Adoption of New Accounting Standard

We account for our revenue in accordance with FASB 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. The impact of the adoption of the new revenue standard will 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 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 statement of operations and balance sheet was as follows:

	Year Ended December 31, 2018
(In thousands)	Prior to Adoption of ASC 606		Adjustments due to ASC 606			As Reported

Operating revenue	$	788,216	$	(622	)	$	787,594
Operating expenses:
Salaries, wages and benefits		252,327		(280	)		252,047
Purchased transportation		144,573		38			144,611
Fuel and fuel taxes		121,666		(33	)		121,633
Supplies and maintenance		40,832		21			40,853
Income taxes expense		16,121		(119	)		16,002
Net income		55,276		(249	)		55,027

	Balance at December 31, 2018
(In thousands)	Prior to Adoption of ASC 606		Adjustments due to ASC 606			As Reported
Assets:
Prepaid expenses and other	$	18,101	$	1,823	(a)	$	19,924
Liabilities:
Accounts payable and accrued liabilities		42,283		1,587			43,870
Stockholders’ equity:
Retained earnings		498,359		236			498,595

(a)

Contract assets balance at

December 31, 2018.