What did this amendment change?

The amendment corrects mathematical errors in the Operating Segment table and the Contractual Cash Obligations table in Item 7, along with certain rounding errors in statistical data. The filing states these corrections had no impact on the consolidated financial statements for 2001, 2000 and 1999.

Why did earnings decline in 2001?

Net earnings fell to $32.9 million from $36.1 million, though operating income rose. The filing attributes the change partly to a $2.1 million equity loss from associated companies, versus $4.8 million of equity earnings in 2000, which included a $1.9 million TPC loss in 2001. Income taxes also rose to $10.1 million from $6.4 million.

What is the status of the Transplace investment and the Mexican joint venture?

JBHT holds an approximate 27% interest in Transplace, Inc., accounted for under the equity method, with financial exposure limited to about $6.4 million. The company had an agreement in principle to sell its Mexican joint venture interest to the majority owner, expected to close in early 2002, with no material earnings impact anticipated if the terms hold.

How is the company funding its equipment and what liquidity does it have?

The company funded tractor additions largely through capital leases through September 2001, then with excess cash flow. It expects to purchase about 6,000 new containers and most tractors in 2002 using operations and short-term debt. At year end it had no balance on its $165 million revolving line, which matures November 13, 2002, and it reported a working capital ratio of 1.45.

What were the main risks and credit concerns the filing identifies?

The filing cites soft economic conditions, volatile fuel costs, driver availability (driver turnover exceeded 100% in 2001), and dependence on the tractor supplier's residual value guarantees. Moody's downgraded senior unsecured debt to Baa3 in January 2001, and the company is rated BBB by Standard & Poor's. A downgrade to BB+ or Ba1 could add $1.9 million in annual rental payments under one operating lease.

JBHT 10-K FY2001 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K/A filed May 29, 2002. Cited figures are marked; the original filing is the authoritative source.

J.B.

Hunt Transport Services, Inc. filed this Amendment No. 2 to its Form 10-K for the fiscal year ended December 31, 2001, primarily to correct mathematical errors in the Operating Segment table, the Contractual Cash Obligations table, and rounding of statistical data in Item 7. The filing states these corrections had no impact on the consolidated financial statements. For 2001, operating revenues were $2,100.3 million^a, down from $2,160.4 million in 2000, and net earnings were $32.9 million, compared with $36.1 million in 2000.

Diluted earnings per share were $0.91^b, versus $1.02 in 2000. Operating income rose to $72.2 million from $63.4 million, and the operating ratio improved to 96.6% from 97.1%. Segment performance diverged.

The JBI intermodal segment grew gross revenue 9% to $740.5 million, and operating income rose to $42.1 million^c. The JBT truck segment's gross revenue fell 1% to $828.6 million, and it returned to a $8.7 million operating income from a $7.1 million loss in 2000. DCS revenue grew 15% to $548.7 million, but operating income fell to $17.4 million from $28.4 million due to idle tractors and higher allocated costs.

The Logistics business was contributed to Transplace, Inc. in July 2000, and JBHT holds an approximate 27% interest accounted for under the equity method, which produced a $1.9 million^d loss in 2001. The company also disclosed an agreement in principle to sell its Mexican joint venture interest, expected to close in early 2002.

Balance sheet and cash flow data show total assets of $1.26 billion, stockholders' equity of $458.3 million, and net cash from operations of $171.6 million in 2001, up from $125.1 million. No dividends were paid in 2001, and the company had $165 million of unused borrowing capacity under its revolving credit line at year end.

02—Key points

Key Highlights

Operating revenues of $2,100.3 million in 2001, down from $2,160.4 million in 2000
Net earnings of $32.9 million, or $0.91 diluted EPS, versus $36.1 million and $1.02 in 2000
Operating income increased to $72.2 million from $63.4 million; operating ratio improved to 96.6% from 97.1%
JBI intermodal segment revenue grew 9% to $740.5 million, with operating income up to $42.1 million
JBT truck segment returned to operating income of $8.7 million after a $7.1 million loss in 2000
DCS segment operating income declined to $17.4 million from $28.4 million despite 15% revenue growth
Net cash provided by operating activities rose to $171.6 million from $125.1 million; no dividends paid in 2001

03—Questions

Frequently Asked Questions

What did this amendment change?
The amendment corrects mathematical errors in the Operating Segment table and the Contractual Cash Obligations table in Item 7, along with certain rounding errors in statistical data. The filing states these corrections had no impact on the consolidated financial statements for 2001, 2000 and 1999.
Why did earnings decline in 2001?
Net earnings fell to $32.9 million from $36.1 million, though operating income rose. The filing attributes the change partly to a $2.1 million equity loss from associated companies, versus $4.8 million of equity earnings in 2000, which included a $1.9 million TPC loss in 2001. Income taxes also rose to $10.1 million from $6.4 million.
What is the status of the Transplace investment and the Mexican joint venture?
JBHT holds an approximate 27% interest in Transplace, Inc., accounted for under the equity method, with financial exposure limited to about $6.4 million. The company had an agreement in principle to sell its Mexican joint venture interest to the majority owner, expected to close in early 2002, with no material earnings impact anticipated if the terms hold.
How is the company funding its equipment and what liquidity does it have?
The company funded tractor additions largely through capital leases through September 2001, then with excess cash flow. It expects to purchase about 6,000 new containers and most tractors in 2002 using operations and short-term debt. At year end it had no balance on its $165 million revolving line, which matures November 13, 2002, and it reported a working capital ratio of 1.45.
What were the main risks and credit concerns the filing identifies?
The filing cites soft economic conditions, volatile fuel costs, driver availability (driver turnover exceeded 100% in 2001), and dependence on the tractor supplier's residual value guarantees. Moody's downgraded senior unsecured debt to Baa3 in January 2001, and the company is rated BBB by Standard & Poor's. A downgrade to BB+ or Ba1 could add $1.9 million in annual rental payments under one operating lease.

04—Continue

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