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J.B. Hunt Transport Services Annual Report, Year Ended Dec 31, 2002

Filing Date
Filed March 11, 2003
Period End
December 31, 2002
Security
JBHT
In the record · 2016–202610-K1110-Q348-K102

JBHT filed 11 annual reports (10-K), 34 quarterly reports (10-Q) and 102 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Leadership change8-K · Feb ’20Feb ’20
  3. Leadership change8-K · Jan ’22Jan ’22
  4. Material agreement8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed March 11, 2003. Cited figures are marked; the original filing is the authoritative source.

J.B.

Hunt Transport Services, Inc. (JBHT) reported 2002 operating revenues of $2,247.9 milliona, up from $2,100.3 million in 2001, and net earnings of $51.8 million, or $1.33 per diluted share, compared with $32.9 million, or $0.91 per diluted share, in 2001. Operating income rose to $101.0 million from $72.2 million, and the operating ratio improved to 95.5% from 96.6%. Management attributed the gain to all three reportable segments: Truck (JBT), Intermodal (JBI) and Dedicated Contract Services (DCS).

JBI gross revenue grew 9% to $809.1 millionb, and DCS revenue grew nearly 15% to $628.3 million, while JBT revenue was essentially flat at $827.3 million but its operating income rose to $26.6 million from $8.7 million. The company's financial position strengthened during the year. A secondary stock offering closed in June 2002 raised approximately $68 million, and total debt and capitalized lease obligations fell to $343 million from $392 million.

Cash and cash equivalents increased to $80.6 million, and stockholders' equity rose to $590.5 millionc from $458.3 million. Management expects to spend approximately $220 million on revenue equipment in 2003, net of expected proceeds, and it estimates a 2003 effective tax rate of 37% to 39%, reflecting a driver per diem plan implemented in February 2003. Investors should weigh several risks disclosed in the filing.

The IRS has begun examining a 1999 sale and leaseback of intermodal containers and chassis, and an adverse outcome could materially affect financial results. The company also faces an EEOC action, a judgment of approximately $7 milliond that it is appealing, and driver recruiting and retention pressures. Fuel prices in February 2003 averaged roughly 15% above December 2002 levels, and the company held no derivative instruments to hedge fuel.

02—Key points

Key Highlights

  1. Operating revenues rose 7.0% to $2,247.9 million in 2002 from $2,100.3 million in 2001.
  2. Net earnings were $51.8 million, or $1.33 per diluted share, versus $32.9 million, or $0.91 per diluted share, in 2001.
  3. Operating income increased nearly 40% to $101.0 million; the operating ratio improved to 95.5% from 96.6%.
  4. Intermodal (JBI) gross revenue grew 9% to $809.1 million, and Dedicated Contract Services (DCS) revenue grew nearly 15% to $628.3 million.
  5. Truck (JBT) operating income rose to $26.6 million from $8.7 million on flat gross revenue of $827.3 million.
  6. A June 2002 secondary stock offering raised approximately $68 million, and total debt and capitalized lease obligations declined to $343 million from $392 million.
  7. The IRS began examining a 1999 container and chassis sale and leaseback, and an adverse outcome could materially affect financial condition and operating results.

03—Questions

Frequently Asked Questions

  1. How did J.B. Hunt perform financially in 2002?

    Operating revenues were $2,247.9 million, up from $2,100.3 million in 2001. Net earnings were $51.8 million, or $1.33 per diluted share, compared with $32.9 million, or $0.91 per diluted share, in 2001. Operating income was $101.0 million, versus $72.2 million a year earlier.

  2. Which business segments drove the improvement?

    All three reportable segments contributed. JBI gross revenue grew 9% to $809.1 million with operating income of $54.6 million, DCS revenue grew nearly 15% to $628.3 million with operating income of $19.7 million, and JBT operating income rose to $26.6 million from $8.7 million on essentially flat revenue of $827.3 million.

  3. How did the company change its capital structure in 2002?

    A secondary public offering that closed in June 2002 raised approximately $68 million, with 2.8 million shares issued by JBHT and 3.1 million shares sold by a shareholder at $26 per share before underwriter discounts. Total debt and capitalized lease obligations declined to $343 million at year-end 2002 from $392 million, and stockholders' equity increased to $590.5 million.

  4. What are the main risks flagged in the filing?

    The filing highlights a possible IRS challenge to the 1999 intermodal container and chassis sale and leaseback, with the IRS examination beginning in October 2002. It also cites an EEOC action that may be appealed, a judgment of approximately $7 million that the company is contesting, difficulty attracting and retaining drivers, and fuel price volatility, with no derivative hedges in place as of December 31, 2002.

  5. What spending and tax outlook did management provide for 2003?

    Management expects to spend approximately $220 million on revenue equipment in 2003, net of expected proceeds from sale or trade-in allowances. It also estimates an effective income tax rate of 37% to 39% for 2003, reflecting a driver per diem plan implemented in February 2003 and anticipated higher earnings.

04—Continue

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