01—Abstract
Summary
Summary of the 10-K filed February 22, 2013. Cited figures are marked; the original filing is the authoritative source.
J.B.
Hunt Transport Services, Inc. reported total operating revenues of $5.05 billiona for 2012, up from $4.53 billion in 2011 and $3.79 billion in 2010, with the company stating revenue grew 11.7% over 2011. Operating income rose to $530.2 million from $444.2 million, and net earnings increased to $310.4 million, or $2.59 per diluted share, from $257.0 million, or $2.11 per diluted share, in 2011. The operating ratio improved to 89.5% from 90.2%, driven primarily by load growth in the JBI intermodal segment, which generated 61% of consolidated revenue and operating income of $375 million.
Cash generation and balance sheet metrics moved in mixed directions. Net cash provided by operating activities fell to $548.0 millionb from $635.7 million, which the company attributed mainly to higher cash taxes tied to 100% bonus depreciation in 2011 and timing of payables. Capital expenditures for additions to property and equipment were $439.5 million, and total debt declined to $685.3 million from $749.2 million, with the debt-to-equity ratio falling to 0.87 from 1.32.
Stockholders' equity rose to $791.9 millionc. The company committed approximately $283 million for 2013 capital spending, primarily containers, chassis and tractors. Shareholder returns included $83.4 million in dividends paid, with the quarterly dividend raised from $0.14 to $0.15 and paid early in December 2012.
The company does not expect to pay a dividend in the first quarter of 2013 and intends to resume quarterly payments in the second quarter of 2013. Share repurchases totaled $50 milliond in 2012, leaving $453 million under the authorized plan. Key risks noted include exposure to a few major railroads and customers (top 10 customers were approximately 30% of revenue), driver availability, fuel cost volatility, insurance costs, and a California class-action wage lawsuit whose loss cannot be reasonably estimated.
02—Key points
Key Highlights
- Total operating revenues of $5.05 billion in 2012, up 11.7% from $4.53 billion in 2011
- Operating income of $530.2 million, up from $444.2 million; operating ratio improved to 89.5% from 90.2%
- Net earnings of $310.4 million, or $2.59 per diluted share, versus $2.11 per diluted share in 2011
- JBI intermodal segment generated $3.07 billion in revenue (61% of total) and $375 million in operating income
- Operating cash flow declined to $548.0 million from $635.7 million, mainly due to higher cash income tax payments
- Total debt reduced to $685.3 million from $749.2 million; debt-to-equity improved to 0.87 from 1.32
- Quarterly dividend increased to $0.15 (paid December 2012), but no dividend expected in Q1 2013 with resumption planned in Q2 2013
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 22, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $5.05B$4.53B | +11.7% |
| Operating Expenses | $4.52B$4.08B | +10.8% |
| Operating Income | $530.20M$444.23M | +19.4% |
| Interest Expense | $25.56M$28.51M | −10.3% |
| Net Income | $310.35M$257.01M | +20.8% |
| EPS (Basic) | $2.64$2.16 | +22.2% |
| EPS (Diluted) | $2.59$2.11 | +22.7% |
| Shares Outstanding (Basic) | 117.57M119.16M | −1.3% |
| Shares Outstanding (Diluted) | 120.02M121.92M | −1.6% |
05—Questions
Frequently Asked Questions
How did J.B. Hunt perform financially in 2012?
Total operating revenues rose to $5.05 billion from $4.53 billion, and operating income increased to $530.2 million from $444.2 million. Net earnings reached $310.4 million, or $2.59 per diluted share, compared with $257.0 million, or $2.11 per diluted share, in 2011.
Which business segment drives the company's results?
The JBI intermodal segment is the largest, contributing $3.07 billion of 2012 revenue (61% of consolidated revenue) and $375 million of segment operating income. DCS, ICS and JBT generated $1.08 billion, $456 million and $484 million of revenue, respectively.
Why did operating cash flow decline in 2012?
Net cash provided by operating activities fell to $548 million from $636 million in 2011. The company attributed the decrease primarily to higher cash paid for income taxes, reflecting timing effects of 100% bonus depreciation used in its 2011 tax filings, along with timing of trade accounts payable and accrued expense payments.
Will J.B. Hunt pay a dividend in early 2013?
The company does not expect to declare or pay a quarterly dividend in the first quarter of 2013 and intends to resume quarterly cash dividends in the second quarter of 2013. The filing notes no assurance can be given that future dividends will be paid.
What are the main risks and pending legal matters?
Key risks include dependence on certain railroads, principally Burlington Northern Santa Fe and Norfolk Southern, reliance on third-party carriers, fuel price volatility, insurance and claims costs, driver availability, and customer concentration, with the top 10 customers at approximately 30% of revenue. The company is a defendant in California class-action lawsuits by drivers alleging unpaid wages and meal and rest period violations, and it stated it cannot reasonably estimate the possible loss.
06—Continue