8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.   20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 17, 2016

J.B. HUNT TRANSPORT SERVICES, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Arkansas	0-11757	71-0335111
(State or other Jurisdiction of	Commission File Number	(IRS Employer
Incorporation or Organization)		Identification No.)
615 J.B. Hunt Corporate Drive
Lowell, Arkansas	72745	(479) 820-0000
(Address of Principal Executive Offices)	(Zip Code)	(Registrant’s telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On October 17, 2016, we issued a news release announcing our revenues and earnings for the third quarter ended September 30, 2016. A copy of the news release is attached as Exhibit 99.1 and is incorporated herein by reference.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.     

99.1 News release dated October 17, 2016, issued by J.B. Hunt Transport Services, Inc.

SIGNATURES

Pursuant to the requirements 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 on the 19th day of October 2016.

J.B. HUNT TRANSPORT SERVICES, INC.
BY:	/s/ John N. Roberts, III
	John N. Roberts, III
	President and Chief Executive Officer
	(Principal Executive Officer)

BY:	/s/ David G. Mee
	David G. Mee
	Executive Vice President, Finance and
	Administration and Chief Financial Officer
	(Principal Financial Officer)

EX-99.1

 Exhibit 99.1

J.B. Hunt Transport Services, Inc. 615 J.B. Hunt Corporate Drive Lowell, Arkansas 72745 (NASDAQ: JBHT) Contact: David G. Mee Executive Vice President, Finance/Administration and Chief Financial Officer (479) 820-8363

FOR IMMEDIATE RELEASE

J.B. HUNT TRANSPORT SERVICES, INC. REPORTS EARNINGS FOR THE THIRD QUARTER 2016

■	Third Quarter 2016 Revenue:	$1.69 billion; up 7%
■	Third Quarter 2016 Operating Income:	$183 million; down 6%
■	Third Quarter 2016 EPS:	97 cents vs. 99 cents

LOWELL, ARKANSAS, October 17, 2016 - J.B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced third quarter 2016 net earnings of $109.4 million, or diluted earnings per share of 97 cents vs. third quarter 2015 net earnings of $115.1 million, or 99 cents per diluted share.

Total operating revenue for the current quarter was $1.69 billion, compared with $1.59 billion for the third quarter 2015. Load growth of 7% in Intermodal (JBI), a 2.9% increase in revenue producing trucks and improved asset productivity in Dedicated Contract Services (DCS)™, an 88% increase in load volume in Integrated Capacity Solutions (ICS) and a 4% increase in truck count in our Truck (JBT) business segment, partially offset by lower customer rates in JBI, ICS and JBT and tepid customer demand, contributed to the increase in consolidated revenue compared to prior year. Current quarter total operating revenue, excluding fuel surcharges, increased 8.4% vs. the comparable quarter 2015.

Operating income for the current quarter totaled $183 million vs. $194 million for the third quarter 2015. Operating income decreased from third quarter 2015 primarily from lower customer rates in JBI, ICS and JBT, increased rail purchase transportation rates, lower box turns, increases in driver wages and recruiting costs, losses on the sale of used equipment (versus gains in 2015), increased legal and consulting costs and higher equipment maintenance and ownership costs.

Interest expense in the current quarter decreased primarily from the timing effect of the issuance of the senior notes that occurred in the third quarter 2015. The effective income tax rate for the current quarter is 38%, compared to 38.1% in the third quarter 2015. We expect our 2016 annual tax rate to be approximately 38%.

Segment Information:

Intermodal (JBI)

■ Third Quarter 2016 Segment Revenue: $970 million; up 2%

■ Third Quarter 2016 Operating Income: $116.9 million; down 7%

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. Revenue per load excluding fuel surcharges decreased approximately 2% compared to third quarter 2015.

Operating income decreased 7% over prior year. 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. The current period ended with approximately 82,800 units of trailing capacity and 5,280 power units assigned to the dray fleet.

Dedicated Contract Services (DCS)

■ Third Quarter 2016 Segment Revenue:    $394 million; up 6%

■ Third Quarter 2016 Operating Income:    $52.5 million; up 16%

DCS 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. A year-over-year net addition of 205 revenue producing trucks, 50 net additions sequentially from second quarter 2016, were in the fleet by the end of the quarter. Approximately 75% of these additions represent private fleet conversions versus traditional dedicated capacity services and primarily reflect new contract implementations in this and prior periods. Customer retention rates remain above 98%.

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.

Integrated Capacity Solutions (ICS)

■ Third Quarter 2016 Segment Revenue:      $233 million; up 35%

■ Third Quarter 2016 Operating Income:      $ 8.5 million; down 26%

ICS revenue increased 35% in the current quarter vs. the third quarter 2015. Load volume increased 88% while revenue per load decreased 28.5% due to lower fuel prices, freight mix changes driven by customer demand and lower customer rates on contractual business. Contractual volumes represented approximately 75% of total load volume and 64% of total revenue in the current quarter compared to 66% and 60%, respectively, in third quarter 2015.

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. Personnel costs increased compared to a year ago as the total branch count grew to 40 compared to 33 at the end of third quarter last year. ICS’s carrier base increased 14% and the employee count increased 18% vs. third quarter 2015.

Truck (JBT)

■ Third Quarter 2016 Segment Revenue:    $ 97 million; flat

■ Third Quarter 2016 Operating Income:    $ 5.1 million; down 55%

JBT revenue was flat from the same period in 2015. Revenue excluding fuel surcharge increased 2%, primarily from a 4% increased truck count and a 2% increase in utilization offset with an approximate 4% decrease in rate per mile excluding fuel mostly from customer driven freight mix changes. Core customer rates were flat compared to the same period in 2015. 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.

Cash Flow and Capitalization:

At September 30, 2016, we had a total of $944 million outstanding on various debt instruments compared to $989 million at September 30, 2015 and $998 million at December 31, 2015.

Our net capital expenditures for the nine months ended September 30, 2016 approximated $359 million compared to $431 million for the same period 2015. At September 30, 2016, we had cash and cash equivalents of approximately $5.5 million.

We purchased approximately 922,000 shares of our common stock during the quarter for $74.8 million. At September 30, 2016 we had approximately $276 million remaining under our share repurchase authorization. Shares outstanding at September 30, 2016 approximated 112.2 million.

This press release may contain forward-looking statements, which are based on information currently available. Actual results may differ materially from those currently anticipated due to a number of factors, including, but not limited to, those discussed in Item 1A of our Annual Report filed on Form 10-K for the year ended December 31, 2015. We assume no obligation to update any forward-looking statement to the extent we become aware that it will not be achieved for any reason. This press release and additional information will be available immediately to interested parties on our web site, www.jbhunt.com.

J.B. HUNT TRANSPORT SERVICES, INC. Condensed Consolidated Statements of Earnings (in thousands, except per share data) (unaudited)

	Three Months Ended September 30
	2016					2015
			% Of					% Of
	Amount		Revenue			Amount		Revenue
Operating revenues, excluding fuel surcharge revenues	$	1,538,701				$	1,419,451
Fuel surcharge revenues		151,958					167,043
Total operating revenues		1,690,659		100.0	%		1,586,494		100.0	%
Operating expenses
Rents and purchased transportation		846,238		50.1	%		770,148		48.5	%
Salaries, wages and employee benefits		374,517		22.2	%		351,651		22.2	%
Depreciation and amortization		91,001		5.4	%		86,201		5.4	%
Fuel and fuel taxes		74,179		4.4	%		76,755		4.8	%
Operating supplies and expenses		62,191		3.7	%		57,299		3.6	%
General and administrative expenses, net of asset dispositions		21,025		1.1	%		14,866		1.0	%
Insurance and claims		21,862		1.3	%		20,078		1.3	%
Operating taxes and licenses		11,665		0.7	%		10,683		0.7	%
Communication and utilities		5,004		0.3	%		4,967		0.3	%
Total operating expenses		1,507,682		89.2	%		1,392,648		87.8	%
Operating income		182,977		10.8	%		193,846		12.2	%
Net interest expense		6,485		0.4	%		7,838		0.5	%
Earnings before income taxes		176,492		10.4	%		186,008		11.7	%
Income taxes		67,067		3.9	%		70,869		4.4	%
Net earnings	$	109,425		6.5	%	$	115,139		7.3	%
Average diluted shares outstanding		113,363					116,282
Diluted earnings per share	$	0.97				$	0.99

J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Statements of Earnings

(in thousands, except per share data)

(unaudited)

	Nine Months Ended September 30
	2016					2015
			% Of					% Of
	Amount		Revenue			Amount		Revenue
Operating revenues, excluding fuel surcharge revenues	$	4,448,709				$	4,043,991
Fuel surcharge revenues		385,688					522,640
Total operating revenues		4,834,397		100.0	%		4,566,631		100.0	%
Operating expenses
Rents and purchased transportation		2,381,547		49.3	%		2,194,683		48.1	%
Salaries, wages and employee benefits		1,108,997		22.9	%		1,030,438		22.6	%
Depreciation and amortization		269,717		5.6	%		251,239		5.5	%
Fuel and fuel taxes		205,082		4.2	%		243,459		5.3	%
Operating supplies and expenses		173,222		3.6	%		164,497		3.6	%
General and administrative expenses, net of asset dispositions		61,570		1.3	%		56,471		1.3	%
Insurance and claims		58,384		1.2	%		55,714		1.2	%
Operating taxes and licenses		34,156		0.7	%		31,505		0.7	%
Communication and utilities		15,063		0.3	%		15,824		0.3	%
Total operating expenses		4,307,738		89.1	%		4,043,830		88.6	%
Operating income		526,659		10.9	%		522,801		11.4	%
Net interest expense		19,347		0.4	%		21,202		0.4	%
Earnings before income taxes		507,312		10.5	%		501,599		11.0	%
Income taxes		192,778		4.0	%		191,109		4.2	%
Net earnings	$	314,534		6.5	%	$	310,490		6.8	%
Average diluted shares outstanding		113,709					117,293
Diluted earnings per share	$	2.77				$	2.65

Financial Information By Segment

(in thousands)

(unaudited)

	Three Months Ended September 30
	2016						2015
				% Of						% Of
	Amount			Total			Amount			Total
Revenue
Intermodal	$	969,654			57	%	$	948,779			60	%
Dedicated		393,770			23	%		370,360			23	%
Integrated Capacity Solutions		233,022			14	%		172,894			11	%
Truck		97,154			6	%		97,521			6	%
Subtotal		1,693,600			100	%		1,589,554			100	%
Intersegment eliminations		(2,941	)		(0	%)		(3,060	)		(0	%)
Consolidated revenue	$	1,690,659			100	%	$	1,586,494			100	%
Operating income
Intermodal	$	116,885			64	%	$	126,077			65	%
Dedicated		52,463			28	%		45,123			23	%
Integrated Capacity Solutions		8,516			5	%		11,453			6	%
Truck		5,080			3	%		11,244			6	%
Other (1)		33			0	%		(51	)		(0	%)
Operating income	$	182,977			100	%	$	193,846			100	%

	Nine Months Ended September 30
	2016						2015
				% Of						% Of
	Amount			Total			Amount			Total
Revenue
Intermodal	$	2,798,284			58	%	$	2,697,537			59	%
Dedicated		1,134,861			23	%		1,082,264			24	%
Integrated Capacity Solutions		619,956			13	%		509,985			11	%
Truck		291,468			6	%		286,218			6	%
Subtotal		4,844,569			100	%		4,576,004			100	%
Intersegment eliminations		(10,172	)		(0	%)		(9,373	)		(0	%)
Consolidated revenue	$	4,834,397			100	%	$	4,566,631			100	%
Operating income
Intermodal	$	325,625			62	%	$	348,955			67	%
Dedicated		147,700			28	%		121,511			23	%
Integrated Capacity Solutions		30,186			6	%		22,974			4	%
Truck		23,112			4	%		29,448			6	%
Other (1)		36			0	%		(87	)		(0	%)
Operating income	$	526,659			100	%	$	522,801			100	%

(1) Includes corporate support activity

Operating Statistics by Segment

(unaudited)

	Three Months Ended September 30
	2016			2015
Intermodal
Loads		489,109			458,584
Average length of haul		1,662			1,660
Revenue per load	$	1,983		$	2,069
Average tractors during the period *		5,279			4,977
Tractors (end of period)
Company-owned		4,568			4,292
Independent contractor		714			750
Total tractors		5,282			5,042
Net change in trailing equipment during the period		1,578			1,658
Trailing equipment (end of period)		82,821			77,937
Average effective trailing equipment usage		79,107			74,669
Dedicated
Loads		607,876			578,628
Average length of haul		177			174
Revenue per truck per week**	$	4,120		$	3,998
Average trucks during the period***		7,357			7,098
Trucks (end of period)
Company-owned		6,936			6,758
Independent contractor		22			9
Customer-owned (Dedicated operated)		414			400
Total trucks		7,372			7,167
Trailing equipment (end of period)		22,391			21,141
Average effective trailing equipment usage		22,939			22,420
Integrated Capacity Solutions
Loads		239,399			127,016
Revenue per load	$	973		$	1,361
Gross profit margin		12.8	%		15.9	%
Employee count (end of period)		769			650
Approximate number of third-party carriers (end of period)		50,100			44,000
Truck
Loads		97,052			91,639
Average length of haul		453			454
Loaded miles (000)		43,865			41,376
Total miles (000)		52,317			49,213
Average nonpaid empty miles per load		87.2			85.6
Revenue per tractor per week**	$	3,468		$	3,630
Average tractors during the period *		2,162			2,080
Tractors (end of period)
Company-owned		1,384			1,471
Independent contractor		799			629
Total tractors		2,183			2,100
Trailers (end of period)		7,572			7,740
Average effective trailing equipment usage		7,083			6,610

* Includes company-owned and independent contractor tractors

** Using weighted workdays

*** Includes company-owned, independent contractor, and customer-owned trucks

Operating Statistics by Segment

(unaudited)

	Nine Months Ended September 30
	2016			2015
Intermodal
Loads		1,424,733			1,305,347
Average length of haul		1,648			1,648
Revenue per load	$	1,964		$	2,067
Average tractors during the period *		5,206			4,903
Tractors (end of period)
Company-owned		4,568			4,292
Independent contractor		714			750
Total tractors		5,282			5,042
Net change in trailing equipment during the period		3,864			4,639
Trailing equipment (end of period)		82,821			77,937
Average effective trailing equipment usage		75,702			71,395
Dedicated
Loads		1,794,432			1,671,407
Average length of haul		175			175
Revenue per truck per week**	$	4,021		$	4,021
Average trucks during the period***		7,280			6,957
Trucks (end of period)
Company-owned		6,936			6,758
Independent contractor		22			9
Customer-owned (Dedicated operated)		414			400
Total trucks		7,372			7,167
Trailing equipment (end of period)		22,391			21,141
Average effective trailing equipment usage		22,657			22,324
Integrated Capacity Solutions
Loads		614,334			371,060
Revenue per load	$	1,009		$	1,374
Gross profit margin		14.9	%		15.0	%
Employee count (end of period)		769			650
Approximate number of third-party carriers (end of period)		50,100			44,000
Truck
Loads		288,392			271,107
Average length of haul		460			446
Loaded miles (000)		132,562			120,366
Total miles (000)		157,526			142,419
Average nonpaid empty miles per load		86.6			81.3
Revenue per tractor per week**	$	3,432		$	3,711
Average tractors during the period*		2,202			2,015
Tractors (end of period)
Company-owned		1,384			1,471
Independent contractor		799			629
Total tractors		2,183			2,100
Trailers (end of period)		7,572			7,740
Average effective trailing equipment usage		6,846			6,342

* Includes company-owned and independent contractor tractors

** Using weighted workdays

*** Includes company-owned, independent contractor, and customer-owned trucks

J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

	September 30, 2016		December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	5,481	$	5,566
Accounts Receivable		775,020		654,542
Prepaid expenses and other		61,900		197,817
Total current assets		842,401		857,925
Property and equipment		4,209,080		4,019,451
Less accumulated depreciation		1,400,339		1,318,122
Net property and equipment		2,808,741		2,701,329
Other assets		78,852		70,290
	$	3,729,994	$	3,629,544
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable	$	402,913	$	340,332
Claims accruals		104,243		104,220
Accrued payroll		72,920		59,420
Other accrued expenses		20,769		28,445
Total current liabilities		600,845		532,417
Long-term debt		943,696		998,003
Other long-term liabilities		69,302		58,552
Deferred income taxes		731,068		740,220
Stockholders' equity		1,385,083		1,300,352
	$	3,729,994	$	3,629,544

Supplemental Data

(unaudited)

	September 30, 2016		December 31, 2015
Actual shares outstanding at end of period (000)		112,185		113,948
Book value per actual share outstanding at end of period	$	12.35	$	11.41

	Nine Months Ended September 30
	2016		2015
Net cash provided by operating activities (000)	$	683,963	$	696,960
Net capital expenditures (000)	$	358,754	$	430,660