J B Hunt Transport Services : HUNT J B TRANSPORT SERVICES I…

J B Hunt Transport Services : HUNT J B TRANSPORT SERVICES I…


You should refer to the attached interim Condensed Consolidated Financial
Statements and related notes and also to our Annual Report (Form 10-K) for the
year ended December 31, 2019, as you read the following discussion. We may make
statements in this report that reflect our current expectation regarding future
results of operations, performance, and achievements. These are
"forward-looking" statements as defined in the Private Securities Litigation
Reform Act of 1995, and are based on our belief or interpretation of information
currently available. You should realize there are many risks and uncertainties
that could cause actual results to differ materially from those described. Some
of the factors and events that are not within our control and could have a
significant impact on future operating results are general economic and business
conditions; competition and competitive rate fluctuations; excess capacity in
the intermodal or trucking industries; a loss of one or more major customers;
cost and availability of diesel fuel; interference with or termination of our
relationships with certain railroads; rail service delays; disruptions to U.S.
port-of-call activity; ability to attract and retain qualified drivers, delivery
personnel, independent contractors, and third-party carriers; retention of key
employees; insurance costs and availability; litigation and claims expense;
determination that independent contractors are employees; new or different
environmental or other laws and regulations; volatile financial credit markets
or interest rates; terrorist attacks or actions; acts of war; adverse weather
conditions; national or international health pandemics; disruption or failure of
information systems; operational disruption or adverse effects of business
acquisitions; increased costs for new revenue equipment; increased tariffs
assessed on or disruptions in the procurement of imported revenue equipment;
decreases in the value of used equipment; and the ability of revenue equipment
manufacturers to perform in accordance with agreements for guaranteed equipment
trade-in values. Additionally, our business is somewhat seasonal with slightly
higher freight volumes typically experienced during August through early
November in our full-load transportation business. You should also refer to Part
I, Item 1A of our Annual Report (Form 10-K) for the year ended December 31, 2019
and Part II, Item 1A of this Quarterly Report on Form 10-Q for additional
information on risk factors and other events that are not within our control.
Our future financial and operating results may fluctuate as a result of these
and other risk factors as described from time to time in our filings with the
SEC.



GENERAL



We are one of the largest surface transportation, delivery, and logistics
companies in North America. We operate five distinct, but complementary,
business segments and provide a wide range of transportation and delivery
services to a diverse group of customers throughout the continental United
States, Canada, and Mexico. Our service offerings include transportation of
full-truckload containerized freight, which we directly transport utilizing our
company-controlled revenue equipment and company drivers or independent
contractors. We have arrangements with most of the major North American rail
carriers to transport freight in containers or trailers, while we perform the
majority of the pickup and delivery services. We also provide customized freight
movement, revenue equipment, labor, systems, and delivery services that are
tailored to meet individual customers' requirements and typically involve
long-term contracts. These arrangements are generally referred to as dedicated
services and may include multiple pickups and drops, local and home deliveries,
freight handling, specialized equipment, and freight network design. Our local
and home delivery services typically are provided through a network of
cross-dock service centers throughout the continental United States. Utilizing a
network of thousands of reliable third-party carriers, we also provide
comprehensive transportation and logistics services. In addition to dry-van,
full-load operations, these unrelated outside carriers also 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. We account for our business on a calendar year basis, with
our full year ending on December 31 and our quarterly reporting periods ending
on March 31, June 30, and September 30. The operation of each of our five
business segments is described in Note 10, Business Segments, in our Condensed
Consolidated Financial Statements included in this Quarterly Report on Form
10-Q.




Critical Accounting Policies and Estimates



The preparation of our financial statements in conformity with U.S. GAAP
requires us to make estimates and assumptions that impact the amounts reported
in our Condensed Consolidated Financial Statements and accompanying notes.
Therefore, the reported amounts of assets, liabilities, revenues, expenses and
associated disclosures of contingent liabilities are affected by these
estimates. We evaluate these estimates on an ongoing basis, utilizing historical
experience, consultation with experts, and other methods considered reasonable
in the particular circumstances. Nevertheless, actual results may differ
significantly from our estimates. Any effects on our business, financial
position or results of operations resulting from revisions to these estimates
are recognized in the accounting period in which the facts that give rise to the
revision become known.



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Information regarding our Critical Accounting Policies and Estimates can be
found in our Annual Report (Form 10-K). The critical accounting policies that we
believe require us to make more significant judgments and estimates when we
prepare our financial statements include those relating to self-insurance
accruals, revenue equipment, revenue recognition and income taxes. We have
discussed the development and selection of these critical accounting policies
and estimates with the Audit Committee of our Board of Directors. In addition,
Note 2, Summary of Significant Accounting Policies, to the financial statements
in our Annual Report (Form 10-K) for the year ended December 31, 2019, contains
a summary of our critical accounting policies. There have been no material
changes to the methodology we apply for critical accounting estimates as
previously disclosed in our Annual Report on Form 10-K.



RESULTS OF OPERATIONS



Comparison of Three Months Ended March 31, 2020 to Three Months Ended March 31,
2019



                                         Summary of Operating Segment Results
                                         For the Three Months Ended March 31,
                                                     (in millions)
                                Operating Revenues             Operating Income/(Loss)
                               2020            2019            2020               2019
JBI                          $   1,150$   1,088$      102.2$      103.3
DCS                                542...

Moving & Transportation Services CEO Jonathan Cartu

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