j.b. hunt transport, inc....this presentation and discussion may contain forward-looking statements...

J.B. Hunt Transport Services, Inc.

Q3 2016 Results

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This presentation and discussion may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “anticipates,” “intends,” “estimates,” or similar expressions are intended to identify these forward -looking statements. These statements are based on J.B. Hunt’s current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. For further information, please refer to J.B. Hunt’s reports and filings with the Securities and Exchange Commission.

Disclosure

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• Intermodal (JBI)• Largest, 100% 53’ high-cube container fleet• Largest drayage fleet in North America• Priority loading and unloading at major rail

terminals

• Dedicated Contract Services (DCS)• Fleet creation, conversion and augmentation• Design and implementation of value-driven

supply chain solutions• On-site management

• Integrated Capacity Solutions (ICS)• Non-asset based offering of dry van, flatbed,

refrigerated, expedited and LTL services• 40- and 20-foot box domestic and international

containers and international intermodal services• Services to all 50 States, Canada and Mexico

• Truckload (JBT)• One of the largest capacity networks in North

America• Instant tracking via the Internet• GPS trailer tracking

Distinct Complementary Businesses

57%

23%

14%

6%

3Q 2016 Revenue Mix

JBI

DCS

ICS

JBT

64%

28%

5% 3%0%

20%

40%

60%

80%

JBI DCS ICS JBT

Percentage of 3Q 2016 Operating Income by Business Segment

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• 3Q 2016 Revenue: $1.69 billion; up 7%

• 3Q 2016 Revenue, excl FSC: $1.54 billion; up 8%

• 3Q 2016 Operating Income: $183 million; down 6%

• 3Q 2016 EPS: $0.97 vs. $0.99; down 2%

• Segment Performance

• Intermodal (JBI)• Revenue: $970 million; up 2%• Operating Income: $116.9 million; down 7%

• Dedicated Contract Services (DCS)• Revenue: $394 million; up 6%• Operating Income: $52.5 million; up 16%

• Integrated Capacity Solutions (ICS)• Revenue: $233 million; up 35%• Operating Income: $8.5 million; down 26%

• Truck (JBT)• Revenue: $97 million; flat• Operating Income: $5.1 million; down 55%

3Q 2016 Results vs. 3Q 2015

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3Q 2016 Results - Consolidated

$3,203

$3,793

$4,527

$5,055

$5,585

$6,165 $6,188

$1,586 $1,691

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16

Revenue(in millions)

$248

$348 $444

$530 $577

$632

$716

$194 $183

$-

$100

$200

$300

$400

$500

$600

$700

$800

2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16

Operating Income(in millions)

$1.05

$1.56

$2.11

$2.59

$2.87 $3.16

$3.66

$0.99 $0.97

$-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16

Diluted EPS

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• Industry leading Intermodal franchise

• Differentiated & specialized Dedicated business

• Independent brokerage/management services

• Lighter Truckload asset model

Key Points

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Segment Discussion

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JBI - Intermodal

• Overall volumes increased 7% over the same period in 2015.

• The Eastern network realized load growth of 5% and Transcontinental loads grew 8% over the third quarter 2015 as west coast outbound freight growth outpaced the rest of the network and western rail service continued a year over year improvement trend.

• Revenue increased 2% reflecting the 7% volume growth and an approximate 4.2% decrease in revenue per load, which is the combination of changes in customer rate, freight mix and fuel surcharges.

• Benefits from improved volumes, improved operating efficiencies from network balance and reduced reliance on third party dray carriers were offset by lower customer rates, increases in rail purchased transportation rates, equipment ownership costs including lower box utilization, increased insurance and claims costs and increased costs to attract and retain drivers.

$1,764

$2,141

$2,673

$3,071

$3,456

$3,687 $3,665

$949 $970

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16

JBI Revenue(in millions)

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JBI Performance

13%

7%

-1%

2%

-5%

5%

15%

FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y

JBI Revenue Change

19%

3% 4%

-7%

-15%

-5%

5%

15%

25%


JBI Operating Income Change

$2,169

$2,067 $2,069

$1,983

$1,800

$1,900

$2,000

$2,100

$2,200

2014 2015 3Q 15 3Q 16

JBI Revenue per Load

1,656 1,652 1,660 1,662

1,550

1,650

1,750

2014 2015 3Q 15 3Q 16

JBI Average Length of Haul

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DCS - Dedicated

• Revenue increased 6% during the current quarter over the same period in 2015.

• Productivity (revenue per truck per week) increased by approximately 3% vs. 2015. Productivity excluding fuel surcharge revenue increased approximately 4% from a year ago primarily from improved integration of assets between customer accounts, fewer unseated trucks, increased customer supply chain fluidity and customer rate increases.

• Operating income increased by 16% from a year ago primarily from the increased revenue and improved asset utilization partially offset by higher driver wages and recruiting costs, increased salaries and benefits costs and higher equipment ownership costs compared

to the same period in 2015.

$757

$907

$1,031 $1,080

$1,231

$1,394 $1,451

$370 $394

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16

DCS Revenue(in millions)

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DCS Performance14%

13%

4%

6%

0%

5%

10%

15%


DCS Revenue Change

-5%

6%

40%

16%

-10%

0%

10%

20%

30%

40%

50%


DCS Operating Income Change

2,101,707 2,250,099

578,628 607,876

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2014 2015 3Q 15 3Q 16

DCS Loads

4,098

4,028 3,998

4,120

3,500

3,600

3,700

3,800

3,900

4,000

4,100

4,200

2014 2015 3Q 15 3Q 16

Revenue Per Truck Per Week

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ICS - Non-Asset Based

• Revenue increased 35% in the current quarter vs. the third quarter 2015.

• Load volume increased 88% while revenue per load decreased 29% due to lower fuel prices,

freight mix changes driven by customer demand and lower customer rates on contractual business.

• Operating income decreased 26% over the same period 2015.

• Gross profit margin decreased to 12.8% in the current quarter vs. 15.9% in the prior year primarily from new customer rates implemented during the quarter on contractual business and lower customer spot

rates compared to third quarter 2015.

• ICS’s carrier base increased 14% and the employee count increased 18% vs. third quarter 2015.

$259

$291

$356

$456

$537

$718 $699

$173

$233

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

$550

$600

$650

$700

$750

2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16

ICS Revenue(in millions)

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ICS Performance

18%

34%

-3%

35%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%


ICS Revenue Change

13.0%

15.3% 15.9%

12.8%

0%

5%

10%

15%

20%

2014 2015 3Q 15 3Q 16

ICS Gross Profit Margin

453,410

542,947

127,016

239,399

-

100,000

200,000

300,000

400,000

500,000

600,000

2014 2015 3Q 15 3Q 16

ICS Loads

-3%

90%

20%

-26%-35%

-20%

-5%

10%

25%

40%

55%

70%

85%

100%


ICS Operating Income Change

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JBT - Truckload

• Revenue was flat from the same period in 2015.

• Revenue excluding fuel surcharge increased 2%, primarily from a 4% increased truck count a 2% increase in utilization offset with an approximate 4% decrease in rate per mile excluding fuel mostly from customer driven freight mix changes.

• At the end of the period, JBT operated 2,183

tractors compared to 2,100 a year ago.

• Operating income decreased by 55% compared to third quarter 2015.

• Favorable changes from an increased fleet count and improved utilization were more than offset by lower customer rates per mile, increased equipment maintenance costs, higher safety and insurance costs and increased driver

hiring costs compared to third quarter 2015.

$447

$479

$504 $484

$391 $386 $386

$98 $97

$-

$100

$200

$300

$400

$500

$600

2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16

JBT Revenue(in millions)

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JBT Performance

411

448 454 453

0

100

200

300

400

500

2014 2015 3Q 15 3Q 16

JBT Average Length of Haul

73.9

83.8

85.6

87.2

70

72

74

76

78

80

82

84

86

88

90

2014 2015 3Q 15 3Q 16

JBT Average Nonpaid Empty Miles Per Load

370,555 366,297

91,639 97,052

-

100,000

200,000

300,000

400,000

2014 2015 3Q 15 3Q 16

JBT Loads

$4,068 $3,698

$3,630

$3,468

$-

$1,000

$2,000

$3,000

$4,000

$5,000

2014 2015 3Q 15 3Q 16

JBT Revenue per Tractor per Week

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• Competitively differentiated• Unique intermodal network

• Distinct advantages in dedicated segments

• Network economics and brand strength to penetrate new markets

• Complemented by industry dynamics

• Shippers need to reduce costs

• Shippers demand on-time service

• Increasingly complex supply-chains

• Positioned for growth• Leading positions in large and consolidating

markets

• Clear value proposition for our customers

• Best-in-class systems and technology

Summary

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Balance Sheet

j.b. hunt transport, inc....this presentation and discussion may contain forward-looking statements...

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