HUNT J B TRANSPORT SERVICES INC

Part I. ** Financial Information**

Condensed Consolidated Statements of Earnings

(in thousands, except per share amounts)

Condensed Consolidated Balance Sheets

(in thousands)

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except per share amounts)

Condensed Consolidated Statements of Cash Flows

(in thousands)

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Basis of Presentation

The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. We believe such statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of our financial position, results of operations and cash flows at the dates and for the periods indicated. Pursuant to the requirements of the Securities and Exchange Commission (SEC) applicable to quarterly reports on Form 10-Q, the accompanying financial statements do not include all disclosures required by GAAP for annual financial statements. While we believe the disclosures presented are adequate to make the information not misleading, these unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024. Operating results for the periods presented in this report are not necessarily indicative of the results that may be expected for the calendar year ending December 31, 2025, or any other interim period. Our business is somewhat seasonal with slightly higher freight volumes typically experienced during August through early November in our full-load freight transportation business.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes: Improvements to Income Tax Disclosures, which enhances income tax disclosures to provide more transparency about income tax information, primarily related to the rate reconciliation and income taxes paid by jurisdiction information. These disclosures will include consistent categories and greater disaggregation of information in the rate reconciliation and require income taxes paid to be disaggregated by jurisdiction as well as additional amendments to improve the effectiveness of income tax disclosures. The new standard became effective prospectively for us on January 1, 2025, for annual periods, with retrospective adoption permitted. We do not anticipate the adoption of this accounting pronouncement to have a material impact on our financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures, which requires public business entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items in the notes to the financial statements. The standard becomes effective prospectively for us on January 1, 2027, for annual periods, and January 1, 2028, for interim periods, with retrospective adoption permitted. We are currently evaluating the impact of the adoption of this accounting pronouncement on our financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software, which clarified and modernizes the accounting for costs related to internal-use software. The amendments in the standard remove all previous references to project stages and clarify the threshold entities apply to begin capitalizing costs. The standard becomes effective for us on January 1, 2028, for annual and interim periods and may be adopted on a prospective basis, a modified basis for in-process projects, or a retrospective basis. We are currently evaluating the impact of the adoption of this accounting pronouncement on our financial statements.

We compute basic earnings per share by dividing net earnings available to common shareholders by the actual weighted average number of common shares outstanding for the reporting period. Diluted earnings per share reflects the potential dilution that could occur if holders of unvested restricted and performance share units converted their holdings into common stock. The dilutive effect of restricted and performance share units was 0.7 million and 0.6 million shares during the three and nine months ended September 30, 2025, respectively, compared to 0.8 million shares during the three and nine months ended September 30, 2024.

The following table summarizes the components of our share-based compensation program expense (in thousands):

As of September 30, 2025, we had $66.5 million and $35.7 million of total unrecognized compensation expense related to restricted share units and performance share units, respectively, that is to be recognized over the remaining weighted average period of approximately 2.8 years for restricted share units and 2.2 years for performance share units. During the nine months ended September 30, 2025, we issued 40,686 shares for vested restricted share units and 84,001 shares for vested performance share units. Of this total,34,838 shares for vested restricted share units andzero shares for vested performance share units were issued during the third quarter 2025.

Outstanding borrowings, net of unamortized discount and unamortized debt issuance cost, under our current financing arrangements consist of the following (in millions):

Senior Credit Facility

At September 30, 2025, we were authorized to borrow through a revolving line of credit, which is supported by a credit agreement with a group of banks. The revolving line of credit authorizes us to borrow up to $1.0 billion under afive-year term expiring September 2027 and allows us to request an increase in the revolving line of credit total commitment by up to $300 million and to request twoone-year extensions of the maturity date. In addition, the credit agreement authorized us to borrow up to an additional $500 million through committed term loans during the nine-month period beginning September 27, 2022, due September 2025, which we exercised in June 2023. The entire outstanding balance of these term loans was paid in full in March 2025. The applicable interest rates under this agreement are based on either the Secured Overnight Financing Rate (SOFR), or a Base Rate, depending upon the specific type of borrowing, plus an applicable margin and other fees. At September 30, 2025, we had $160 million outstanding on the revolving line of credit, at an average interest rate of 5.16%, under this agreement.* *

Senior Notes

Our senior notes consist of two separate issuances. The first is $700 million of 3.875% senior notes due March 2026, issued in March 2019. Interest payments under these notes are due semiannually in March and September of each year beginning September 2019. The second is $750 million of 4.90% senior notes due March 2030, issued in March 2025. Interest payments under these notes are due semiannually in March and September of each year beginning September 2025. Both senior notes were issued by J.B. Hunt Transport Services, Inc., a parent-level holding company with no significant tangible assets or operations. The notes are guaranteed on a full and unconditional basis by our wholly-owned operating subsidiary. All other subsidiaries of the parent are minor. We registered these offerings and the sale of the notes under the Securities Act of 1933, pursuant to shelf registration statements filed in January 2019 and February 2023, respectively. Both notes are unsecured obligations and rank equally with our existing and future senior unsecured debt. We may redeem for cash some or all of the notes based on a redemption price set forth in the note indenture.

Our financing arrangements require us to maintain certain covenants and financial ratios. We were in compliance with all covenants and financial ratios at September 30, 2025.

On August 16, 2024, our Board of Directors authorized the purchase of up to $1 billion of our common stock. At September 30, 2025, we had $106.5 million available under this authorized plan to purchase our common stock. On October 22, 2025, our Board of Directors authorized the purchase of up to an additional $1 billion of our common stock to be effective upon our purchase of the remaining balance under the August 2024 authorization. During the nine months ended September 30, 2025, we purchased approximately 5,427,000 shares, or $783.4 million of our common stock in accordance with plans authorized by our Board, of which approximately 1,603,000 shares, or $230.4 million, were purchased in the third quarter of 2025. On January 23, 2025, our Board of Directors declared a regular quarterly cash dividend of $0.44, which was paid February 21, 2025, to shareholders of record on February 7, 2025. On April 24, 2025, our Board of Directors declared a regular quarterly dividend of $0.44 per common share, which was paid May 23, 2025, to shareholders of record on May 9, 2025. On July 23, 2025, our Board of Directors declared a regular quarterly dividend of $0.44 per common share, which was paid on August 22, 2025, to shareholders of record on August 8, 2025. On October 22, 2025, our Board of Directors declared a regular quarterly dividend of $0.44 per common share, which will be paid on November 21, 2025, to shareholders of record on November 7, 2025.

Our assets and liabilities measured at fair value are based on valuation techniques which consider prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. These valuation methods are based on either quoted market prices (Level 1) or inputs, other than quoted prices in active markets, that are observable either directly or indirectly (Level 2).

Assets Measured at Fair Value on a Recurring Basis

The following assets are measured at fair value on a recurring basis (in millions):

The fair value of trading investments has been measured using the market approach (Level 1) and reflects quoted market prices. Trading investments are classified in other assets in our Condensed Consolidated Balance Sheets.

Financial Instruments

The carrying amount of our senior credit facility and senior notes was $1.60 billion and $1.48 billion at September 30, 2025 and December 31, 2024, respectively. The estimated fair value of these liabilities using the income approach (Level 2), based on their net present value, discounted at our current borrowing rate, was $1.63 billion and $1.48 billion at September 30, 2025 and December 31, 2024, respectively.

The carrying amounts of all other instruments at September 30, 2025, approximate their fair value due to the short maturity of these instruments.

Our effective income tax rate was 24.0% for the three months ended September 30, 2025, compared to 25.2% for the three months ended September 30, 2024. Our effective income tax rate was 25.6% for the first nine months of 2025, compared to 26.8% in 2024. In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate, adjusted for discrete items. This rate is based on our expected annual income, statutory tax rates, best estimate of nontaxable and nondeductible items of income and expense, and the ultimate outcome of tax audits.

At September 30, 2025, we had a total of $80.6 million in gross unrecognized tax benefits, which are a component of other long-term liabilities on our Condensed Consolidated Balance Sheets. Of this amount, $64.9 million represents the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate. The total amount of accrued interest and penalties for such unrecognized tax benefits was $17.3 million at September 30, 2025.

On July 4, 2025, new U.S tax legislation was signed into law which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the legislation makes changes to certain U.S. corporate tax provisions. We continue to evaluate the impact of the new legislation; however, we do not expect it to have a material impact on our consolidated statements of earnings. Our deferred income tax liabilities as of September 30, 2025 and December 31, 2024 were $938 million and $896 million, respectively. This increase was primarily due to the bonus depreciation and domestic tax research cost expensing provisions of the legislation.

As the result of state use tax audits, we have been assessed amounts owed from which we are vigorously appealing. We have recorded a liability for the estimated probable exposure under these audits and await resolution of the matter.

We purchase insurance coverage for a portion of expenses related to vehicular collisions and accidents. These policies include a level of self-insurance (deductible) coverage applicable to each claim as well as certain coverage-layer-specific, aggregated reimbursement limits of covered excess claims. Our claims from time to time exceed some of these existing coverage layer aggregate reimbursement limits, and accordingly, we have recorded a liability for the estimated probable exposure for these occurrences.

We are involved in certain other claims and pending litigation arising from the normal conduct of business. Based on present knowledge of the facts and, in certain cases, opinions of outside counsel, we believe the resolution of these claims and pending litigation will not have a material adverse effect on our financial condition, results of operations or liquidity.

We reported five distinct business segments during the nine months ended September 30, 2025 and 2024. These segments included Intermodal (JBI), Dedicated Contract Services® (DCS®), Integrated Capacity Solutions (ICS), Final Mile Services® (FMS), and Truckload (JBT). The operation of each of these businesses is described in Note 13, Segment Information, of our Annual Report (Form 10-K) for the year ended December 31, 2024. A summary of certain segment information is presented below (in millions):