General

Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. We believe such statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair presentation of our financial position, results of operations and cash flows at the dates and for the periods indicated. Pursuant to the requirements of the Securities and Exchange Commission (SEC) applicable to quarterly reports on Form

-Q, the accompanying financial statements do

not

include all disclosures required by GAAP for annual financial statements. While we believe the disclosures presented are adequate to make the information

not

misleading, these unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related notes included in our Annual Report on Form

-K for the year ended

December 31, 2017.

Operating results for the periods presented in this report are

not

necessarily indicative of the results that

may

be expected for the calendar year ending

December 31, 2018,

or any other interim period. Our business is somewhat seasonal with slightly higher freight volumes typically experienced during

August

through early

November

in our full-load freight transportation business.

Recent Accounting Pronouncements

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

is to be applied using a modified retrospective method and is effective for interim and annual periods beginning after

December 15, 2018,

but early adoption is permitted. We are currently evaluating the potential effects of the adoption of this update on our financial statements. See Note

10,

Commitments and Contingencies, in our Consolidated Financial Statements included in our Annual Report on Form

-K for the year ended

December 31, 2017

for discussion of our remaining obligations under operating lease arrangements.

Accounting Prono

uncement

Adopted in

201

May 2014,

the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)

No.

2014

09,

Revenue from Contracts with Customers, which supersedes virtually all existing revenue recognition guidance. The new standard requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. This update also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. We adopted ASU

2014

in the

first

quarter

2018,

using the modified retrospective transition approach, which did

not

have a material impact on how we recognize revenue or to our financial statements or disclosures. See below for additional information related to our recognition of revenue generated from customer contracts.

We record revenues on the gross basis at amounts charged to our customers because we control and are primarily responsible for the fulfillment of promised services. Accordingly, we serve as a principal in the transaction. We invoice our customers, and we maintain discretion over pricing. Additionally, we are responsible for selection of

third

-party transportation providers to the extent used to satisfy customer freight requirements.

Revenue

Our revenue is earned through the service offerings of our

four

reportable business segments. See Note

10,

Business Segments, for revenue reported by segment. All revenue transactions between reporting segments are eliminated in consolidation.

Intermodal (JBI) -

JBI segment includes freight that is transported by rail over at least some portion of the movement and also includes certain repositioning truck freight moved by JBI equipment or

third

-party carriers, when such highway movement is intended to direct JBI equipment back toward intermodal operations. JBI performs these services primarily through contractual rate quotes with customers that are held static for a period of time, usually

one

year.

Dedicated Contract Services® (DCS)

- DCS segment business includes company-owned and customer-owned, DCS-operated revenue equipment and employee drivers assigned to a specific customer, traffic lane, or service. DCS operations usually include formal, written longer-term customer contracts that govern services performed and applicable rates.

Integrated Capacity Solutions (ICS)

- ICS provides non-asset and asset-light transportation solutions to customers through relationships with

third

-party carriers and integration with company-owned equipment. ICS services include flatbed, refrigerated, and less-than-truckload (LTL), as well as a variety of dry-van and intermodal solutions. ICS performs these services through customer contractual rate quotes as well as spot quotes that are

one

-time rate quotes issued for a single transaction or group of transactions.

Truckload (JBT)

- JBT business includes full-load, dry-van freight that is typically transported utilizing company-owned or company-controlled revenue equipment. This freight is typically transported over roads and highways and does

not

move by rail. JBT utilizes both contractual rate quotes and spot rate quotes with customers.

We recognize revenue from customer contracts based on relative transit time in each reporting period and as other performance obligations are provided, with related expenses recognized as incurred. Accordingly, a portion of the total revenue that will be billed to the customer is recognized in each reporting period based on the percentage of the freight pickup and delivery performance obligation that has been completed at the end of the reporting period.