which a significant portion of claims related to personal injury and property damage.

As of December 31, 2024, the Company’s current claims accrual balance was $232 million and long-term claims accrual balance was $369 million, of which a significant portion of claims related to personal injury and property damage.

The Company recognizes a liability at the time of the incident based on an analysis of the nature and severity of the claims and analyses provided by third-party claims administrators, as well as legal, economic, and regulatory factors.

40 unchanged sentences

Long-term debt

Long-term claims accruals

Other long-term liabilities

25 unchanged sentences

Salaries, wages and employee benefits

Fuel and fuel taxes

Depreciation and amortization

Fuel and fuel taxes

Operating supplies and expenses

60 unchanged sentences

Proceeds from sale of equipment

Proceeds from sale of investment

Business acquisitions

45 unchanged sentences

To the extent that actual, final outcomes are different from our estimates, or that additional facts and circumstances cause us to revise our estimates, our earnings during that accounting period will be affected.

Revision to Previously Issued Financial Statements

We revised our Consolidated Balance Sheet at December 31, 2023 to correct an error in the classification of our claims accruals and corresponding insurance receivables for claims in excess of self-insurance levels, which are included in other receivables.

This revision resulted in $ 326.9 million of claims accruals previously reported as current liabilities and $ 173.6 million of insurance receivables previously reported in current assets, being classified in long-term claims accruals and other assets, respectively, based on our expectations of the timing of payments and receipt of insurance recoveries.

We also revised our Consolidated Balance Sheet at December 31, 2023 to correct an error in the calculation of our insurance accruals deferred tax asset and correct the associated impacts of this adjustment in the Consolidated Statement of Cash Flows.

This revision resulted in a $ 49.9 million increase in deferred income taxes and other receivables on the Consolidated Balance Sheet at December 31, 2023 as well as corresponding revisions to deferred income taxes and income taxes receivable or payable in our Consolidated Statement of Cash Flows for the year ended December 31, 2023, with no effect on previously reported net cash provided by operating activities.

We evaluated the impact of these items under the guidance of the SEC Staff Accounting Bulletin No.

99, "Materiality," and determined that these errors are not material to our previously issued financial statements.

Accordingly, we have revised the Consolidated Balance Sheet and Consolidated Statement of Cash Flows for the year ended December 31, 2023 included in the accompanying financial statements.

Cash and Cash Equivalents

56 unchanged sentences

ICS performs these services through customer contractual rate quotes as well as spot quotes that are one-time rate quotes issued for a single transaction or group of transactions.

ICS offers the majority of these services through an online multimodal marketplace via J.B.

ICS further offers these services through an online multimodal marketplace via J.B.

Hunt 360°® that matches the right load with the right carrier and the best mode.

60 unchanged sentences

We do not discount our estimated losses.

At December 31, 2023 and 2022, we had an accrual of approximately $ 523 million and $ 427 million, respectively, for estimated claims, which are recorded in claims accruals in our Consolidated Balance Sheets.

At December 31, 2024 and 2023, we had current accruals of approximately $ 232 million and $ 196 million, respectively, and long-term accruals of approximately $ 369 million and $ 327 million, respectively, for estimated claims, which are recorded in claims accruals and long-term claims accruals in our Consolidated Balance Sheets.

A significant increase in the volume of claims or amount of settlements exceeding our coverage-layer specific, aggregated reimbursement limits could result in significant increase in our estimated liability for claims in future periods.

1 unchanged sentence

At December 31, 2024 and 2023, we have recorded $ 429 million and $ 493 million, respectively, of expected reimbursement for covered excess claims, other insurance deposits, and prepaid insurance premiums.

Of these total asset balances, $ 276 million and $ 198 million have been included in other receivables, with the remaining balance included in prepaid expenses and other current assets in our Consolidated Balance Sheets at December 31, 2023 and 2022, respectively.

Of these total asset balances, $ 116 million and $ 102 million have been included in other receivables, $ 121 million and $ 217 million in prepaid expenses and other current assets, and $ 192 million and $ 174 million in other assets in our Consolidated Balance Sheets at December 31, 2024 and 2023, respectively.

Business Combinations

10 unchanged sentences

Intangible assets with finite lives are amortized on the straight-line method over the estimated useful lives of 2 to 15 years.

Recent Accounting Pronouncements

Accounting Pronouncements Adopted in 2024

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting:

Improvements to Reportable Segment Disclosures, which requires disclosure of significant segment expense categories and amounts for each of our reportable segments.

The new standard is effective retrospectively for us on January 1, 2024, for annual periods, and January 1, 2025, for interim periods, with early adoption permitted.

We are currently evaluating the impact of the adoption of this accounting pronouncement on our Consolidated Financial Statements.

The new standard was effective retrospectively for us on January 1, 2024, for annual periods, and January 1, 2025, for interim periods, with early adoption permitted.

We adopted ASU 2023-07 retrospectively in the fourth quarter 2024.

See Note 13, Segment Information in our Consolidated Financial Statements.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes:

3 unchanged sentences

We are currently evaluating the impact of the adoption of this accounting pronouncement on our Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures, which requires public business entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items in the notes to the financial statements.

The new standard is effective prospectively for us on January 1, 2027, for annual periods, and January 1, 2028, for interim periods, with retrospective adoption permitted.

We are currently evaluating the impact of the adoption of this accounting pronouncement on our Consolidated Financial Statements.

Financing Arrangements

11 unchanged sentences

At December 31, 2024, we had $ 280.0 million outstanding on the revolving line of credit and a $ 500.0 million outstanding balance of term loans, at an average interest rate of 5.48 %, under this agreement.

Our senior notes consist of two separate issuances.

The first is $ 250 million of 3.85 % senior notes due March 2024, which was issued in March 2014.

Interest payments under these notes are due semiannually in March and September of each year, beginning September 2014.

The second is $ 700 million of 3.875 % senior notes due March 2026, issued in March 2019.

Our senior notes consist of $ 700 million of 3.875 % senior notes due March 2026, issued in March 2019.

Interest payments under these notes are due semiannually in March and September of each year, beginning September 2019.

Both senior notes were issued by J.B.

These senior notes were issued by J.B.

Hunt Transport Services, Inc., a parent-level holding company with no significant assets or operations.

1 unchanged sentence

All other subsidiaries of the parent are minor.

We registered these offerings and the sale of the notes under the Securities Act of 1933, pursuant to shelf registration statements filed in February 2014 and January 2019.

Both notes are unsecured obligations and rank equally with our existing and future senior unsecured debt.

We registered these offerings and the sale of the notes under the Securities Act of 1933, pursuant to a shelf registration statement filed in January 2019.

These notes are unsecured obligations and rank equally with our existing and future senior unsecured debt.

We may redeem for cash some or all of the notes based on a redemption price set forth in the note indenture.

Our financing arrangements require us to maintain certain covenants and financial ratios.

We were in compliance with all covenants and financial ratios at December 31, 2023.

Our $ 250 million of 3.85 % senior notes matured in March 2024.

The entire outstanding balance was paid in full at maturity.

Our financing arrangements require us to maintain certain financial covenants and ratios.

We were in compliance with all financial covenants and ratios at December 31, 2024.

Capital Stock

38 unchanged sentences

Unvested at December 31, 2024

Unvested at December 31, 2022

Unvested at December 31, 2023

Performance Share Units

3 unchanged sentences

Unvested at December 31, 2024

Unvested at December 31, 2022

Unvested at December 31, 2023

At December 31, 2024, we had $ 57.6 million and $ 27.6 million of total unrecognized compensation expense related to restricted share units and performance share units, respectively, that is expected to be recognized over the remaining weighted average vesting period of approximately 3.0 years for restricted share units and 2.1 years for performance share units.

The aggregate intrinsic value of restricted and performance share units vested during the years ended December 31, 2024, 2023, and 2022, was $ 105.4 million, $ 104.0 million, and $ 94.0 million, respectively.

The aggregate intrinsic value of unvested restricted and performance share units was $ 264.3 million at December 31, 2023.

The aggregate intrinsic value of unvested restricted and performance share units was $ 185.9 million at December 31, 2024, with a remaining weighted average vesting period of approximately 2.9 years.

The total fair value of shares vested for restricted share and performance share units during the years ended December 31, 2024, 2023, and 2022, was $ 83.8 million, $ 73.8 million, and $ 63.1 million, respectively.

8 unchanged sentences

State tax, net of federal effect

Benefit of stock compensation

199/R&D credit, net of FIN 48

Federal 1341 Claim

Nondeductible meals and entertainment

Change in effective state tax rate, net of federal benefit

Total tax expense

64 unchanged sentences

Commitments and Contingencies

At December 31, 2023, we had outstanding commitments of approximately $ 1.3 billion, net of proceeds from sales or trade-ins during 2024 and 2025, which is primarily related to the acquisition of tractors, containers, chassis, and other trailing equipment.

At December 31, 2024, we had outstanding commitments of approximately $ 677 million, net of proceeds from sales or trade-ins, during the years 2025 and 2026, as well as an additional $ 89 million thereafter, which is primarily related to the acquisition of tractors, containers, chassis, and other trailing equipment.

During 2024, we issued financial standby letters of credit as a guaranty of our performance under certain operating agreements and self-insurance arrangements.

28 unchanged sentences

Operating lease expense is recorded in general and administrative expenses, net of asset dispositions in our Consolidated Statements of Earnings.

During the years ended December 31, 2023, 2022, and 2021, a total of $ 159.7 million, $ 213.9 million, and $ 101.9 million of right-of-use assets were obtained in exchange for new operating lease liabilities, of which, $ 9.1 million and $ 28.6 million was obtained through business combinations in 2023 and 2022, respectively.

During the years ended December 31, 2024, 2023, and 2022, a total of $ 78.9 million, $ 159.7 million, and $ 213.9 million of right-of-use assets were obtained in exchange for new operating lease liabilities, of which, $ 9.1 million was obtained through business combinations in 2023.

On September 14, 2023, we entered into an asset purchase agreement to acquire substantially all of the brokerage assets and assume certain specified liabilities of BNSF Logistics, LLC (BNSFL), an affiliate of Burlington Northern Santa Fe, LLC, subject to customary closing conditions.

The closing of the transaction was effective on September 30, 2023, with a purchase price of $ 85.0 million.

Total consideration to be paid in cash under the BNSFL agreement is $ 81.2 million and consists of the agreed upon purchase price adjusted for estimated work capital adjustments.

Total consideration paid in cash under the BNSFL agreement was $ 81.2 million and consisted of the agreed upon purchase price paid in 2023, reduced for estimated working capital adjustments received in 2024.

Transaction costs incurred were not material.

The BNSFL acquisition was accounted for as a business combination and will operate within our Integrated Capacity Solutions business segment.

The BNSFL acquisition was accounted for as a business combination and operates within our ICS business segment.

Assets acquired and liabilities assumed were recorded in our Consolidated Balance Sheet at their estimated fair values, as of the closing date, using cost, market data and valuation techniques that reflect management’s judgment and estimates.

1 unchanged sentence

Goodwill consists of acquiring and retaining the BNSFL existing brokerage network and expected synergies from the combination of operations.

The following table outlines the expected consideration transferred and preliminary purchase price allocation at their respective estimated fair values as of September 30, 2023 (in millions):

Consideration

Accounts receivable

Other current assets

Property and equipment

Right-of-use assets

Accounts payable and accrued liabilities

Lease liabilities

On September 14, 2022, we entered into purchase agreements to acquire substantially all of the assets and assume certain specified liabilities of Alterri Distribution Center, LLC and to acquire all the real property and other assets of related entities (Alterri), subject to customary closing conditions.

15 unchanged sentences

Goodwill and Other Intangible Assets

Total goodwill was $ 134.0 million, $ 120.4 million, and $ 100.5 million at December 31, 2023, 2022, and 2021 respectively.

Total goodwill was $ 134.0 million and $ 134.0 million at December 31, 2024 and 2023, respectively.

At December 31, 2024, $ 111.6 million, $ 13.6 million and $ 8.8 million of our goodwill was assigned to our FMS, ICS, and JBI business segments, respectively.

No impairment losses have been recorded for goodwill as of December 31, 2024.

Prior to the BNSFL acquisition, our intangible assets consisted of those arising from previous business acquisitions within our FMS and JBI segments.

Our intangible assets consisted of those arising from previous business acquisitions within our FMS, ICS, and JBI segments.

Identifiable intangible assets consist of the following (in millions):

8 unchanged sentences

During the years ending December 31, 2024, 2023, and 2022, intangible asset amortization expense was $ 37.0 million, $ 20.5 million and $ 18.2 million, respectively.

During the year ending December 31, 2024, we recorded expense of $ 14.4 million for the impairment of certain customer relationships intangible assets related to the BNSFL acquisition.

Estimated amortization expense for our finite-lived intangible assets is expected to be approximately $ 20.6 million for 2025, $ 19.8 million for 2026, $ 15.5 million for 2027, $ 9.7 million for 2028, and $ 9.5 million for 2029.

7 unchanged sentences

ICS services include flatbed, refrigerated, and expedited, as well as a variety of dry-van and intermodal solutions.

ICS offers the majority of these services through an online multimodal marketplace via J.B.

ICS further offers these services through an online multimodal marketplace via J.B.

Hunt 360 that matches the right load with the right carrier and the best mode.

1 unchanged sentence

FMS provides both asset and non-asset big and bulky delivery and installation services, as well as fulfillment, retail-pooling distributions, and LTL services.

JBT business includes full-load, dry-van freight that is transported utilizing company-owned revenue equipment or third-party carriers utilizing company-owned trailing equipment as well as services through our J.B.

JBT business includes full-load, dry-van freight that is transported using independent contractors or third-party carriers utilizing company-owned trailing equipment as well as services through our J.B.

Hunt 360box program which utilizes the J.B.

2 unchanged sentences

All transactions between reporting segments are eliminated in consolidation.

On January 1, 2023, we transferred the majority of the company owned trucking operations in our JBT business segment to our DCS business segment and transferred our LTL brokerage operations from our ICS business segment to our FMS business segment.

Accordingly, the prior period segment information reported below has been reclassified to conform to the current period presentation.

These reclassifications have no impact on our historical consolidated balance sheets, statements of earnings or cash flows.

Our President and Chief Executive Officer serves as our Chief Operating Decision Maker (CODM) and is responsible for reviewing segment performance and making decisions regarding capital and personnel allocations.

Our measure of profit or loss for segment reporting purposes provided to the CODM is operating income.

The CODM considers operating income budget-to-actual variances on a monthly basis to assess the performance for each of our segments.

Effectively all corporate support expenses are allocated to our operating segments within various expense line items presented.

Assets reported by our corporate support group are not allocated.

Intersegment revenues and corresponding expenses included in our segment reporting are eliminated upon consolidation.

Our customers are geographically dispersed across the United States.

1 unchanged sentence

(Excludes intercompany accounts)

Total segment assets

Other (includes corporate)

Net Capital Expenditures (1)

Years ended December 31,

Total segment revenues

Total segment net capital expenditures

Other (includes corporate)

Revenues and Operating Income/(Loss)

Year ended December 31, 2024

Intersegment Eliminations

Total operating revenues

Operating expenses:

Rents, purchased transportation, and fuel

Salaries, wages and employee benefits

Depreciation and amortization

Operating supplies and expenses

Insurance and claims

General and administrative expenses, net of asset dispositions

Other segment items (2)

Total operating expenses

Operating Income (3)

Years ended December 31,

Depreciation and Amortization Expense

Years ended December 31,

Revenues and Operating Income/(Loss)

Year ended December 31, 2023

Intersegment Eliminations

Total operating revenues

Operating expenses:

Rents, purchased transportation, and fuel

Salaries, wages and employee benefits

Depreciation and amortization

Operating supplies and expenses

Insurance and claims

General and administrative expenses, net of asset dispositions

Other segment items (2)

Total operating expenses

Operating Income (3)

Revenues and Operating Income

Year ended December 31, 2022

Intersegment Eliminations

Total operating revenues

Operating expenses:

Rents, purchased transportation, and fuel

Salaries, wages and employee benefits

Depreciation and amortization

Operating supplies and expenses

Insurance and claims

General and administrative expenses, net of asset dispositions

Other segment items (2)

Total operating expenses

Operating Income (3)

Net capital expenditures report the additions to property and equipment, net of proceeds from the sale of property and equipment.

Other segment items include communication, utilities, and operating taxes and licenses expense items.

Refer to the Consolidated Statements of Earnings for the reconciliation of consolidated operating income to earnings before income taxes.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures