J.B. Hunt Transport Services (JBHT) 10-K risk factor changes: FY2020 vs FY2019

As of December 31, [removed: 2019,] [added: 2020,] we had no derivative financial instruments to reduce our exposure to fuel-price fluctuations.

We have policies in place for [removed: 2020] [added: 2021] with substantially the same terms as our [removed: 2019] [added: 2020] policies for personal injury, property damage, workers’ compensation, and cargo loss or damage.

For the calendar year ended December 31, [removed: 2019,] [added: 2020,] our top 10 customers, based on revenue, accounted for approximately [removed: 32%] [added: 37%] of our revenue.

Difficulty in attracting and retaining [removed: drivers and delivery personnel could] [added: drivers and delivery personnel could] affect our profitability and ability to grow.

Our inability to defend ourselves against a significant litigation [removed: claim,] [added: claim] could have a material adverse effect on our financial results.

We have also invested significantly in the development of our Marketplace for J.B. Hunt [removed: 360] [added: 360°] online freight matching platform, through which we are generating an increasing amount of revenue.

Each of our information technology systems may be susceptible to various interruptions, including equipment or network failures, failed upgrades or replacement of software, user error, power outages, natural disasters, cyber-attacks, [added: theft or misuse of data,] terrorist attacks, computer viruses, hackers, or other security breaches.

We operate in a competitive [removed: and highly fragmented] [added: and highly fragmented] industry.

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

Our business could be materially impacted if and to the extent that we are unable to succeed in addressing any of these risks or other problems encountered in connection with an acquisition or business [removed: combination,] [added: combination involving FMS or other segments,] many of which cannot be presently identified.

_Risk__s R__elated to Our Industry_

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.

Our operations can be heavily impacted by the effects of a widespread outbreak of contagious disease, principally the recent outbreak of the COVID-19 virus.

This virus has spread throughout multiple countries, including the United States, and in March 2020, the World Health Organization designated COVID-19 as a pandemic.

The effects of COVID-19 have and may continue to disrupt or restrict the freight shipping activities of some of our customers, on which our business is dependent.

In addition, adverse economic conditions caused by COVID-19 may also require us to increase our reserve for bad debt losses.

Furthermore, the continuation of COVID-19 related social and economic disruptions may lead to other events which could negatively impact our operations including service limitations of our third-party purchased transportation providers, reduced availability of drivers and other key employees, disruptions in the procurement of revenue equipment, restrictions at U.S. ports of call, excess capacity or rate reductions within the intermodal or trucking industries, inability of suppliers to continue activities, or volatile financial credit markets.

The extent to which the COVID-19 outbreak will impact general economic and business conditions is highly uncertain and unpredictable; however, any of these factors could have a significant adverse effect on our financial condition and results of operations.

_Risk__s Related to Our Business_

One customer accounted for approximately 10% of our total revenue for the year ended December 31, 2020.

We also could experience an inability to keep pace with technological advances, resulting in our information technology platforms becoming obsolete or our competitors developing related or similar service offerings more effective than ours.

A substantial portion of the growth of our FMS segment has resulted from strategic acquisitions, and our future growth strategy for FMS and possibly other operating segments may involve the acquisition of one or more businesses.

For [removed: 2017 and] 2018, we were self-insured for $500,000 per occurrence for personal injury and property damage and self-insured for $100,000 per workers’ compensation claim.

For [removed: 2019,] [added: 2019 and 2020,] we were self-insured for $500,000 per occurrence for personal injury and property damage and fully insured for workers’ compensation claims for nearly all states.

We have policies in place for [removed: 2020] [added: 2021] with substantially the same terms as our [removed: 2019] [added: 2020] policies for personal injury, property damage, workers’ compensation, and cargo loss or damage.

At December 31, [removed: 2019,] [added: 2020,] we had an accrual of approximately [removed: $263] [added: $257] million for estimated claims.

At December 31, [removed: 2019,] [added: 2020,] we have recorded [removed: $281] [added: $304] million of expected reimbursement for covered excess claims, other insurance deposits, and prepaid insurance premiums.

We have not identified any impairment to our assets at December 31, [removed: 2019.][added: 2020.]

Our trade accounts receivable includes [removed: amounts due from customers that have been] [added: accounts receivable] reduced by an allowance for uncollectible [removed: accounts and revenue adjustments.][added: accounts.]

| | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2019] [added: 2020] vs. [removed: 2018] [added: 2019] | | | | [removed: 2018] [added: 2019] vs. [removed: 2017] [added: 2018] | | |

| Operating revenues | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | [removed: 6.4] [added: 5.1] | % | | | [removed: 19.8] [added: 6.4] | % |

| Rents and purchased transportation | | | [removed: 49.4] [added: 51.4] | | | | [removed: 51.5] [added: 49.4] | | | | [removed: 50.8] [added: 51.5] | | | | [removed: 2.1] [added: 9.4] | | | | [removed: 21.5] [added: 2.1] | |

| Salaries, wages and employee benefits | | | [removed: 23.7] [added: 24.4] | | | | [removed: 22.4] [added: 23.7] | | | | 22.4 | | | | [removed: 12.5] [added: 8.3] | | | | [removed: 19.8] [added: 12.5] | |

| Depreciation and amortization | | | [removed: 5.4] [added: 5.5] | | | | [removed: 5.1] [added: 5.4] | | | | [removed: 5.3] [added: 5.1] | | | | [removed: 14.5] [added: 5.7] | | | | [removed: 13.7] [added: 14.5] | |

| Fuel and fuel taxes | | | [removed: 5.1] [added: 3.7] | | | | [removed: 5.3] [added: 5.1] | | | | [removed: 4.8] [added: 5.3] | | | | [removed: 0.9] [added: (22.8] | [added: )] | | | [removed: 32.1] [added: 0.9] | |

| Operating supplies and expenses | | | [removed: 3.6] [added: 3.5] | | | | [removed: 3.5] [added: 3.6] | | | | [removed: 3.6] [added: 3.5] | | | | [removed: 9.7] [added: 0.4] | | | | [removed: 18.0] [added: 9.7] | |

| General and administrative expenses, net of asset dispositions | | | [removed: 2.1] [added: 1.8] | | | | [removed: 1.8] [added: 2.1] | | | | 1.8 | | | | [removed: 17.6] [added: (6.2] | [added: )] | | | [removed: 29.7] [added: 17.6] | |

| Insurance and claims | | | [removed: 1.7] [added: 1.4] | | | | [removed: 1.5] [added: 1.7] | | | | [removed: 1.7] [added: 1.5] | | | | [removed: 21.5] [added: (14.5] | [added: )] | | | [removed: 4.7] [added: 21.5] | |

| Operating taxes and licenses | | | 0.6 | | | | 0.6 | | | | 0.6 | | | | [removed: 8.3] [added: (1.8] | [added: )] | | | [removed: 14.0] [added: 8.3] | |

| Communication and utilities | | | [removed: 0.4] [added: 0.3] | | | | 0.4 | | | | [removed: 0.3] [added: 0.4] | | | | [removed: 12.6] [added: (3.7] | [added: )] | | | [removed: 28.9] [added: 12.6] | |

| Total operating expenses | | | [removed: 92.0] [added: 92.6] | | | | [removed: 92.1] [added: 92.0] | | | | [removed: 91.3] [added: 92.1] | | | | [removed: 6.3] [added: 5.8] | | | | [removed: 20.8] [added: 6.3] | |

| Operating income | | | [removed: 8.0] [added: 7.4] | | | | [removed: 7.9] [added: 8.0] | | | | [removed: 8.7] [added: 7.9] | | | | [removed: 7.8] [added: (2.8] | [added: )] | | | [removed: 9.2] [added: 7.8] | |

| Net interest expense | | | [removed: 0.6] [added: 0.5] | | | | [removed: 0.5] [added: 0.6] | | | | [removed: 0.4] [added: 0.5] | | | | [removed: 31.7] [added: (11.0] | [added: )] | | | [removed: 40.8] [added: 31.7] | |

| Earnings before income taxes | | | [removed: 7.4] [added: 6.9] | | | | 7.4 | | | | [removed: 8.3] [added: 7.4] | | | | [removed: 6.3] [added: (2.2] | [added: )] | | | [removed: 7.7] [added: 6.3] | |

| Income taxes | | | [removed: 1.8] [added: 1.6] | | | | [removed: 1.7] [added: 1.8] | | | | [removed: (1.2] [added: 1.7] | [removed: )] | | | [removed: 8.8] [added: (2.8] | [added: )] | | | [removed: 266.1] [added: 8.8] | |

| Net earnings | | | [removed: 5.6] [added: 5.3] | % | | | [removed: 5.7] [added: 5.6] | % | | | [removed: 9.5] [added: 5.7] | % | | | [removed: 5.5] [added: (2.0] | [removed: %] [added: )%] | | | [removed: (28.7] [added: 5.5] | [removed: %)] [added: %] |

[removed: 2019] [added: 2020] Compared With [removed: 2018][added: 2019]

This increase was primarily related to increases in driver pay and office personnel compensation due to [added: a tighter supply of qualified drivers and] an increase in the number of employees [removed: and a tighter supply] [added: as well as higher cost] of [removed: qualified drivers.][added: employee group medical benefits compared to 2019.]

General and administrative expenses increased 17.6% from 2018, primarily due to increased technology spend on the J.B. Hunt [removed: 360] [added: 360°] platform and legacy system upgrades, higher [removed: Final Mile Services® (FMS)] [added: FMS] network facility costs, and increased advertising expenses.

We operated [removed: four] [added: five] business segments during calendar year [removed: 2019.][added: 2020.]

| | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | |

| JBI | | $ | [removed: 4,745] [added: 4,675] | | | $ | [removed: 4,717] [added: 4,745] | | | $ | [removed: 4,084] [added: 4,717] | |

| ICS | | | [removed: 1,348] [added: 1,658] | | | | [removed: 1,335] [added: 1,348] | | | | [removed: 1,025] [added: 1,335] | |

| JBT | | | [removed: 389] [added: 463] | | | | [removed: 417] [added: 389] | | | | [removed: 378] [added: 417] | |

| Total segment revenues | | | [removed: 9,177] [added: 9,681] | | | | [removed: 8,632] [added: 9,177] | | | | [removed: 7,206] [added: 8,632] | |

| Intersegment eliminations | | | [removed: (12] [added: (44] | ) | | | [removed: (17] [added: (12] | ) | | | [removed: (16] [added: (17] | ) |

| Total | | $ | [removed: 9,165] [added: 9,637] | | | $ | [removed: 8,615] [added: 9,165] | | | $ | [removed: 7,190] [added: 8,615] | |

| JBI | | $ | [removed: 447] [added: 428] | | | $ | [removed: 401] [added: 447] | | | $ | [removed: 407] [added: 401] | |

| ICS | | | [removed: (11] [added: (45] | ) | | | [removed: 50] [added: (11] | [added: )] | | | [removed: 23] [added: 50] | |

| JBT | | | [removed: 29] [added: 17] | | | | [removed: 37] [added: 29] | | | | [removed: 23] [added: 37] | |

| Total | | $ | [removed: 734] [added: 713] | | | $ | [removed: 681] [added: 734] | | | $ | [removed: 624] [added: 681] | |

| Loads | | | [removed: 1,979,169] [added: 2,019,391] | | | | [removed: 2,049,014] [added: 1,979,169] | | | | [removed: 1,999,807] [added: 2,049,014] | |

Receivables are recorded at amounts billed to customers when loads are delivered or services are performed.

The allowance for uncollectible accounts is calculated over the life of the underlying receivable and is based on historical experience; any known trends or uncertainties related to customer billing and account collectability; current economic conditions; and reasonable and supportable economic forecasts, each applied to segregated risk pools based on the business segment that generated the receivable.

Our total consolidated operating revenues increased 5.1% to $9.64 billion in 2020, compared to $9.17 billion in 2019, primarily due to increased ICS revenue per load, the December 2019 acquisition and new contractual business onboarded throughout 2020 in FMS, and increased load volumes in JBT and DCS.

The increase in revenue was partially offset by a decrease in JBI revenue per load.

Fuel surcharge revenues decreased 27.4% to $757 million in 2020, compared to $1.04 billion in 2019.

In addition, 2020 included a $12.3 million one-time COVID-19 related bonus paid to employee drivers and other key field personnel.

Depreciation and amortization expense increased 5.7% in 2020, primarily due to equipment purchases related to new DCS long-term customer contracts and the addition of standard and specialized trailing equipment within our JBI segment.

General and administrative expenses decreased 6.2% from 2019, primarily due to decreased professional fees, lower advertising costs, lower driver hiring expenses and, decreased net loss from the sale or disposal of assets, partially offset by increased technology spend on the J.B. Hunt 360° platform and legacy system upgrades, higher bad debt expenses, and increased building rental expenses.

Insurance and claims expense decreased 14.5% in 2020, primarily due to the absence of a $20 million FMS claim settlement charge and $17.4 million in reserve charges in 2019 for arbitration related legal fees, cost and interest claimed by BNSF, partially offset by an increase in insurance premiums in 2020.

Net interest expense for 2020 decreased by 11.0% compared with 2019, due to lower effective interest rates on our debt.

Income tax expense decreased 2.8% in 2020, due primarily to decreased taxable earnings in 2020.

| DCS | | | 2,196 | | | | 2,128 | | | | 1,788 | |

| FMS | | | 689 | | | | 567 | | | | 375 | |

| | | 2020 | | | | 2019 | | | | 2018 | | |

| DCS | | | 314 | | | | 278 | | | | 195 | |

| FMS | | | (1 | ) | | | (9 | ) | | | (2 | ) |

| | | 2020 | | | | 2019 | | | | 2018 | | |

| Loads | | | 3,676,212 | | | | 3,353,553 | | | | 2,728,683 | |

| FMS | | | | | | | | | | | | |

| Stops | | | 5,771,533 | | | | 4,432,591 | | | | 2,162,040 | |

| Average trucks during the period(3) | | | 1,405 | | | | 1,254 | | | | 1,134 | |

| | | | | | | | | | | | | |

| Nonpaid empty mile percentage | | | 18.8 | % | | | 18.9 | % | | | 16.7 | % |

JBI segment revenue decreased 1% to $4.68 billion in 2020, from $4.74 billion in 2019.

Benefits from increased load volume in 2020 were more than offset by higher rail purchased transportation costs, COVID-19 related network inefficiencies, higher personnel costs, which included a one-time COVID-19 related bonus paid to employee drivers and other key field personnel, and higher dray costs resulting from disruptions in rail capacity and a constricted labor and truck capacity environment.

Operating income for JBI in 2019 was impacted by a $26.8 million charge to rail purchase transportation expense resulting from the issuance of a final award regarding our arbitration with BNSF and a $17.4 million charge to insurance and claims expense, for arbitration related legal fees, cost and interest claimed by BNSF.

The increase is primarily due to increased fleet productivity, the absence of significant new customer implementation costs throughout the majority of the year, lower driver related turnover costs, and lower travel and entertainment expenses.

Operating income was partially offset by higher non-driver personnel costs, a one-time COVID-19 related bonus and higher equipment ownership costs when compared to 2019.

ICS segment revenue increased 23% to $1.66 billion in 2020, from $1.35 billion in 2019.

Overall volumes increased 2%, with truckload volumes increasing 15% when compared to 2019.

ICS segment incurred an operating loss of $45 million in 2020, compared to operating loss of $11 million in 2019.

The increase in operating loss was primarily due to lower gross profit margins and increased technology spending as the Marketplace for J.B. Hunt 360° continues to expand in functionality and capacity.

Gross profit margin decreased to 9.9% in the current year versus 13.1% last year primarily due to a more competitive pricing environment and constricted supply dynamics compared to 2019.

FMS Segment

FMS revenue increased 22% to $689 million in 2020 from $567 million in 2019, primarily due to two business acquisitions completed in 2019 and an increase in new customer contracts throughout 2020, partially offset by the temporary suspension of operations at various customer sites in 2020 as a result of the effects of the COVID-19 pandemic.

Stop count for 2020 increased 30%, and productivity, defined as revenue per stop, decreased 7% compared to 2019.

The reduction in productivity was primarily due to a change in the mix of service methods to a more asset-light model resulting from the 2019 business acquisitions and a shift in the mix of services provided during 2020 as customers were affected by COVID-19 within our FMS network.

FMS segment had an operating loss of $1 million in 2020 compared to an operating loss of $9 million in 2019.

The current period operating loss was primarily due to increased costs to expand and improve, through service quality performance controls, the FMS network, lost revenue resulting from the temporary suspension of operations at several customer sites in response to COVID-19, higher bad debt expense, higher personnel costs, which included a one-time COVID-19 related bonus, higher COVID-19 related operating supplies expense an increase in noncash amortization expense attributable to the 2019 business acquisitions.

FMS segment operating loss for 2019 included a $20 million insurance claim settlement charge.

The allowance for uncollectible accounts and revenue adjustments is based on historical experience, as well as any known trends or uncertainties related to customer billing and account collectability.

The Tax Cuts and Jobs Act (the Act) was enacted in December 2017.

Beginning in 2018, the Act reduced the U.S. federal corporate tax rate from 35% to 21%.

At December 31, 2017, we made a reasonable estimate of the effects on our existing deferred tax assets and liabilities based on the rates at which they were expected to reverse in the future, which was generally 21%.

The provisional amount recorded resulting from the remeasurement of our deferred tax balance was $309.2 million, which was included as a component of 2017 income tax from continuing operations.

During 2018, we finalized our calculations for our 2017 federal income tax return, which was filed based on the law prior to the Act, resulting in no significant change to the initial measurement of these balances.

Remaining aspects of the Act were not relevant to our operations.

| DCS | | | 2,695 | | | | 2,163 | | | | 1,719 | |

| DCS | | | 269 | | | | 193 | | | | 171 | |

| Company-owned | | | 4,989 | | | | 5,017 | | | | 4,776 | |

| Independent contractor | | | 570 | | | | 633 | | | | 764 | |

| Total tractors | | | 5,559 | | | | 5,650 | | | | 5,540 | |

| Net change in trailing equipment during the period | | | 1,841 | | | | 6,262 | | | | 4,016 | |

| Loads | | | 3,615,580 | | | | 2,981,344 | | | | 2,575,245 | |

| Company-owned | | | 10,542 | | | | 9,652 | | | | 8,124 | |

| Customer-owned (DCS-operated) | | | 505 | | | | 412 | | | | 544 | |

| Total trucks | | | 11,087 | | | | 10,115 | | | | 8,727 | |

| Average effective trailing equipment usage | | | 28,147 | | | | 26,806 | | | | 24,550 | |

| Approximate carrier tractor count (end of period) | | | 682,000 | | | | 529,000 | | | | 312,000 | |

| Revenue (millions) | | $ | 839.8 | | | $ | 557.8 | | | $ | 125.8 | |

| Average length of haul (miles) | | | 415 | | | | 427 | | | | 435 | |

| Total miles (000) | | | 177,035 | | | | 181,718 | | | | 192,433 | |

| Average nonpaid empty miles per load | | | 96.9 | | | | 85.5 | | | | 85.1 | |

| Independent contractor | | | 986 | | | | 973 | | | | 741 | |

| Average effective trailing equipment usage | | | 6,497 | | | | 6,513 | | | | 7,066 | |

| --- | --- |

In addition, the growth in DCS revenue includes an increase of $187 million in FMS revenue, the majority of which was derived from the first quarter 2019 Cory acquisition.

Approximately 58% of these additions represent private fleet conversions and 15% represent FMS versus traditional dedicated capacity fleets.

Our total consolidated operating revenues increased 19.8% to $8.61 billion in 2018, compared to $7.19 billion in 2017, primarily due to overall increased load volume and higher revenue per load in all four of our segments.

Fuel surcharge revenues increased 40.2% to $1.1 billion in 2018, compared to $754 million in 2017.

In addition, our JBI segment incurred charges of $152.3 million to rail purchase transportation expense related to the arbitration with BNSF.

Depreciation and amortization expense increased 13.7% in 2018, primarily due to additions to our JBI segment tractor, container and chassis fleets to support additional business demand and equipment purchased related to new DCS long-term customer contracts.

General and administrative expenses increased 29.7% from 2017, primarily due to increased building and computer rentals, higher professional fees, higher advertising costs, higher bad debt expense driven by a customer bankruptcy, and increased net losses from asset sales and disposals, partially offset by the 2017 inclusion of a $20.2 million reserve of a cash advance for the purchases of new trailing equipment from a manufacturer that did not meet delivery.

Insurance and claims expense increased 4.7% in 2018, primarily due to higher incident volume.

Net interest expense for 2018 increased by 40.8% compared with 2017, due to an increase in average debt levels, higher effective interest rates on our debt, and expenses incurred to refinance our revolving line of credit compared to 2017.

The increase in 2018 was primarily due to a $309.2 million decrease in income tax expense in 2017 resulting from adjustments to our deferred tax balances at December 31, 2017, for the change in future tax rates prescribed by the Tax Cuts and Jobs Act.

JBI segment revenue increased 15% to $4.72 billion in 2018, from $4.08 billion in 2017.

Benefits from volume growth and increased revenue per load were offset by increases in rail purchased transportation costs, which included $152.3 million of additional expense related to the arbitration with BNSF.

Benefits were further offset by higher driver wage and retention costs, higher driver recruiting expenses, higher outsourced dray costs, increased costs for onboarding and integration of container tracking technologies, higher equipment ownership costs, and costs of reduced efficiency and disruptions within the rail network.

In addition, 2017 included a $20.2 million expense for the reserve of a cash advance for the purchases of new trailing equipment from a manufacturer that did not meet delivery.

Additionally, foreign currency transaction gains and losses were not material to our results of operations for the year ended December 31, [removed: 2019.][added: 2020.]

As of December 31, [removed: 2019,] [added: 2020,] we had no derivative financial instruments to reduce our exposure to fuel-price fluctuations.

We have arrangements with most of the major North American rail carriers to transport freight in containers or [removed: trailers.][added: trailers, while we perform the majority of the pickup and delivery services.]

These arrangements are generally referred to as dedicated services and may include multiple pickups and drops, [removed: local and home deliveries,] freight handling, specialized equipment, and freight network design.

[removed: Our] [added: In addition, we provide] local and home delivery [removed: services typically are provided] [added: services, generally referred to as final-mile delivery services, to customers] through a network of cross-dock [removed: service centers] [added: and other delivery system locations] throughout the continental United States.

[removed: We also provide comprehensive transportation and logistics services with] [added: Utilizing] a network of thousands of reliable third-party [removed: carriers.][added: carriers, we also provide comprehensive transportation and logistics services.]

In addition to [removed: full-load, dry-van] [added: dry-van, full-load] operations, these unrelated outside carriers also provide flatbed, refrigerated, less-than-truckload (LTL), and other specialized equipment, drivers, and services.

Many of them are served by J.B. Hunt [removed: 360○®,] [added: 360°®,] an online platform that offers shippers and carriers greater access, visibility and transparency of the supply chain.

We believe our ability to offer multiple services, utilizing our [removed: four] [added: five] business segments and a full complement of logistics services through third parties, represents a competitive advantage.

These segments include Intermodal (JBI), Dedicated Contract Services® (DCS), Integrated Capacity Solutions™ (ICS), [added: Final Mile Services® (FMS)] and Truckload (JBT).

Meanwhile, DCS [removed: is] [added: and FMS are] subject to less seasonal variation than our other segments.

We forge long-term relationships with key customers that include [removed: supply-chain] [added: supply chain] management as an integral part of their strategies.

JBI draws on the intermodal services of [added: these] rail carriers for the underlying linehaul movement of its equipment between rail ramps.

JBI operates [removed: 96,743] [added: 98,689] pieces of company-owned trailing equipment systemwide.

We own and maintain our own chassis fleet, consisting of [removed: 82,731] [added: 83,259] units.

JBI also manages a fleet of [removed: 4,989] [added: 5,166] company-owned tractors, [removed: 570] [added: 497] independent contractor trucks, and [removed: 6,376] [added: 6,745] company drivers.

At December 31, [removed: 2019,] [added: 2020,] the total JBI employee count was [removed: 7,281.][added: 7,673.]

Revenue for the JBI segment in [removed: 2019] [added: 2020] was [removed: $4.74] [added: $4.68] billion.

DCS focuses on private fleet conversion and creation in [removed: replenishment, specialized equipment,] [added: replenishment] and [removed: final-mile delivery services.][added: specialized equipment.]

We specialize in the design, development, and execution of [removed: supply-chain] [added: supply chain] solutions that support a variety of transportation networks.

[removed: Our] [added: FMS provides] final-mile delivery services [removed: are supported with] [added: to customers through] a [added: nationwide] network of [removed: approximately 120] cross-dock and other delivery system network [removed: locations nationwide,] [added: locations,] with 98% of the continental U.S. population living within 150 miles of a network location.

At December 31, [removed: 2019,] [added: 2020,] this segment operated [removed: 10,542] [added: 9,408] company-owned trucks, [removed: 505] [added: 498] customer-owned trucks, and [removed: 40] [added: 5] independent contractor trucks.

DCS also operates [removed: 20,860] [added: 19,573] owned pieces of trailing equipment and [removed: 7,258] [added: 7,717] customer-owned trailers.

The DCS segment employed [removed: 15,019] [added: 12,785] people, including [removed: 12,181] [added: 11,039] drivers, at December 31, [removed: 2019.][added: 2020.]

DCS revenue for [removed: 2019] [added: 2020] was [removed: $2.69] [added: $2.20] billion.

Furthermore, we offer an online multimodal marketplace via J.B. Hunt [removed: 360] [added: 360°] that matches the right load with the right carrier and the best mode.

ICS also provides single-source logistics management for customers desiring to outsource their transportation functions and utilize our proven [removed: supply-chain] [added: supply chain] technology and design expertise to improve efficiency.

ICS operates [removed: 37] [added: multiple] remote sales offices or branches, as well as on-site logistics personnel working in direct contact with customers.

At December 31, [removed: 2019,] [added: 2020,] the ICS segment employed [removed: 1,213] [added: 1,011] people, with a carrier base of approximately [removed: 84,400.][added: 100,200.]

ICS revenue for [removed: 2019] [added: 2020] was [removed: $1.35] [added: $1.66] billion.

The service offering in this segment is full-load, dry-van freight, utilizing tractors [added: and trailers] operating over roads and highways.

At December 31, [removed: 2019,] [added: 2020,] the JBT segment operated [removed: 845] [added: 798] company-owned tractors and employed [removed: 1,102] [added: 1,049] people, [removed: 868] [added: 797] of whom were drivers.

At December 31, [removed: 2019,] [added: 2020,] we had [removed: 986] [added: 971] independent contractors operating in the JBT segment.

JBT revenue for [removed: 2019] [added: 2020] was [removed: $389] [added: $463] million.

We provide many transportation services that meet the [removed: supply-chain] [added: supply chain] logistics needs of shippers.

We use [removed: a] specific sales [removed: force] [added: forces] in DCS [added: and FMS] due to the length, complexity, and specialization of the sales cycle.

In addition to our sales teams, J.B. Hunt [removed: 360] [added: 360°] offers instant access to a wide array of technology-driven solutions for customers and carriers.

[removed: We believe that] [added: Despite operating nearly 150,000 pieces of transportation equipment, our single greatest asset and] one of the factors differentiating us from our competitors is our service-oriented people.

As of December 31, [removed: 2019,] [added: 2020,] we had [removed: 29,056] [added: 30,309] employees, which consisted of [removed: 19,425] [added: 20,206] company drivers, [removed: 8,292] [added: 8,779] office personnel, [removed: 1,137] [added: 1,114] maintenance technicians, and [removed: 202] [added: 210] delivery and material assistants.

We also had arrangements with [removed: approximately 1,596] [added: 1,506] independent contractors to transport freight in our trailing equipment.

The composition of our DCS trailing fleet varies with specific customer requirements and may include dry-vans, flatbeds, temperature-controlled, curtain-side vans, [removed: straight trucks,] and dump trailers.

Our [added: FMS segment primarily utilizes straight trucks or similar equipment through third-party carriers, while the] JBT segment operates primarily 53-foot dry-van trailers.

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

Our operations continue to be impacted by the COVID-19 global pandemic.

Due to the nature of our business and the large portion of our workforce consisting of drivers and other non-office personnel, fewer than 25% of our total employees have been able to work remotely; however, we remain committed to the safety of our workforce, suppliers, and customers while continuing to meet our customers’ needs.

In March 2020, we began our COVID-19 response activities which have been expanded and will continue as necessary until the risks related to COVID-19 dissipate.

Our COVID-19 safety response activities at our home office campus and all other field locations throughout North America include requiring remote working when possible, expanded health and safety policies, facility modifications, increased security coverage, and purchase and distribution of personal protective equipment and supplies.

We are reviewing and analyzing both external and internal COVID-related data on a daily basis in anticipation of the full return to work phase of our COVID-19 response.

Thus far throughout the pandemic, we have been pleased with the continued performance of our employees, particularly our drivers, who have been consistently available to serve our customers.

Our Mission: To create the most efficient transportation network in North America.

Throughout the years that followed, JBI established multiple agreements with other Class I railroads.

FMS Segment

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

FMS contracts with customers range from one to five years, with the average being approximately three years.

At December 31, 2020, this segment operated 1,255 company-owned trucks, 265 customer-owned trucks, and 33 independent contractor trucks.

FMS also operates 963 owned pieces of trailing equipment and 159 customer-owned trailers.

The FMS segment employed 2,929 people, including 1,625 drivers and 207 delivery and material assistants, at December 31, 2020.

FMS revenue for 2020 was $689 million.

Human Capital Resources

_General_

J.B. Hunt strives to provide a supportive and safe work environment for its employees, where diverse and innovative ideas can be fostered to solve problems and provide value-added services for our customers.

In addition to our employees, our customers, vendors, and communities in which we operate also share diverse backgrounds and an equally diverse range of interests and passions.

J.B. Hunt puts forth its best effort to support initiatives reflecting the company values which are shared by its stakeholders.

In managing the Company’s business, management focuses on various human capital measures and objectives designed to address the development, attraction, and retention of personnel.

These include competitive compensation and benefits, paid time off, employee retirement plan, bonus and other incentive compensation plans, modern equipment and support, leadership development, and tuition assistance as well as those described below.

_Diversity and Inclusion_

We hold strongly to the principle that a qualified, diverse, and inclusive workforce helps us represent the broad cross-section of ideas, values, and beliefs of our employees, customers, suppliers, and communities.

In 2017, we established our Diversity and Inclusion initiative which reaches enterprise-wide and aims to create an inclusive culture and environment where employees from all backgrounds can succeed and be heard.

Employees are evaluated and hired nationally in accordance with established criteria and regulatory requirements specific to their anticipated role within the Company.

In addition, the Company’s Employee Resource Groups (ERG) offer opportunities for employee professional development, community engagement, and networking.

Comprised of groups for women, Latinos, veterans, LGBTQIA+, and African Americans, our ERGs promote camaraderie within the workforce and allow employees with similar interests to build meaningful work relationships.

_Employee Safety and Health_

The health and well-being of our workforce is a priority as we continue to ingrain safety into our corporate culture and strive to conduct all our operations as safely as possible.

J.B. Hunt employees participate in regular job-specific safety training programs.

In addition, J.B. Hunt’s Million Mile Safe Driving and Recognition Awards Program has recognized and rewarded our drivers who dedicate themselves to accident-free driving.

Since its inception in 1996, the program has awarded more than $31 million to over 3,900 drivers.

We believe that access to quality healthcare is also an important part of this priority, and we have programs in place that focus on improving the quality of care that our employees and their families receive.

Paid leave is another key component of this focus and the Company offers benefit plans that comply with all applicable laws.

In response to COVID-19, we implemented safety response activities at our home office campus and all other field locations throughout North America which included requiring remote working when possible, expanded health and safety policies, facility modifications, increased security coverage, and purchase and distribution of personal protective equipment and supplies.

Due to the nature of our business and the large portion of our workforce consisting of drivers and other non-office personnel, fewer than 25% of our total employees have been able to work remotely; however, we remain committed to the safety of our workforce, suppliers, and customers while continuing to meet our customers’ needs.

We are subject to various environmental laws and regulations dealing with the handling of hazardous materials, underground fuel storage tanks, and discharge and retention of storm water.

These laws and regulations have the effect of increasing the costs, risks and liabilities associated with our applicable operations.

People

In [removed: addition,] [added: October 2019 the arbitrators issued a Final Award and] we recorded [removed: a $17.4 million charge] [added: pretax charges] in the third quarter 2019 [added: of $26.8 million related to certain charges claimed by BNSF and $17.4 million] for legal fees, [removed: costs] [added: cost] and interest claimed by BNSF, for a total of $44.2 million.

On January 17, 2020, we filed under seal in the United States District Court for the Western District of Arkansas [added: (the Arkansas Federal Court)] a motion to confirm and enforce the Final Award, seeking the Court’s specific enforcement of certain confidential contractual rights the arbitrators decided in our favor.

BNSF [removed: has] moved to confirm the Final Award in the United States District Court for the District of [removed: Columbia.][added: Columbia, but that requested relief was ultimately denied and dismissed as moot.]

During the first quarter 2020, we recorded an $8.2 million pretax charge resulting from an adjusted calculation of the revenue divisions owed to BNSF under the Final Award.

On July 21, 2020, the Arkansas Federal Court granted our motion in part, entering a judgment confirming the arbitration awards.

In a sealed opinion, the Court denied our request for additional enforcement relief but did not foreclose our right to pursue post-confirmation enforcement in court or in arbitration if warranted.

We have filed an appeal with the United States Court of Appeals for the Eighth Circuit seeking review of the Arkansas Federal Court’s denial.

In October 2018 we received the arbitrators’ Interim Award.

For the determined components of the Interim Award, we recorded an $18.3 million pre-tax charge in the third quarter 2018 related to certain charges claimed by BNSF for specific services requested for customers from April 2014 through May 2018.

In January 2019 the Panel issued its Second Interim Award ordering that $89.4 million is due from the Company to BNSF resulting from the adjusted revenue divisions relating to the 2016 period at issue ($52.1 million) and for calendar year 2017 ($37.3 million).

We recorded pretax charges for contingent liabilities in the fourth quarter 2018 of $89.4 million claimed by the BNSF for the period May 1, 2016 through December 31, 2017 and $44.6 million for the period January 1, 2018 through December 31, 2018, for a total of $134 million.

In October 2019 the arbitrators issued a Final Award.

As a result, we recorded pre-tax charges in the third quarter 2019 of $26.8 million related to certain charges claimed by BNSF for the period January 1, 2018 through December 31, 2018 and no material adjustments for the period January 1, 2019 through September 30, 2019.

[removed: | | ☒ |] [added: ☒]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) [removed: OF THE] [added: OFTHE] SECURITIES EXCHANGE ACT OF 1934 [removed: |]

December 31, [removed: 2019][added: 2020]

[removed: | | ☐ | Transition Report Pursuant to Section] [added: ☐   TRANSITION REPORT PURSUANT TO SECTION] 13 [removed: or 15(d) of the Securities Exchange Act of] [added: OR 15(D) OF THE SECURITIES EXCHANGE ACT OF] 1934 [removed: for the transition Period from __________to__________ |][added: FOR THE TRANSITION PERIOD FROM _______ TO _______]

[removed: |] Commission file number [removed: 0-11757 |]

| [added: |] Arkansas | 71-0335111 | [added: | | |]

| [added: |] (State or other jurisdiction of | (I.R.S. Employer | [added: | | |]

| [added: |] incorporation or organization) | Identification No.) | [added: | | |]

| [added: |] 615 J.B. Hunt Corporate Drive | [added: |] 72745-0130 | [added: | |]

| [added: |] Lowell, Arkansas | (ZIP Code) | [added: | | |]

| [added: |] (Address of principal executive offices) | | [added: | | |]

Securities registered pursuant to Section [removed: 12(b)] [added: 12(g)] of the Act: None

Securities registered pursuant to Section [removed: 12(g)] [added: 12(b)] of the Act:

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [added: a] smaller reporting company, or an emerging growth company.

The aggregate market value of [removed: 84,485,328] [added: 83,657,096] shares of the registrant’s $0.01 par value common stock held by non-affiliates as of June 30, [removed: 2019,] [added: 2020,] was [removed: $7.7] [added: $10.1] billion (based upon [removed: $91.41] [added: $120.34] per share).

As of February [removed: 18, 2020,] [added: 16, 2021,] the number of outstanding shares of the registrant’s common stock was [removed: 106,258,961.][added: 105,705,006.]

Certain portions of the Notice and Proxy Statement for the Annual Meeting of Stockholders, to be held April [removed: 23, 2020,] [added: 22, 2021,] are incorporated by reference in Part III of this Form 10-K.

For The Fiscal Year Ended December 31, [removed: 2019][added: 2020]

| [removed: |] PART I | | [added: |]

Risk Factors [removed: 6][added: 7]

Unresolved Staff Comments [removed: 9][added: 11]

Properties [removed: 9][added: 12]

Legal Proceedings [removed: 10][added: 12]

OR

0-11757

| --- | --- | --- | --- | --- | --- |

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

| --- | --- | --- |

| or |

| --- |

| --- | --- |

| | | |

| [removed: |] PART II | | [added: |]

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities [removed: 11][added: 13]

Selected Financial Data [removed: 13][added: 15]

Management’s Discussion and Analysis of Financial Condition and Results of Operations [removed: 14][added: 16]

Quantitative and Qualitative Disclosures About Market Risk [removed: 24][added: 28]

Financial Statements and Supplementary Data [removed: 25][added: 28]

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure [removed: 25][added: 28]

Controls and Procedures [removed: 25][added: 29]

| | | |

| [removed: |] PART III | | [added: |]

Directors, Executive Officers and Corporate Governance [removed: 26][added: 29]

Executive Compensation [removed: 26][added: 29]

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters [removed: 26][added: 30]

Certain Relationships and Related Transactions, and Director Independence [removed: 27][added: 30]

Principal Accounting Fees and Services [removed: 27][added: 30]

| [removed: |] PART IV | | [added: |]

Exhibits, Financial Statement Schedules [removed: 28][added: 31]

| Signatures | | [removed: 30] [added: 34] |

_This report, including documents whic__h are incorporated by reference_ _and other documents which we file periodically with the Securities and Exchange Commission (SEC), contains statements that may be considered to be “forward-looking statements.” Such statements relate to our predictions concerning future events or operations and are within the meaning of Section 27A of the Securities Act_ _of 1933, as amended,_ _and Section 21E of the Securities Exchange Act of 1934, as [removed: amended.][added: amended._ _When we use words like “may,” “plan,” “contemplate,” “anticipate,” “believe,” “intend,” “continue,” “expect,” “project,”_ _“goals,” “strategy,” “future,”_ _“predict,”_ _“seek,”_ _“estimate,”_ _“likely,”_ _“could,” “should,” “would,” and similar expressions, you should consider them as identifying forward-looking statements, although we may use other phrasing._ _Forward-looking statements are inherently uncertain, subject to risks, and should be viewed with caution.]

Some of the factors and events that are not within our control and that could have a material impact on future operating results include_ _the following:_ _general economic and business conditions__;_ [added: _potential business or operational disruptions resulting from the ongoing effects of the novel coronavirus (COVID-19) pandemic, including any future spikes or outbreaks of the virus, as well as government actions_ _taken_ _in response to the pandemic__;_] _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__;_ _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__._

| | | |

Forward-looking statements are inherently uncertain, subject to risks, and should be viewed with caution.

We also own or lease [removed: 46] [added: 50] other significant facilities across the United States where we perform maintenance on our equipment, provide bulk fuel, and employ personnel to support operations.

In addition, we have [removed: 117] [added: 120] leased or owned facilities in our [removed: DCS] [added: FMS] cross-dock and other delivery system networks, with the remaining three locations outsourced, and [removed: 37] [added: multiple] leased or owned remote sales offices or branches in our ICS segment.

| Type | | Acreage | | | | [removed: |] Maintenance Shop/ Cross-dock Facility (square feet) | | | | Office Space (square feet) | | |

| Maintenance and support facilities | | | [removed: 488 |] [added: 499] | | | | [removed: 1,065,000] [added: 1,078,000] | | | | [removed: 196,000] [added: 188,000] | |

| Cross-dock and delivery system facilities | | | 20 | | | | [removed: | 3,348,000] [added: 3,528,000] | | | | [removed: 125,000] [added: 130,00] | |

| Corporate headquarters campus, Lowell, Arkansas | | | 119 | | | | [removed: |] \- | | | | [removed: 600,000] [added: 607,000] | |

| Branch sales offices | | | \- | | | | [removed: |] \- | | | | [removed: 91,000] [added: 52,000] | |

| Other facilities, offices, and parking yards | | | [removed: 335 |] [added: 409] | | | | [removed: 129,000] [added: 117,000] | | | | [removed: 253,000] [added: 262,000] | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Our common stock is traded on the NASDAQ Global Select Market (NASDAQ) under the symbol “JBHT.” At December 31, [removed: 2019,] [added: 2020,] we were authorized to issue up to 1 billion shares of our common stock, and 167.1 million shares were issued.

We had [removed: 106.2] [added: 105.7] million and [removed: 108.7] [added: 106.2] million shares outstanding as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019] respectively.

On February [removed: 18, 2020,] [added: 16, 2021,] we had [removed: 1,011] [added: 988] stockholders of record of our common stock.

On January [removed: 22, 2020,] [added: 21, 2021,] we announced an increase in our quarterly cash dividend from [removed: $0.26 to] $0.27 [added: to $0.28] per share, which [removed: will be] [added: was] paid February [removed: 21, 2020,] [added: 19, 2021,] to stockholders of record on February [removed: 7, 2020.][added: 5, 2021.]

The following table summarizes purchases of our common stock during the three months ended December 31, [removed: 2019:][added: 2020:]

[added: | |] (1) [added: |] On April 20, 2017, our Board of Directors authorized the purchase of up to $500 million of our common stock. [added: On January 22, 2020, our Board of Directors authorized an additional purchase of up to $500 million of our common stock. This stock repurchase program has no expiration date. |]

The peer group consists of 14 companies: C.H. Robinson Worldwide Inc., CSX Corporation, Expeditors International of Washington Inc., Hub Group Inc., Kansas City Southern, Knight-Swift Transportation Holdings Inc., Norfolk Southern Corporation, Old Dominion Freight Line Inc., Republic Services Inc., Ryder System Inc., Schneider National Inc., Stericycle Inc., Waste Management Inc., and XPO Logistics Inc. The graph assumes the value of the investment in our common stock, in the index, and in the peer group (including reinvestment of dividends) was $100 on December 31, [removed: 2014] [added: 2015] and tracks it through December 31, [removed: 2019.][added: 2020.]

[removed: ][added: ]

| | | [removed: 2014 | | | |] 2015 | | | | 2016 | | | | 2017 | | | | 2018 | | | | 2019 | | | [added: | 2020 | | |]

| October 1 through October 31, 2020 | | | 143,912 | | | $ | 120.59 | | | | 143,912 | | | $ | 503 | |

| November 1 through November 30, 2020 | | | \- | | | | \- | | | | \- | | | | 503 | |

| December 1 through December 31, 2020 | | | \- | | | | \- | | | | \- | | | | 503 | |

| Total | | | 143,912 | | | $ | 120.59 | | | | 143,912 | | | $ | 503 | |

| --- | --- | --- |

| J.B. Hunt Transport Services, Inc. | | $ | 100.00 | | | $ | 133.79 | | | $ | 160.01 | | | $ | 130.55 | | | $ | 165.49 | | | $ | 195.45 | |

| S&P 500 | | | 100.00 | | | | 111.96 | | | | 136.40 | | | | 130.42 | | | | 171.49 | | | | 203.04 | |

| Peer Group | | | 100.00 | | | | 128.31 | | | | 172.63 | | | | 171.77 | | | | 220.44 | | | | 269.20 | |

| October 1 through October 31, 2019 | | | \- | | | $ | \- | | | | \- | | | $ | 145 | |

| November 1 through November 30, 2019 | | | \- | | | | \- | | | | \- | | | | 145 | |

| December 1 through December 31, 2019 | | | 441,097 | | | | 113.30 | | | | 441,097 | | | | 95 | |

| Total | | | 441,097 | | | $ | 113.30 | | | | 441,097 | | | $ | 95 | |

On January 22, 2020, our Board of Directors authorized an additional purchase of up to $500 million of our common stock.

| J.B. Hunt Transport Services, Inc. | | $ | 100.00 | | | $ | 87.97 | | | $ | 117.70 | | | $ | 140.76 | | | $ | 114.85 | | | $ | 145.58 | |

| S&P 500 | | | 100.00 | | | | 101.38 | | | | 113.51 | | | | 138.29 | | | | 132.23 | | | | 173.86 | |

| Peer Group | | | 100.00 | | | | 84.66 | | | | 108.63 | | | | 146.15 | | | | 145.42 | | | | 186.63 | |

| Earnings data for the years ended December 31, | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Operating revenues | | $ | [removed: 9,165] [added: 9,637] | | | $ | [removed: 8,615] [added: 9,165] | | | $ | [removed: 7,190] [added: 8,615] | | | $ | [removed: 6,555] [added: 7,190] | | | $ | [removed: 6,188] [added: 6,555] | |

| Operating income | | | [removed: 734] [added: 713] | | | | [removed: 681] [added: 734] | | | | [removed: 624] [added: 681] | | | | [removed: 721] [added: 624] | | | | [removed: 716] [added: 721] | |

| Net earnings | | | [removed: 516] [added: 506] | | | | [removed: 490] [added: 516] | | | | [removed: 686] [added: 490] | | | | [removed: 432] [added: 686] | | | | [removed: 427] [added: 432] | |

| Basic earnings per share | | | [removed: 4.81] [added: 4.79] | | | | [removed: 4.48] [added: 4.81] | | | | [removed: 6.24] [added: 4.48] | | | | [removed: 3.84] [added: 6.24] | | | | [removed: 3.69] [added: 3.84] | |

| Diluted earnings per share | | | [removed: 4.77] [added: 4.74] | | | | [removed: 4.43] [added: 4.77] | | | | [removed: 6.18] [added: 4.43] | | | | [removed: 3.81] [added: 6.18] | | | | [removed: 3.66] [added: 3.81] | |

| Cash dividends per share | | | [removed: 1.04] [added: 1.08] | | | | [removed: 0.96] [added: 1.04] | | | | [removed: 0.92] [added: 0.96] | | | | [removed: 0.88] [added: 0.92] | | | | [removed: 0.84] [added: 0.88] | |

| Rents and purchased transportation | | | [removed: 49.4] [added: 51.4] | % | | | [removed: 51.5] [added: 49.4] | % | | | [removed: 50.8] [added: 51.5] | % | | | [removed: 49.7] [added: 50.8] | % | | | [removed: 48.4] [added: 49.7] | % |

| Salaries, wages and employee benefits | | | [removed: 23.7] [added: 24.4] | | | | [removed: 22.4] [added: 23.7] | | | | 22.4 | | | | 22.4 | | | | [removed: 22.5] [added: 22.4] | |

| Depreciation and amortization | | | [removed: 5.4] [added: 5.5] | | | | [removed: 5.1] [added: 5.4] | | | | [removed: 5.3] [added: 5.1] | | | | [removed: 5.5] [added: 5.3] | | | | 5.5 | |

| Fuel and fuel taxes | | | [removed: 5.1] [added: 3.7] | | | | [removed: 5.3] [added: 5.1] | | | | [removed: 4.8] [added: 5.3] | | | | [removed: 4.3] [added: 4.8] | | | | [removed: 5.1] [added: 4.3] | |

| Operating supplies and expenses | | | [removed: 3.6] [added: 3.5] | | | | [removed: 3.5] [added: 3.6] | | | | [removed: 3.6] [added: 3.5] | | | | 3.6 | | | | 3.6 | |

| General and administrative expenses, net of asset dispositions | | | [removed: 2.1] [added: 1.8] | | | | [removed: 1.8] [added: 2.1] | | | | 1.8 | | | | [removed: 1.3] [added: 1.8] | | | | [removed: 1.1] [added: 1.3] | |

| Insurance and claims | | | [removed: 1.7] [added: 1.4] | | | | [removed: 1.5] [added: 1.7] | | | | [removed: 1.7] [added: 1.5] | | | | [removed: 1.2] [added: 1.7] | | | | 1.2 | |

| Operating taxes and licenses | | | 0.6 | | | | 0.6 | | | | 0.6 | | | | [removed: 0.7] [added: 0.6] | | | | 0.7 | |

| Communication and utilities | | | [removed: 0.4] [added: 0.3] | | | | 0.4 | | | | [removed: 0.3] [added: 0.4] | | | | 0.3 | | | | 0.3 | |

| Total operating expenses | | | [removed: 92.0] [added: 92.6] | | | | [removed: 92.1] [added: 92.0] | | | | [removed: 91.3] [added: 92.1] | | | | [removed: 89.0] [added: 91.3] | | | | [removed: 88.4] [added: 89.0] | |

| Operating income | | | [removed: 8.0] [added: 7.4] | | | | [removed: 7.9] [added: 8.0] | | | | [removed: 8.7] [added: 7.9] | | | | [removed: 11.0] [added: 8.7] | | | | [removed: 11.6] [added: 11.0] | |

| Net interest expense | | | [removed: 0.6] [added: 0.5] | | | | [removed: 0.5] [added: 0.6] | | | | [removed: 0.4] [added: 0.5] | | | | 0.4 | | | | 0.4 | |

| Earnings before income taxes | | | [removed: 7.4] [added: 6.9] | | | | 7.4 | | | | [removed: 8.3] [added: 7.4] | | | | [removed: 10.6] [added: 8.3] | | | | [removed: 11.2] [added: 10.6] | |

| Income taxes | | | [added: 1.6 | | | |] 1.8 | | | | 1.7 | | | | (1.2 | ) | | | 4.0 | | [removed: | | 4.3 | |]

| Net earnings | | | [removed: 5.6] [added: 5.3] | % | | | [removed: 5.7] [added: 5.6] | % | | | [removed: 9.5] [added: 5.7] | % | | | [removed: 6.6] [added: 9.5] | % | | | [removed: 6.9] [added: 6.6] | % |

| Balance sheet data as of December 31, | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Working capital ratio | | | [removed: 1.43] [added: 1.70] | | | | [removed: 1.11] [added: 1.43] | | | | [removed: 1.45] [added: 1.11] | | | | [removed: 1.65] [added: 1.45] | | | | [removed: 1.61] [added: 1.65] | |

| Total assets (millions) | | $ | [removed: 5,471] [added: 5,928] | | | $ | [removed: 5,092] [added: 5,471] | | | $ | [removed: 4,465] [added: 5,092] | | | $ | [removed: 3,951] [added: 4,465] | | | $ | [removed: 3,630] [added: 3,951] | |

| Stockholders’ equity (millions) | | $ | [removed: 2,267] [added: 2,600] | | | $ | [removed: 2,101] [added: 2,267] | | | $ | [removed: 1,839] [added: 2,101] | | | $ | [removed: 1,414] [added: 1,839] | | | $ | [removed: 1,300] [added: 1,414] | |

| Current portion of long-term debt (millions) | | | \- | | | [removed: $] | [removed: 251] [added: \-] | | | [added: $] | [removed: \-] [added: 251] | | | | \- | | | | \- | |

| Total debt (millions) | | $ | [removed: 1,296] [added: 1,305] | | | $ | [removed: 1,149] [added: 1,296] | | | $ | [removed: 1,086] [added: 1,149] | | | $ | [removed: 986] [added: 1,086] | | | $ | [removed: 998] [added: 986] | |

| Total debt to equity | | | [removed: 0.57] [added: 0.50] | | | | [removed: 0.55] [added: 0.57] | | | | [removed: 0.59] [added: 0.55] | | | | [removed: 0.70] [added: 0.59] | | | | [removed: 0.77] [added: 0.70] | |

| Total debt as a percentage of total capital | | | [removed: 36] [added: 33] | % | | | [removed: 35] [added: 36] | % | | | [removed: 37] [added: 35] | % | | | [removed: 41] [added: 37] | % | | | [removed: 43] [added: 41] | % |

Consolidated Balance Sheets as of December 31, [removed: 2019] [added: 2020] and [removed: 2018][added: 2019]

Consolidated Statements of Earnings for years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017][added: 2018]

Consolidated Statements of Stockholders’ Equity for years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017][added: 2018]

Consolidated Statements of Cash Flows for years ended December 31, [added: 2020,] 2019, [removed: 2018,] and [removed: 2017][added: 2018]

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, [removed: 2019.][added: 2020.]

Management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2019.][added: 2020.]

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in _Internal Control – Integrated_ _Framework (2013_ _Framework)__._ Based on our assessment, we believe that as of December 31, [removed: 2019,] [added: 2020,] our internal control over financial reporting is effective based on those criteria.

The effectiveness of internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] has been audited by Ernst & Young LLP, an independent registered public accounting firm that also audited our Consolidated Financial Statements.

There has been no change in our internal control over financial reporting during the fourth quarter ended December 31, [removed: 2019,] [added: 2020,] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

The information required for Item 10 is hereby incorporated by reference from the Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April [removed: 23, 2020.][added: 22, 2021.]

The information required for Item 11 is hereby incorporated by reference from the Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April [removed: 23, 2020.][added: 22, 2021.]

Except as set forth below, the information required for Item 12 is hereby incorporated by reference from the Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April [removed: 23, 2020.][added: 22, 2021.]

The following table summarizes, as of December 31, [removed: 2019,] [added: 2020,] information about compensation plans under which equity securities of the Company are authorized for issuance.

| Equity compensation plans approved by security holders | | | [removed: 1,688,946] [added: 1,679,071] | | | $ | \- | (2) | | | [removed: 5,710,001] [added: 5,120,327] | |

The information required for Item 13 is hereby incorporated by reference from the Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April [removed: 23, 2020.][added: 22, 2021.]

The information required for Item 14 is hereby incorporated by reference from the Notice and Proxy Statement for the Annual Meeting of Stockholders to be held April [removed: 23, 2020.][added: 22, 2021.]

[added: | |] (A) [added: |] Financial Statements, Financial Statement Schedules and Exhibits: [added: |]

[added: | |] (1) [added: |] Financial Statements [added: |]

[added: | | |] The financial statements included in Item 8 above are filed as part of this annual report. [added: |]

[added: | |] (2) [added: |] Financial Statement Schedules [added: |]

[added: | | |] Schedule II – Valuation and Qualifying Accounts (in millions) [added: |]

| Allowance for Doubtful [removed: Accounts, Revenue Adjustments] [added: Accounts] and Other [added: Receivables] for the Years Ended: | | Balance at Beginning of Year | | | | Charged to [removed: Expense/ Against Revenue] [added: Expense] | | | | Write-Offs, Net of Recoveries | | | | Balance at End of Year | | |

[added: | |] The above schedule reports allowances related to trade accounts receivable and other receivables. [added: |]

[added: | |] All other schedules have been omitted either because they are [removed: _not_] [added: not] applicable or because the required information is included in our Consolidated Financial Statements or the notes thereto. [added: |]

[added: | |] (3) [added: |] Exhibits [added: |]

| [added: Exhibit] Number | | [removed: |] Description |

| 3.1 | | [removed: |] [Amended and Restated Articles of Incorporation of J.B. Hunt Transport Services, Inc. dated May 19, 1988 (incorporated by reference from Exhibit 3.1 of the Company’s quarterly report on Form 10-Q for the period ended March 31, 2005, filed April 29, 2005)](http://www.sec.gov/Archives/edgar/data/728535/000110465905019297/a05-7638_1ex3d1.htm) |

| 3.2 | | [removed: |] [Amended and Restated Bylaws of J.B. Hunt Transport Services, Inc. dated April 23, 2015 (incorporated by reference from Exhibit 3.1 of the Company’s current report on Form 8-K, filed April 27, 2015)](http://www.sec.gov/Archives/edgar/data/728535/000143774915008111/ex3-1.htm) |

| 4.1 | | [removed: |] [Description of Capital Stock of J.B. Hunt Transport Services, [removed: Inc.](https://www.sec.gov/Archives/edgar/data/728535/000143774920004119/ex_174405.htm)] [added: Inc.](https://www.sec.gov/Archives/edgar/data/728535/000143774921003667/ex_226653.htm)] |

| 4.2 | | [removed: |] [Indenture (incorporated by reference from Exhibit 4.1 of the Company’s registration statement on Form S-3ASR (File No. 333-169365), filed September 14, 2010)](http://www.sec.gov/Archives/edgar/data/728535/000143774910002996/ex4-1.htm) |

| 4.3 | | [removed: |] [Third Supplemental Indenture (incorporated by reference from Exhibit 4.4 of the Company’s current report on Form 8-K, filed March 6, 2014)](http://www.sec.gov/Archives/edgar/data/728535/000143774914003579/ex4-4.htm) |

| 4.4 | | [removed: |] [Fourth Supplemental Indenture (incorporated by reference from Exhibit 4.3 of the Company’s current report on Form 8-K, filed August 6, 2015)](http://www.sec.gov/Archives/edgar/data/728535/000143774915015006/ex4-3.htm) |

| 4.5 | | [removed: |] [Base Indenture, dated as of March 1, 2019 (incorporated by reference from Exhibit 4.1 of the Company’s current report on Form 8-K, filed March 1, 2019)](http://www.sec.gov/Archives/edgar/data/728535/000143774919003755/ex_136073.htm) |

| [removed: 4.6 |] [added: 4.5] | | [First Supplemental Indenture, dated as of March 1, 2019 (incorporated by reference from Exhibit 4.2 of the Company’s current report on Form 8-K, filed March 1, 2019)](http://www.sec.gov/Archives/edgar/data/728535/000143774919003755/ex_136213.htm) |

| 10.1 | | [removed: |] [Third Amended and Restated Management Incentive Plan (incorporated by reference from Appendix A of the Company’s definitive proxy statement on Schedule 14A, filed March 9, 2017)](http://www.sec.gov/Archives/edgar/data/728535/000119312517075917/d324322ddef14a.htm) |

| 10.2 | | [removed: |] [Amendment to J.B. Hunt Transport Services, Inc. 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)](http://www.sec.gov/Archives/edgar/data/728535/000143774919007691/ex_141397.htm) |

| 10.3 | | [removed: |] [Summary of Compensation Arrangements with Named Executive Officers for [removed: 2019] [added: 2020] (incorporated by reference from Exhibit 99.1 of the Company’s current report on Form [removed: 8-K,] [added: 8-K/A,] filed [removed: January 25, 2019)](http://www.sec.gov/Archives/edgar/data/728535/000143774919001348/ex_133346.htm)] [added: February 3, 2020)](http://www.sec.gov/Archives/edgar/data/728535/000143774920001559/ex_171160.htm)] |

| 10.4 | | [removed: |] [Summary of Compensation Arrangements with Named Executive Officers for [removed: 2020] [added: 2021] (incorporated by reference from Exhibit 99.1 of the Company’s current report on Form [removed: 8-K/A,] [added: 8-K,] filed [removed: February 3, 2020)](http://www.sec.gov/Archives/edgar/data/728535/000143774920001559/ex_171160.htm)] [added: January 25, 2021)](http://www.sec.gov/Archives/edgar/data/728535/000143774920001300/ex_170585.htm)] |

| 10.5* | | [removed: |] [Executive Retirement Agreement with David G. Mee, dated February 6, 2020 (incorporated by reference from Exhibit 10.1 of the Company’s current report on Form 8-K, filed February 10, 2020)](http://www.sec.gov/Archives/edgar/data/728535/000143774920002187/ex_171755.htm) |

| 10.6* | | [removed: |] [Executive Retirement Agreement with Terrance D. Matthews, dated February 6, 2020 (incorporated by reference from Exhibit 10.2 of the Company’s current report on Form 8-K, filed February 10, 2020)](http://www.sec.gov/Archives/edgar/data/728535/000143774920002187/ex_171757.htm) |

| 10.7 | | [removed: |] [Credit Agreement and related documents (incorporated by reference from Exhibit 10.1 of the Company’s current report on Form 8-K, filed September 28, 2018)](http://www.sec.gov/Archives/edgar/data/728535/000143774918017588/ex_124627.htm) |

| 10.8 | | [removed: |] [First Amendment to Credit Agreement, dated as of March 1, 2019 (incorporated by reference from Exhibit 10.2 of the Company’s current report on Form 8-K, filed March 1, 2019)](http://www.sec.gov/Archives/edgar/data/728535/000143774919003755/ex_136049.htm) |

| 21.1 | | [removed: |] [Subsidiaries of J.B. Hunt Transport Services, [removed: Inc.](https://www.sec.gov/Archives/edgar/data/728535/000143774920004119/ex_174335.htm)] [added: Inc.](https://www.sec.gov/Archives/edgar/data/728535/000143774921003667/ex_226654.htm)] |

| 23.1 | | [removed: |] [Consent of Ernst & Young [removed: LLP](https://www.sec.gov/Archives/edgar/data/728535/000143774920004119/ex_174336.htm)] [added: LLP](https://www.sec.gov/Archives/edgar/data/728535/000143774921003667/ex_226656.htm)] |

| 31.1 | | [removed: |] [Rule 13a-14(a)/15d-14(a) [removed: Certification](https://www.sec.gov/Archives/edgar/data/728535/000143774920004119/ex_174337.htm)] [added: Certification](https://www.sec.gov/Archives/edgar/data/728535/000143774921003667/ex_226657.htm)] |

| 31.2 | | [removed: |] [Rule 13a-14(a)/15d-14(a) [removed: Certification](https://www.sec.gov/Archives/edgar/data/728535/000143774920004119/ex_174338.htm)] [added: Certification](https://www.sec.gov/Archives/edgar/data/728535/000143774921003667/ex_226658.htm)] |

| 32.1 | | [removed: |] [Section 1350 [removed: Certification](https://www.sec.gov/Archives/edgar/data/728535/000143774920004119/ex_174339.htm)] [added: Certification](https://www.sec.gov/Archives/edgar/data/728535/000143774921003667/ex_226659.htm)] |

| 101.INS | | [removed: |] Inline XBRL Instance Document |

| 101.SCH | | [removed: |] Inline XBRL Taxonomy Extension Schema Document |

| 101.CAL | | [removed: |] Inline XBRL Taxonomy Extension Calculation Linkbase Document |

| 101.DEF | | [removed: |] Inline XBRL Taxonomy Extension Definition Linkbase Document |

| 101.LAB | | [removed: |] Inline XBRL Taxonomy Extension Label Linkbase Document |

| 101.PRE | | [removed: |] Inline XBRL Taxonomy Extension Presentation Linkbase Document |

| 104 | | [removed: |] Cover Page Interactive Data File (embedded within the Inline XBRL Document) |

[added: | |] * [added: |] Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. [added: |]

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 [removed: 2nd] [added: 22nd] day of [removed: March 2020.][added: February 2021.]

| December 31, 2018 | | | 15.9 | | | | 8.9 | | | | (0.9 | ) | | | 23.9 | |

| December 31, 2019 | | | 23.9 | | | | 2.8 | | | | (13.4 | ) | | | 13.3 | |

| December 31, 2020 | | | 13.3 | | | | 5.6 | | | | (0.5 | ) | | | 18.4 | |

| | | |

| | | |

| | | |

| | | |

| | | |

| | | |

| | | |

| 22.1 | | [List of Guarantor Subsidiaries of J.B. Hunt Transport Services, Inc.](https://www.sec.gov/Archives/edgar/data/728535/000143774921003667/ex_226655.htm) |

| | | |

| | | |

| --- | --- | --- |

| | | |

| | | |

| --- | --- | --- |

| | | John N. Roberts, III | |

| | Gale V. King | | |

| --- | --- | --- |

| (Principal Executive Officer) | | Executive Vice President |

February 22, 2021

| /s/ Ernst & Young LLP |

February 22, 2021

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | 2020 | | | | 2019 | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | |

| Accrued payroll and payroll taxes | | | | 130,943 | | | | 68,220 | |

| | | | | | | | | | |

| J.B. HUNT TRANSPORT SERVICES, INC. | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| J.B. HUNT TRANSPORT SERVICES, INC. | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Years Ended December 31, 2020, 2019 and 2018 | | | | | | | | | | | | | | | | | | |

| (in thousands, except per share amounts) | | | | | | | | | | | | | | | | | | |

| Net earnings | | | \- | | | | \- | | | | 506,035 | | | | \- | | | | 506,035 | |

| Balances at December 31, 2020 | | $ | 1,671 | | | $ | 408,244 | | | $ | 4,984,739 | | | $ | (2,794,516 | ) | | $ | 2,600,138 | |

| J.B. HUNT TRANSPORT SERVICES, INC. | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| December 31, 2017 | | | 13.4 | | | | 29.3 | | | | (18.7 | ) | | | 24.0 | |

| December 31, 2018 | | | 24.0 | | | | 35.7 | | | | (23.9 | ) | | | 35.8 | |

| December 31, 2019 | | | 35.8 | | | | 34.2 | | | | (47.5 | ) | | | 22.5 | |

| Exhibit | | | |

| | | | |

| 99.1 | | | [Equity Interests Purchase Agreement dated July 20, 2017 (incorporated by reference from Exhibit 99.1 of the Company’s current report on Form 8-K, filed July 25, 2017)](http://www.sec.gov/Archives/edgar/data/728535/000143774917013024/ex99-1.htm) |

| 99.2 | | | [Asset Purchase Agreement dated January 7, 2019 (incorporated by reference from Exhibit 99.2 of the Company’s current report on Form 8-K, filed January 10, 2019)](http://www.sec.gov/Archives/edgar/data/728535/000143774919000637/ex_132700.htm) |

| Coleman H. Peterson | | |

| | | Chief Financial Officer | |

| | | (Principal Financial Officer) | |

_Accounting for Acquisition of Cory 1__st_ _Choice Home Delivery_

| _Description of the Matter_ | | During 2019, the Company completed its acquisition of Cory 1st Choice Home Delivery (“Cory”) for net consideration of $100 million, as disclosed in Note 12 to the consolidated financial statements. The transaction was accounted for as a business combination. Auditing the Company's accounting for its acquisition of Cory was complex due to the significant estimation required by management to determine the fair value of acquired customer-related intangible assets and goodwill of $45.8 million and $48.2 million, respectively. The significant estimation was primarily due to the complexity of the valuation methods used by management to measure the fair value of the intangible assets and the sensitivity of the respective fair values to the significant underlying assumptions. The significant assumptions used in the valuation included volatility, discount rate, and revenue projections. The Company used the multi-period excess earnings, relief from royalty, and with-and-without methods to measure the intangible assets. The significant assumptions used to estimate the value of the intangible assets included discount rates and certain assumptions that form the basis of the forecasted results (e.g., revenue growth rates, attrition rate and market participant synergies). These significant assumptions are forward looking and could be affected by future economic and market conditions. |

| _How We Addressed the Matter in Our Audit_ | | We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company's controls over its accounting for acquisitions. Our tests included controls over the estimation process supporting the recognition and measurement of consideration transferred, and the intangible assets. We also tested management’s review of assumptions used in the valuation models. To test the estimated fair value of the intangible assets, we performed audit procedures that included, among others, evaluating the Company's selection of the valuation methodology, evaluating the methods and significant assumptions used in the Company’s valuation models, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. We involved our valuation specialists to assist with our evaluation of the methodology used by the Company and significant assumptions included in the fair value estimates. For example, we compared the significant assumptions to current industry, market and economic trends, to the assumptions used to value similar assets in other acquisitions, to the historical results of the acquired business and to other guidelines used by companies within the same industry. We involved our valuation specialists to assist in our evaluation of the significant assumptions, including revenue growth rates and discount rate, and to assist with reconciling the prospective financial information with other prospective financial information prepared by the Company. |

March 2, 2020

| --- |

| | | | | | | | | |

| Accrued payroll | | | 68,220 | | | | 80,922 | |

| Balances at December 31, 2016 | | $ | 1,671 | | | $ | 293,087 | | | $ | 3,218,943 | | | $ | (2,099,640 | ) | | $ | 1,414,061 | |

| Net earnings | | | \- | | | | \- | | | | 686,263 | | | | \- | | | | 686,263 | |

| Advance deposit impairment | | | \- | | | | \- | | | | 20,240 | |

| Payments on long-term debt | | | (250,000 | ) | | | \- | | | | \- | |

The allowance for uncollectible accounts and revenue adjustments is based on historical experience, as well as any known trends or uncertainties related to customer billing and account collectability.

The allowance for uncollectible accounts for our other receivables was $12.2 million at _December 31, 2018,_ with no allowance present at _December 31, 2019._

_40_

_41_

_42_

We had _no_ individual customers with revenues greater than _10%_ of total revenues.

_43_

Accounting Pronouncements Adopted in _201__9_

In _February 2016,_ the FASB issued ASU _2016_\-_02,_ Leases, which requires lessees to recognize a right-of-use asset and a lease liability for most leases on the balance sheet as well as other qualitative and quantitative disclosures.

ASU _2016_\-_02_ is to be applied using a modified retrospective method and was effective for us on _January 1, 2019._ In _July 2018,_ the FASB issued ASU _2018_\-_11,_ Leases, which provides an optional transition method allowing entities to recognize a cumulative-effect adjustment to the opening balance of stockholders’ equity in the period of adoption, with _no_ restatement of comparative prior periods required.

We adopted the standard using this optional transition method.

The FASB has provided certain practical expedients in applying the standard.

Of the allowed practical expedients within the standard applicable to our operations, we elected the package of practical expedients which, among other things, allowed us to carry forward the historical lease classification upon adoption of the standard.

We did _not_ elect the hindsight practical expedient when determining the lease term for existing leases.

In addition, we did _not_ separate non-lease components from lease components by class of underlying assets where appropriate and we did _not_ apply the recognition requirements of the standard to short-term leases, as allowed by the standard.

Upon adoption of the standard, we recorded offsetting lease assets and lease liabilities resulting in a $102.4 million increase in other assets, a $32.3 million increase in other accrued expenses and a $70.1 million increase in other long-term liabilities in our Consolidated Balance Sheet, as of _January 1, 2019._ The adoption of the standard did _not_ have a material impact on our Consolidated Statements of Earnings, Consolidated Statements of Cash Flows or debt covenant compliance.

| Senior revolving line of credit | | $ | \- | | | $ | 307.1 | |

| Less current portion of long-term debt | | | \- | | | | (250.7 | ) |

| Total long-term debt | | $ | 1,295.7 | | | $ | 898.4 | |