What changed in this filing

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Item 1. Financial Statements

2025-04-25 compared with 2024-10-25 · 160 added, 264 removed, 303 unchanged (58% of the section changed)

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Operating revenues, excluding fuel surcharge revenues

23 unchanged sentences

(in thousands)

September 30, 2024

March 31, 2025

December 31, 2024

8 unchanged sentences

Goodwill and intangible assets, net

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

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Long-term debt

Long-term claims accruals

Other long-term liabilities

Deferred income taxes

Stockholders' equity

Total liabilities and stockholders' equity

Shareholders' equity

Total liabilities and shareholders' equity

See Notes to Condensed Consolidated Financial Statements.

HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Statements of Stockholders' Equity

Condensed Consolidated Statements of Shareholders' Equity

(in thousands, except per share amounts)

Three Months Ended September 30, 2024 and 2023

Stockholders’

Balances at June 30, 2023

Comprehensive income:

Cash dividend declared and paid ($ 0.42 per share)

Purchase of treasury shares

Share-based compensation

Restricted share issuances, net of stock repurchased for payroll taxes and other

Balances at September 30, 2023

Balances at June 30, 2024

Comprehensive income:

Cash dividend declared and paid ($ 0.43 per share)

Purchase of treasury shares

Share-based compensation

Restricted share issuances, net of stock repurchased for payroll taxes and other

Balances at September 30, 2024

Nine Months Ended September 30, 2024 and 2023

Stockholders’

Shareholders’

Balances at December 31, 2023

4 unchanged sentences

Restricted share issuances, net of stock repurchased for payroll taxes and other

Balances at September 30, 2023

Balances at March 31, 2024

Balances at December 31, 2024

4 unchanged sentences

Restricted share issuances, net of stock repurchased for payroll taxes and other

Balances at September 30, 2024

Balances at March 31, 2025

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

3 unchanged sentences

Share-based compensation

Net loss on sale of revenue equipment and other assets

Loss on sale of revenue equipment and other

Deferred income taxes

8 unchanged sentences

Additions to property and equipment

Proceeds from sale of equipment

Proceeds from sale of investment

Business acquisitions

Net proceeds from sale of equipment

Business acquisition

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuances of long-term debt

Payments on long-term debt

23 unchanged sentences

Our business is somewhat seasonal with slightly higher freight volumes typically experienced during August through early November in our full-load freight transportation business.

Summary of Significant Accounting Policies – Property and Equipment

In January 2024, we changed the estimated useful lives of certain trailing equipment used in our Intermodal segment from 20 years to 25 years.

This change did not have a material impact on our financial statements.

Recent Accounting Pronouncements

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 financial statements.

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

1 unchanged sentence

These disclosures will include consistent categories and greater disaggregation of information in the rate reconciliation and require income taxes paid to be disaggregated by jurisdiction as well as additional amendments to improve the effectiveness of income tax disclosures.

The new standard is effective prospectively for us on January 1, 2025, with retrospective adoption permitted.

The new standard is effective prospectively for us on January 1, 2025, for annual periods, with retrospective adoption permitted.

We are currently evaluating the impact of the adoption of this accounting pronouncement on our financial statements.

Recent Disclosure Rules

In March 2024, the SEC adopted new rules that will require registrants to provide certain climate-related information in their registration statements and annual reports.

These rules will require information about our climate-related risks that are reasonably likely to have a material impact on our business, results of operations, or financial condition.

The required information about climate-related risks will also include disclosure of our greenhouse gas emissions.

In addition, the rules will require us to present certain climate-related financial metrics in our audited financial statements.

We are currently evaluating the impact of the adoption of these rules on our financial statements and related disclosures and monitoring the status of the rules while legal challenges are pending.

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 financial statements.

Earnings Per Share

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Diluted earnings per share reflects the potential dilution that could occur if holders of unvested restricted and performance share units converted their holdings into common stock.

The dilutive effect of restricted and performance share units was 0.8 million shares during the three and nine months ended September 30, 2024, compared to 1.1 million and 1.0 million shares during the three and nine months ended September 30, 2023.

The dilutive effect of restricted and performance share units was 0.6 million shares during the three months ended March 31, 2025, compared to 0.9 million shares during the three months ended March 31, 2024.

Share-based Compensation

1 unchanged sentence

Three Months Ended

September 30,

Nine Months Ended

September 30,

Restricted share units:

4 unchanged sentences

Performance share unit expense, net of tax

As of September 30, 2024, we had $ 67.2 million and $ 34.6 million of total unrecognized compensation expense related to restricted share units and performance share units, respectively, that is to be recognized over the remaining weighted average period of approximately 3.0 years for restricted share units and 2.2 years for performance share units.

During the nine months ended September 30, 2024, we issued 104,033 shares for vested restricted share units and 138,115 shares for vested performance share units.

Of this total, 67,173 shares for vested restricted share units and zero shares for vested performance share units were issued during the third quarter 2024.

As of March 31, 2025, we had $ 94.0 million and $ 46.0 million of total unrecognized compensation expense related to restricted share units and performance share units, respectively, that is to be recognized over the remaining weighted average period of approximately 2.7 years for restricted share units and 2.5 years for performance share units.

During the three months ended March 31, 2025, we issued 4,092 shares for vested restricted share units and 84,001 shares for vested performance share units.

Financing Arrangements

Outstanding borrowings, net of unamortized discount and unamortized debt issuance cost, under our current financing arrangements consist of the following (in millions):

September 30, 2024

March 31, 2025

December 31, 2024

3 unchanged sentences

Senior Credit Facility

At September 30, 2024, we were authorized to borrow up to $ 1.5 billion through a revolving line of credit and committed term loans, which is supported by a credit agreement with a group of banks.

At March 31, 2025, we were authorized to borrow through a revolving line of credit, which is supported by a credit agreement with a group of banks.

The revolving line of credit authorizes us to borrow up to $ 1.0 billion under a five-year term expiring September 2027, and allows us to request an increase in the revolving line of credit total commitment by up to $ 300 million and to request two one-year extensions of the maturity date.

The committed term loans authorized us to borrow up to an additional $ 500 million during the nine-month period beginning September 27, 2022, due September 2025, which we exercised in June 2023.

In addition, the credit agreement authorized us to borrow up to an additional $ 500 million through committed term loans during the nine-month period beginning September 27, 2022, due September 2025, which we exercised in June 2023.

The entire outstanding balance of these term loans were paid in full in March 2025.

The applicable interest rates under this agreement are based on either the Secured Overnight Financing Rate (SOFR), or a Base Rate, depending upon the specific type of borrowing, plus an applicable margin and other fees.

At September 30, 2024, we had $ 335 million outstanding on the revolving line of credit and a $ 500 million outstanding balance of term loans, at an average interest rate of 6.07 %, under this agreement.

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

At March 31, 2025, we had $ 139.2 million outstanding on the revolving line of credit, at an average interest rate of 5.33 %, under this agreement.

Our senior notes consist of two separate issuances.

The first is $ 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.

These senior notes were issued by J.B.

The second is $ 750 million of 4.90 % senior notes due March 2030, issued in March 2025.

Interest payments under these notes are due semiannually in March and September of each year beginning September 2025.

Both senior notes were issued by J.B.

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

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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 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 registered these offerings and the sale of the notes under the Securities Act of 1933, pursuant to shelf registration statements filed in January 2019 and February 2023, respectively.

Both 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 $ 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 covenants and financial ratios.

We were in compliance with all covenants and financial ratios at September 30, 2024.

We were in compliance with all covenants and financial ratios at March 31, 2025.

Capital Stock

On July 20, 2022, our Board of Directors authorized the purchase of up to $ 500 million of our common stock.

On August 16, 2024, our Board of Directors authorized the purchase of up to an additional $ 1 billion of our common stock to be effective upon our purchase of the remaining balance under the July 2022 authorization.

At September 30, 2024, the July 2022 authorization was fully exhausted, and $ 967 million of the August 2024 authorization was remaining.

We purchased 2,551,033 shares, or $ 428 million, including applicable taxes, of our common stock under our repurchase authorizations during the nine months ended September 30, 2024, of which 1,200,330 shares, or $ 200 million, including applicable taxes, were purchased in the third quarter 2024.

On July 17, 2024, our Board of Directors declared a regular quarterly dividend of $ 0.43 per common share, which was paid on August 16, 2024, to shareholders of record on August 2, 2024.

On October 17, 2024, our Board of Directors declared a regular quarterly dividend of $ 0.43 per common share, which will be paid on November 22, 2024, to shareholders of record on November 8, 2024.

During the three months ended March 31, 2025, we purchased approximately 1,413,000 shares, or $ 234.1 million of our common stock in accordance with plans authorized by our Board.

At March 31, 2025, we had $ 650.2 million available under an authorized plan to purchase our common stock.

On January 23, 2025, our Board of Directors declared a regular quarterly cash dividend of $ 0.44 , which was paid February 21, 2025, to shareholders of record on February 7, 2025.

On April 24, 2025, our Board of Directors declared a regular quarterly dividend of $ 0.44 per common share, which will be paid on May 23, 2025, to shareholders of record on May 9, 2025.

Fair Value Measurements

3 unchanged sentences

The following assets are measured at fair value on a recurring basis (in millions):

September 30, 2024

March 31, 2025

December 31, 2024

3 unchanged sentences

Financial Instruments

The carrying amount of our senior credit facility and senior notes was $ 1.53 billion and $ 1.58 billion at September 30, 2024 and December 31, 2023, respectively.

The estimated fair value of these liabilities using the income approach (Level 2), based on their net present value, discounted at our current borrowing rate, was $ 1.53 billion and $ 1.57 billion at September 30, 2024 and December 31, 2023, respectively.

The carrying amounts of all other instruments at September 30, 2024, approximate their fair value due to the short maturity of these instruments.

Our effective income tax rate was 25.2 % for the three months ended September 30, 2024, compared to 18.2 % for the three months ended September 30, 2023, which included a discrete income tax benefit.

Our effective income tax rate was 26.8 % for the first nine months of 2024, compared to 23.2 % in 2023.

The carrying amount of our senior credit facility and senior notes was $ 1.58 billion and $ 1.48 billion at March 31, 2025 and December 31, 2024, respectively.

The estimated fair value of these liabilities using the income approach (Level 2), based on their net present value, discounted at our current borrowing rate, was $ 1.60 billion and $ 1.48 billion at March 31, 2025 and December 31, 2024, respectively.

The carrying amounts of all other instruments at March 31, 2025, approximate their fair value due to the short maturity of these instruments.

Our effective income tax rate was 26.5 % for the three months ended March 31, 2025, compared to 28.7 % for the three months ended March 31, 2024.

In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate, adjusted for discrete items.

This rate is based on our expected annual income, statutory tax rates, best estimate of nontaxable and nondeductible items of income and expense, and the ultimate outcome of tax audits.

At September 30, 2024, we had a total of $ 81.4 million in gross unrecognized tax benefits, which are a component of other long-term liabilities on our Condensed Consolidated Balance Sheets.

At March 31, 2025, we had a total of $ 79.5 million in gross unrecognized tax benefits, which are a component of other long-term liabilities on our Condensed Consolidated Balance Sheets.

Of this amount, $ 64.6 million represents the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate.

The total amount of accrued interest and penalties for such unrecognized tax benefits was $ 14.5 million at September 30, 2024.

The total amount of accrued interest and penalties for such unrecognized tax benefits was $ 14.7 million at March 31, 2025.

Commitments and Contingencies

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These policies include a level of self-insurance (deductible) coverage applicable to each claim as well as certain coverage-layer-specific, aggregated reimbursement limits of covered excess claims.

Our claims from time to time exceed some of these existing coverage-layer, aggregated reimbursement limits, and accordingly, we have recorded a liability for the estimated probable exposure for these occurrences.

Our claims from time to time exceed some of these existing coverage layer aggregate reimbursement limits, and accordingly, we have recorded a liability for the estimated probable exposure for these occurrences.

We are involved in certain other claims and pending litigation arising from the normal conduct of business.

Based on present knowledge of the facts and, in certain cases, opinions of outside counsel, we believe the resolution of these claims and pending litigation will not have a material adverse effect on our financial condition, results of operations or liquidity.

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 paid in cash under the BNSFL agreement was $ 81.2 million and consisted of the agreed upon purchase price reduced for estimated work capital adjustments.

Transaction costs incurred were not material.

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

As a result of the acquisition, we recorded approximately $ 38.5 million of definite-lived intangible assets and approximately $ 13.6 million of goodwill.

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

Business Segments

We reported five distinct business segments during the nine months ended September 30, 2024 and 2023.

We reported five distinct business segments during the three months ended March 31, 2025 and 2024.

These segments included Intermodal (JBI), Dedicated Contract Services® (DCS®), Integrated Capacity Solutions (ICS), Final Mile Services® (FMS), and Truckload (JBT).

2 unchanged sentences

(Excludes intercompany accounts)

September 30, 2024

March 31, 2025

December 31, 2024

Other (includes corporate)

Operating Revenues

Three Months Ended

September 30,

Nine Months Ended

September 30,

Inter-segment eliminations

Operating Income/(Loss)

Three Months Ended

September 30,

Nine Months Ended

September 30,

Total segment assets

Other (includes corporate)

Depreciation and Amortization Expense

Three Months Ended

September 30,

Nine Months Ended

September 30,

Net Capital Expenditures (1)

For The Three Months Ended

Total segment net capital expenditures

Other (includes corporate)

Revenues and Operating Income/(Loss)

For The Three Months ended March 31, 2025

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/(Loss)

For The Three Months ended March 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)

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

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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volatile financial credit markets or interest rates;

the impacts of recent or future changes in border or trade policies, including tariffs;

terrorist attacks or actions;

political instability;

adverse weather conditions;

potential business or operational disruptions resulting from the effects of a national or international health pandemic;

disruption or failure of information systems;

inability to keep pace with technological advances affecting our information technology platforms;

potential business or operational disruptions resulting from the effects of a national or international health pandemic;

operational disruption or adverse effects of business acquisitions;

increased costs for and availability of new revenue equipment;

increased tariffs assessed on or disruptions in the procurement of imported revenue equipment;

disruptions in the procurement of domestic or imported revenue equipment;

decreases in the value of used equipment;

13 unchanged sentences

In addition to dry-van, full-load operations, we also arrange for these unrelated outside carriers to provide flatbed, refrigerated, less-than-truckload (LTL), and other specialized equipment, drivers, and services.

Also, we utilize a combination of company-owned and contracted power units to provide traditional over-the-road full truckload delivery services.

Also, we utilize contracted power units to provide traditional over-the-road full truckload delivery services.

Our customers, who include many Fortune 500 companies, have extremely diverse businesses.

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RESULTS OF OPERATIONS

Comparison of Three Months Ended September 30, 2024 to Three Months Ended September 30, 2023

Comparison of Three Months Ended March 31, 2025 to Three Months Ended March 31, 2024

Summary of Operating Segment Results

For the Three Months Ended September 30,

For the Three Months Ended March 31,

(in millions)

3 unchanged sentences

Inter-Segment eliminations

Total consolidated operating revenues were $3.07 billion for the third quarter 2024, a 3% decrease from $3.16 billion in the third quarter 2023.

This decrease was primarily the result of decreased revenue per load in JBI and JBT, lower volumes in ICS, JBT, and DCS, and a decrease in stops in FMS when compared to the third quarter 2023.

These decreases were partially offset by load volume growth in JBI and an increase in ICS revenue per load in the current quarter over the past year.

Total consolidated operating revenue, excluding fuel surcharge revenue, decreased less than 1%.

JBI segment reported revenue of $1.56 billion during the third quarter 2024, which was flat compared to third quarter 2023, resulting from a 5% increase in load volume being fully offset by a 5% decrease in revenue per load, which is determined by the combination of customer rates, fuel surcharges, and freight mix.

The increase in load volumes was primarily driven by increased customer demand, seasonal activity, and rail network improvements.

Transcontinental loads increased 7% and eastern network load volume increased 3% compared to the third quarter 2023.

Revenue per load, excluding fuel surcharge revenue, decreased 2% compared to the third quarter 2023.

JBI segment operating income decreased 13% to $111.8 million in third quarter 2024 from $128.0 million in 2023.

The decrease was primarily due to increased network imbalance and repositioning cost and higher driver wages to meet peak season customer demand as well as increased maintenance and equipment-related costs, higher insurance premium and claims expense, and higher other personnel-related expenses, compared to third quarter 2023.

Total consolidated operating revenues were $2.92 billion for the first quarter 2025, a 1% decrease from $2.94 billion in the first quarter 2024.

This decrease was primarily the result of lower average revenue producing trucks in DCS, decreased stop counts in FMS, lower ICS volumes, and reduced revenue per load in JBT, when compared to the first quarter 2024.

These decreases were partially offset by higher load volumes in JBI in the current quarter.

Total consolidated operating revenue excluding fuel surcharge revenue was relatively flat when compared to the first quarter 2024.

JBI segment revenue increased 5% to $1.47 billion during the first quarter 2025, compared with $1.40 billion in 2024.

Load volumes during the first quarter 2025 increased 8% compared to the same period 2024, partially offset by a 2% decrease in revenue per load, which is determined by the combination of customer rates, fuel surcharges and freight mix.

Eastern network loads increased 13%, while transcontinental load volume increased 4% compared to the first quarter 2024.

Revenue per load excluding fuel surcharge revenue decreased 1% compared to the first quarter 2024.

JBI segment operating income decreased 7%, to $94.4 million in the first quarter 2025, from $101.9 million in 2024.

The decrease is primarily due to lower yields as well as higher driver and non-driver wages and benefits, increased equipment storage costs, and higher insurance claims and premiums expense, when compared to the first quarter 2024.

The current quarter ended with approximately 125,000 units of trailing capacity and 6,400 power units assigned to the dray fleet.

DCS segment revenue decreased 5% to $846 million in the third quarter 2024 from $892 million in 2023.

Productivity, defined as revenue per truck per week, decreased 3% when compared to the third quarter 2023.

Productivity, excluding fuel surcharge revenue, remained flat, primarily due to decreased asset utilization and increased idle equipment, offset by contractual index-based rate increases.

On a net basis, revenue-producing trucks in the fleet at the end of the third quarter 2024 decreased by 498 trucks, or 4%, compared to the prior-year period.

DCS segment operating income decreased 7% to $95.5 million in the third quarter 2024, from $102.4 million in 2023.

The decrease is primarily due to decreased revenue, increased insurance premium and claims expense, and higher new account start-up costs, partially offset by lower maintenance and equipment-related costs, lower bad debt expense, and the maturing of new business onboarded over the past year when compared to the third quarter 2023.

Customer retention rates are approximately 87%, primarily due to fleet downsizing and customer account losses.

ICS segment revenue decreased 7% to $278 million in the third quarter 2024, from $298 million in 2023.

Overall volumes decreased 10% compared to the third quarter 2023, while revenue per load increased 3%, primarily due to higher contractual and spot rates and changes in customer freight mix.

Contractual business represented approximately 62% of total load volume and 61% of total revenue in the third quarter 2024, compared to 68% and 67%, respectively, in 2023.

Approximately $92 million of third quarter 2024 ICS revenue was executed through the Marketplace for J.B.

Hunt 360, compared to $169 million in the third quarter 2023.

ICS segment had an operating loss of $3.3 million in the third quarter 2024, compared to an operating loss of $9.4 million in 2023.

The decrease in operating loss was driven primarily by a 31% increase in gross profit, lower cargo claims expense, and lower personnel-related expenses, partially offset by integration and transition costs related to the purchase of the brokerage assets of BNSF Logistics, LLC (BNSFL).

Gross profit margin increased to 17.9% in the third quarter 2024, compared to 12.8% in 2023, reflecting focused bid season yield management, improved capacity procurement, and certain project-related activity.

ICS’s carrier base decreased 18% compared to third quarter 2023, primarily due to changes in carrier qualification requirements.

FMS segment revenue decreased 3% to $218 million in the third quarter 2024 from $226 million in 2023, primarily due to general weakness in customer demand, partially offset by the addition of multiple new customer contracts implemented over the past year as well as internal efforts to improve revenue quality across certain accounts.

FMS segment operating income decreased to $12.0 million in the third quarter of 2024 compared to $13.0 million in 2023.

This decrease was primarily due to decreased revenue, higher purchased transportation costs and higher insurance premiums expense, partially offset by decreased personnel-related expenses compared to the third quarter 2023.

JBT segment revenue decreased 12% to $173 million in the third quarter 2024, from $196 million in 2023.

Revenue, excluding fuel surcharge revenue, decreased 9% primarily due to a 6% decrease in load volume and a 3% decrease in revenue per load, excluding fuel surcharge revenue, compared to third quarter 2023.

JBT average effective trailer count in third quarter 2024 decreased 2% to 12,588, compared to third quarter 2023.

Trailer turns in third quarter 2024 decreased 4% compared to third quarter 2023, due to weakened overall customer demand.

At the end of third quarter 2024, the JBT power fleet consisted of 1,989 tractors.

JBT segment operating income increased to $8.2 million in 2024, compared with $7.7 million during third quarter 2023.

The increase is primarily due to improved network balance, decreased trailing capacity costs, and overall cost management initiatives, partially offset by higher insurance premiums expense.

DCS segment revenue decreased 4% to $822 million in the first quarter 2025 from $860 million in 2024.

Average revenue producing trucks decreased 5%, however, productivity, defined as revenue per truck per week, increased 2% when compared to the first quarter 2024.

Productivity excluding fuel surcharges increased 4%, primarily due to contractual index-based rate increases and increased utilization of equipment.

DCS segment operating income decreased 14% to $80.3 million in the first quarter 2025, from $93.6 million in 2024.

The decrease is primarily due to decreased revenue, higher insurance claim and premium expense, higher group medical expense, and increased equipment and maintenance costs, partially offset by lower bad debt expense, the maturing of new business onboarded over the past year, and improved productivity when compared to the first quarter 2024.

ICS segment revenue decreased 6% to $268 million in the first quarter 2025, from $285 million in 2024.

Overall volumes decreased 13% compared to the first quarter 2024.

Revenue per load increased 8%, primarily due to higher contractual and spot customer rates as well as changes in customer freight mix compared to first quarter 2024.

Contractual business represented approximately 65% of total load volume and 63% of total revenue in the first quarter 2025, compared to 57% and 59%, respectively, in 2024.

ICS segment had an operating loss of $2.7 million in the first quarter 2025, compared to an operating loss of $17.5 million in 2024.

The improvement in operating performance is primarily due to a 1% increase in gross profit, decreased personnel- related and cargo claims expense, lower technology costs, and a reduction in integration and transition costs related to the 2023 purchase of the brokerage assets of BNSF Logistics, LLC.

Gross profit margin increased to 15.3% in the first quarter 2025, compared to 14.3% in 2024.

ICS’s carrier base decreased 3% compared to the first quarter 2024, primarily due to changes in carrier qualification requirements.

FMS segment revenue decreased 12% to $201 million in the first quarter 2025 from $229 million in 2024, primarily due to decreased customer demand, slightly offset by the addition of multiple new customer contracts implemented over the past year and internal efforts to improve revenue quality across certain accounts.

FMS segment operating income decreased 69% to $4.7 million in the first quarter 2025 compared to $15.1 million in 2024.

This decrease was primarily due to decreased revenue, higher insurance premium and claims expense as well as a $3.1 million benefit from a prior year claim settlement present in the first quarter of 2024.

The decrease was partially offset by lower facility rental expense and lower personnel- related costs compared to the first quarter 2024.

JBT segment revenue totaled $167 million for the first quarter 2025, a decrease of 7% from $178 million in first quarter 2024.

Revenue excluding fuel surcharge revenue decreased 4% primarily due to a 6% decrease in revenue per load excluding fuel surcharge revenue, partially offset by a 2% increase in load volume compared to first quarter 2024.

Trailer turns in the first quarter 2025 increased 9% compared to first quarter 2024 due to increased asset utilization and improvements in network balance and velocity.

JBT average effective trailer count decreased to 12,096 in the first quarter 2025, compared to 12,891 in 2024.

At the end of the first quarter 2025, the JBT power fleet consisted of 1,852 tractors, compared to 1,933 tractors in 2024.

JBT segment operating income increased 66% to $2.0 million in 2025, compared with $1.2 million during first quarter 2024.

This increase was primarily due to decreased casualty and cargo claims expense, lower personnel-related expenses, and a continued focus on cost management and productivity.

Consolidated Operating Expenses

The following table sets forth items in our Condensed Consolidated Statements of Earnings as a percentage of operating revenues and the percentage increase or decrease of those items as compared with the prior period.

Three Months Ended September 30,

Three Months Ended March 31,

Dollar Amounts as a

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Earnings before income taxes

Total operating expenses decreased 2.7%, while operating revenues decreased 3.0% during the third quarter 2024 from the comparable period 2023.

Operating income decreased to $224.1 million during the third quarter 2024 from $241.7 million in 2023.

Rents and purchased transportation costs decreased 4.4% in the third quarter 2024.

This decrease was primarily the result of a decrease in rail and truck carrier purchased transportation rates within JBI, ICS, and JBT segments and decreased ICS and JBT load volumes, which decreased services provided by third-party rail and truck carriers during the third quarter 2024 compared to 2023.

Salaries, wages and employee benefits costs increased 0.8% during the third quarter 2024, compared with 2023.

This increase was primarily due to increased group medical benefit expenses, partially offset by a decrease in non-driver employee headcounts.

Depreciation and amortization expense increased 0.1% in third quarter 2024 compared with 2023, primarily due to the addition of trailing equipment within JBI and additional depreciation and amortization expense resulting from the recent business acquisition, partially offset by the impact of the change in expected useful lives of our container fleet and equipment reductions within DCS.

Fuel costs decreased 19.0% in the third quarter 2024, compared with 2023, due primarily to a decrease in the price of fuel and decreased road miles.

Operating supplies and expenses decreased 2.3%, driven primarily by decreased tolls expense, lower towing costs, and decreased other operating supply costs, partially offset by higher equipment maintenance costs.

Insurance and claims expenses increased 25.2% in 2024 compared with 2023, primarily due to higher insurance policy premiums expense.

General and administrative expenses increased 4.3% for the current quarter from the comparable period in 2023, primarily due to higher building and yard rental expense and increased professional services expense, partially offset by a decrease in net loss from sale or disposal of assets and lower bad debt expense.

Net loss from sale or disposal of assets was $0.8 million in 2024, compared to a net loss from sale or disposal of assets of $7.7 million in 2023.

Net interest expense increased 64.9% in 2024 due to an increase in effective interest rates on our debt and an increase in our average debt balance compared to third quarter 2023.

In addition, third quarter 2023 interest expense included an interest component of a discrete income tax benefit recognized in the quarter.

Income tax expense increased 23.0% in 2024, compared with 2023, primarily due to a higher effective income tax rate in the third quarter 2024 compared with 2023, which included the recording of a discrete benefit, partially offset by lower taxable earnings.

Our effective income tax rate was 25.2% for the third quarter of 2024, compared to 18.2% in 2023.

Our annual tax rate for 2024 is expected to be approximately 24.5.%.

In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate, adjusted for discrete items.

This rate is based on our expected annual income, statutory tax rates, best estimate of nontaxable and nondeductible items of income and expense, and the ultimate outcome of tax audits.

Comparison of Nine Months Ended September 30, 2024 to Nine Months Ended September 30, 2023

Summary of Operating Segment Results

For the Nine Months Ended September 30,

(in millions)

Operating Revenues

Operating Income/(loss)

Other (includes corporate)

Inter-segment eliminations

Total consolidated operating revenues were $8.94 billion for the first nine months of 2024, a 6% decrease from $9.53 billion for the comparable period 2023.

Fuel surcharge revenue decreased to $1.16 billion during the first nine months of 2024, compared with $1.39 billion in 2023.

Total consolidated operating revenue, excluding fuel surcharge revenue, decreased 5% for the first nine months of 2024 compared to the prior-year period.

JBI segment revenue decreased 5% to $4.36 billion during the first nine months of 2024, compared with $4.58 billion in 2023.

Load volume during the first nine months of 2024 increased 1% and revenue per load decreased 6%, compared to a year ago.

Revenue per load, excluding fuel surcharge revenue, decreased 5% compared to the first nine months of 2023.

JBI segment operating income decreased 29% to $312.9 million in the first nine months of 2024, from $439.5 million in 2023.

The decrease is primarily due to decreased revenue and higher driver wages and benefits, increased maintenance and equipment-related costs, and higher insurance premiums expense.

DCS segment revenue decreased 4% to $2.56 billion during the first nine months of 2024, from $2.66 billion in 2023.

Productivity, defined as revenue per truck per week, decreased 2% from a year ago.

Productivity, excluding fuel surcharge revenue, for the first nine months of 2024 decreased 1% from a year ago.

The decrease in productivity was primarily due to decreased utilization of equipment, partially offset by contractual index-based rate increases during the current period.

Operating income of our DCS segment decreased to $285.6 million in the first nine months of 2024, from $318.6 million in 2023.

The decrease is primarily due to decreased revenue, higher insurance premiums expense, and higher new account start-up costs, partially offset by decreased equipment-related costs, lower personnel costs, decreased loss on equipment sales, and the maturing of new business onboarded over the past year, when compared to the first nine months of 2023.

ICS revenue decreased 19% to $834 million during the first nine months of 2024, from $1.03 billion in 2023.

Overall volumes decreased 20%, while revenue per load increased 1% compared to 2023.

Approximately $302 million of ICS revenue for the first nine months of 2024 was executed through the Marketplace for J.B.

Hunt 360 compared to $644 million in 2023.

ICS segment had an operating loss of $34.1 million in the first nine months of 2024 compared to an operating loss of $19.2 million in 2023, primarily due to decreased gross profit and integration and transition costs related to the purchase of the brokerage assets of BNSFL.

These items were partially offset by lower salary, wages, and benefits expenses and reduced equipment rental expense during the first nine months of 2024.

Gross profit margin increased to 15.7% in the current period compared to 13.1% in 2023, reflecting our focused bid season yield management and improved capacity procurement.

FMS revenue increased 1% to $683 million during the first nine months of 2024, from $675 million in 2023, primarily due to the addition of multiple new customer contracts implemented over the past year, partially offset by internal efforts to improve revenue quality across certain accounts and general weakness in customer demand.

FMS segment had operating income of $46.9 million in the first nine months of 2024 compared to $34.4 million in 2023.

This increase was primarily due to increased revenue and decreased personnel expenses as well as a $4.2 million net benefit from offsetting claim settlements, partially offset by higher insurance premiums expense compared to the first nine months of 2023.

JBT segment revenue decreased 13% to $519 million for the first nine months of 2024, from $594 million in 2023.

Revenue, excluding fuel surcharge revenue, decreased 12%, primarily due to a 5% decrease in revenue per load, excluding fuel surcharge revenue, and a 7% decrease in load volume compared to the first nine months of 2023.

Operating income of our JBT segment decreased to $12.9 million in the first nine months of 2024, from $16.5 million in 2023.

The decrease in operating income was driven primarily by the decrease in revenue and higher insurance premiums expense, partially offset by overall cost management initiatives.

Consolidated Operating Expenses

Nine Months Ended September 30,

Dollar Amounts as a

Percentage of Total

Operating Revenues

Percentage Change

of Dollar Amounts

Between Periods

Total operating revenues

Operating expenses:

Rents and purchased transportation

Salaries, wages and employee benefits

Depreciation and amortization

Fuel and fuel taxes

Operating supplies and expenses

Insurance and claims

General and administrative expenses, net of asset dispositions

Operating taxes and licenses

Communication and utilities

Total operating expenses

Operating income

Net interest expense

Earnings before income taxes

Total operating expenses decreased 4.8%, while operating revenues decreased 6.1%, during the first nine months of 2024, from the comparable period of 2023.

Operating income decreased to $624.2 million during the first nine months of 2024, from $789.9 million in 2023.

Rents and purchased transportation costs decreased 8.8% in 2024.

This decrease was primarily the result of a decrease in rail and truck carrier purchased transportation rates within JBI, ICS, and JBT segments and decreased ICS and JBT load volume, which decreased services provided by third-party rail and truck carriers during the current period.

Salaries, wages and employee benefits costs decreased 1.2% in 2024 from 2023.

This decrease was primarily due to a decrease in driver and office employee headcounts, partially offset by an increase in group medical benefit expenses.

Depreciation and amortization expense increased 2.2% in 2024 primarily due to equipment purchases related to the addition of tractors and trailing equipment within JBI and additional depreciation and amortization expense resulting from the recent business acquisition, partially offset by the impact of the change in expected useful lives of our container fleet and equipment reductions within DCS.

Total operating expenses decreased 0.3%, while operating revenues decreased 0.8% during the first quarter 2025, from the comparable period 2024.

Operating income decreased to $178.7 million during the first quarter 2025 from $194.4 million in 2024.

Rents and purchased transportation costs increased 1.0% in the first quarter 2025.

This increase was primarily the result of increased JBI load volume, which increased services provided by third-party rail carriers during the first quarter 2025 compared to 2024.

Salaries, wages and employee benefits costs decreased 1.0% during the first quarter 2025, compared with 2024.

This decrease was primarily due to a decrease in employee headcounts, partially offset by an increase in group medical benefit expenses and wage increases.

Depreciation and amortization expense decreased 1.9% in the first quarter 2025, primarily due to the reduction in overall truck and tractor counts, lower depreciation of information systems, and the change in expected useful lives of our chassis fleet, partially offset by higher intermodal container counts.

Fuel costs decreased 7.8% in 2025, compared with 2024, due primarily to a decrease in the price of fuel and decreased road miles.

Operating supplies and expenses decreased 4.4% primarily due to lower equipment maintenance costs, decreased towing expenses, lower tolls expense, decreased other operating supply costs, and lower travel and entertainment expenses.

Insurance and claims expense increased 15.5% in 2024 compared with 2023, primarily due to higher insurance policy premium expense, partially offset by decreased cost per claim and lower claim volume in the current period.

General and administrative expenses increased 17.0% from the comparable period in 2023, primarily due to an increase in building and yard rental expense, higher professional services expense, increased technology costs, and higher bad debt expense, partially offset by lower advertising costs and lower net losses from sale or disposal of assets.

Net loss from sale or disposal of assets was $13.3 million in 2024, compared to a net loss from sale or disposal of assets of $17.2 million in 2023.

Net interest expense increased 34.8% in 2024, due primarily to an increase in effective interest rates on our debt and an increase in our average debt balance.

Income tax expense decreased 12.1% during the first nine months of 2024 compared with 2023, primarily due to decreased taxable earnings, partially offset by a higher effective income tax rate in the first nine months of 2024.

Our effective income tax rate was 26.8% for the first nine months of 2024, compared to 23.2% in 2023 due to discrete tax items.

Our annual tax rate for 2024 is expected to be approximately 24.5.%.

Operating supplies and expenses increased 0.4%, driven primarily by higher equipment maintenance costs and increased tire expense partially offset by lower travel and entertainment expenses and towing costs.

Insurance and claims expense increased 12.3% in 2025 compared with 2024, primarily due to higher claim severity, increased insurance policy premiums expense, and a $3.1 million benefit from a prior year claim settlement present in the first quarter of 2024, partially offset by lower claim volume.

General and administrative expenses decreased 5.0% for the current quarter from the comparable period in 2024, primarily due to decreased professional services expense, lower bad debt expense, and lower building lease expense.

Net loss from sale or disposal of assets was $6.5 million in 2025, compared to $7.3 million in 2024.

Net interest expense increased 18.8% in 2025 due to a higher debt balance and decreased interest income compared to first quarter 2024.

Income tax expense decreased 17.3% in 2025, compared with 2024, primarily due to lower taxable earnings and a lower effective income tax rate.

Our effective income tax rate decreased to 26.5% for the first quarter 2025, compared with 28.7% for the first quarter 2024, due to discrete tax items.

Our annual tax rate for 2025 is expected to be between 24.0% and 25.0%.

In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate, adjusted for discrete items.

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Liquidity and Capital Resources

Net cash provided by operating activities totaled $1.17 billion during the first nine months of 2024, compared with $1.53 billion for the same period 2023.

Net cash provided by operating activities totaled $404.2 million during the first quarter 2025, compared with $466.5 million for the same period 2024.

Operating cash flows decreased primarily due to decreased earnings, partially offset by the timing of general working capital activities.

Net cash used in investing activities totaled $477.5 million in 2024, compared with $1.40 billion in 2023.

The decrease resulted primarily from a decrease in equipment purchases, net of proceeds from the sale of equipment in the current period.

Net cash used in investing activities totaled $225.1 million in 2025, compared with $162.4 million in 2024.

The increase resulted primarily from an increase in real estate acquisitions and equipment purchases, net of proceeds from the sale of equipment during the first quarter 2025.

Net cash used in financing activities was $182.7 million in 2025, compared with $293.2 million in 2024.

This increase resulted primarily from the retirement of long-term debt that matured in the first quarter of 2024 and an increase in treasury stock purchased during the current period.

This decrease resulted primarily from the proceeds of our issuance in March 2025 of $750 million in senior notes, partially offset by the use of a portion of those proceeds to retire our $500 million of term loans in March 2025 as well as an increase in treasury stock purchases.

Our need for capital has typically resulted from the acquisition of containers and chassis, trucks, tractors, and trailers required to support our growth and the replacement of older equipment as well as periodic business acquisitions and real estate transactions.

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We have also periodically utilized operating leases to acquire revenue equipment.

For our senior credit facility term loans maturing in 2025, it is our intent to pay the entire outstanding balances in full, on or before the maturity dates, using our existing cash balance, revolving line of credit or other sources of long-term financing.

For our senior notes maturing in 2026, it is our intent to pay the entire outstanding balances in full, on or before the maturity dates, using our existing cash balance, senior revolving line of credit or other sources of long-term financing.

We believe our liquid assets, cash generated from operations, and revolving line of credit will provide sufficient funds for our operating and capital requirements for the foreseeable future.

At September 30, 2024 we were authorized to borrow up to $1.5 billion through a revolving line of credit and committed term loans, which is supported by a credit agreement with a group of banks.

At March 31, 2025, we were authorized to borrow through a revolving line of credit, which is supported by a credit agreement with a group of banks.

The revolving line of credit authorizes us to borrow up to $1.0 billion under a five-year term expiring September 2027, and allows us to request an increase in the revolving line of credit total commitment by up to $300 million and to request two one-year extensions of the maturity date.

The committed term loans authorized us to borrow up to an additional $500 million during the nine-month period beginning September 27, 2022, due September 2025, which we exercised in June 2023.

In addition, the credit agreement authorized us to borrow up to an additional $500 million through committed term loans during the nine-month period beginning September 27, 2022, due September 2025, which we exercised in June 2023.

The entire outstanding balance of these term loans were paid in full in March 2025.

At September 30, 2024, we had a cash balance of $120.0 million.

Under our senior credit facility, we had a $335 million outstanding balance on the revolving line of credit and a $500 million outstanding balance of term loans at an average interest rate of 6.07%.

At March 31, 2025, we had a $139.2 million outstanding balance under our senior credit facility, at an average interest rate of 5.33% and a cash balance of $43.4 million

We continue to evaluate the possible effects of current economic conditions and reasonable and supportable economic forecasts on operational cash flows, including the risks of declines in the overall freight market and our customers' liquidity and ability to pay.

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

At September 30, 2024, we were compliant with all covenants and financial ratios.

Our net capital expenditures were approximately $488.1 million during the first nine months of 2024, compared with $1.32 billion for the same period 2023.

At March 31, 2025, we were compliant with all covenants and financial ratios.

Our net capital expenditures were approximately $225.1 million during the first three months of 2025, compared with $166.2 million for the same period 2024.

Our net capital expenditures include net additions to revenue equipment and non-revenue producing assets that are necessary to contribute to and support the future growth of our various business segments.

Capital expenditures in 2024 were primarily for tractors, intermodal containers and chassis and other trailing equipment.

We expect to spend approximately $625 million for net capital expenditures during the full calendar year 2024.

We are currently committed to spend approximately $385 million, net of proceeds from sales or trade-ins, during the years 2024 and 2025, as well as an additional $237 million thereafter.

These expenditures will relate primarily to the acquisition of tractors, containers and chassis, and other trailing equipment.

At September 30, 2024, our aggregate future minimum lease payments under operating lease obligations totaled $370 million, related primarily to the rental of maintenance and support facilities, cross-dock and delivery system facilities, office space, parking yards, and equipment.

Capital expenditures in the first quarter 2025 were primarily for tractors, trailing equipment and related enhancements, and real estate.

We expect to spend in the range of $500 million to $700 million for net capital expenditures during the full calendar year 2025.

We are currently committed to spend approximately $301 million, net of proceeds from sales or trade-ins, during the years 2025 and 2026.

At March 31, 2025, our aggregate future minimum lease payments under operating lease obligations related primarily to the rental of maintenance and support facilities, cross-dock and delivery system facilities, office space, parking yards, and equipment totaled $340.7 million.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements, other than our net purchase commitments of $622 million, as of September 30, 2024.

We had no off-balance sheet arrangements, other than our net purchase commitments of $301 million, as of March 31, 2025.

You should refer to Part I, Item 1A of our Annual Report (Form 10-K) for the year ended December 31, 2024, under the caption “Risk Factors” for specific details on the following factors and events that are not within our control and could affect our financial results.

Risks Related to Our Industry

Our business is significantly impacted by economic conditions, customer business cycles, and seasonal factors.

Our business can be significantly impacted by economic conditions, customer business cycles, government policies, and seasonal factors.

Extreme or unusual weather conditions can disrupt our operations, impact freight volumes, and increase our costs, all of which could have a material adverse effect on our business results.

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Compliance with environmental requirements could result in significant expenditures and the violation of these regulations could result in substantial fines or penalties.

We depend on third parties in the operation of our business.

We depend on third parties in the operation of our business, particularly rail service providers, transportation equipment manufacturers, third party carriers and independent contractors.

Rapid changes in fuel costs could impact our periodic financial results.

2 unchanged sentences

Difficulty in attracting and retaining drivers and delivery personnel could affect our profitability and ability to grow.

Our business is significantly impacted by the effects of national or international health pandemics on general economic conditions and the operations of our customers and third-party suppliers and service providers.

We operate in a competitive and highly fragmented industry.

Numerous factors could impair our ability to maintain our current profitability and to compete with other carriers and private fleets.

Our business can be significantly impacted by the effects of national or international health pandemics on general economic conditions and the operations of our customers and third-party suppliers and service providers.

Risks Related to Our Business

2 unchanged sentences

We may be subject to litigation claims that could result in significant expenditures.

We rely significantly on our information technology systems, a disruption, failure or security breach of which or inability to keep pace with technological advances could have a material adverse effect on our business.

We rely significantly on our information technology systems, a disruption, failure or security breach of which or an inability to keep pace with technological advances could have a material adverse effect on our business.

Acquisitions or business combinations may disrupt or have a material adverse effect on our operations or earnings.

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-Q

Item 1. Financial Statements