(

) 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 June 30, 2018
(In thousands)	Prior to Adoption of ASC 606		Adjustments Due to ASC 606			As Reported

Operating revenue	$	197,113	$	(89	)	$	197,024
Operating expenses:
Salaries, wages and benefits		63,262		(12	)		63,250
Purchased transportation		35,106		(58	)		35,048
Fuel and fuel taxes		31,740		2			31,742
Supplies and maintenance		10,300		(49	)		10,251
Income taxes expense		4,652		7			4,659
Net income		13,681		21			13,702

	Six Months Ended June 30, 2018
(In thousands)	Prior to Adoption of ASC 606		Adjustments Due to ASC 606			As Reported

Operating revenue	$	384,168	$	(184	)	$	383,984
Operating expenses:
Salaries, wages and benefits		122,020		52			122,072
Purchased transportation		69,929		145			70,074
Fuel and fuel taxes		60,783		3			60,786
Supplies and maintenance		20,711		(24	)		20,687
Income taxes expense		8,211		(100	)		8,111
Net income		24,293		(260	)		24,033

	Balance at June 30, 2018
(In thousands)	Prior to Adoption of ASC 606		Adjustments Due to ASC 606			As Reported
Assets:
Prepaid expenses and other	$	17,615	$	2,261	(a)	$	19,876
Liabilities:
Accounts payable and accrued liabilities		43,746		2,036			45,782
Stockholders’ equity:
Retained earnings		470,104		225			470,329

(a)

Contract assets balance at

June 30, 2018.