8-K

UNITED STATES

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) July 25, 2018

LANDSTAR SYSTEM, INC.

(Exact name of registrant as specified in its charter)

Delaware	021238	06-1313069
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
13410 Sutton Park Drive South, Jacksonville, Florida		32224
(Address of principal executive offices)		(Zip Code)

(904) 398-9400

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02 Results of Operations and Financial Condition

On July 25, 2018, Landstar System, Inc. issued a press release announcing results for the second quarter of fiscal 2018. A copy of the press release is attached hereto as Exhibit 99.1.

The information contained in Item 7.01 concerning the presentation to Landstar investors is hereby incorporated into this Item 2.02 by reference.

The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 7.01 Regulation FD Disclosure

A slide presentation, dated July 25, 2018, is attached hereto as Exhibit 99.2 and is incorporated herein by reference. The slide presentation provides information that may be referred to by the Company on its conference call with investors scheduled to occur on July 26, 2018 in connection with the Company’s release of results for the second quarter of fiscal 2018.

The information furnished under Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01 Financial Statements and Exhibits

Exhibits
99.1	News Release dated July 25, 2018 of Landstar System, Inc.
99.2	Slide Presentation dated July 25, 2018 of Landstar System, 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 hereunto duly authorized.

	LANDSTAR SYSTEM, INC.
Date: July 25, 2018	By:	/s/ L. Kevin Stout
	Name:	L. Kevin Stout
	Title:	Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

For Immediate Release	Contact: Kevin Stout
	Landstar System, Inc.
	www.landstar.com
July 25, 2018	904-398-9400

LANDSTAR SYSTEM REPORTS RECORD QUARTERLY

REVENUE OF $1.183 BILLION AND RECORD SECOND QUARTER DILUTED

EARNINGS PER SHARE OF $1.51

Jacksonville, FL – Landstar System, Inc. (NASDAQ: LSTR) reported record quarterly revenue of $1.183 billion in the 2018 second quarter, a 36 percent increase over the $870 million revenue reported in the 2017 second quarter. Net income of $62.5 million and diluted earnings per share of $1.51 were each second quarter records and increased 67 percent and 70 percent, respectively, over net income and diluted earnings per share in the 2017 second quarter. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2018 second quarter was $171.4 million, 29 percent above the 2017 second quarter, while 2018 second quarter operating income was $83.4 million, 37 percent above the 2017 second quarter. Gross profit and operating income in the 2018 second quarter were both all-time quarterly records.

Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2018 second quarter was $1.105 billion, or 93 percent of revenue, compared to $815.6 million, or 94 percent of revenue, in the 2017 second quarter. Truckload transportation revenue hauled via van equipment in the 2018 second quarter was $713.3 million compared to $509.1 million in the 2017 second quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2018 second quarter was $364.7 million compared to $283.5 million in the 2017 second quarter. Revenue hauled by rail, air and ocean cargo carriers was $60.3 million, or 5 percent of revenue, in the 2018 second quarter compared to $43.1 million, or 5 percent of revenue, in the 2017 second quarter.

LANDSTAR SYSTEM/ 2

Landstar purchased approximately 986,000 shares of its common stock during the 2018 second quarter at an aggregate cost of approximately $104.0 million. Currently, the Company is authorized to purchase up to an additional 2,000,000 shares of the Company’s common stock under Landstar’s previously announced share purchase programs. As of June 30, 2018, the Company had $189 million in cash and short term investments and $216 million available for borrowings under the Company’s senior credit facility.

In addition, Landstar announced today that its Board of Directors has declared a quarterly dividend of $0.165 per share payable on August 31, 2018, to stockholders of record as of the close of business on August 13, 2018. This quarterly dividend includes a 10 percent increase to the amount of the Company’s regular quarterly dividend declared following each of the prior two quarters. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.

“I am extremely pleased with the financial performance of the Landstar model during the 2018 second quarter,” said Landstar’s President and Chief Executive Officer Jim Gattoni. “The 2018 second quarter established all-time Landstar quarterly records for revenue, gross profit and operating income while diluted earnings per share was a second quarter record. The Company also set new all-time Landstar records for trucks provided by BCOs with 10,155 as of the end of the quarter and net truck additions in a single quarter with the net addition of 287 trucks in the second quarter.”

Gattoni continued, “Demand for our services was strong throughout the 2018 first half. The number of loads hauled via truck in the 2018 second quarter was an all-time quarterly record and increased 11 percent over the 2017 second quarter, driven by a 13 percent increase in the number of loads hauled via van equipment, an 8 percent increase in the number of loads hauled via unsided/platform equipment and an 8 percent increase in less-than-truckload volume. The number of loads hauled via railroads, ocean cargo carriers and air cargo carriers was 23 percent higher in the 2018 second quarter compared to the 2017 second quarter, primarily due to a 32 percent increase in rail intermodal volume.”

LANDSTAR SYSTEM/ 3

Gattoni further commented, “As expected, the pricing environment for our truckload services continued to be very strong in the 2018 second quarter, as industry-wide truck capacity continued to be very tight. Revenue per load on loads hauled via van equipment increased 25 percent over the 2017 second quarter and revenue per load on loads hauled via unsided/platform equipment increased 19 percent over the 2017 second quarter. As a result, revenue per load on loads hauled via truck was 22 percent higher than the 2017 second quarter.”

Gattoni continued, “Through the first few weeks of July our truck load volumes continue to reflect strong demand. I expect that demand to continue through the 2018 third quarter and, therefore, expect the number of loads hauled via truck in the 2018 third quarter to approximate the number of loads hauled in the 2018 second quarter. My expectation is that pricing conditions for truck services in the 2018 third quarter will continue to be very strong with little change in the level of demand or available truck capacity. Assuming those conditions remain, I expect 2018 third quarter truck revenue per load to be higher than the 2017 third quarter in a 19 to 22 percent range. I anticipate record revenue for the 2018 third quarter in a range of $1.175 billion to $1.225 billion. Assuming that range of estimated revenue and insurance and claims expense at 3.5 percent of projected BCO revenue, representing average insurance and claims costs as a percent of BCO revenue over the past five years, I would anticipate record diluted earnings per share in the 2018 third quarter in a range of $1.58 to $1.64 per share compared to $1.01 per diluted share in the 2017 third quarter.”

Landstar will provide a live webcast of its quarterly earnings conference call tomorrow morning at 8:00 a.m. ET. To access the webcast, visit the Company’s website at www.landstar.com; click on “Investor Relations” and “Webcasts,” then click on “Landstar’s Second Quarter 2018 Earnings Release Conference Call.”

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements contained in this press release that are not based on historical facts are “forward-looking statements”. This press release contains forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Terms such as “anticipates,” “believes,” “estimates,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “will,” the negative

LANDSTAR SYSTEM/ 4

thereof and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; decreased demand for transportation services; U.S. foreign trade relationships; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; changes in fuel taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; catastrophic loss of a Company facility; intellectual property; unclaimed property; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10K for the 2017 fiscal year, described in Item 1A Risk Factors, and in other SEC filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking statements, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

About Landstar:

Landstar System, Inc. is a worldwide, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third-party capacity providers and employees. Landstar transportation services companies are certified to ISO 9001:2015 quality management system standards and RC14001:2015 environmental, health, safety and security management system standards. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market^® under the symbol LSTR.

(Tables follow)

LANDSTAR SYSTEM/ 5

Landstar System, Inc. and Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

	Twenty Six Weeks Ended					Thirteen Weeks Ended
	June 30, 2018			July 1, 2017		June 30, 2018			July 1, 2017
Revenue	$	2,230,712		$	1,651,342	$	1,182,786		$	870,434
Investment income		1,752			1,022		891			608
Costs and expenses:
Purchased transportation		1,727,237			1,263,111		916,940			667,588
Commissions to agents		176,524			134,080		94,399			70,282
Other operating costs, net of gains on asset sales/dispositions		15,210			14,400		7,606			7,503
Insurance and claims		38,899			28,406		21,539			13,893
Selling, general and administrative		94,249			79,184		48,998			40,861
Depreciation and amortization		21,766			19,831		10,769			9,897
Total costs and expenses		2,073,885			1,539,012		1,100,251			810,024
Operating income		158,579			113,352		83,426			61,018
Interest and debt expense		1,639			1,902		839			819
Income before income taxes		156,940			111,450		82,587			60,199
Income taxes		36,975			41,557		20,095			22,689
Net income		119,965			69,893		62,492			37,510
Less: Net loss attributable to noncontrolling interest		(75	)		—		(31	)		—
Net income attributable to Landstar System, Inc. and subsidiary	$	120,040		$	69,893	$	62,523		$	37,510
Earnings per common share attributable to Landstar System, Inc. and subsidiary	$	2.88		$	1.67	$	1.51		$	0.89
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary	$	2.87		$	1.66	$	1.51		$	0.89
Average number of shares outstanding:
Earnings per common share		41,744,000			41,907,000		41,450,000			41,935,000
Diluted earnings per share		41,795,000			42,004,000		41,491,000			42,010,000
Dividends per common share	$	0.30		$	0.18	$	0.15		$	0.09

LANDSTAR SYSTEM/ 6

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)

	June 30, 2018			December 30, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	148,641		$	242,416
Short-term investments		40,323			48,928
Trade accounts receivable, less allowance of $6,549 and $6,131		688,961			631,164
Other receivables, including advances to independent contractors, less allowance of $6,495 and $6,012		20,737			24,301
Other current assets		29,553			14,394
Total current assets		928,215			961,203
Operating property, less accumulated depreciation and amortization of $232,760 and $218,700		256,096			276,011
Goodwill		38,704			39,065
Other assets		85,880			76,181
Total assets	$	1,308,895		$	1,352,460
LIABILITIES AND EQUITY
Current liabilities:
Cash overdraft	$	45,365		$	42,242
Accounts payable		311,768			285,132
Current maturities of long-term debt		38,869			42,051
Insurance claims		42,546			38,919
Dividends payable		—			62,985
Accrued compensation		19,041			30,103
Other current liabilities		51,285			47,211
Total current liabilities		508,874			548,643
Long-term debt, excluding current maturities		65,093			83,062
Insurance claims		30,205			30,141
Deferred income taxes and other non-current liabilities		43,790			36,737
Equity
Landstar System, Inc. and subsidiary shareholders’ equity Common stock, $0.01 par value, authorized 160,000,000 shares, issued 67,847,692 and 67,740,380 shares		678			677
Additional paid-in capital		216,328			209,599
Retained earnings		1,719,475			1,611,158
Cost of 26,754,810 and 25,749,493 shares of common stock in treasury		(1,273,489	)		(1,167,600	)
Accumulated other comprehensive loss		(5,284	)		(3,162	)
Total Landstar System, Inc. and subsidiary shareholders’ equity		657,708			650,672
Noncontrolling interest		3,225			3,205
Total equity		660,933			653,877
Total liabilities and equity	$	1,308,895		$	1,352,460

LANDSTAR SYSTEM/ 7

Landstar System, Inc. and Subsidiary

Supplemental Information

(Unaudited)

	Twenty Six Weeks Ended						Thirteen Weeks Ended
	June 30,			July 1,			June 30,			July 1,
	2018			2017			2018			2017
Revenue generated through (in thousands):
Truck transportation
Truckload:
Van equipment	$	1,369,476		$	978,918		$	713,341		$	509,135
Unsided/platform equipment		664,045			520,658			364,676			283,481
Less-than-truckload		50,948			42,799			27,364			22,942
Total truck transportation		2,084,469			1,542,375			1,105,381			815,558
Rail intermodal		61,587			44,357			32,295			21,515
Ocean and air cargo carriers		51,506			41,185			28,029			21,595
Other (1)		33,150			23,425			17,081			11,766
	$	2,230,712		$	1,651,342		$	1,182,786		$	870,434
Revenue on loads hauled via BCO Independent Contractors (2) included in total truck transportation	$	998,953		$	776,085		$	527,803		$	411,177
Number of loads:
Truck transportation
Truckload:
Van equipment		691,866			613,565			354,947			315,499
Unsided/platform equipment		255,334			236,427			135,543			125,242
Less-than-truckload		70,670			64,508			37,250			34,589
Total truck transportation		1,017,870			914,500			527,740			475,330
Rail intermodal		26,840			20,960			13,560			10,310
Ocean and air cargo carriers		13,030			11,940			6,700			6,210
		1,057,740			947,400			548,000			491,850
Loads hauled via BCO Independent Contractors (2) included in total truck transportation		480,890			453,860			247,710			235,630
Revenue per load:
Truck transportation
Truckload:
Van equipment	$	1,979		$	1,595		$	2,010		$	1,614
Unsided/platform equipment		2,601			2,202			2,690			2,263
Less-than-truckload		721			663			735			663
Total truck transportation		2,048			1,687			2,095			1,716
Rail intermodal		2,295			2,116			2,382			2,087
Ocean and air cargo carriers		3,953			3,449			4,183			3,477
Revenue per load on loads hauled via BCO Independent Contractors (2)	$	2,077		$	1,710		$	2,131		$	1,745
Revenue by capacity type (as a % of total revenue);
Truck capacity providers:
BCO Independent Contractors (2)		45	%		47	%		45	%		47	%
Truck Brokerage Carriers		49	%		46	%		49	%		46	%
Rail intermodal		3	%		3	%		3	%		2	%
Ocean and air cargo carriers		2	%		2	%		2	%		2	%
Other		1	%		1	%		1	%		1	%
							June 30,			July 1,
							2018			2017
Truck Capacity Providers
BCO Independent Contractors (2)								9,501			8,818
Truck Brokerage Carriers:
Approved and active (3)								37,045			31,636
Other approved								15,406			15,381
								52,451			47,017
Total available truck capacity providers								61,952			55,835
Trucks provided by BCO Independent Contractors (2)								10,155			9,404

(1) Includes primarily reinsurance premium revenue generated by the insurance segment and, during the 2018 fiscal year and quarter, intra-Mexico transportation services revenue generated by Landstar Metro.

(2) BCO Independent Contractors are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.

(3) Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal quarter end.

EX-99.2

July 25, 2018 Landstar System, Inc. Earnings Conference Call Second Quarter 2018 Date Published: 07/25/2018 Exhibit 99.2

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements made during this presentation that are not based on historical facts are “forward looking statements.” During this presentation, I may make certain statements, containing forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Such statements are by nature subject to uncertainties and risks, including but not limited to: the operational, financial and legal risks detailed in Landstar’s Form 10-K for the 2017 fiscal year, described in the section Risk Factors, and other SEC filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking statements, and Landstar undertakes no obligation to publicly update or revise any forward-looking statements. Date Published: 07/25/2018

Model Definition Landstar is a worldwide, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third party capacity providers and employees. Date Published: 07/25/2018

The Network Landstar Employees Approx. 1,300 Agents Approx. 1,200 Customers 25,000+ Capacity 59,000+ 2017 Results $3.6 billion in revenue 2.0 million loadings 542 million dollar agents 9,696 BCO trucks (2017 year-end) 49,934 Carriers (2017 year-end) 15,000+ Trailers (2017 year-end) Date Published: 07/25/2018

Percentage of Revenue 2Q17 2Q18 Truck Transportation Truckload Van equipment 58% 60% Unsided/platform equipment 33% 31% Less-than-truckload 3% 2% Rail intermodal 2% 3% Ocean and air cargo 2% 2% Transportation Management Services Date Published: 07/25/2018

Percentage change in rate is calculated on a revenue per load basis. Percentage change in volume is calculated on the number of loads hauled. Revenue ($’s in thousands) Date Published: 07/25/2018 Quarter Year-to-Date Qtr over Prior Year Qtr Rate (1) Volume (2) Change Truck Revenue 0.221 0.11 0.35499999999999998 Rail Intermodal Revenue 0.14099999999999999 0.315 0.501 Ocean/Air Revenue 0.20300000000000001 7.9% 0.29799999999999999 Insurance Premiums NA NA 0.106 Total Revenue 0.35899999999999999 Year over Prior Year Rate (1) Volume (2) Change Truck Revenue 0.214 0.113 0.35099999999999998 Rail Intermodal Revenue 8.4% 0.28100000000000003 0.38800000000000001 Ocean/Air Revenue 0.14599999999999999 9.0999999999999998 0.251 Insurance Premiums NA NA 8.5% Total Revenue 0.35099999999999998

Van Equipment Unsided/Platform Equipment Truckload Loadings and Revenue per Load (Excludes LTL) Date Published: 07/25/2018

As a Percentage of Revenue 2Q17 2Q18 Quarter over Prior Year Quarter Growth Consumer Durables 21.1 22.8 47% Machinery 15.2 14.5 30% Automotive 8.2 8.0 33% Building Products 9.7 9.5 34% Metals 6.7 6.9 41% AA&E, Hazmat 9.0 9.0 37% Foodstuffs 4.7 5.6 61% Energy 3.7 2.3 -16% Other 21.7 21.4 34% Transportation Revenue 100.0 100.0 36% Industries Served Date Published: 07/25/2018

15.2% 14.5% Gross profit equals revenue less the cost of purchased transportation and commissions to agents. Gross profit margin equals gross profit divided by revenue. Revenue on transactions with a fixed gross profit margin was 54% and 52% of revenue in the 2017 and 2018 year-to-date periods, respectively, and 54% and 51% of revenue in the 2017 and 2018 second quarters, respectively. Gross Profit (1) and Gross Profit Margin (2) ($’s in thousands) Date Published: 07/25/2018 Quarter Year-to-Date 15.4% 14.7% 2nd Qtr (3) Changes in gross profit margin % 2017 Period 15.2 Revenue - fixed gp margin -0.1 Revenue - variable gp margin -0.1 Change in mix and other -0.5 2018 Period 14.5 2nd Qtr YTD (3) Changes in gross profit margin % 2017 Period 15.4 Revenue - fixed gp margin -0.1 Revenue - variable gp margin -0.2 Change in mix and other -0.4 2018 Period 14.7

50.5% 48.4% 4 Operating margin equals operating income divided by gross profit. Operating Income and Operating Margin (1) ($’s in thousands) Date Published: 07/25/2018 Quarter Year-to-Date 46.0% 48.7% 44.6% 10 48.5% 2nd Qtr Changes in operating margin % 2017 Period 46 Other operating costs 1.2 Insurance and claims -2 SG&A 2.2999999999999998 Depreciation and amortization 1.2 2018 Period 48.7 2nd Qtr YTD Changes in operating margin % 2017 Period 44.6 Other operating costs 1 Insurance and claims -0.6 SG&A 2.2999999999999998 Depreciation and amortization 1.2 2018 Period 48.5

Date Published: 07/25/2018 Truck Capacity Data (All information is provided as of the end of the period) KEY INCOME STATEMENT DATA ($ in Millions) % of 2013 % of 2013 % of 2012 Rev/GP Plan Rev/GP Proj Rev/GP Jul 1, Dec 30, Jun 30, External Revenue $9,087 #REF! #REF! 2017 (2) 2017 2018 (2) Purchased Transportation #REF! #REF! #REF! #REF! #REF! #REF! BCO Independent Contractors 8,818 9,087 9,501 Truck Brokerage Carriers: Interest and Debt Expense #REF! #REF! #REF! Approved and Active (1) 31,636 34,243 37,045 Income Before Income Taxes #REF! #REF! #REF! Other Approved 15,381 15,691 15,406 47,017 49,934 52,451 Income Taxes #REF! #REF! #REF! Total Available Truck Capacity Providers 55,835 59,021 61,952 Trucks Provided by BCO Independent Contractors 9,404 9,696 10,155 (1) Active refers to truck brokerage carriers who hauled freight for Landstar in the 180 day period immediately preceding the period end. (2) Fuel surcharges billed to customers on freight hauled by BCO Independent Contractors, which are paid 100% to the BCO and excluded from revenue, and the cost of purchased transportation were $117.0 million and $80.6 million in the 2018 and 2017 year-to-date periods, respectively, and $62.6 million and $42.1 million in the 2018 and 2017 second quarters, respectively.

(1) Net cash is defined as cash and cash equivalents plus short term investments less outstanding debt. Date Published: 07/25/2018 Key Balance Sheet and Cash Flow Statistics ($’s in thousands) % of 2013 % of 2013 % of 2012 Rev/GP Plan Rev/GP Proj Rev/GP YTD YTD Jul 1, Jun 30, External Revenue $0.21 #REF! #REF! 2017 2018 Purchased Transportation #REF! #REF! #REF! #REF! #REF! #REF! Balance sheet (period end amounts): Debt to Capital 0.16 0.14000000000000001 Net Cash (1) $,154,274 $85,002 Cash flow: Cash flow from operations $79,799 $,113,029 Capital expenditures $6,628 $4,121 Income Before Income Taxes #REF! #REF! #REF! Share repurchases $0 $,105,488 Dividends paid $7,544 $75,481 Returns: TTM Return on Equity 0.27 0.35 TTM Return on Invested Capital 0.22 0.28999999999999998 TTM Return on Assets 0.14000000000000001 0.18

Free Cash Flow (1) / Share Purchases Date Published: 07/25/2018 (In Thousands) (1) Free cash flow is defined as cash flow from operations less capital expenditures, each set forth on the prior slide. Second quarter 2018 YTD (000's) Free cash flow (1) $,108,908 Share purchases $,105,488 Ending common share count 41,093

Date Published: 07/25/2018