(

) Adoption of New Accounting Standard

We account for our revenue in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC,

606,

Revenue from Contracts with Customers

, which we adopted on

January 1, 2018

using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an increase of

$485,000

to the opening balance of retained earnings. The comparative information has

not

been restated and continues to be reported under the accounting standards in effect for those periods. We expect the impact of the adoption of the new revenue standard to be immaterial to our net income and financial position on an ongoing basis.

The new revenue standard requires us to recognize revenue and related expenses within each of our

four

reporting segments over time, compared with our former policy in which we recorded revenue and related expenses on the date shipment of freight was completed.

The cumulative effect of the changes made to our consolidated condensed balance sheet on

January 1, 2018

for the adoption of the new revenue standard was as follows:

(In thousands)	Balance at December 31, 2017		Adjustments Due to ASC 606			Balance at January 1, 2018
Assets:
Prepaid expenses and other	$	19,810	$	2,445	(a)	$	22,255
Liabilities:
Accounts payable and accrued liabilities		38,100		1,960			40,060
Stockholders’ equity:
Retained earnings		448,542		485			449,027

(a)

Contract assets balance at

January 1, 2018.

The impact of the adoption of the new revenue standard on our consolidated condensed statement of operations and balance sheet was as follows:

	Three Months Ended March 31, 2018
(In thousands)	Prior to Adoption of ASC 606		Adjustments Due to ASC 606			As Reported

Operating revenue	$	187,055	$	(95	)	$	186,960
Operating expenses:
Salaries, wages and benefits		58,758		64			58,822
Purchased transportation		34,823		203			35,026
Fuel and fuel taxes		29,043		1			29,044
Supplies and maintenance		10,411		25			10,436
Income taxes expense		3,559		(107	)		3,452
Net income		10,612		(281	)		10,331

	Balance at March 31, 2018
(In thousands)	Prior to Adoption of ASC 606		Adjustments Due to ASC 606			As Reported
Assets:
Prepaid expenses and other	$	16,836	$	2,350	(a)	$	19,186
Liabilities:
Accounts payable and accrued liabilities		47,275		2,146			49,421
Stockholders’ equity:
Retained earnings		457,789		204			457,993

(a)

Contract assets balance at

March 31, 2018.