J.B. HUNT TRANSPORT SERVICES, INC.
2020 NOTICE OF ANNUAL MEETING,
PROXY STATEMENT AND ANNUAL REPORT
With innovation and technology at our
core and people as our driving force,
we are fulfi lling our mission to create
the most effi cient transportation
network in North America.
TABLE OF
CONTENTS
LETTER TO OUR STOCKHOLDERS AND EMPLOYEES
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
Proxy Summary
PROPOSAL NUMBER ONE – ELECTION OF DIRECTORS
Information About the Board
Nominees for Director
Director Compensation
Executive Officers of the Company
Security Ownership of Management
Corporate Governance
Audit Committee
Executive Compensation Committee
Nominating and Corporate Governance Committee
Principal Stockholders of the Company
Executive Compensation
Compensation Discussion and Analysis
Process of Setting Compensation
2020 Compensation
Summary Compensation
Grants of Plan-Based Awards
Outstanding Equity Awards at Calendar Year-end
Restricted Share Units Vested
Nonqualified Deferred Compensation
Potential Post-Employment Benefits
CEO Pay Ratio
Report of the Executive Compensation Committee
J.B. HUNT TRANSPORT SERVICES, INC. Table of Contents
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1
TABLE OF CONTENTS
PROPOSAL NUMBER TWO – ADVISORY VOTE ON EXECUTIVE COMPENSATION
Report of the Audit Committee
PROPOSAL NUMBER THREE – RATIFICATION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Questions and Answers About the Proxy Materials and the Annual Meeting
2020 ANNUAL REPORT
PART I
Item 1.
Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.
Properties
Item 3.
Legal Proceedings
Item 4.
Mine Safety Disclosures
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
Item 6.
Selected Financial Data
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Financial Statements and Supplementary Data
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12.
Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services
PART IV
Item 15. Exhibits, Financial Statement Schedules
Signatures
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J.B. HUNT TRANSPORT SERVICES, INC. Table of Contents
TO OUR
STOCKHOLDERS
AND EMPLOYEES,
Our Mission: To create the most efficient transportation network in North America.
This mission statement – unveiled in 2019 – couldn’t have come at a more significant time.
2020 would upend our operations, the supply chain industry at large and nearly every
aspect of our individual lives in ways we never imagined. Through it all, our mission to
create the most efficient transportation network in North America remained as our guiding
principle. And it was never more needed. The past year has challenged us to look beyond
our prior accomplishments, focus on our future and leverage our people, processes and
technology to capitalize on our competitive advantages in new ways.
So often, we see talented people join the company and put down roots. This is the eleventh
annual stockholders’ letter I have had the privilege to author and I’m proud to say I just
celebrated my 32nd employment anniversary with J.B. Hunt. But career longevity is not
a unique experience here. Our chairman, Kirk Thompson, has been with the company for
over 45 years. We, and so many others, have seen years turn into decades and what may
have started as a job, turn into a career.
Why does it happen? Very simply, we believe it’s because we provide pathways for our
people to succeed – both personally and professionally. Our workplace culture values
entrepreneurship, innovation and execution among other required disciplines. This
empowers our employees to continuously add value for our customers with new services,
solutions to problems and outstanding customer experience. Ten years ago, when we
set a goal of growing company revenue to $10 billion, we understood that investing in
our people would be one of the biggest enablers to helping us achieve that goal. We
should surpass that target this year – largely because we don’t see growing revenue and
supporting the well-being of our workforce as mutually exclusive, but complementary.
Meeting Unexpected Challenges
2020 started with what felt like a fire drill. In mid-March, we transitioned our corporate
headquarter’s employees to remote work. Those serving in positions the government
deemed essential – our field managers, maintenance teams and drivers – continued
normal operations actively serving our customers. Their performance – even in the midst
of great uncertainty – was exemplary and we couldn’t be prouder of the roles they played
in the early stages of the pandemic to keep goods moving through supply chains. We
also began making adjustments to key financial areas, like the preservation of cash and
J.B. HUNT TRANSPORT SERVICES, INC. Letter To Our Stockholders and Employees
3
LETTER TO OUR STOCKHOLDERS
AND EMPLOYEES
reductions to our planned capital expenditures, to prepare for unforeseen circumstances.
We also vocally re-affirmed our commitment to two vital and longstanding priorities:
1) protect the health and well-being of our employees; and 2) honor the promises and
commitments we have made to our customers.
We activated our Business Continuity Disaster Recovery Team (BCDR) to facilitate effective
communication and information-sharing across the entire company. This team meets daily to
share data on the events occurring nationally and in all areas where we have employees. The
BCDR team remains actively engaged in guiding our efforts to combat the coronavirus, and
their actions are integral to our operational and strategic decision-making for the company.
In early 2020, we adapted our operations, making significant use of video conferencing
and remote work, and we managed well. But as weeks turned into months and the spike
of adrenaline waned, we discovered that our team collaboration and productivity also
began to slowly fade. So much of our culture and creative energy is sustained by working
together, in person. So, we enabled processes that would allow those working remotely
to begin to safely return to the office in a phased approach. While only about 50 percent
of our Lowell staff is able to work from the office in accordance with CDC guidelines, our
safety protocols have been effective at our headquarters and across our field locations.
In the midst of the turmoil and distractions 2020 created, we have gained more clarity and
reassurance that our business model and strategy are sound. Our digital freight management
strategy, grounded in our J.B. Hunt 360°® platform, continued to evolve and gain momentum
with our customers and carriers. The demand for final mile services accelerated during
the pandemic, and we see this segment as an ideal complement to our suite of offerings
and anticipate strong growth thanks to surges in e-commerce purchasing. Meanwhile,
the expansion of our 360box drop and hook trailer pilot and the growth of temperature-
controlled intermodal services were catalysts for progress inside our core businesses of
Highway Services and Intermodal. Lastly, Dedicated Contract Services, where we are
positioned as clear leaders, saw meaningful growth and strengthening of our competitive
advantages in several industry verticals.
Our 2020 financial results can be found in this annual report and are easily accessible via
our website. We are grateful for the support of our customers and the efforts of our people
to maintain safe operations while working to meet the commitments we’ve made.
Foundational Leadership
We recently announced several executive appointments and changes that, we believe, set
us on a firm foundation for growth in key areas.
In the spring of 2020, we bid farewell to longtime Intermodal president Terry Matthews and
are deeply grateful for his many years of service and leadership. Darren Field took charge
of Intermodal, our largest business unit, as Executive Vice President (EVP) and President.
Darren will lead our Intermodal segment to the next level using his vast experiences and
customer-centric approach to business.
4
J.B. HUNT TRANSPORT SERVICES, INC. Letter To Our Stockholders and Employees
LETTER TO OUR STOCKHOLDERS
AND EMPLOYEES
Following the 2020 retirement of former Chief Financial Officer (CFO) Dave Mee, John
Kuhlow was named CFO of J.B. Hunt – the sixth person in the company’s history to fill the
post. We wish Dave well in his retirement and appreciate his service to the company as a
colleague and friend.
We broadened Shelley Simpson’s role as our Chief Commercial Officer to allow more
comprehensive focus on our strategic direction and further develop our J.B. Hunt 360°
product suite alongside Stuart Scott, our Chief Information Officer. Our People and Human
Resources teams will also now report to Shelley as we seek to accelerate our efforts in
inclusion and diversity and cultivate a closer connection between our talent management
function and the hiring needs of our individual business units.
Nick Hobbs adds the role of Chief Operating Officer to his responsibilities as president
of Contract Services (Dedicated Contract Services (DCS) and Final Mile Services (FMS)).
In this expanded role, Nick will serve as the executive leader for our equipment and
maintenance teams and will also focus our efforts on more comprehensive integration
between the company’s operations in each segment.
Brad Hicks will bring his experience from DCS and FMS to lead our Highway Services
segments as their new EVP and President. Brad will work with Eric McGee, currently EVP
of the segments, to continue building Highway Services into a leader in the domestic
transportation market. We believe this area is the largest domestic market we serve.
A final change, but a very important one, is in the creation of a new role for the company.
Craig Harper moved into the executive position of Chief Sustainability Officer and will
oversee all elements of the company’s environmental sustainability initiatives as well as
helping guide our efforts in all areas of ESG transparency.
Developing Our People and Culture
2020 was a most remarkable year at J.B. Hunt in both good and bad ways. The rage of
a pandemic coupled with inequality and societal racial tensions tested our culture. We
faced challenges and questions we had not answered before. The situations presented by
2020 have made us more aware of and more committed to tackling tough issues together.
We have progress to make, but across the organization we observed a willingness to
continue an open, honest dialog, to develop a deeper understanding of these issues and
a strong desire to create solutions. We believe that this attitude and commitment will help
us strengthen and sustain a culture that supports justice and equality for everyone, both at
work and in our communities.
Our focus on the needs and quality of life of our employees and their families is as high a
priority as any we have. To that end and bearing in mind all that we have learned during
2020, we are raising the bar on our own expectations. Inclusion, diversity, and equality
are not buzzwords for us. We take the fairness of income, opportunity and treatment of all
people within the company very seriously.
J.B. HUNT TRANSPORT SERVICES, INC. Letter To Our Stockholders and Employees
5
LETTER TO OUR STOCKHOLDERS
AND EMPLOYEES
As noted, Shelley Simpson has assumed executive leadership of all people and human
resources functions inside the company. With Shelley’s reputation as a thought leader,
we see the potential for enrichment in all areas of people under her guidance. We
have also made an investment with the University of Arkansas (U of A) in creating the
J.B. Hunt Transport Services, Inc. Inclusion Education and Thought Leadership Fund,
along with our investments with the U of A in the area of sustainability.
Last year, we also encountered strong headwinds with regard to our driver recruiting.
The training and development of qualified drivers to operate our equipment is facing
new challenges. Driver availability has been compromised and we have to determine
the best course for correction. One element of the equation is drivers’ earning power.
Our pay levels are at generally all-time highs, but we don’t think it is enough. Studies
are underway to better understand what is needed to ensure we have enough drivers
available.
Advancing Technology
Over the past four years, our investments in engineering and technology have made a
profound impact on the bottom line and long-term strategic direction of our business.
Under the capable leadership of Chief Information Officer Stuart Scott, we have recruited
top talent from a diverse group of industries, companies and universities. This group
is helping shift and expand our perspectives about both the internal and external
applications of technology in freight transportation.
The J.B. Hunt 360° platform is central to the modernization of our core systems
and infrastructure, while also being the foundation for disruptive, external-facing
technologies that will move the company and industry forward. Over 70 percent of
our freight management business is now conducted within our 360° platform and
our asset businesses drive an additional 20 percent growth of our marketplace. More
than 50 percent of our core revenue generation, operations execution and back office
support systems now reside on modernized technology and cloud infrastructure.
We recently announced a strategic alliance with Google to bolster our work in expanding
our development of freight technologies. This alliance is groundbreaking and will facilitate
the amplification and acceleration of the most advanced machine learning and artificial
intelligence based transportation management system in the industry.
Building a Sustainable Future
In 2020, we committed ourselves to increasing our outreach and disclosure efforts
around Environmental, Social and Governance (ESG) topics. These efforts commenced
with the formation of our ESG Committee, comprised of a diverse group of employees
across our organization who are responsible for advancing our ESG initiatives. I am
proud of our team’s work over the course of the year which includes being the first
company in the road transportation sector to publish a report using the Sustainability
Accounting Standards Board (SASB) framework. Other accomplishments include
6
J.B. HUNT TRANSPORT SERVICES, INC. Letter To Our Stockholders and Employees
LETTER TO OUR STOCKHOLDERS
AND EMPLOYEES
receiving the Smartway® Excellence Award from the U.S. Environmental Protection
Agency for the 11th consecutive year and improving our performance across multiple
reporting agencies including the CDP (formerly the Carbon Disclosure Project) and
Sustainalytics. While this work is a solid start, we recognize that advancing our
sustainable business practices is an ever-evolving process. As we progress forward, we
remain committed to the testing and rollout of alternative fuel equipment as it becomes
a commercially viable alternative to diesel-powered equipment. Specifically, our priorities
for 2021 will focus on expanding our disclosures in the SASB framework, with the
addition of both Task Force on Climate-related Financial Disclosures (TCFD) and Global
Resource Initiative (GRI) performance indicators.
We continue to see a very bright future for the company in all aspects of our customer,
financial, environmental, social and community responsibilities. Our long-held belief
that our people, leadership and technology will serve as the enablers for future growth
remains intact and we saw evidence of this in action daily throughout 2020. Our team
responded in remarkable ways to the challenges and uncertainties of the previous year,
giving us every confidence that the year ahead is filled with promise and prosperity.
Thank you for your interest and your trust.
John N. Roberts, III
President & Chief Executive Officer
Director
James Kirk Thompson
Chairman of the Board of Directors
Director
J.B. HUNT TRANSPORT SERVICES, INC. Letter To Our Stockholders and Employees
7
J.B. HUNT TRANSPORT SERVICES, INC.
615 J.B. Hunt Corporate Drive
Lowell, Arkansas 72745
479-820-0000
Internet Site: jbhunt.com
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD APRIL 22, 2021
The Annual Meeting of Stockholders of J.B. Hunt Transport Services, Inc. (the Company) will be held April 22, 2021,
at 10 a.m. (CDT) at the Company’s headquarters, located at 615 J.B. Hunt Corporate Drive in Lowell, Arkansas, for
the following purposes:
1
2
3
4
To elect Directors for a term of one (1) year
To consider and approve an advisory resolution regarding the Company’s compensation of its named executive
officers
To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm
for the 2021 calendar year
To transact such other business as may properly come before the Annual Meeting or any adjournments thereof
Only stockholders of record on February 16, 2021, will be entitled to vote at the meeting or any adjournments thereof.
The stock transfer books will not be closed.
The 2020 Annual Report to Stockholders is included in this publication.
By Order of the Board of Directors
JENNIFER R. BOATTINI
Corporate Secretary
Lowell, Arkansas
March 18, 2021
8
J.B. HUNT TRANSPORT SERVICES, INC. Notice of Annual Meeting
PROXY STATEMENT
SUMMARY
YOUR VOTE IS IMPORTANT
PLEASE EXECUTE YOUR PROXY WITHOUT DELAY
J.B. HUNT TRANSPORT SERVICES, INC.
615 J.B. Hunt Corporate Drive
Lowell, Arkansas 72745
479-820-0000
Internet Site: jbhunt.com
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of proxies by J.B. Hunt Transport Services, Inc.
(the Company), on behalf of its Board of Directors (the Board), for the 2021 Annual Meeting of Stockholders (the
Annual Meeting). The Proxy Statement and the related proxy card are being distributed on or about March 18, 2021.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDERS MEETING TO BE HELD APRIL 22, 2021
This Proxy Statement and our 2020 Annual Report to Stockholders, which includes our Annual Report on Form
10-K, are available at jbhunt.com.
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
Item
Election of Directors
Advisory Vote on Executive Compensation
Ratification of Independent Registered Public Accounting Firm
Board
Recommendations
Further Details
FOR
FOR
FOR
Page 22
Page 78
Page 82
YOU SHOULD CAREFULLY READ THIS PROXY STATEMENT IN ITS ENTIRETY
The summary information provided above is for your convenience only and is merely a brief description of material
information contained in this Proxy Statement.
YOUR VOTE IS IMPORTANT
IF YOU ARE A REGISTERED OWNER, YOU MAY VOTE BY INTERNET, TELEPHONE, OR BY COMPLETING,
SIGNING, AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT TO US IN THE ACCOMPANYING
ENVELOPE AS PROMPTLY AS POSSIBLE
IF YOU ARE A BENEFICIAL OWNER, PLEASE FOLLOW THE VOTING INSTRUCTIONS OF YOUR BROKER,
BANK, OR OTHER NOMINEE AS PROVIDED WITH THIS PROXY STATEMENT AS PROMPTLY AS POSSIBLE
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
9
PROXY STATEMENT | SUMMARY
Director Nominees
Name
Occupation
Age
Director
Since
Independent
Other Current
Directorships
with Publicly Held
Companies
Committees Upon Election
Douglas G.
Duncan
FedEx Freight
Corporation
(retired)
70
2010
Yes
Benchmark
Electronics, Inc.
Audit
Corporate Governance
Francesca M.
Edwardson
Wayne
Garrison
American Red
Cross of Greater
Chicago &
Northern Illinois
(retired)
J.B. Hunt
Transport
Services, Inc.
(retired)
Sharilyn S.
Gasaway
Alltel Corp.
(retired)
63
2011
Yes
Duluth Holdings,
Inc.
Audit
Corporate Governance
68
1981
No
52
2009
Yes
Genesis Energy, LP
Audit (Chair)
Waddell & Reed
Financial, Inc.
Compensation
Corporate Governance
Gary C.
George
George’s Inc.
70
2006
Yes
Corporate Governance (Chair)
Compensation
Thad Hill
Calpine
Corporation
53
—
Yes
Compensation
Corporate Governance
Bryan
Hunt, Jr.
Hunt Automotive
Group
62
1991
No
Gale V. King
Nationwide
Mutual
Insurance Co.
64
2020
Yes
AutoZone, Inc.
Compensation
Corporate Governance
John N.
Roberts, III
President and
Chief Executive
Officer
56
2010
No
James L.
Robo
NextEra
Energy, Inc.
58
2002
Yes
NextEra Energy, Inc.
Compensation (Chair)
NextEra Energy
Partners, LP
Corporate Governance
Kirk
Thompson
Chairman of
the Board
67
1985
No
10
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
PROXY STATEMENT | SUMMARY
Compensation Objectives, Principles and Practices
We believe the ability to attract, retain, and provide appropriate incentives for the senior executive officers and other
key employees of the Company is essential to maintaining the Company’s leading competitive position, thereby
providing for the long-term success of the Company. The overall compensation philosophy of the Company’s Board
of Directors and management is guided by the following principles:
Recruitment and Retention
Performance and Responsibility
The Company aims to attract, motivate, and retain
high-performing talent to achieve and maintain a leading
position in our industry. Our total compensation package
should be strongly competitive with other transportation
and logistics companies.
Total compensation should be tied to and vary with
performance and responsibility, both at the Company and
individual levels, in achieving financial, operational, and
strategic objectives. Differentiated pay for high-performing
individuals should be proportional to their contributions to
the Company’s success.
Short-term Incentive
Long-term Incentive
A large portion of total compensation should be tied
to Company performance, and therefore at risk, as
position and responsibility increase. Individuals with
greater roles and the ability to directly impact strategic
direction and long-term results should bear a greater
proportion of the risk.
Awards of long-term compensation encourage
participating employees to focus on the Company’s
long-range growth and development and incent them
to manage from the perspective of stockholders with a
meaningful stake in the Company, as well as to focus on
long-term career orientation.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
11
PROXY STATEMENT | SUMMARY
2020 Business Highlights
Consolidated Revenue
$10,000
(in millions)
$10,000
$10,000
$8,000
$8,000
$8,000
$6,000
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2010
2010
2011
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2015
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2016
2017
2017
2018
2018
2019
2019
2020
2020
$0
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Consolidated Operating Income
(in millions)
Diluted EPS
$800
$800
$7.00
$7.00
$700
$800
$700
$600
$700
$600
$500
$500
$600
$400
$500
$400
$300
$400
$300
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$200
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J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
PROXY STATEMENT | SUMMARY
J.B. HUNT
CONSOLIDATED
INTERMODAL
(JBI)
DEDICATED
(DCS)
REVENUE
$9.6B
5%
REVEN UE
$4.7B
1%
R EVEN UE
$2.2B
3%
OPERATING INCOME
OPER ATI NG IN CO ME
O PER ATI NG IN CO ME
$713M
3%
$428M
4%
$314M
13%
INTEGRATED
(ICS)
FINAL MILE
(FMS)
TRUCKLOAD
(JBT)
REVENUE
$1.7B
23%
REVEN UE
$688M
22%
R EVEN UE
$463M
19%
OPERATING INCOME
OPER ATI NG IN CO ME
O PER ATI NG IN CO ME
$(45)M
$34M
$(1)M
$8M
$17M
43%
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
13
PROXY STATEMENT | SUMMARY
J.B. HUNT CORPORATE RESPONSIBILITY
Overview/Mission Statement
At J.B. Hunt, our success is dependent upon our employees solving complex problems and creating value for
our customers by eliminating waste, reducing costs, and forging long-term relationships by delivering exceptional
service. The Board and Management recognize that our future success rests on creating a sustainable business
model built on a foundation of strong corporate governance while maintaining sound environmental and social
responsibility for the benefi t of all our stakeholders. By continuously focusing on reducing our carbon footprint,
investing in the latest technologies to help improve effi ciency, keeping the roads and our employees safe, and
embracing the diversity of our customers and people, we’re in it for the long haul. We do what we can to have
a positive impact on the things that matter most to our stakeholders with a stated mission - to create the most
effi cient transportation network in North America.
CORPORATE
RESPONSIBILITY / GOVERNANCE
Accountability • Transparency • Sustainability
EMPLOYEES
COMMUNITIES
SAFETY
ENVIRONMENT
SHAREHOLDERS
Safety
Career Development
Diversity & Inclusion
Corporate Giving
Volunteering
Stewardship
Reduce Accidents & Injuries
Invest in Latest
Safety Technologies
Driver Training
Improve Fuel Economy
Improve Effi ciency
Optimize Supply Chains
Growth
Capital Effi ciency
Enhance Shareholder
Value
14
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
PROXY STATEMENT | SUMMARY
Sustainability
Throughout our history, J.B. Hunt has recognized the importance of building a sustainable business and continues
to take steps to increase awareness and transparency regarding our efforts with all our stakeholders. In 2019, the
executive management team advanced these efforts with the establishment of our Sustainability Committee led by
our then Chief Operations Officer, Craig Harper. Mr. Harper was recently named our Chief Sustainability Officer and
reports directly to our CEO on the progress of advancing our sustainability initiative. The Sustainability Committee
is comprised of a diverse group of J.B. Hunt employees responsible for identifying opportunities to advance our
measurement, management, and disclosure of our sustainability efforts to help identify and mitigate climate and
other related risks. Members of the Committee regularly present to our Nominating and Corporate Governance
Committee on the Company’s efforts and investments made to reduce our greenhouse gas (GHG) emissions as
part of its oversight of fossil fuel efficiency and progress on reducing the Company’s environmental impact.
Environmental Matters
The Company recognizes that reducing
GHG emissions in our business is important
to our stockholders, our customers, the
communities we serve, the global environment,
and ultimately the future success of our
Company. Increasingly, our customers are
making environmental responsibility a priority
in their business decision-making, and the
same is true for the Company. We strive to
offer transportation solutions that help the
Company and our customers reduce both
costs and carbon emissions while meeting or
exceeding our customers’ operational needs.
Challenges to further reducing our carbon
emissions include but are not limited to the
availability of commercially and economically
viable alternatives to diesel-powered equipment
and our ability to convert over-the-road shipments to rail through our intermodal service offering. Management
is committed to monetizing the efficient use of fossil fuels, such as adopting the most advanced technologies
provided from original equipment manufacturers (OEM), utilizing aftermarket products to reduce fuel burn, adopting
policies to incentivize reduced fuel burn, and assisting manufacturers in developing commercially viable alternative
fuel sources. In 2020, J.B. Hunt completed its first delivery using an all-electric Class 8 truck.
In 2020, J.B. Hunt completed its first delivery using
an all-electric Class 8 truck.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
15
PROXY STATEMENT | SUMMARY
The Company recognizes that reducing our carbon footprint is a continuous journey, and we believe the following
items support our commitment to reducing our environmental impact:
Intermodal Conversion
Energy-Efficient Trucks and Equipment
J.B. Hunt leads the industry in converting over-the-
road (OTR) shipments to intermodal. In 2020, as a
result of our conversion efforts, the Company reduced
CO2e emissions (versus an all-truck alternative) by
approximately 50% or ~3.4 million metric tons.
We maintain a modern fleet with an average truck age
of only 2.3 years as compared to the ~5.6 year industry
average. Modernization ensures that we maintain the
latest in emission reduction technologies. We also spec
our equipment to maximize fuel efficiency with features
including aerodynamic packages, idle-reducing cab
heaters, and automatic manual transmissions (AMTs)
that all contribute to improved fuel economy.
Renewable Technology
Fuel Technology
J.B. Hunt invests in renewable technology solutions.
Company assets are equipped with solar-powered
tracking units that optimize the location and availability
of trailing equipment. This technology allows J.B. Hunt to
increase the efficiency of its assets, reduce empty miles
and costs, and gain better control over its operations.
Fuel is one of the largest sources of carbon emissions
within the supply chain. We strive to find advanced fuel
solutions for customers, including the use of biofuels and
ensuring the fuel efficiency of our fleets. In 2020, 51%
of all fuel purchased was a bio-blended diesel product.
The Company’s total weighted average of fuel from
renewable sources was 8%.
Engineering Solutions
Customer Carbon Footprint
J.B. Hunt has a dedicated engineering team that helps
customers optimize their shipping strategy to minimize
total miles, maximize payload, and reduce carbon
emissions per shipment.
J.B. Hunt’s proprietary tool calculates a customer’s
carbon footprint. We then offer mode conversion
solutions, displaying how much carbon reduction can be
achieved by converting a load to an intermodal shipment.
Carbon Diet
Alternative Vehicles
We provide support to customers with a company-
developed sustainability practice called the “Carbon
Diet.” We educate customers on best practices in supply
chain sustainability and supply the resources needed to
be successful.
We continually seek and evaluate opportunities to
utilize emerging technologies in the area of exhaust-free
vehicles. In 2020, J.B. Hunt completed its first delivery
using an all-electric Class 8 truck. Additionally, we were
one of the first to place an order for an all-electric heavy-
duty Class 8 truck, and we anticipate further discussions
with OEMs and solutions providers about acquiring
additional electric and alternative fuel trucks when they
become commercially available in the future.
16
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
PROXY STATEMENT | SUMMARY
Social Matters
J.B. Hunt recognizes that operating a successful and sustainable business means acknowledging and
addressing important social issues. As a company, we support numerous initiatives that reflect the values most
important to our customers, employees, and the communities where we operate. With over 30,000 J.B. Hunt
employees across North America (~20,000 of which are our truck drivers), we believe our focus on safety, career
development, fostering a diverse and inclusive workplace, and giving back to the communities we serve are
among our highest priorities.
Public Safety
At J.B. Hunt, safety is a core value and is fundamental to the culture of the Company. Our commitment to safety,
which is a cornerstone of our business, has not deterred us from our goal of providing best-in-class service to our
customers. Ensuring the roads are safe for our drivers and the motoring public is important to us as a key social
responsibility and as a business concern. We train drivers extensively to understand and comply with all required
safety measures.
J.B. Hunt has made considerable investments in safety over the last two decades because first and foremost, it
is the right thing to do, and it is an investment with almost immeasurable returns. We share the road with millions
of people across the country every day, and our livelihood depends on keeping those roads as safe as possible
for everyone, including our drivers. In addition to complying with industry-relevant laws and mandates, J.B. Hunt
makes its contribution to public road safety in a variety of ways — driver training, drug testing, and investing in
technologies that make drivers and equipment safer.
We have continuously maintained a satisfactory safety rating from the Federal Motor Carrier Safety Administration
(FMCSA) since 1992. Our out-of-service (OOS) rates for vehicle, driver, and HAZMAT fall substantially below reported
national averages in the FMCSA’s Safety and Fitness Electronic Records (SAFER) System. In CSA (Compliance,
Safety, Accountability), our safety performance falls below the threshold of FMCSA’s on-road safety performance
BASICs (Behavior Analysis and Safety Improvement Categories) in all categories.
Public safety is further promoted through smart purchasing decisions. As new safety technologies are made
available, we carefully evaluate each to determine the overall impact and benefit they could bring to our drivers,
trucks, and equipment.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
17
PROXY STATEMENT | SUMMARY
Intermodal Conversion
Defensive Driving Training
J.B. Hunt leads the industry in converting OTR shipments
to intermodal. We estimate the conversion of shipments
from highway to rail has likely resulted in approximately
60 fewer truck-involved fatalities on our nation’s
highways during 2020 (using industry average fatality rate
per 100 million miles).
J.B. Hunt drivers are certified in a nationwide defensive
driving program, involving classroom and in-vehicle
training. All drivers are recertified periodically.
Monthly and Quarterly Safety Training
Hair Testing
Our drivers participate in regular ongoing web-based and
classroom safety training. Ongoing driver development
is designed to provide additional training for drivers, as
well as keep them up to date on regulatory issues and
company matters.
In 2006, J.B. Hunt implemented a policy requiring hair testing
for the presence of controlled substances in addition to
the U.S. Department of Transportation (DOT) required urine
testing. Management believes hair testing serves as a more
accurate and stringent standard to base an individual’s
habitual drug usage and has resulted in a material reduction
in unfavorable results from random and post-accident tests.
Automatic Onboard Recording Devices/ELDs
Forward Collision Warning Systems
We began implementing automatic onboard recording
devices in 2007. As an early adopter of this technology,
we have seen benefits in its ability to manage compliance
with hours-of-service (HOS) regulations and reduce
roadside inspection violations. J.B. Hunt remains
compliant with the mandate requiring electronic logging
devices in commercial vehicles.
Installation of forward collision warning systems on our
Class 8 tractors began in 2011. Currently, 99.9% of our
company Class 8 fleet is deployed with this equipment,
which includes an automatic emergency braking
system. We have seen a significant reduction in rear-
end collision frequency and costs since implementation
of these systems.
Video-Recording Technology
Installation of video-recording equipment began in 2016.
Currently, 87% of our Class 8 fleet has forward-facing
cameras installed. This equipment provides lane departure
warnings and enhanced radar functionalities for some
systems, such as braking on stationary objects. The
primary benefit of this technology is improving driver safety
performance. J.B. Hunt is also piloting rearview digital
camera technology on its fleet that will expand driver visibility
and potentially improve aerodynamics and fuel economy.
COVID-19: Employee Safety and Health
In 2020, the novel coronavirus (COVID-19) presented new challenges for our organization and the communities
where we operate. The health and well-being of our workforce is a priority as we continue to ingrain safety into
our corporate culture and strive to conduct all our operations as safely as possible. In response to COVID-19, we
implemented safety response activities at our home office campus and all other field locations throughout North
America which included requiring remote working when possible, expanded health and safety policies, facility
modifications, increased security coverage, and purchase and distribution of personal protective equipment (PPE)
and supplies. Due to the essential nature of our business, a large portion of our workforce consisting of drivers
and other non-office personnel have not been able to work remotely. Employees who are directly impacted by
COVID-19 or who might have been in contact with someone with COVID-19 are encouraged to quarantine and
utilize our COVID-19 paid-time off (PTO) benefit program, established in early 2020. Also during the year, J.B. Hunt
procured, donated, and arranged for the transportation of PPE supplies to local communities in need.
18
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
PROXY STATEMENT | SUMMARY
People Matters
Despite operating over 150,000 pieces of transportation equipment, our single greatest asset is our people. J.B.
Hunt strives to provide a supportive and safe work environment for its employees where diverse and innovative
ideas can be fostered to solve problems and provide value-added services for our customers. In addition to our
employees, our customers, vendors, and the communities where we operate also share diverse backgrounds and
an equally diverse range of interests and passions. J.B. Hunt puts forth its best effort to support initiatives reflecting
the company values that are shared with its stakeholders.
Company Giving
Veterans Hiring Initiatives
Traditional philanthropic strategies often times rule out
organizations that do not meet certain privileged criteria.
J.B. Hunt is proud to promote disruptive philanthropy,
which fractures existing giving values and applies new
technologies and competitive charitable models to raise
awareness about exclusion within traditional philanthropic
strategies. J.B. Hunt is a champion for advocating for
organizations that, in the past, have not received the
recognition or opportunities that they may deserve. In
2020, company and employee contributions toward J.B.
Hunt’s company pillars of Healthcare, Veterans, Crisis
Management and Education exceeded $4.2 million.
In 2014, J.B. Hunt made a commitment to hire 10,000
veterans by 2020, which we were proud to accomplish
before year-end 2019. More than 15% of our employees
are military veterans, and we are proud to be consistently
recognized for being a Top 100 Military Friendly Employer
by VIQTORY. For 2020, we achieved Gold status,
indicating a Top 10 ranking in our industry. J.B. Hunt
remains committed to hiring those who have served
and providing the best support of our military members
to further our goal of being an employer of choice for
veterans.
Employee Healthcare
Diversity & Inclusion Initiative
J.B. Hunt is committed to improving the health of its
workforce. Access to quality care is an important part of
that commitment, and we have programs in place that
focus on improving the quality of care that our employees
and their families receive. Paid leave is another key
component of our strategy. J.B. Hunt offers benefit plans
that comply with all applicable laws. In 2020, J.B. Hunt
introduced our COVID-19 paid-time off (PTO) benefit
program to ensure full wages were available to employees
quarantined during the pandemic.
The Company’s Diversity and Inclusion initiative was
founded in 2017. This initiative is spearheaded by our
strategic leader who has a doctorate in organizational
leadership and administration and was brought on board
to expand the program. Diversity and Inclusion reaches
enterprise-wide and aims to create a diverse and inclusive
culture and environment where employees from all
backgrounds can succeed and be heard.
Information Privacy & Protection Program (IP3)
Employee Resource Groups (ERGs)
Our IP3 is designed to protect the privacy of our workers,
customers, vendors, and other proprietary corporate
information. Its mission is to employ privacy best
practices in collection, usage, storage, and disposal
of information in compliance with applicable laws and
regulations and to foster a culture that values privacy
through awareness. All non-driver personnel are required
to complete IP3 training.
Our ERGs offer opportunities for employee professional
development, community engagement, and networking.
Comprised of groups for women, Latinos, veterans,
African Americans, and the LGBTQIA+ community, our
ERGs promote camaraderie within the workforce and
allow employees with similar interests to build meaningful
work relationships.
Human Trafficking
The issue of human trafficking is one that hits close to
home in our industry. J.B. Hunt launched Truckers Against
Trafficking training in 2014 and has trained over 90,000
employees to recognize and report signs of human
trafficking. In 2020, the Company became a signatory
of the DOT’s Transportation Leaders Against Human
Trafficking Pledge.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
19
PROXY STATEMENT | SUMMARY
Governance Highlights
We believe that good corporate governance helps to ensure the Company is managed for the long-term benefit of
all of our stakeholders and accordingly observe the following key corporate governance principles:
Director Independence
The Company maintains a Board of Directors comprised
of a majority of individuals who satisfy the criteria for
independence under the NASDAQ listing standards.
Lead Director and Independent Director
Executive Sessions
Independent directors generally meet in executive
session as part of each regularly scheduled Board
meeting, with the position of Independent Lead Director
being established to direct these executive sessions
and authority to call additional meetings of independent
directors as deemed necessary.
Board Committees
Board Qualifications
The Company requires all committees of the Board be
comprised solely of independent directors and formal
charters have been established outlining the purpose,
composition, and responsibility of each committee,
with all having authority to retain outside, independent
advisors and consultants as needed.
The Board has established qualification guidelines for
director nominees and performs continual evaluation of
current director performance and qualifications.
Board Attendance and Overboarding
Board Diversity
The Board has adopted formal Corporate Governance
Guidelines, including director attendance expectations,
and requires limitations and preapproval of director
membership on other corporate boards.
The Board maintains diversity in both gender and
ethnic representation by identifying nominees whose
backgrounds, attributes, and experiences taken as a
whole will contribute to the high standards of Board
service to the Company.
Code of Conduct
The Company has adopted a formal Code of Ethical
and Professional Standards applicable to all directors,
officers, and employees of the Company.
20
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
PROXY STATEMENT | SUMMARY
Summary of Current and Nominated Directors
DIRECTOR TENURE
DIRECTOR AGE
DIVERSITY
0-10:
11-20:
20+:
<60:
60-65:
66-69:
70-72:
27% Women Directors.
Women:
Men:
Minority:
BOARD SIZE AND
INDEPENDENCE
BOARD
COMPOSITION
MEETING
ATTENDANCE
7 Directors are
independent.
4 are not independent.
All Committees
comprised of
independent directors.
Separate Board
Chairman and CEO
positions.
Independent lead
director.
100%
Overall attendance at
Board and Committee
Meetings.
There were 4 Board
meetings and 15
commitee meetings
in 2020.
OTHER CURRENT
PUBLIC COMPANY
BOARDS
0.7
Average Board
Positions
0 Boards:
1 Board:
2 Boards:
Accolades
J.B. Hunt operates in a highly competitive industry which requires an intense focus on continuous improvement
across all aspects of the business. From introducing innovative and disruptive technologies that drive effi ciencies in
operations, to championing for enhancements to industry safety standards, we remain committed to our mission
to create the most effi cient transportation network in North America. In 2020, J.B. Hunt is proud to have been
recognized with the following:
Recognitions
• Named Top 100 3PL for the Eleventh Consecutive Year by Inbound Logistics
• Named Top 75 Green Supply Chain Partner (G75) for Tenth Consecutive Year by Inbound Logistics
• Received Three Quest for Quality Awards from Logistics Management
• Named Top 3PL & Cold Storage Provider by Food Logistics for Eighth Time
• Earned SmartWay® Excellence Award from the EPA for Eleventh Consecutive Year
•
• Earned Cold Carrier Certifi cation from the International Refrigerated Transportation Association
• Named Military Friendly Employer by VIQTORY for Fourteenth Consecutive Year
• Ranked 4th on Transport Topics Top 100 Largest For-Hire Carriers
• Ranked 4th on Transport Topics Top 50 Logistics Companies
• Ranked 1st on Transport Topics Top Dedicated Contract Carriers
• Named Top 100 Trucker by Inbound Logistics
Finished 6th on FreightWaves FreightTech 25
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
21
P ROPOSAL S TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL ONE
ELECTION OF DIRECTORS
Our Board nominates Douglas G. Duncan, Francesca M. Edwardson, Wayne Garrison, Sharilyn S. Gasaway,
Gary C. George, Thad Hill, Bryan Hunt, Gale V. King, John N. Roberts, III, James L. Robo, and Kirk Thompson as
directors to hold office for a term of one year, expiring at the close of the 2022 Annual Meeting of Stockholders
or until their successors are elected and qualified or until their earlier resignation or removal. Thad Hill is a new
candidate and is nominated by the Board at the recommendation of one of our nonemployee directors. The Board
believes that these director nominees are well-qualified and experienced to direct and manage the Company’s
operations and business affairs and will represent the interests of the stockholders as a whole. Biographical
information on each of these nominees is set forth below in “Nominees for Director.”
If any director nominee becomes unavailable for election, which is not anticipated, the named proxies will vote for
the election of such other person as the Board may nominate, unless the Board resolves to reduce the number of
directors to serve on the Board and thereby reduce the number of directors to be elected at the Annual Meeting.
PROPOSAL 1
The Board of Directors unanimously recommends a vote FOR each of
the director nominees listed herein
INFORMATION YOU NEED TO MAKE AN INFORMED DECISION
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Number of Directors and Term of Directors and Executive Officers
The Amended and Restated Bylaws of J.B. Hunt Transport Services, Inc. (the Bylaws) provide that the number of
directors shall not be less than three or more than 12, with the exact number to be fixed by the Board. In 2020,
the Board consisted of ten directors. On February 24, 2021, the Board approved the nomination of Thad Hill to an
eleventh director position. Directors serve a term of one year from their election date to the Annual Meeting.
Directors are elected by a majority of votes cast with respect to each director, provided that the number of
nominees does not exceed the number of directors to be elected.
At the Company’s Annual Meeting, the stockholders of the Company elect successors for directors whose terms
have expired. The Board elects members to fill new membership positions and vacancies in unexpired terms
on the Board. No director will be eligible to stand for re-election or be elected to a vacancy once he or she has
reached 72 years of age. Executive officers are elected by the Board and hold office until their successors are
elected and qualified or until their earlier death, retirement, resignation, or removal.
22
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
NOMINEES FOR DIRECTOR Terms expire 2022
DOUGLAS G. DUNCAN
Age: 70
Director Since: 2010
Committees Upon Election: Audit Committee, Nominating and Corporate Governance
Committee
Principal Occupation: FedEx Freight Corporation (retired)
Recommendation: The Board has determined that Mr. Duncan’s 30 years of transportation
experience, including management positions in operations, sales, and marketing and
ultimately chief executive officer, qualify him to continue to serve as a Director of the Company.
Experience: Mr. Duncan retired as President and Chief Executive Officer of FedEx Freight
Corporation, a wholly owned subsidiary of FedEx Corporation, in February 2010. FedEx
Freight Corporation is a leading provider of regional and national less-than-truckload (LTL)
freight services. Mr. Duncan was the founding chief executive officer of FedEx Freight.
He also served on the Strategic Management Committee of FedEx Corporation. Before
the formation of FedEx Freight, he served for two years as President and Chief Executive
Officer of Viking Freight. He served on the Executive Committee of the American Trucking
Associations and as Chairman of the American Transportation Research Institute. A graduate
of Christopher Newport University, Mr. Duncan served on the university’s Board of Visitors.
Other Directorships - Publicly Held Companies (Prev. 5 Yrs.): Benchmark Electronics,
Inc. (Chair of Nominating and Governance Committee), Brambles LTD
Other Directorships – Private Organizations (Prev. 5 Yrs.): None
Family Relationships: None
FRANCESCA M. EDWARDSON
Age: 63
Director Since: 2011
Committees Upon Election: Audit Committee, Nominating and Corporate Governance
Committee
Principal Occupation: American Red Cross of Greater Chicago and Northern Illinois (retired)
Recommendation: The Board has determined that Ms. Edwardson continues to qualify
to serve as a Director of the Company based on her lengthy and successful experience in
both the transportation industry and legal environment, which provide respected insight and
guidance to both the Board and management.
Experience: Ms. Edwardson retired as the Chief Executive Officer of the American Red
Cross of Chicago and Northern Illinois, a business unit of the American Red Cross, in 2016,
a position she held since 2005. She previously served as Senior Vice President and General
Counsel for UAL Corporation, a predecessor company to United Airlines Holdings, Inc. She
has also been a partner in the law firm of Mayer Brown and the Executive Director of the
Illinois Securities Department. Ms. Edwardson is a graduate of Loyola University in Chicago,
Illinois, holding degrees in economics and law.
Other Directorships - Publicly Held Companies (Prev. 5 Yrs.): Duluth Holdings, Inc. (Chair
of Compensation Committee)
Other Directorships – Private Organizations: Rush University Medical Center, Lincoln Park
Zoo (Chair of Nominating Committee)
Family Relationships: None
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
23
PROPOSAL ONE > ELECTION OF DIRECTORS
WAYNE GARRISON
Age: 68
Director Since: 1981
Committees Upon Election: None
Principal Occupation: J.B. Hunt Transport Services, Inc. (retired)
Recommendation: The Board has determined that Mr. Garrison’s extensive experience in the
industry and over 40 years with J.B. Hunt in multiple roles provides invaluable experience to
the board and stockholders, qualifying him to continue to serve as a Director of the Company.
Experience: Mr. Garrison served as Chairman of the Board of the Company from 1995
to December 31, 2010, and continues to serve as a member of the Board of Directors.
Joining the Company in 1976 as Plant Manager, Mr. Garrison has also served as Vice
President of Finance in 1978, Executive Vice President of Finance in 1979, President in
1982, Chief Executive Officer in 1987 and Vice Chairman of the Board from January 1986
until May 1991.
Other Directorships - Publicly Held Companies (Prev. 5 Yrs.): None
Other Directorships – Private Organizations (Prev. 5 Yrs.): None
Family Relationships: None
SHARILYN S. GASAWAY
Age: 52
Director Since: 2009
Committees Upon Election: Audit Committee (Chair), Executive Compensation
Committee, Nominating and Corporate Governance Committee
Principal Occupation: Alltel Corp. (retired)
Recommendation: The Board has determined that Ms. Gasaway’s experience in
accounting, finance, mergers and acquisitions, and regulatory matters, all gained through
her extended tenures within the financial environment, which provide unquestionable value
to the Company, qualify her to continue to serve as a Director of the Company.
Experience: Ms. Gasaway served as Executive Vice President and Chief Financial Officer
of Alltel Corp., the Little Rock, Arkansas-based Fortune 500 wireless carrier, from 2006 to
2009. She was part of the executive team that spearheaded publicly traded Alltel’s transition
through the largest private equity buyout in the telecom sector and was an integral part of the
successful combination of Alltel and Verizon. She also served as Alltel’s Corporate Controller
and Principal Accounting Officer from 2002 to 2006. Joining Alltel in 1999, she served as
Director of General Accounting, Controller, and Vice President of Accounting and Finance.
Prior to joining Alltel, she worked for eight years at Arthur Andersen LLP. Ms. Gasaway has a
degree in accounting from Louisiana Tech University and is a Certified Public Accountant.
Other Directorships - Publicly Held Companies (Prev. 5 Yrs.): Genesis Energy, LP (Chair
of Audit Committee), Waddell & Reed Financial, Inc. (Chair of Audit Committee)
Other Directorships – Private Organizations (Prev. 5 Yrs.): Louisiana Tech University
Foundation, Louisiana Tech University College of Business Advisory Board, Arkansas
Children’s, Inc., Arkansas Children’s Foundation
Family Relationships: None
24
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
PROPOSAL ONE > ELECTION OF DIRECTORS
GARY C. GEORGE
Age: 70
Director Since: 2006
Committees Upon Election: Nominating and Corporate Governance Committee (Chair),
Executive Compensation Committee
Principal Occupation: George’s Inc.
Recommendation: The Board has determined that Mr. George continues to qualify to
serve as a Director of the Company based on his extensive business and management
knowledge gained through his leadership of a large, diversified corporation.
Experience: Mr. George is Chairman of George’s, Inc., a private, fully integrated poultry
company with operations in Arkansas, Missouri, Virginia, and Tennessee. He is a graduate
of the University of Arkansas with a degree in business administration. He served on
the Board of Trustees for the University of Arkansas from 1995 through 2005 and was
Chairman of the Board of Trustees in 2005.
Other Directorships - Publicly Held Companies (Prev. 5 Yrs.): None
Other Directorships – Private Organizations (Prev. 5 Yrs.): Legacy National Bank
(Chairman), Arkansas Children’s, Inc., Arkansas Children’s Northwest, National Chicken Council
Family Relationships: None
THAD (JOHN B., III) HILL
Age: 53
New Director Candidate
Committees Upon Election: Executive Compensation Committee, Nominating and
Corporate Governance Committee
Principal Occupation: Calpine Corporation
Recommendation: The Board has determined that Mr. Hill’s expertise in financial and
capital markets and experience leading a diverse and geographically dispersed workforce
qualify him to serve as a Director of the Company.
Experience: Mr. Hill is President and Chief Executive Officer for Calpine Corporation
(Calpine), one of the nation’s largest independent competitive power companies, operating
power plants and retail businesses in 24 states and Ontario, Canada. Mr. Hill has led
Calpine since 2014, when he was promoted from President and Chief Operating Officer
to his current position. Prior to joining Calpine, he was Executive Vice President of NRG
Energy and President of NRG Texas, where he was responsible for NRG’s largest regional
business. Mr. Hill received his bachelor of arts degree from Vanderbilt University magna
cum laude and his master of business administration degree from the Amos Tuck School of
Dartmouth College, where he was elected an Edward Tuck Scholar.
Other Directorships - Publicly Held Companies (Prev. 5 Yrs.): Calpine Corporation (No
longer publicly traded)
Other Directorships – Private Organizations (Prev. 5 Yrs.): Amos Tuck School of
Dartmouth College, Episcopal High School, Greater Houston Partnership (Vice Chair, Higher
Education Committee Chair)
Family Relationships: None
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
25
PROPOSAL ONE > ELECTION OF DIRECTORS
BRYAN HUNT
Age: 62
Director Since: 1991
Committees Upon Election: None
Principal Occupation: Hunt Automotive Group
Recommendation: The Board has determined that Mr. Hunt’s historical and current
knowledge of the company and valuable contributions to the Board of J.B. Hunt since
1991 continue to qualify him to serve as a Director of the Company.
Experience: Mr. Hunt served as an employee of the Company from 1983 through 1997.
He is the Managing Member of Best Buy Here Pay Here of Arkansas, a private company
with used-car operations in Arkansas, Missouri, and Oklahoma; Progressive Car Finance,
a private company that provides subprime financing for automobile dealers; and 71B Auto
Auction and 71B Mobile Auto Auction, both private companies engaged in the auction
of automobiles, trucks, boats, and other motor vehicles to dealers and the general public
in Arkansas and Kansas. A graduate of the University of Arkansas, he has degrees in
marketing and transportation.
Other Directorships - Publicly Held Companies (Prev. 5 Yrs.): None
Other Directorships – Private Organizations (Prev. 5 Yrs.): The New School
Family Relationships: Son of co-founders J.B. and Johnelle Hunt
GALE V. KING
Age: 64
Director Since: 2020
Committees Upon Election: Executive Compensation Committee, Nominating and
Corporate Governance Committee
Principal Occupation: Nationwide Mutual Insurance Co.
Recommendation: The Board has determined that Ms. King’s lengthy experience in the
area of human resource management within a Fortune 100 company, together with her
established strategic and operational leadership success, provide valuable guidance to the
organization, qualifying her to serve as a Director of the Company.
Experience: Ms. King is Executive Vice President and Chief Administrative Officer for
Nationwide Mutual Insurance Co. (Nationwide), a Fortune 100 financial services company
with approximately 28,000 associates. She oversees Nationwide’s Human Resources,
Corporate Real Estate, Corporate Security, and Aviation operations. Prior to her current
position, she served as Nationwide’s Executive Vice President and Chief Human Resources
Officer from 2009 to 2012. She holds bachelor’s and master’s degrees from the University
of Florida.
Other Directorships - Publicly Held Companies (Prev. 5 Yrs.): AutoZone, Inc.
Other Directorships – Private Organizations (Prev. 5 Yrs.): The University of Florida
Foundation, Inc. (Past Chair), The Executive Leadership Council (Co-Chair Membership
Committee), Columbus Women’s Commission, National Urban League, Columbus Museum
of Art
Family Relationships: None
26
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
PROPOSAL ONE > ELECTION OF DIRECTORS
JOHN N. ROBERTS, III
Age: 56
Director Since: 2010
Committees Upon Election: None
Principal Occupation: J.B. Hunt Transport Services, Inc.
Recommendation: The Board has determined that Mr. Roberts continues to qualify to
serve as a Director of the Company based on his continual success while serving as the
Company’s current President and Chief Executive Officer.
Experience: Mr. Roberts is the Company’s President and Chief Executive Officer. A
graduate of the University of Arkansas, he served as Executive Vice President and
President of Dedicated Contract Services from 1997 to December 31, 2010. Joining
the Company in 1989, he began his career as a Management Trainee and subsequently
served as an EDI Services Coordinator, Regional Marketing Manager for the Intermodal and
Truckload business units, Business Development Executive for DCS, and Vice President of
Marketing Strategy for the Company.
Other Directorships - Publicly Held Companies (Prev. 5 Yrs.): None
Other Directorships – Private Organizations (Prev. 5 Yrs.): Federal Reserve Bank of St.
Louis, Arkansas Children’s Northwest
Family Relationships: None
JAMES L. ROBO
Age: 58
Director Since: 2002
Committees Upon Election: Executive Compensation Committee (Chair), Nominating and
Corporate Governance Committee, Independent Lead Director
Principal Occupation: NextEra Energy, Inc.
Recommendation: The Board has determined that Mr. Robo’s financial expertise,
leadership experience, and business experience gained through his leadership of a large
complex corporation, qualify him to continue to serve as a Director of the Company.
Experience: Mr. Robo is Chairman and Chief Executive Officer of NextEra Energy, Inc., a
leading clean energy company. He is Chairman of the company’s rate-regulated electric
utility subsidiary, Florida Power & Light Company, as well as Chairman and CEO of NextEra
Energy Partners, LP, a growth-oriented limited partnership formed by NextEra Energy
to acquire, manage, and own contracted clean energy projects. Prior to joining NextEra
Energy in 2002, Mr. Robo spent ten years at General Electric Company. He served as
President and Chief Executive Officer of GE Mexico from 1997 until 1999 and as President
and Chief Executive Officer of the GE Capital TIP/ Modular Space division from 1999 until
February 2002. From 1984 through 1992, Mr. Robo worked for Mercer Management
Consulting. He received a BA summa cum laude from Harvard College and an MBA from
Harvard Business School, where he was a Baker Scholar.
Other Directorships - Publicly Held Companies (Prev. 5 Yrs.): NextEra Energy, Inc.
(Chairman), NextEra Energy Partners, LP (Chairman)
Other Directorships – Private Organizations (Prev. 5 Yrs.): None
Family Relationships: None
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
27
PROPOSAL ONE > ELECTION OF DIRECTORS
KIRK THOMPSON
Age: 67
Director Since: 1985
Committees Upon Election: None
Principal Occupation: J.B. Hunt Transport Services, Inc.
Recommendation: The Board has determined that Mr. Thompson’s extensive experience in
the industry and over 45 years with J.B. Hunt in multiple roles provides invaluable experience
to the organization and qualify him to continue to serve as a Director of the Company.
Experience: Mr. Thompson is the Company’s Chairman of the Board. He served as
President and Chief Executive Officer from 1987 to December 31, 2010. A graduate of
the University of Arkansas and a Certified Public Accountant, Mr. Thompson joined the
Company in 1973. He served as Vice President of Finance from 1979 until 1984, Executive
Vice President and Chief Financial Officer until 1985, and President and Chief Operating
Officer from 1986 until 1987, when he was elected President and Chief Executive Officer.
Other Directorships - Publicly Held Companies (Prev. 5 Yrs.): Rand Logistics, Inc. (No
longer publicly traded)
Other Directorships – Private Organizations (Prev. 5 Yrs.): None
Family Relationships: None
28
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
PROPOSAL ONE > ELECTION OF DIRECTORS
DIRECTOR COMPENSATION
Nonemployee Director Compensation Program
The Company pays only nonemployee directors for their services as directors. Directors who are also officers or
employees of the Company are not eligible to receive any of the compensation described below.
For the annual period between the Company’s 2020 and 2021 Annual Meetings, compensation for nonemployee
directors serving on the Board was as follows:
•
•
•
•
•
•
•
•
an annual retainer of $225,000 paid in Company stock, cash, or any combination thereof
an annual retainer of $20,000, paid in cash, to each member of the Audit Committee
an annual retainer of $15,000, paid in cash, to each member of the Executive Compensation Committee
an annual retainer of $10,000, paid in cash, to each member of the Nominating and Corporate Governance
Committee
an additional annual retainer of $25,000, paid in cash, to the Audit Committee Chairman
an additional annual retainer of $25,000, paid in cash, to the Executive Compensation Committee Chairman
an additional annual retainer of $10,000, paid in cash, to the Nominating and Corporate Governance
Committee Chairman
reimbursement of expenses to attend Board and Committee meetings
In January 2021, the Executive Compensation Committee reviewed a summary of various compensation packages
awarded to directors of the Company’s peer group compiled by Meridian Compensation Partners, LLC. Based
on this review, the Executive Compensation Committee recommended and the Board of Directors approved the
following compensation for the annual period beginning after our 2021 Annual Meeting:
•
•
•
•
•
•
•
•
an annual retainer of $245,000 paid in Company stock, cash or any combination thereof
an annual retainer of $20,000, paid in cash, to each member of the Audit Committee
an annual retainer of $15,000, paid in cash, to each member of the Executive Compensation Committee
an annual retainer of $10,000, paid in cash, to each member of the Nominating and Corporate Governance
Committee
an additional annual retainer of $25,000, paid in cash, to the Audit Committee Chairman
an additional annual retainer of $25,000, paid in cash, to the Executive Compensation Committee Chairman
an additional annual retainer of $10,000, paid in cash, to the Nominating and Corporate Governance
Committee Chairman
reimbursement of expenses to attend Board and Committee meetings
Process for Reviewing and Setting Nonemployee Director Compensation
The Executive Compensation Committee reviews the adequacy and competitiveness of the nonemployee
director compensation program annually and makes recommendations to the full Board for approval. Each year,
the Committee directs its compensation consultant to provide an independent assessment of the Company’s
nonemployee director compensation program. The consultant analyzes and compares the Company’s program
against the same peer group used to benchmark executive officer compensation (see page 50 for further details
about the peer group). The Committee targets total nonemployee director compensation levels at a competitive
range of peer group total compensation. The Committee also considers total aggregate Board compensation and
other factors when making recommendations to the Board for approval.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
29
PROPOSAL ONE > ELECTION OF DIRECTORS
Chairman of the Board
The role of Chairman of the Board is an employed executive position of the Company. Therefore, the Chairman of
the Board participates in all primary compensation components available to executive officers of the Company as
discussed in our Compensation Discussion and Analysis of this Proxy Statement, with the exception of short-term
cash incentive awards and long-term equity incentive awards. He does not receive any director fees for his service
on the Company’s Board of Directors.
Board of Director Compensation Paid in Calendar Year 2020
Fees
Paid
in Cash
($)
Fees
Paid
in Stock
($)
Restricted
Share or
Stock Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Salary
($)
Board Member
Douglas G. Duncan
— 255,000
—
Francesca M. Edwardson
— 30,000
224,940
Wayne Garrison
— 225,000
—
Sharilyn S. Gasaway
— 182,500
112,470
Gary C. George
— 35,000
224,940
Bryan Hunt
Gale V. King
—
— 224,940
— 137,500
112,470
Coleman H. Peterson(2)
—
—
—
James L. Robo
— 50,000
224,940
Kirk Thompson
373,846
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
—
—
—
—
—
—
—
—
—
—
All Other
Compensation
($)
Total
($)
— 255,000
— 254,940
— 225,000
— 294,970
— 259,940
— 224,940
— 249,970
—
—
— 274,940
14,935(1)
388,781
(1) Includes $10,000 taxable allowance for financial counseling services and $4,935 Company contributions to 401(k) plan.
(2) Mr. Peterson retired from the Board on April 23, 2020.
Each nonemployee member of the Board had the choice of receiving his or her annual retainer of $225,000
in Company stock, cash, or any combination thereof. Those directors choosing to receive their full retainer in
Company stock received 2,230 shares based on the $100.87 closing market price on April 23, 2020. Sharilyn S.
Gasaway and Gale V. King elected to receive half of their retainer in stock, totaling 1,115 shares each, based on
the closing market price shown above. Douglas G. Duncan and Wayne Garrison elected to receive their annual
retainer in cash.
To more closely align his or her interests with those of the stockholders, each Board member is required to own
three times his or her estimated annual compensation in Company stock within five years of his or her initial
stockholder election to the Board. All Board members comply with this requirement.
Nonemployee members of the Board did not participate in either a company-sponsored pension or deferred
compensation plan in calendar year 2020.
30
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE OFFICERS
OF THE COMPANY
Jennifer R. Boattini, 48, joined the Company in 2006 as Director of Litigation and Contract Management and
currently serves as Senior Vice President of Legal and Litigation and General Counsel. She also serves as the
Company’s Corporate Secretary.
Kevin Bracy, 50, joined the Company in 1998 as a Financial Analyst and currently serves as Senior Vice
President of Finance and Treasurer.
Darren Field, 50, joined the company in 1994 as a Night Dispatcher and currently serves as President of
Intermodal and Executive Vice President.
Craig Harper, 63, joined the Company in 1992 as Vice President of Marketing and currently serves as Chief
Sustainability Officer and Executive Vice President. Prior to joining the Company, he worked for Rineco Chemical
Industries as its Chief Executive Officer.
Bradley Hicks, 48, joined the Company in 1996 as a Management Trainee and currently serves as President of
Highway Services and Executive Vice President.
Nicholas Hobbs, 58, joined the Company in 1984 as a Management Trainee and currently serves as Chief
Operating Officer, President of Contract Services, and Executive Vice President.
John Kuhlow, 50, joined the Company in 2006 as Assistant Corporate Controller and currently serves as Chief
Financial Officer and Executive Vice President. Prior to joining the Company, he was a Senior Audit Manager for
KPMG LLP. Mr. Kuhlow is a Certified Public Accountant.
Eric McGee, 47, joined the Company in 1998 as a National Account Service Monitor and currently serves as
Executive Vice President of Highway Services.
Stuart Scott, 54, joined the Company in 2016 as Chief Information Officer and Executive Vice President. Prior to
joining the Company, he served as Chief Information Officer (CIO) at Tempur-Sealy International, CIO at Microsoft,
and CIO for various General Electric businesses.
Shelley Simpson, 49, joined the Company in 1994 as a Management Trainee and currently serves as Chief
Commercial Officer and Executive Vice President of People and Human Resources.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
31
SECURITY OWNERSHIP
OF MANAGEMENT
The following table sets forth the beneficial ownership of the Company’s common stock as of February 16, 2021,
by each of its current and nominated directors, the Named Executive Officers (the NEOs), and all other executive
officers and directors as a group. Unless otherwise indicated in the footnotes below, “beneficially owned” means
the sole or shared power to vote or direct the voting of a security or the sole or shared power to dispose or direct
the disposition of a security.
Owner
Douglas G. Duncan
Francesca M. Edwardson
Darren Field
Wayne Garrison
Sharilyn S. Gasaway
Gary C. George
Thad Hill
Nicholas Hobbs
Bryan Hunt
Gale V. King
John Kuhlow
Terrence D. Matthews (5)
David G. Mee (6)
John N. Roberts, III
James L. Robo
Shelley Simpson
Kirk Thompson
Number of Shares
Beneficially Owned
Directly (1)
Number of Shares
Beneficially Owned
Indirectly (2)
Percent
of Class (%) (3)
10,828
22,833
14,838
1,304,524
22,646
31,693
—
80,622
72,927
1,115
9,840
19,291
125,800
339,903
21,783
93,070
40,038
2,600
—
—
35,385
275
995,105 (4)
—
168
—
—
—
42,253
500
—
25,953
48,329
—
*
*
*
1.3
*
*
*
*
*
*
*
*
*
*
*
*
*
All executive officers and directors
as a group (23)
*Less than 1 percent
2,322,274
1,158,095
3.3
32
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
(1) Includes shares owned by the director or executive officer that are:
(a) held in a 401(k) or deferred compensation account
(b) held in trusts for the benefit of an immediate family member for which the director or executive officer is the trustee
(c) pledged shares as shown below:
Darren Field
John Kuhlow
David G. Mee
John N. Roberts, III
Kirk Thompson
All executive officers and directors as a group
8,429
2,500
77,330
217,028
12,000
320,886
(2) Indirect beneficial ownership includes shares owned by the director or executive officer:
(a) as beneficiary or trustee of a personal trust
(b) by a spouse or as trustee or beneficiary of a spouse’s trust
(c) held in trusts for the benefit of an immediate family member for which the director or executive officer’s spouse is the trustee
(d) in a spouse’s retirement account
(3) Calculated on the basis of 105,705,006 shares of common stock outstanding of the Company on February 16, 2021.
(4) The reporting person disclaims beneficial ownership of these shares, which are held in limited partnerships or trusts. This report shall
not be deemed an admission that the reporting person is the beneficial owner of such securities for the purposes of Section 16 or for
any other purposes.
(5) Mr. Matthews retired from the Company on July 16, 2020.
(6) Mr. Mee retired from the Company on April 1, 2020.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
33
CORPORATE
GOVERNANCE
We believe that good corporate governance helps to ensure that the Company is managed for the long-term
benefit of our stockholders. We continually review and consider our corporate governance policies and practices,
the SEC’s corporate governance rules and regulations, and the corporate governance listing standards of
NASDAQ, the stock exchange on which our common stock is traded. Key corporate governance principles
observed by the Board and Company include:
• maintaining a Board composed of a majority of directors who satisfy the criteria for independence under the
•
•
•
•
•
NASDAQ listing standards,
establishment of the position of Independent Lead Director,
utilization of independent director executive session meetings,
requiring that all committees of the Board be comprised solely of independent directors,
establishment of formal charters outlining the purpose, composition, and responsibility of each committee of
the Board,
granting authority to all committees of the Board to retain outside, independent advisors and consultants as
needed,
establishment of qualification guidelines for director nominees,
continual evaluation of current director performance and qualifications,
limitation and preapproval of director membership on other corporate boards,
•
•
•
• maintaining Board diversity in both gender and ethnic representation,
•
•
•
review of the Company’s plan for succession of management,
adoption of Corporate Governance Guidelines, including director attendance expectations, and
adoption of a formal Code of Ethical and Professional Standards applicable to all directors, officers, and
employees of the Company.
You can access and print the Charters of our Audit Committee, Executive Compensation Committee, and
Nominating and Corporate Governance Committee (Corporate Governance Committee), as well as our Corporate
Code of Ethical and Professional Standards for Directors, Officers and Employees, Whistleblower Policy, and other
Company policies and procedures required by applicable law, regulation, or NASDAQ corporate governance listing
standards on the “Corporate Governance” page of the “Corporate Responsibility” section of our website at jbhunt.
com. Additionally, you can request copies of any of these documents by writing to our Corporate Secretary at the
following address:
J.B. Hunt Transport Services, Inc.
Attention: Corporate Secretary
615 J.B. Hunt Corporate Drive
Lowell, Arkansas 72745
34
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
Director Independence
The Board is composed of a majority of directors who satisfy the criteria for independence under the NASDAQ
corporate governance listing standards. In determining independence, each year the Board affirmatively
determines, among other items, whether the directors have no material relationship with the Company or any of
its subsidiaries pursuant to the NASDAQ corporate governance listing standards. When assessing the “materiality”
of a director’s relationship with the Company, if any, the Board considers all relevant facts and circumstances,
not merely from the director’s standpoint, but from that of the persons or organizations with which the director
has an affiliation and the frequency or regularity of the services, whether the services are being carried out at
arm’s length in the ordinary course of business, and whether the services are being provided substantially on the
same terms to the Company as those prevailing at the time from unrelated parties for comparable transactions.
Material relationships can include commercial, banking, industrial, consulting, legal, accounting, charitable, and
familial relationships. The Board also considers any other relationship that could interfere with the exercise of
independence or judgment in carrying out the duties of a director.
Applying these independence standards, the Board has determined that Douglas G. Duncan, Francesca M.
Edwardson, Sharilyn S. Gasaway, Gary C. George, Thad Hill, Gale V. King, and James L. Robo are all independent.
After due consideration, the Board has determined that none of these current or nominated nonemployee directors
have a material relationship with the Company or any of its subsidiaries (either directly or indirectly as a partner,
stockholder, or officer of any organization that has a relationship with the Company or any of its subsidiaries) and
that they all meet the criteria for independence under the NASDAQ corporate governance listing standards.
Risk Management and Oversight
As previously described in their biographies, current members and director nominees of our Board represent
diverse backgrounds of business and academic experience. The Board, as a whole, performs the risk oversight
of the Company and does not assign the task or responsibility to any one member or a committee. Therefore, the
Board believes that the current and nominated members each possess unique yet complementary experiences
and backgrounds that create diverse points of view, opinions, personalities, and management styles that allow for
the proper risk management and oversight of the Company.
Independent Lead Director
The Board has established the position of Independent Lead Director, to which James L. Robo was appointed.
The Independent Lead Director directs the executive sessions of independent directors at the Board meetings at
which the Chairman is not present and has authority to call meetings of independent directors. The Independent
Lead Director facilitates communication between the Chairman, the CEO, and the independent directors, as
appropriate, and performs such other functions as the Board directs.
Independent Director Meetings
Independent directors generally meet in executive session as part of each regularly scheduled Board meeting, with
discussion led by the Independent Lead Director.
Director Recommendations by Stockholders
In addition to recommendations from Board members, management, or professional search firms, the Corporate
Governance Committee will consider director candidates properly submitted by stockholders who individually or
as a group have beneficially owned at least 2% of the outstanding shares of the Company’s common stock for
at least one year from the date the recommendation is submitted. Stockholders must submit director candidate
recommendations in writing by certified mail to the Company’s Corporate Secretary not less than 120 days prior
to the first anniversary of the date of the Proxy Statement relating to the Company’s previous Annual Meeting.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
35
CORPORATE GOVERNANCE
Accordingly, for the 2022 Annual Meeting of Stockholders, director candidates must be submitted to the
Company’s Corporate Secretary on or before November 18, 2021. Director candidates submitted by stockholders
must contain at least the following information:
•
•
•
•
•
•
•
•
the name and address of the stockholder or group of stockholders making the recommendation
(Recommending Stockholder),
the number of shares of the Company’s common stock beneficially owned by the Recommending Stockholder
and the dates such shares were purchased,
if the Recommending Stockholder is not the registered holder of such shares, proof of beneficial ownership of
such shares in compliance with Rule 14a-8(b)(2) of the Securities Exchange Act of 1934, as amended,
the name, age, business address, and residence of the recommended director candidate (Candidate),
the principal occupation or employment of the Candidate for the past five years,
a description of the Candidate’s qualifications to serve as a director, including financial expertise and why
the Candidate does or does not qualify as “independent” under the NASDAQ corporate governance listing
standards,
the number of shares of the Company’s common stock beneficially owned by the Candidate, if any, and
a description of the arrangements or understandings between the Recommending Stockholder and the
Candidate, if any, or any other person pursuant to which the Recommending Stockholder is making the
recommendation.
In addition, the Recommending Stockholder and the Candidate must submit, with the recommendation, a signed
statement agreeing and acknowledging that:
•
•
•
•
the Candidate consents to being a director candidate and, if nominated and elected, he or she will serve
as a director representing all of the Company’s stockholders in accordance with applicable laws and the
Company’s Articles of Incorporation and Bylaws,
the Candidate, if elected, will comply with the Company’s Corporate Governance Guidelines and any other
applicable rules, regulations, policies, or standards of conduct applicable to the Board and its individual
members,
the Recommending Stockholder will maintain beneficial ownership of at least 2% of the Company’s issued
and outstanding common stock through the date of the Annual Meeting for which the Candidate is being
recommended for nomination and that, upon the Candidate’s nomination and election to the Board, the
Recommending Stockholder intends to maintain such ownership throughout the Candidate’s term as director,
and
the Recommending Stockholder and the Candidate will promptly provide any additional information requested
by the Corporate Governance Committee and/or the Board to assist in the consideration of the Candidate,
including a completed and signed Questionnaire for Directors and Officers on the Company’s standard form
and an interview with the Corporate Governance Committee or its representative.
For a complete list of the information that must be included in director recommendations submitted by stockholders,
please see the “Directorship Guidelines and Selection Policy” on the “Corporate Governance” page of the “Corporate
Responsibility” section of our website at jbhunt.com. The Corporate Governance Committee will consider all
Candidates submitted through its established processes and will evaluate each of them, including incumbents, based
on the same criteria. In the event a Candidate of a Recommending Stockholder is subsequently nominated by the
Corporate Governance Committee and the Board, included in the Company’s Proxy Statement, and does not receive
at least 25% of the votes cast in the related election of Directors, the Candidate is prohibited from again serving as a
Candidate for four years from the date of the annual meeting in question.
36
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
CORPORATE GOVERNANCE
The policies and procedures as set forth above are intended to provide flexible guidelines for the effective
functioning of the Company’s director nomination process. The Board intends to review these policies and
procedures periodically and anticipates that modifications may be necessary from time to time as the Company’s
needs and circumstances change.
Board Composition and Director Qualifications
The Corporate Governance Committee periodically assesses the appropriate size and composition of the Board and
whether any vacancies on the Board are expected. In the event that vacancies are anticipated or otherwise arise, the
Corporate Governance Committee will review and assess potential director candidates. The Corporate Governance
Committee utilizes various methods for identifying and evaluating candidates for director. Candidates may come to
the attention of the Corporate Governance Committee through recommendations of Board members, management,
stockholders, or professional search firms. Generally, director candidates should, at a minimum:
• possess relevant business and financial expertise and experience, including a basic understanding of
fundamental financial statements,
have exemplary character and integrity and be willing to work constructively with others,
have sufficient time to devote to Board meetings and consultation on Board matters, and
•
•
• be free from conflicts of interest that violate applicable law or interfere with director performance.
In addition, the Corporate Governance Committee seeks director candidates who possess the following qualities
and skills:
the capacity and desire to represent the interests of the Company’s stockholders as a whole,
•
• diverse backgrounds with respect to business experience, professional expertise and knowledge, individual
perspectives, gender, and ethnicity that support Board dynamics and effectiveness,
leadership experience and sound business judgment,
accomplishments in their respective field, with superior credentials and recognition,
experience in skillful management or oversight of a publicly held company,
•
•
•
• personal and professional reputation for industry, integrity, honesty, candor, fairness, and discretion,
• willingness and ability to devote sufficient time and diligence towards the fulfillment of responsibilities,
•
•
•
free from any conflict of interest,
knowledge of the critical aspects of the Company’s business and operations, and
the ability to contribute to the mix of skills, core competencies, diversity, and qualifications of the Board
through expertise in one or more of the following areas:
> accounting and finance
> mergers and acquisitions
> business and management
> law
> academia
> strategic planning
> investor relations
> executive leadership development
> executive compensation
> service as a senior officer of, or a trusted adviser to senior management of, a publicly held company.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
37
CORPORATE GOVERNANCE
The current and nominated independent members of the Board each possess the general skills, experience,
attributes, and qualifications that make them a proper fit for the Company’s Board as described above. Specific
strengths and qualities possessed by each member that makes him or her eligible to serve on the Company’s
Board include:
Douglas G. Duncan – 30 years of experience in the transportation industry
Francesca M. Edwardson – business experience in the transportation industry, law, human resources, and
corporate governance
Sharilyn S. Gasaway – accounting, finance, mergers and acquisitions, and regulatory experience
Gary C. George – business experience related to managing a diversified business headquartered in Springdale,
Arkansas
Thad Hill – financial expertise in capital markets and business experience managing a diverse and geographically
dispersed workforce
Gale V. King – human resource experience with a large and diverse workforce and leadership experience
James L. Robo – financial expertise, leadership experience, and business experience related to equipment and
the transportation industry
Messrs. Garrison, Hunt, Roberts, and Thompson, as nonindependent directors, have extensive work experience
and history with the Company from its origins, which the Board believes is critical to its composition.
Overboarding
To further facilitate each director’s ability to effectively serve as a member of the Board, each director is limited to
serving on no more than four boards of directors of publicly held companies in total, including that of the Company.
In addition, a director is required to obtain Board approval prior to joining the board of another publicly held company,
which allows the Board to exercise its judgment regarding various considerations and potential conflicts of interest.
Board Diversity
As indicated by the criteria above, the Board prefers a mix of background and experience among its members.
Furthermore, our current and nominated Board is diverse both in gender and ethnic representation, with more
than 25% of our current and nominated members reflecting female or minority demographics. The Board does
not follow any ratio or formula to determine the appropriate mix. Rather, it uses its judgment to identify nominees
whose backgrounds, attributes, and experiences, taken as a whole, will contribute to the high standards of Board
service to the Company. The effectiveness of this approach is evidenced by the directors’ participation in insightful
and robust yet mutually respectful deliberation that occurs at Board and Committee meetings.
38
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
CORPORATE GOVERNANCE
Board Leadership Structure
The Company split the titles, roles, and responsibilities of the Chairman of the Board and Chief Executive Officer in
1985. The Company and the Board believe that, while the duties may be performed by the same person without
consequence to either Company operations or stockholders’ interest, separation of duties allows the Chairman to
focus more on active participation by the Board and oversight of management, while the Chief Executive Officer is
better able to focus on day-to-day operations of the Company.
Communications With The Board
Stockholders and other interested parties may communicate with the Board, Board Committees, or the
independent or nonmanagement directors, each as a group or any director individually, by submitting their
communications in writing to the attention of the Company’s Corporate Secretary. All communications must
identify the recipient and author, state whether the author is a stockholder of the Company, and be forwarded to
the following address via certified mail:
J.B. Hunt Transport Services, Inc.
Attention: Corporate Secretary
615 J.B. Hunt Corporate Drive
Lowell, Arkansas 72745
The directors of the Company have instructed the Corporate Secretary not to forward to the intended recipient any
communications that are reasonably determined in good faith by the Corporate Secretary to relate to improper or
irrelevant topics or that are substantially incomplete.
Board Meetings and Annual Meeting Attendance
The Board held four scheduled meetings during the 2020 calendar year. All directors attended all of the Board
meetings and committee meetings on which each served during 2020, and all members of the Board attended
the 2020 Annual Meeting of Stockholders. As a safety precaution due to the COVID-19 pandemic, the Board
members attended the 2020 Annual Meeting by teleconference but were available for questions from shareholders.
The Company has adopted Corporate Governance Guidelines which stress the importance of attendance, director
preparedness, and active and effective participation at Board and Board Committee meetings.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
39
CORPORATE GOVERNANCE
Board Committees
Standing committees of the Board include the Audit, Compensation, and Corporate Governance committees.
Committee members are elected annually by the Board and serve until their successors are elected and qualified
or until their earlier death, retirement, resignation, or removal.
The following table summarizes the membership of the Board and each of its committees and the number of times
each met during calendar year 2020:
Audit
X
X
Chair
Director
Douglas G. Duncan
Francesca M. Edwardson
Sharilyn S. Gasaway
Gary C. George
Gale V. King
James L. Robo
Number of Meetings in 2020
8
Compensation
Corporate Governance
X
X
X
Chair
3
X
X
X
Chair
X
X
4
The Board has nominated Thad Hill as a candidate to fill an eleventh director position on the Board. On February
24, 2021, the Corporate Governance Committee recommended, and the Board approved, the following
committee assignments for the annual period beginning after our 2021 Annual Meeting:
Audit
X
X
Chair
Director
Douglas G. Duncan
Francesca M. Edwardson
Sharilyn S. Gasaway
Gary C. George
Thad Hill
Gale V. King
James L. Robo
Compensation
Corporate Governance
X
X
X
X
Chair
X
X
X
Chair
X
X
X
40
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
CORPORATE GOVERNANCE
AUDIT COMMITTEE
Under the terms of its charter, the Audit Committee represents and assists the Board in fulfilling its oversight
responsibilities relating to the integrity of the Company’s financial statements and the financial reporting process,
the systems of internal accounting and financial controls, the internal audit function, the annual independent audit
of the Company’s financial statements, the Company’s compliance with legal and regulatory requirements, the
independent auditor’s qualifications and independence, the performance of the Company’s internal audit function,
and the performance of its independent auditors.
In fulfilling its duties, the Audit Committee, among other things, shall:
•
recommend appointment, terminate, retain, compensate, and oversee the work of the independent registered
public accounting firm,
oversee the performance of the Company’s internal audit function,
review the qualifications, performance, and independence of the independent registered public accounting firm,
• preapprove all services provided by the independent registered public accounting firm,
•
•
• discuss with the independent auditors their audit plan,
•
• monitor the integrity of the financial reporting process, system of internal accounting controls, and financial
review external and internal audit reports and management’s responses thereto,
•
•
statements and reports of the Company,
oversee the Company’s compliance with legal and regulatory requirements,
review the Company’s annual and quarterly financial statements, including disclosures made in “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” set forth in periodic reports filed
with the SEC,
• discuss earnings news releases with management and the independent auditors,
• meet with management, the internal auditors, the independent auditors, and the Board,
• discuss the results of the external audit with the independent auditors prior to releasing the year-end earnings,
• discuss with the independent auditors the quality of the Company’s accounting principles as applied in its
financial reporting,
• provide the Board with information and materials as it deems necessary to make the Board aware of
•
significant financial accounting and internal control matters of the Company,
recommend to the Board that the audited financial statements be included in the Company’s Annual Report
on Form 10-K,
• prepare a report of the Committee to be included in the Company’s Proxy Statement
•
oversee the receipt, investigation, resolution, and retention of all complaints of a financial nature submitted
under the Company’s Whistleblower Policy, and
otherwise comply with its responsibilities and duties as set forth in the Company’s Audit Committee Charter.
•
The Board has determined that each member of the Audit Committee satisfies the independence and other
requirements for audit committee membership of the NASDAQ corporate governance listing standards and
SEC requirements. The Board has also determined that the majority of the members of the Audit Committee
have the attributes of an audit committee financial expert as defined by the SEC. The Board determined that
these members acquired such attributes through their experience in preparing, auditing, analyzing, or evaluating
financial statements, or actively supervising one or more persons engaged in such activities, and their experience
of overseeing or assessing the performance of companies and public accountants with respect to preparation,
auditing, or evaluation of financial statements. For additional information concerning the Audit Committee, see
“Report of the Audit Committee” set forth below.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
41
CORPORATE GOVERNANCE
EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee (the Compensation Committee) shall:
review and approve annually the Company’s stated compensation strategy,
•
• determine and approve base salary compensation of the Company’s senior executive officers,
• determine and approve annual equity-based awards for the Company’s “insiders” as defined in Section 16 of
the Securities Exchange Act of 1934, with the exception of the Chairman of the Board and the Chief Executive
Officer,
evaluate and recommend to the independent members of the Board, for their approval, base salary and
annual equity-based awards for the Chairman of the Board and the Chief Executive Officer,
review annually and recommend to the Board the compensation for members of the Board,
review and approve the annual performance goals and objectives of the Company’s senior executive officers,
including the Chief Executive Officer,
establish and certify the achievement of performance goals,
oversee the Company’s incentive compensation and equity-based compensation plans,
assess the adequacy and competitiveness of the Company’s executive and director compensation programs,
review and discuss with management the Compensation Discussion and Analysis and recommend whether
such analysis should be included in the Proxy Statement filed with the SEC,
•
•
•
•
•
•
•
• produce an Annual Report on executive compensation for inclusion in the Company’s Proxy Statement,
•
review and approve any employment agreements, severance agreements or arrangements, retirement
arrangements, change in control agreements/provisions, and any special or supplemental benefits for each
officer of the Company,
approve, disapprove, modify, or amend any non-equity compensation plans designed and intended to provide
compensation primarily for officers,
•
administer, modify, or amend equity-based compensation plans,
• make recommendations to the Board regarding adoption of equity-based compensation plans,
•
• monitor the diversity of the Company’s workforce,
•
review annually the Company’s employee benefit programs, where appropriate, for shareholder or Board
approval,
review and recommend to the Board the frequency with which the Company will conduct Say on Pay Votes
required by Section 14A of the Exchange Act, and review and approve any proposals related thereto,
review annually whether the Company’s executive compensation arrangements could create any material risks
to the Company and evaluate policies and practices that could mitigate any such risk, and
otherwise comply with its responsibilities and duties as set forth in the Company’s Compensation Committee
Charter.
•
•
•
None of the individuals currently serving or nominated to serve on the Compensation Committee has ever been
an officer or employee of the Company. The Board has determined that all current and nominated members of
the Compensation Committee satisfy the independence requirements of the NASDAQ corporate governance
listing standards. All current and nominated members of the Compensation Committee qualify as “nonemployee
directors” for purposes of Rule 16b-3 of the Exchange Act and as “outside directors” for purposes of Section
162(m) of the Internal Revenue Code, as amended.
42
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
CORPORATE GOVERNANCE
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Nominating and Corporate Governance Committee (the Corporate Governance Committee) shall:
annually review the Company’s Corporate Governance Guidelines and policies,
assist the Board in identifying, screening, and recruiting qualified individuals to become Board members,
•
•
• propose nominations for Board membership and committee membership,
•
•
assess the composition of the Board and its committees,
oversee the performance of the Board and committees thereof, and provide recommendations to the Board to
enhance the Board’s effectiveness,
review the Company’s plan for succession of management,
create, recommend to the Board for adoption, and maintain a corporate code of ethics for directors, executive
officers, and employees,
oversee the implementation and enforcement of the corporate code of ethics,
oversee the Company’s strategies addressing environmental and social issues,
oversee and monitor the Company’s policies, activities, and expenditures with respect to government lobbying
and advocacy and political contributions,
appoint subcommittees and delegate power and authority to such subcommittees, as it deems appropriate,
review and approve all related-party transactions (as required by law, NASDAQ rules, or SEC regulations), and
otherwise comply with its responsibilities and duties as set forth in the Company’s Corporate Governance
Committee Charter.
•
•
•
•
•
•
•
•
The Board has determined that all current and nominated members of the Corporate Governance Committee
satisfy the independence requirements of the NASDAQ corporate governance listing standards.
Code of Business Conduct and Ethics
The Board has adopted a Corporate Code of Ethical and Professional Standards for Directors, Officers and
Employees (the Code of Ethics) that applies to all of the Company’s directors, officers, and employees. The
purpose and role of this Code of Ethics is to focus our directors, officers, and employees on areas of ethical risk,
provide guidance to help them recognize and deal with ethical issues, provide mechanisms to report unethical or
unlawful conduct, and help enhance and formalize our culture of integrity, honesty, and accountability. As required
by applicable law, the Company will post on the “Corporate Governance” page of the “Corporate Responsibility”
section of its website at jbhunt.com any amendments to or waivers of any provision of this Code of Ethics made
for the benefit of executive officers or directors of the Company.
Corporate Governance Guidelines
The Board has adopted Corporate Governance Guidelines and policies to assist it in exercising its responsibilities
to the Company and its stockholders. These guidelines and policies address, among other items, director
qualifications and responsibilities, Board Committees, and nonemployee director compensation.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
43
CORPORATE GOVERNANCE
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires each director, officer, and any individual beneficially owning more
than 10% of the Company’s common stock to file with the SEC reports of security ownership and reports on
subsequent changes in ownership. These reports are generally due within two business days of the transaction
giving rise to the reporting obligation.
To the Company’s knowledge, based solely on a review of such reports filed electronically with the SEC and written
representations from the reporting persons that no other reports were required, the Company believes that all
Section 16(a) filings were made in a timely manner, with the exception of one late filing to report the sale of shares
by Brad Hicks and two late filings to report two gifts of shares by Nicholas Hobbs, inadvertently not reported in
2019 and 2020, respectively.
Certain Relationships and Related-Party Transactions
The Corporate Governance Committee is charged with the responsibility of reviewing and preapproving all related-
party transactions (as defined in SEC regulations) and periodically reassessing any related-party transaction
entered into by the Company. The Committee does not currently have any formal policy or procedures with
respect to its review and approval of related-party transactions but considers each such transaction or proposed
transaction on a case-by-case basis.
Bryan Hunt, one of our current directors, is the son of Johnelle Hunt, a principal stockholder of the Company.
Two sons-in-law of Kirk Thompson, Chairman of the Board of the Company, were employed by the Company
in calendar year 2020. The first earned $446,744 and the second earned $225,477 in 2020 compensation.
Shelley Simpson’s husband was employed by the Company in calendar year 2020 and earned $317,998 in 2020
compensation. Jennifer R. Boattini’s husband was employed by the Company in calendar year 2020 and earned
$251,882 in 2020 compensation.
In the ordinary course of business, the Company has entered into Dedicated Contract Services® agreements with
George’s, Inc. and certain of its affiliates, which are considered a related party. The customer agreements consist
primarily of fleets of tractors and specialty trailers delivering feed and live poultry to and from plants located in
Cassville, Missouri; Edinburg, Virginia; Harrisonburg, Virginia; and Mt. Jackson, Virginia, as well as other agreed-
upon services on an as-needed basis. Gary C. George is Chairman of George’s, Inc. Mr. George was not involved
in the establishment of these service agreements, nor did he solicit the Company’s services on behalf of George’s,
Inc. or its affiliates. Total revenue earned in calendar year 2020 under these service agreements was $13.3 million.
Services provided under these contracts are and will be carried out at arm’s length in the ordinary course of
business and are being provided substantially on the same terms as those of unrelated parties for comparable
transactions.
During 2020, the Company earned $36.5 million in revenue for transportation services provided to its customer
Simmons Foods, Inc. The brother of John Roberts, President and Chief Executive Officer, is employed by
Simmons Foods, Inc. as a Senior Vice President – Business Development & Sales Operations, Pet Food. Mr.
Roberts was not involved in the solicitation or establishment of these services, which were provided at arm’s length
in the ordinary course of business and were provided substantially on the same terms as those of unrelated parties
for comparable transactions.
44
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
CORPORATE GOVERNANCE
In January 2021, the Company accepted a nonbinding proposal from DG Development & Acquisitions, LLC,
a subsidiary of NextEra Energy, Inc., outlining the general terms of a proposed transaction for the sale of a
photovoltaic solar generation and electric vehicle charging system. James L. Robo, the Board’s independent
lead director, is Chairman and Chief Executive Officer of NextEra Energy, Inc. Mr. Robo was not involved in
the preparation or submission of the nonbinding proposal or any discussions with the Company regarding the
proposed transaction. The Company received and considered the nonbinding proposal from DG Development
& Acquisitions, LLC at arm’s length in the ordinary course of business and substantially on the same terms as
proposals received from unrelated parties for a comparable transaction.
During 2020, the Company procured $1.6 million in third-party purchased transportation services from Western
Flyer Xpress. The son of John Roberts, President and Chief Executive Officer, is employed by Western Flyer Xpress
as a Regional Sales Manager. Mr. Roberts was not involved in the solicitation or establishment of these services,
which were provided at arm’s length in the ordinary course of business and were provided substantially on the
same terms as those of unrelated parties for comparable transactions.
Additionally during 2020, the Company procured $212,726 in third-party purchased transportation services from
TuSimple. The daughter of Craig Harper, Chief Sustainability Officer and Executive Vice President, is employed by
TuSimple as a Corporate Strategy and Development Associate. Mr. Harper was not involved in the solicitation or
establishment of these services, which were provided at arm’s length in the ordinary course of business and were
provided substantially on the same terms as those of unrelated parties for comparable transactions.
Compensation Committee Interlocks and Insider Participation
During the 2020 calendar year, none of the Company’s executive officers served on the Board of Directors
or Compensation Committees of any entity whose directors or officers served on the Company’s Board or
Compensation Committee. No current or past executive officers or employees of the Company served on the
Compensation Committee. Gary C. George, a member of the Compensation Committee of the Board, has an
indirect material interest in related-party transactions between the Company and George’s, Inc. because he is the
Chairman of George’s, Inc. Additionally, James L. Robo, Chair of the Compensation Committee of the Board, has
an indirect material interest in a proposed related-party transaction between the Company and DG Development
& Acquisitions, LLC, a subsidiary of NextEra Energy, Inc., because he is the Chairman and Chief Executive Officer
of NextEra Energy, Inc. Descriptions of the related-party transactions between the Company and George’s,
Inc. during 2020 and the proposed related-party transaction between the Company and DG Development &
Acquisitions, LLC are set forth in the Certain Relationships and Related-Party Transactions portion of the Corporate
Governance section of this Proxy Statement.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
45
PRINCIPAL STOCKHOLDERS
OF THE COMPANY
The following table sets forth all persons known to be the beneficial owner of more than 5% of the Company’s
common stock as of December 31, 2020. Unless otherwise indicated in the footnotes below, “beneficially owned”
means the sole or shared power to vote or direct the voting of a security or the sole or shared power to dispose or
direct the disposition of a security.
Name and Address
Johnelle Hunt(1)
3333 Pinnacle Hills Parkway
Rogers, AR 72756
Vanguard Group, Inc.(2)
100 Vanguard Blvd.
Malvern, PA 19355
T. Rowe Price Associates, Inc.(3)
100 East Pratt Street
Baltimore, MD 21202
BlackRock, Inc.(4)
55 East 52nd Street
New York, NY 10055
Number of Shares
Percent of Class
18,326,581
17.3%
9,858,754
9,504,791
6,287,808
9.3%
8.9%
6.0%
(1) Based on the stockholder’s Form 5, filed with the SEC on February 4, 2021.
(2) Based on the most recent SEC filing by Vanguard Group, Inc. on Schedule 13G/A dated February 10, 2021. Of the total shares
shown, the nature of beneficial ownership is as follows: sole voting power, zero shares; shared voting power, 137,999 shares; sole
dispositive power, 9,491,448 shares; and shared dispositive power, 367,306 shares. The Company makes no representation as to
the accuracy of the information reported in such beneficial ownership reports.
(3) Based on the most recent SEC filing by T. Rowe Price Associates, Inc. on Schedule 13G/A dated February 16, 2021. Of the total
shares shown, the nature of beneficial ownership is as follows: sole voting power, 3,532,475 shares; shared voting power, zero
shares; sole dispositive power, 9,504,791 shares; and shared dispositive power, zero shares. The Company makes no representation
as to the accuracy of the information reported in such beneficial ownership reports.
(4) Based on the most recent SEC filing by BlackRock, Inc. on Schedule 13G/A dated January 29, 2021. Of the total shares shown, the
nature of beneficial ownership is as follows: sole voting power, 5,529,550 shares; shared voting power, zero shares; sole dispositive
power, 6,287,808 shares; and shared dispositive power, zero shares. The Company makes no representation as to the accuracy of
the information reported in such beneficial ownership reports.
46
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE
COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
This Compensation Discussion & Analysis (CD&A) provides information regarding the compensation paid to our
President and Chief Executive Officer, Chief Financial Officer, and certain other executive officers who were the
most highly compensated in calendar year 2020. These individuals, referred to collectively as “named executive
officers” or NEOs, are identified below:
John N. Roberts, III – President and Chief Executive Officer
John Kuhlow – Chief Financial Officer and Executive Vice President
•
• David G. Mee – former Chief Financial Officer and Executive Vice President, Finance/Administration
•
• Shelley Simpson – Chief Commercial Officer and Executive Vice President of People and Human Resources
• Nicholas Hobbs – Chief Operating Officer, President of Contract Services, and Executive Vice President
• Darren Field – President of Intermodal and Executive Vice President
•
Terrence D. Matthews – former President of Intermodal and Executive Vice President
David G. Mee retired from his duties as Executive Vice President, Finance and Administration and Chief Financial
Officer on March 1, 2020, and he retired from the Company on April 1, 2020. Following Mr. Mee’s retirement, John
Kuhlow assumed the role of Interim Chief Financial Officer beginning March 1, 2020, and was promoted to Chief
Financial Officer and Executive Vice President effective November 20, 2020. Terrence D. Matthews retired from his
duties as President of Intermodal and Executive Vice President on April 1, 2020, and he retired from the Company
on July 16, 2020. Darren Field was promoted to President of Intermodal and Executive Vice President effective
April 1, 2020.
The Executive Compensation Committee (the Compensation Committee) operates under a written charter adopted
by the Board, a copy of which is available on the “Corporate Governance” page of the “Corporate Responsibility”
section of the Company’s website at jbhunt.com. In carrying out its responsibilities, the Compensation Committee,
among other things:
•
•
•
•
•
evaluates and recommends to the independent Board members, for their approval, the annual salaries and
bonuses of the Chairman of the Board and the Chief Executive Officer,
reviews and approves annual corporate goals and objectives of the Chairman of the Board and the Chief
Executive Officer and other Section 16 reporting officers,
recommends to the independent Board members, for their approval, equity-based compensation awards
under the Company’s Management Incentive Plan (the MIP), as amended and restated, for the Chairman of
the Board and the Chief Executive Officer,
reviews and approves equity-based compensation awards under the Company’s MIP, as amended and
restated, for the Section 16 reporting officers,
establishes and certifies the achievement of performance goals under the Company’s incentive and
performance-based compensation plans,
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
47
EXECUTIVE COMPENSATION
•
•
•
•
•
evaluates and recommends to the full Board, for their approval, annual compensation for the Company’s
nonemployee directors,
reviews other Company executive compensation programs,
reviews and discusses the CD&A with management, and based on such review and discussion, recommends
to the Board whether the CD&A should be included in the Proxy Statement,
reviews and approves the Compensation Committee report to the stockholders and the “say-on-pay”
proposal to be included in the Proxy Statement, and
reviews and discusses whether the Company’s executive compensation arrangements could create any
material risks to the Company.
The Chairman of the Board recommends to the Compensation Committee the form and amount of compensation
to be paid to the Chief Executive Officer. The Chief Executive Officer provides recommendations to the
Compensation Committee regarding the form and amount of compensation to be paid to executive officers who
report directly to him. Additionally, the Chairman of the Board, the Chief Executive Officer, and the Chief Financial
Officer regularly attend Compensation Committee meetings, except for executive sessions. Upon request,
management has provided to the Compensation Committee historical and prospective breakdowns of primary
compensation components for each executive officer, wealth accumulation analyses, and internal pay equity
analyses, as described in more detail below.
At our 2020 Annual Meeting, the stockholders approved, on an advisory basis, the compensation of the named
executive officers (98.3% of votes cast). The Compensation Committee believes this level of stockholder support reflects
a strong endorsement of the Company’s compensation policies and decisions. The Compensation Committee has
considered the results of the last advisory vote on executive compensation in determining the Company’s compensation
policies and decisions for 2021 and has determined that these policies and decisions are appropriate and in the best
interests of the Company and its stockholders at this time. In addition, at our 2017 Annual Meeting, the stockholders
voted for approval of a frequency of holding advisory votes every year with respect to named executive officer
compensation (93.4% of votes cast). Accordingly, an advisory vote on executive compensation has been included as
Proposal Number Two within this Proxy Statement.
In 2020, the Compensation Committee engaged Meridian Compensation Partners, LLC (Meridian) to review
the Company’s executive compensation policies and practices. Meridian was also directed to assist with
the development of a comparable peer group for executive compensation purposes and to benchmark
compensation levels for the NEOs. Meridian is retained by, and reports to, the Compensation Committee to
provide compensation analyses and consultation at the Committee’s request, and Meridian participated in all of the
regularly scheduled Compensation Committee meetings in 2020. The Committee has assessed the independence
of Meridian pursuant to applicable SEC and NASDAQ rules and concluded that Meridian’s work for the Committee
does not raise any conflict of interest.
48
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE COMPENSATION
Historically, the Compensation Committee meets during the first quarter to finalize discussion regarding the
Company’s performance goals for the previous and current year with respect to performance-based compensation
to be paid to executive officers, to review and discuss the CD&A with management, and to approve its report for
the Proxy Statement. These goals are approved within 90 days of the beginning of the year. In addition, during this
and other regularly scheduled meetings throughout the year, the Compensation Committee meets to:
• discuss any new compensation issues,
•
•
review base compensation, bonus, and MIP award analyses,
approve the engagement of the compensation consultant for annual executive and director compensation
surveys,
review and discuss information provided by the compensation consultant and the recommendations made by
the Chairman of the Board and the Chief Executive Officer,
review the performance of the Company and the individual officers,
approve short-term cash bonus and long-term incentive awards, and
•
•
•
• determine executives’ base salaries.
Management also advises the full Board, including the Compensation Committee members, throughout the year of
any new issues and developments regarding executive compensation.
Compensation Philosophy and Principles
The Compensation Committee acknowledges that the transportation industry is highly competitive and that
experienced professionals have career mobility. The Company believes that it competes for executive talent
with a large number of companies, some of which have significantly larger market capitalizations and others of
which are privately owned. Retention of key talent remains critical to our success. The Company’s need to focus
on retention is compounded by its size and geographic location. The Company’s compensation program is
structured to attract, retain, and develop executive talent with the ability to assume a broad span of responsibilities
and successfully lead complex business units to market-leading positions in the industry. The Compensation
Committee believes that the ability to attract, retain, and provide appropriate incentives for professional personnel,
including the senior executive officers and other key employees of the Company, is essential to maintaining
the Company’s leading competitive position, thereby providing for the long-term success of the Company.
The Compensation Committee’s goal is to maintain compensation programs that are competitive within the
transportation industry. Each year, the Compensation Committee reviews the executive compensation program
with respect to external competitiveness and linkage between executive compensation and creation of stockholder
value and determines what changes, if any, are appropriate.
The overall compensation philosophy of the Compensation Committee and management is guided by the following
principles:
• Compensation levels should be sufficiently competitive to attract and retain key talent. The Company aims to
attract, motivate, and retain high-performance talent to achieve and maintain a leading position in our industry.
Our total compensation package should be strongly competitive with other transportation and logistics
companies.
• Compensation should relate directly to performance and responsibility. Total compensation should be tied to
and vary with performance and responsibility, both at the Company and individual level, in achieving financial,
operational, and strategic objectives. Differentiated pay for high-performing individuals should be proportional
to their contributions to the Company’s success.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
49
EXECUTIVE COMPENSATION
•
• Short-term incentive compensation should constitute a significant portion of total executive compensation.
A large portion of total compensation should be tied to performance, and therefore at risk, as position and
responsibility increase. Individuals with greater roles and the ability to directly impact strategic direction and
long-term results should bear a greater proportion of the risk.
Long-term incentive compensation, the Company’s Management Incentive Plan (the MIP), should be closely
aligned with stockholders’ interests. Awards of long-term compensation encourage executive officers to focus
on the Company’s long-range growth and development and incent them to manage from the perspective of
stockholders with a meaningful stake in the Company, as well as to focus on long-term career orientation.
Participants in the MIP are expected to own Company stock. The expectations are discussed in this CD&A
under the caption “Stock Ownership Guidelines.”
The Company’s executive compensation program is designed to reward the achievement of initiatives regarding
growth, productivity, and people, including:
•
setting, implementing, and communicating strategies, goals, and objectives to ensure that the Company
grows revenue and earnings at rates that are comparable to or greater than those of our peers and that create
value for our stockholders,
• motivating and exhibiting leadership that aligns the interests of our employees with those of our stockholders,
• developing a grasp of the competitive environment and taking steps to position the Company for growth and
as a competitive force in the industry,
constantly renewing the Company’s business model and seeking strategic opportunities that benefit the
Company and its stockholders, and
implementing a discipline of compliance and focusing on the highest standards of professional conduct.
•
•
PROCESS OF SETTING COMPENSATION
Benchmarking Against a Peer Group
The Compensation Committee engaged Meridian to perform a competitive market assessment for the NEOs to
evaluate base salary, target annual incentives, target total cash compensation, long-term incentives, and total
direct compensation.
The assessment involved the use of a peer group, as noted below, consisting of 14 transportation and logistics
companies in the national marketplace as well as companies of comparable size, complexity of operations, or
similar customer base. These companies represent both business competition and the most relevant labor market
for our executives.
CH Robinson Worldwide, Inc.
CSX Corporation
Expeditors Int’l of Washington, Inc.
Hub Group, Inc.
Kansas City Southern
Knight-Swift Transportation Holdings, Inc.
Norfolk Southern Corporation
Old Dominion Freight Line, Inc.
Republic Services Inc.
Ryder System, Inc.
Schneider National Inc.
Stericycle Inc.
Waste Management Inc.
XPO Logistics Inc.
No changes were made to the peer group in 2020.
50
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE COMPENSATION
Compensation Analysis Tools
In addition to the competitive compensation survey information for each officer that was compiled, the
Compensation Committee also reviewed historical executive compensation. The Compensation Committee
anticipates that pertinent compensation information will continue to be developed and enhanced to allow the
Committee to perform the most relevant analyses practicable.
Our objective for total executive compensation is to target a competitive range around the 50th percentile of the peer
group. We believe that a sizeable portion of overall compensation should be at risk and tied to stockholder value.
Historically, our bonuses have been tied to operating income, earnings before taxes (EBT), revenue, earnings per
share (EPS), or other identified metrics. As performance against these metrics increases, so do executive bonuses.
Long-term incentives are used as tools to reward executives for current and future performance, to encourage an
executive to remain with the Company, and to align the executive’s interests with those of our stockholders. As part
of our long-term incentive strategy, executives are expected to maintain stock ownership values as a multiple of their
base salaries. Long-term incentives for NEOs are performance-based. While certain components of compensation
are directly tied to the Company’s reported financial performance, sufficient accounting and operational controls are
in place and tested effectively to ensure that the Company’s compensation practices and policies, including those for
nonexecutives, are not reasonably likely to have a material adverse effect on the Company.
Our Company has a 401(k) plan that assists participants in providing for retirement. The Company contributes
to each NEO’s account per year based on the NEO’s voluntary contribution amount. The accumulated value
in unvested equity-based awards and stock owned currently is critical to each executive’s ability to adequately
provide for his or her retirement.
Long-Term Compensation Analyses and Policies
With respect to long-term, equity-based awards, the Company maintains the MIP. The MIP was originally adopted
and approved by the Board on March 17, 1989, and an amended and restated MIP was subsequently approved
by the stockholders on May 11, 1995. The MIP has been amended and restated a number of times since its
adoption, and all amendments requiring approval of the stockholders have been approved, with the last approval
occurring at our Annual Meeting of Stockholders held in 2017. Currently, there are 44 million shares of common
stock authorized for issuance under the MIP, of which approximately 5.1 million shares are available for future
equity-based awards.
Performance-based restricted share units, time-vested restricted share units, and stock options of the Company
may be granted under the MIP in an effort to link future compensation to the long-term financial success of the
Company. These equity-based awards are granted to executive officers, including the NEOs, and other key
employees and are intended to attract and retain employees, to provide incentives to enhance job performance,
and to enable those persons to participate in the long-term success and growth of the Company through an equity
interest in the Company.
The Company does not have a formal policy, but has an established practice described below, with respect to
the granting of any form of equity compensation. The Company does not have a policy or practice of either timing
equity-based compensation grants to current or new executive officers, or timing the release of material, nonpublic
information to affect the value of executive compensation. Recommendations for all Section 16 filers, except for
the Chairman of the Board and the Chief Executive Officer, are presented to the Compensation Committee by the
Chief Executive Officer. The Chairman of the Board recommends to the Compensation Committee the award for the
Chief Executive Officer. The Compensation Committee approves or adjusts the award using the above tools for all
Section 16 filers, except for the Chairman of the Board and the Chief Executive Officer. The awards for the Chairman
of the Board and Chief Executive Officer are recommended by the Compensation Committee and submitted for
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
51
EXECUTIVE COMPENSATION
final approval to the Company’s independent Board members. This process occurs during our first-quarter Board
and Committee meetings in late January of each year to better coincide with the reporting of annual financial and
operating results. We consider this our annual award date. In 2020, annual award grants totaling 567,955 units were
made on January 22, the date of the first-quarter Board meeting of 2020. Grants have been made in months other
than the annual award dates on a very limited basis. The limited exceptions to this grant-date practice have included,
for example, the hiring of a key employee or the promotion of an employee to a stock-eligible position.
The Compensation Committee typically grants performance-based restricted share units to the NEOs of the
Company. Each grant typically vests incrementally over a vesting schedule ranging from two to ten years,
subject to service and performance conditions. Each portion that vests in a particular year, or each tranche, of
performance-based awards is contingent on the Company’s attainment of predetermined performance goals
established by the Compensation Committee. Historically, the Compensation Committee has predominantly
set operating income targets for each tranche of performance-based restricted share units granted to NEOs.
Therefore, while an NEO may receive a grant that vests over a period of years, the operating income performance
goal must be met for each tranche in order for the NEO to receive the full value of the grant. Failure to meet the
operating income goal for any tranche would cause that portion of the total grant to be forfeited by the NEO.
In 2020, the Compensation Committee expanded the performance conditions placed on the NEO restricted share
unit awards granted. Three-fourths of the annual NEO restricted share units awarded are subject to future annual
operating income targets with incremental vesting, consistent with past awards, while the remaining one-fourth are
contingent on two additional metrics measured cumulatively over three years with single cliff vesting at the end of
the three-year performance period. One-half of the three-year cliff vesting portion (one-eighth of the total award)
is contingent on the Company’s attainment of a predetermined range of future earnings before interest, taxes,
depreciation, and amortization (EBITDA) targets. The vesting range requires a minimum threshold of EBITDA to be
met before any vesting occurs. Depending on the extent to which actual EBITDA exceeds the minimum threshold
of the range, the ultimate vesting of the awards can range from 0% to 150% of the original units granted. The
remaining one-eighth portion of the total annual award is contingent on the Company’s attainment of a targeted
three-year return on invested capital (ROIC) relative to the ROIC consistently calculated for the same reporting
periods for each company included in the following additional independent peer group of 13 transportation and
logistics companies in the national marketplace:
CH Robinson Worldwide, Inc.
CSX Corporation
Expeditors Int’l of Washington, Inc.
Forward Air Corporation
Hub Group, Inc.
Kansas City Southern
Knight-Swift Transportation Holdings, Inc.
Landstar System, Inc.
Norfolk Southern Corporation
Old Dominion Freight Line, Inc.
Ryder System, Inc.
Schneider National Inc.
XPO Logistics Inc.
Depending on which level of ROIC is obtained, the ultimate vesting of the awards can range from 0% to 200%
of the original units granted. Consistent with prior grants, all performance criteria used within the awards were
established by the Compensation Committee. The Compensation Committee intends to continue to evaluate
expansion of equity-based awards subject to these performance conditions in the future.
52
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE COMPENSATION
2020 NEO Restricted
Share Unit Awards
Summary >
Operating Income Performance-Based Units
EBITDA Performance-Based Units
ROIC Performance-Based Units
In addition, the Compensation Committee granted separate, one-time 2020 awards of performance-based
restricted share units, subject to future operating income targets, to the NEOs with two-year incremental vesting
to bridge the transition period resulting from the EBITDA and ROIC-based awards being subject to three-year cliff
vesting. One third of these restricted share units vested on the first anniversary of the grant date, and the remaining
two-thirds will vest on the second anniversary of the grant date.
The Compensation Committee believes that restricted share units are currently more effective than stock options
in achieving the Company’s compensation objectives, as these grants are subject to less market volatility and
are less dilutive to stockholders. NEOs realize immediate value as restricted share units vest, with such value
increasing as the Company’s stock performance increases. Cash dividends are not paid and there are no voting
rights on unvested restricted share units.
As stated above, the Company does not have a policy or practice of timing the grant of equity-based awards
and the release of material, nonpublic information in a manner that would affect compensation for new or current
executive officers, nor has it deliberately or knowingly done so. In the event that material, nonpublic information
becomes known to the Compensation Committee, the Company, or its employees at a time when such
information could affect or otherwise impact the imminent grant of equity-based compensation, management and
the Compensation Committee will take the existence of such information under advisement and determine whether
to delay the grant of such equity-based compensation to a later date to avoid the appearance of any impropriety.
Deductibility of Compensation and Other Regulatory Considerations
Section 162(m) of the Internal Revenue Code, as amended (the Code), places a limit of $1 million on the amount
of compensation the Company may deduct for federal income tax purposes in any one year with respect to
the Company’s Chief Executive Officer, the Chief Financial Officer, and the next three most highly compensated
executive officers whose compensation is required to be disclosed in the Company’s annual Proxy Statement
(the Covered Employees). Historically, there has been an exception to this $1 million limitation for performance-
based compensation that meets certain requirements, and the Chief Financial Officer has been excluded from the
definition of a Covered Employee. Effective January 1, 2018, under the Tax Cuts and Jobs Act, the exception for
performance-based compensation was eliminated, and compensation paid to the Chief Financial Officer is now
subject to the $1 million deduction limitation. The amendments to Section 162(m) include a grandfather provision
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
53
EXECUTIVE COMPENSATION
for compensation under a written contract in effect on November 2, 2017, that is not materially modified after such
date. The Company therefore believes that the performance-based equity awards granted to its named executive
officers before November 2, 2017, will continue to be eligible for the performance-based exception provided
certain requirements are met.
In reviewing the effectiveness of the Company’s compensation program, the Compensation Committee considers
the anticipated tax treatment to the Company and to its executives of various payments and benefits. Additionally,
the deductibility of certain compensation payments depends upon the timing of an executive’s vesting or exercise
of previously granted awards, as well as interpretations and changes in the tax laws and other factors beyond
the Compensation Committee’s control. For these and other reasons, including the need to maintain flexibility in
compensating executive officers in a manner designed to promote varying corporate goals, the Compensation
Committee will not necessarily, nor in all circumstances, limit executive compensation to that which is deductible
under the Code. The Company has not adopted a policy requiring all compensation to be deductible.
The Compensation Committee generally intends to preserve the deductibility of awards granted before November
2, 2017, to the extent reasonably practicable under the current law. The MIP contains specific language and
requirements regarding performance-based awards granted to a Covered Employee intended to be “qualified
performance-based compensation” as defined by the Code. These awards shall be based on the attainment of
one or more objective performance goals established in writing by the Committee. Performance goals must be
based on one or more criteria approved by the MIP (e.g., revenue, operating income, return on assets) and be
based on an objective formula or standard. The Committee is currently using approved targeted performance
goals for all outstanding qualified performance-based restricted share awards. Prior to any vesting of an award
intended to qualify for the performance-based exception, the Committee must certify in writing that all of the
necessary performance goals have been met.
Base salary, bonuses, non-performance-based restricted share units, and performance-based restricted share
units that do not qualify under the grandfather provision of the amended Section 162(m) do not qualify as
performance-based compensation under the Code. In 2020, the following compensation paid was not deductible
by the Company:
John N. Roberts, III
$2,266,192
David G. Mee
Shelley Simpson
Nicholas Hobbs
5,296,797
772,623
1,059,217
Terrence D. Matthews
4,031,874
54
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE COMPENSATION
Derivative Trading, Hedging, Pledging and Trading Plans
The Company has a policy that prohibits directors, officers, and other covered employees from engaging in short
sales or in transactions involving derivatives based on the Company’s common stock, such as option contracts,
straddles, collars, hedges, and writing puts or calls. In addition, the Company’s policy requires that directors,
officers, and other covered employees must inform the Office of the Chief Financial Officer before buying or selling
any beneficially owned common stock of the Company or entering into a trading plan under the SEC’s Rule 10b5-
1. In addition, while the Board does not have a formal policy regarding pledging of the Company’s common stock,
the Corporate Governance Committee annually reviews any pledges of the Company’s common stock by directors
and executive officers to assess whether such pledges pose any unnecessary risks to the Company.
Stock Ownership Guidelines
To motivate the Company’s officers and senior management to emulate its stockholders, the Company expects
its management to own Company stock at levels described in the table shown below within five to eight years of
accepting the relevant position.
Stock ownership is defined as stock owned:
• directly or indirectly, and/or
•
through the Company’s 401(k) Employee Retirement Plan.
Position
Chief Executive Officer
Executive Vice Presidents
Senior Vice Presidents
Vice Presidents
Ownership Multiple
of Base Salary
6 times
3.5 times
2.75 times
2.5 times
The Compensation Committee has determined that as of the most recent annual award date, all of the Company’s
officers and members of senior management covered by these guidelines had met their ownership goals or were
within the permitted period of time to meet such goals.
Stock Retention Policy
In addition to the stock ownership guidelines indicated above, the Company expects all shares obtained by an
NEO from the vesting or exercise of restricted share units and stock options to be retained until the established
ownership levels have been achieved. The Company does not have any other stock retention policy.
Recovery of Awards
The Company does not have a policy, other than required by law, requiring replacement of awards or payments as a
result of an officer’s illegal transactions or restatements. However, the Compensation Committee has formally adopted
and explicitly communicated the “clawback” provisions of the Dodd-Frank Wall Street Reform and Consumer
Protection Act with regard to annual cash bonus awards paid to the Company’s executive officers. With regard to
equity-based awards, the MIP gives the Company broad discretion to reduce, cancel, seek to forfeit, or recoup any
Plan participant’s awards upon the breach of any agreement with or obligation to the Company, violation of any Company
policy or procedure, or engagement in conduct that is otherwise detrimental to the business or reputation of the Company.
Since becoming a public company in 1983, the Company has had no illegal actions by its officers or restatements of
financial information.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
55
EXECUTIVE COMPENSATION
Summary
The Company intends to continue its practice of compensating its executives through programs that emphasize
performance. To that end, executive compensation is tied directly to the performance of the Company and is
structured to ensure that, due to the nature of the business and the degree of competitiveness for executive talent,
there is an appropriate balance between:
• base salary and incentive compensation,
•
•
short-term and long-term compensation, and
cash and noncash compensation.
Each is determined and measured by:
•
•
•
•
competitive compensation data,
financial, operational, and strategic goals,
long-term and short-term performance of the Company compared with its peer group, and
individual contribution to the success of the Company.
56
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE COMPENSATION
2020 COMPENSATION
Elements of Compensation
The Company’s primary compensation components are summarized below. Generally, the Company’s compensation
program consists of an annual base salary, short-term cash incentive awards, and an annual long-term, equity-based
award. Primary benefits for executives include participation in the Company’s 401(k) plan, health, dental, and vision
plans, and various insurance plans, including disability and life insurance, all of which are available to all employees on
a nondiscriminatory basis. The Company provides limited perquisites to executive officers and other key employees
as described in more detail on page 64 under the section titled “Other Perquisites.”
Total direct compensation for executive officers, including the NEOs, consists of one or more of the following
components:
• base salary,
•
•
•
•
annual performance-based incentive cash bonus awards,
long-term incentive/equity-based compensation,
health and welfare benefits, and
other benefits.
The table below provides a summary of the description and purpose of each component of our incentive
compensation.
Incentive Compensation
Component
Description
Company Bonus Plan
Annual bonus plan based on operating income, with
bonus payouts calculated as a percentage of base salary
Performance Growth Incentive
Plan
Annual bonus plan that uses a blended bonus calculation
requiring the minimum threshold of both net revenue
growth and EBT to be met before payout occurs
Performance-Based Units –
Operating Income
Awards of restricted share units that are subject to future
annual operating income targets with incremental vesting
Performance-Based Units –
EBITDA
Awards of restricted share units that are contingent on
the Company’s attainment of a predetermined matrix
of future earnings before interest, taxes, depreciation,
and amortization (EBITDA) targets based on EBITDA
compound annual growth rates
Performance-Based Units –
Relative ROIC
Awards of restricted share units that are contingent
on the Company’s attainment of a targeted three-year
return on invested capital (ROIC) relative to the ROIC
consistently calculated for the same reporting periods for
companies included in an independent peer group
Purpose
To encourage individuals
with greater roles and the
abilities to directly impact
strategic direction and
long-term results
To encourage executive
officers to focus on
the Company’s long-
range growth and
development and
incent them to manage
from the perspective
of stockholders with a
meaningful stake in the
Company, as well as
to focus on long-term
career orientation
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
57
EXECUTIVE COMPENSATION
In addition to these annual, ongoing incentive compensation components, as described further below, the
Committee used different equity awards to address certain circumstances such as promotions in 2020.
The Compensation Committee, with recommendations from management, works to create what it believes is
the best mix of these components in delivering total direct compensation. In determining annual compensation,
the Compensation Committee reviews all elements of compensation separately and in the aggregate. These
compensation components are comparable to those of the Company’s competitors and peer group.
In its review of executive compensation, and, in particular, in determining the amount and form of incentive awards
discussed below, the Compensation Committee generally considers several factors. Among these factors are:
• market information with respect to cash and long-term compensation for its peer group,
•
•
•
•
amounts paid to the executive officer in prior years as salary,
annual bonus and other compensation,
the officer’s responsibilities and performance during the calendar year, and
the Company’s overall performance during prior calendar years and its future objectives and challenges.
Cash compensation for our NEOs varies as the operating income of the Company changes or with the growth
of the combination of revenue and EBT, due to the nature of our bonus plans described below. Grants of
performance-based restricted share units are typically made annually.
It has been the policy of the Company to put a significant portion of the executive’s compensation at risk. This is
accomplished by our cash bonus plans, which are directly tied to operating income, revenue, and EBT growth
and the issuance of performance-based restricted share units. Equity-based awards from the MIP vest over a time
period usually from two to ten years. These awards are subject to forfeiture if the employee leaves the Company.
Furthermore, the future vesting of performance-based equity awards is contingent on the Company’s attainment of
predetermined performance metrics established by the Committee. The Committee and management believe that
the proportion of compensation at risk should rise as the employee’s level of responsibility increases.
The Compensation Committee does not rely solely on predetermined formulas or a limited set of criteria when it
evaluates the individual performances of the NEOs. The Compensation Committee considers actual results against
pre-established goals and also bases its compensation decisions for the NEOs on:
•
•
•
•
•
•
•
•
•
•
leadership,
the execution of business plans,
strategic results,
operating results,
growth in operating income, revenue and EBT, or other identified metrics,
size and complexity of the business,
experience,
strengthening of competitive position,
analysis of competitive compensation practices, and
assessment of the Company’s performance.
Where possible, the above criteria were compared with the peer group selected as well as the Chief Executive
Officer’s input for his direct reports and the Chairman of the Board’s input for the Chief Executive Officer.
58
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE COMPENSATION
Base Salary
The Compensation Committee believes that competitive levels of cash compensation, together with equity-based
and other incentive programs, are necessary for motivating and retaining the Company’s executives. Salaries provide
executives with a base level of monthly income and help achieve the objectives outlined above by attracting and
retaining strong talent. Base salaries are evaluated annually for all executive officers, including the Chief Executive
Officer. Generally, base salaries are not directly related to specific measures of corporate performance, but are
determined by the relevance of experience, the scope and complexity of the position, current job responsibilities,
retention, and relative salaries of the peer group members. The Compensation Committee may elect not to increase
an executive officer’s annual salary and has so elected in prior years. However, if warranted, the Compensation
Committee may increase base salary where an executive officer takes on added responsibilities or is promoted.
In January 2020 and 2021, the Compensation Committee reviewed each NEO’s base salary and the independent
Board members reviewed the Chief Executive Officer’s base salary. After applying the aforementioned guidelines,
the independent Board members approved the salary increases listed below for John N. Roberts, III, and the
Compensation Committee approved the salary increases listed below for the remaining NEOs. In December 2020,
salary increases were approved by the Compensation Committee for John Kuhlow, Shelley Simpson, and Nicholas
Hobbs due to promotions.
2019 Salary ($)
2020 Salary ($)
Increase For
2020 (%)
2021 Salary ($)
Increase For
2021 (%)
John N. Roberts, III
David G. Mee (1)
John Kuhlow (1)
Shelley Simpson
Nicholas Hobbs
Darren Field (2)
890,000
525,000
N/A
525,000
525,000
N/A
Terrence D. Matthews (2)
525,000
915,000
540,000
222,000
540,000
540,000
400,000
525,000
2.8
2.9
N/A
2.9
2.9
N/A
—
940,000
—
400,000
600,000
600,000
450,000
—
2.7
—
80.2
11.1
11.1
12.5
—
(1) Mr. Mee retired from the Company on April 1, 2020. Mr. Kuhlow assumed the position of interim Chief Financial Officer in connection
with Mr. Mee’s retirement and was named Chief Financial Officer and Executive Vice President effective December 1, 2020.
(2) Mr. Matthews retired from the Company on July 16, 2020. Mr. Field assumed the position of President of Intermodal and Executive
Vice President effective April 1, 2020 in connection with Mr. Matthews’ retirement.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
59
EXECUTIVE COMPENSATION
Annual Bonus Awards
The Company has in place a bonus plan tied to operating income (company bonus plan). Operating income is
deemed an appropriate metric to determine operational efficiency and removes uncontrollable effects of change
in income tax law. The Compensation Committee has also established a second bonus plan, referred to as the
Performance Growth Incentive (PGI) plan, which was tied to year-over-year revenue growth and EBT. When
management presents its budget for the year, the Compensation Committee establishes separate matrices of
reported results with corresponding bonus payout levels for each of the cash bonus plans. These forecasted
revenue and earnings results are based on customer freight trends, strategies for growth and controlling costs,
and corporate strategies to maximize stockholder return. Once presented to the Board, the financial budget and
bonus plan matrices remain fixed, though management continually reforecasts expectations based on actual
results and on changing facts and assumptions. Changes in uncontrollable factors such as general economic
conditions, railroad or port authority service issues, or rapidly fluctuating fuel costs can have a significant impact
on the Company’s actual financial results. Therefore, as the Company performs against the original budget, the
executives’ bonus performs against the pre-established matrices.
Annual Bonus Payouts
For 2020, the company bonus plan was based on annual reported operating income and consisted of a single
payout to be made in January 2021 based on the full year 2020 operating income matrix approved by the
Compensation Committee. The established matrix consisted of operating income ranging from $730 million to
$810 million, translating to annual bonus payout percentages ranging from 20% to 55% of an executive’s base
salary. Due to his previously announced retirement effective July 16, 2020, Terrence D. Matthews was not eligible
to receive a bonus under the company bonus plan.
The 2020 annual bonus payout targets compared with actual reported operating income and actual payout
percentages were as follows:
Operating Income ($) (millions)
Bonus Payout % of Salary
Period
Annual
Minimum
Target
Reported
Minimum
Target
Actual
730
730
713
20
20
—
No annual payout was made under the company bonus plan for 2020.
60
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE COMPENSATION
For 2020, the PGI bonus plan was based on a targeted annual operating revenue, excluding fuel surcharges (net
revenue) growth rate and annual reported EBT and also utilized a single payout in January 2021, after full year
financial results were publicly reported. For 2020, the established PGI matrices consisted of a net revenue growth
rate of 10% and EBT ranging from $695 thousand to $750 thousand. The PGI plan is a blended bonus calculation
requiring the minimum threshold of both net revenue growth and EBT to be met before payout occurs. The
Committee established stretch goals for 2020 at all levels, requiring performance above the Company’s approved
budget for 2020, in order to achieve any payouts under the plan. The 2020 goals for the PGI were designed to
align participants with achievement of profitable growth outcomes. Due to his previously announced retirement
effective July 16, 2020, Terrence D. Matthews was not eligible to receive a bonus under the PGI bonus plan.
The 2020 annual PGI bonus payout targets compared with actual reported results and actual payouts were as
follows:
Net Revenue Growth % / EBT ($) (millions)
Bonus Payout ($) (thousands)
Period
Min.
Target
Max.
Reported
Min.
Target
Max.
Actual
Annual –
John N. Roberts, III
Annual –
David G. Mee
Annual –
John Kuhlow
Annual –
Shelley Simpson
Annual –
Nicholas Hobbs
Annual –
Darren Field
10.0 / 695
10.0 / 695
10.0 / 750
9.3 / 666
665
665
1,110
10.0 / 695
10.0 / 695
10.0 / 750
9.3 / 666
234
234
473
10.0 / 695
10.0 / 695
10.0 / 750
9.3 / 666
80
80
160
10.0 / 695
10.0 / 695
10.0 / 750
9.3 / 666
234
234
473
10.0 / 695
10.0 / 695
10.0 / 750
9.3 / 666
234
234
473
10.0 / 695
10.0 / 695
10.0 / 750
9.3 / 666
149
149
296
—
—
—
—
—
—
No annual payout was made under the PGI bonus plan for 2020.
Long-Term, Equity-Based Award
Each executive is eligible to receive a long-term incentive award of performance-based restricted share units.
Performance-based restricted share units are intended to help achieve the objectives of the compensation
program, including the retention of high-performing and experienced talent, a career orientation, and strong
alignment with stockholders’ interests. The performance-based restricted share units are awarded and settled from
shares reserved for issuance under the MIP. The Compensation Committee approves or adjusts the award based
on the above criteria for all Section 16 filers who are employees of the Company. The awards for the Company’s
Chairman of the Board and Chief Executive Officer are presented for final approval to the Company’s independent
Board members. The Compensation Committee believes that performance-based restricted share units must be
sufficient in size to provide a strong, long-term performance and retention incentive for executives and to increase
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
61
EXECUTIVE COMPENSATION
their vested interest in the Company. Performance-based restricted share units are used as long-term incentives
because they are less dilutive to shares outstanding and to profits. Performance-based restricted share units
generally vest over a time period ranging from two to ten years.
In determining the number of performance-based restricted share unit grants for each NEO, the Compensation
Committee reviewed peer market data provided by Meridian and a detailed analysis of each NEO’s vested and
unvested stock holdings. In considering unvested stock holdings, the Committee reviewed a forecast of the timing
of potential future restricted stock unit vesting for each NEO over the next ten years.
The Compensation Committee subjectively considered the following objectives (without any particular weighting)
when determining the form and amount of performance-based restricted share units granted to NEOs in 2020:
•
•
•
align NEOs’ long-term interests with those of the Company’s stockholders,
strengthen retention hooks for NEOs over the long term,
ensure competitiveness of NEOs’ total compensation opportunity through an emphasis on performance-
based long-term stock compensation,
reinforce share holdings of NEOs,
•
•
align NEOs’ compensation with the Company’s long-term leadership succession planning initiatives, and
• bolster the continuity of the entire management team through an upcoming period of critical strategic goals
and milestones for the Company.
Terrence D. Matthews did not receive any 2020 incentive awards due to his previously announced retirement
effective July 16, 2020. For the other NEOs, the Compensation Committee and/or independent directors approved
the following performance-based and time-based restricted share unit grants, which are recorded based on target
performance levels:
Annual
Operating
Income
Performance-
Based Units (#)
Annual
ROIC/
EBITDA
Performance-
Based Units (#)(1)
Bridge
Operating
Income
Performance-
Based Units (#)
Promotion
Operating
Income
Performance-
Based Units (#)
Time-
Based
Units (#)(2)
Total Fair
Value ($)
John N. Roberts, III
David G. Mee(3)
John Kuhlow
Shelley Simpson
Nicholas Hobbs
Darren Field
37,699
13,113
—
13,113
13,113
6,556
12,567
4,371
—
4,371
4,371
2,186
8,550
3,278
—
3,278
3,278
1,643
—
—
— 6,507,402
— 2,297,108
7,471
1,512 1,134,409
3,735
3,735
8,742
— 2,780,603
— 2,780,603
— 2,116,211
(1) One-half of these annual restricted share units are based on ROIC targets, and another one-half are based on EBITDA targets, as
further discussed in the Long-Term Compensation Analyses and Policies section of the CD&A on page 51.
(2) In 2020, Mr. Kuhlow also received a time-based award prior to his promotion to Chief Financial Officer and Executive Vice President.
(3) Mr. Mee retired from the Company on April 1, 2020, and all restricted share units previously granted to him in 2020 were forfeited.
62
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE COMPENSATION
The fair value of the performance-based and time-based awards was based on a 3.20% discount from the
Company’s closing stock price of $114.30 on January 22, 2020, except for Mr. Kuhlow’s, Mr. Hobbs’, and Ms.
Simpson’s promotional performance-based awards, which were based on a 3.28% discount from the Company’s
closing stock price of $133.84 on November 20, 2020. The discounts represent the present values of expected
dividends to be paid on the Company’s common stock, using the current dividend rate and the risk-free interest rate,
over the vesting period. The Company believes that these discounts are appropriate to value the restricted share
units, as the units do not collect or accrue dividends until the awards vest and are settled with Company stock.
The 2020 NEO awards shown above vest in annual increments over time periods ranging from two to ten years,
beginning January 31, 2021 and January 31, 2026, or cliff vest on January 31, 2023, upon the Company’s
attainment of predetermined operating metrics established and approved by the Compensation Committee. The
Compensation Committee acknowledges that the separate components of total direct compensation are not
always in the 50th percentile of their respective peer groups, as determined earlier, but it believes that its mix of
current and long-term compensation is more appropriate to align the NEO’s compensation with the stockholders’
interests in both the near and longer term.
The Committee also reviewed its compensation strategy in general and specific components of total direct
compensation and determined that none of the Company’s compensation programs, individually or as a whole,
would create risks that are reasonably likely to have a material adverse effect on the Company. The Committee
presented its review and conclusion to the entire Board.
Deferred Compensation
The Company administers a Deferred Compensation Plan for certain of its officers. The employee participant
may elect on an annual basis to defer part of his or her salary and/or annual bonus awards. This plan assists
key employees in planning for retirement. The Company contributes nothing to the plan, and participants are not
permitted to defer shares of Company stock.
Health and Welfare Benefits
The Company provides benefits such as medical, vision, life insurance, long-term disability coverage, and 401(k)
plan opportunities to all eligible employees, including the NEOs. The Company provides up to $750,000 in life
insurance coverage and up to $10,000 per month in long-term disability coverage. The value of these benefits is
not required to be included in the Summary Compensation Table since they are available to all employees on a
nondiscriminatory basis. The Company matches certain employee contributions to the 401(k) plan. The Company
provides no postretirement medical or supplemental retirement benefits to its employees.
The Company also provides vacation, sick leave, and other paid holidays to employees, including the NEOs, that
are comparable to those provided at other transportation companies. The Company’s commitment to provide
employee benefits is due to our recognition that the health and well-being of our employees contributes directly to
a productive and successful work life that produces better results for the Company and for its employees.
Personal Benefits
The Company provides certain perquisites to management employees, including the NEOs, as summarized below.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
63
EXECUTIVE COMPENSATION
Company Aircraft
The Company actively participates in shared ownership of aircraft services with NetJets. With the approval of the
Chief Executive Officer, the NEOs and other management employees use Company aircraft services for business
purposes. Personal use of Company aircraft services is provided to executive officers on a very limited basis and
to other management employees in the event of emergency or other urgent situations. Also, at the discretion of
NetJets, the personal account of an executive officer could be linked to the Company’s direct NetJets agreement
to allow the individual to receive a discounted monthly management fee, at no incremental cost to the Company.
Company Vehicles
The Company does not provide Company-owned cars to executives.
Other Perquisites
The Company provides executive officers a taxable allowance of up to $10,000 a year for financial counseling
services, which may include legal, financial, estate and/or tax planning, and tax return preparation. This benefit is
based on the actual cost of the services. The Company also provides country club memberships to certain of its
executive officers. These memberships are valued based on the actual costs of the membership, including dues,
regardless of whether use was personal or business. The Company believes that these clubs provide a quiet venue
for negotiations and entertainment of clients, bankers, investment bankers, stockholders, etc. The Company also
offers executive officers security services in the form of home security systems, monitoring services, or security
consulting, the benefit of which is also based on the actual third-party cost or actual time spent and employment
cost incurred. Each executive officer is also assigned an administrative assistant who, from time to time, may provide
administrative support for personal matters of the executive officer, the benefit of which is based on the actual
time spent and employment cost incurred. In addition, as with other members of senior management, executive
officers may utilize tickets to entertainment or social events provided to the Company in connection with a corporate
sponsorship or charitable contribution, at no incremental cost to the Company.
Severance Agreements
The Company does not have employment contracts or predetermined personal severance agreements with any
of its executives. However, according to the terms of the awards granted under the previously mentioned MIP, all
outstanding restricted share units are subject to accelerated or immediate vesting upon the occurrence of a double
triggering event, which requires both a “change in control” and the NEO’s retirement, termination by the Company
without cause, or resignation for good reason.
Generally, a “change in control” is deemed to occur when more than 30% of the outstanding shares of common
stock of the Company change ownership in a transaction that is not a merger, reorganization, or consolidation,
when the persons who constitute the Company’s incumbent board of directors cease to constitute a majority
of the board, or upon the consummation of a merger, reorganization, consolidation, or similar form of corporate
transaction involving the Company that requires the approval of the Company’s stockholders where more than
50% of the outstanding shares change ownership or a complete liquidation or dissolution of the Company or the
sale or disposition of all or substantially all of the assets of the Company.
David G. Mee and Terrence D. Matthews retired from the Company in 2020, and each entered into agreements
that provided for certain consideration to be paid upon their retirement. Mr. Mee’s and Mr. Matthews’ retirement
agreements are further discussed in the Potential Post-Employment Benefits section of the CD&A on page 75.
64
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table summarizes the total compensation earned by or paid to the Chief Executive Officer, Chief
Financial Officer, the next three most highly compensated executive officers of the Company who served in
such capacities as of December 31, 2020, and a former executive officer who would have been among the next
three most highly compensated executive officers of the Company but for the fact that he was not serving as an
executive officer as of December 31, 2020, for services rendered to the Company. These officers are referred to as
the NEOs in this Proxy Statement.
Name and Principal
Position
Year
Salary
($) (1)
Stock
Awards
($) (2)
Option
Awards
($)(2)
Non-Equity
Incentive Plan
Compensation
($)(1)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings ($)
All Other
Compensation
($)
Total
($)
John N. Roberts, III
President and CEO
David G. Mee (3)
EVP, Finance &
Administration, CFO
John Kuhlow (4)
CFO and EVP
Shelley Simpson
CCO, and EVP of
People and HR
Nicholas Hobbs
COO, President of
Contract Services,
and EVP
Darren Field (5)
President of
Intermodal and EVP
2020
912,115
6,507,402
2019
892,542
5,563,165
2018
845,298
4,877,428
2020
152,805
2,297,108
2019
2018
523,224
1,991,710
498,618
1,746,255
2020
231,123
1,134,409
2020
541,500
2,780,603
2019
2018
521,784
1,991,710
496,600
1,746,255
2020
541,500
2,780,603
2019
520,601
1,991,710
2018
485,505
1,746,255
2020
387,308
2,116,211
Terrence D.Matthews (6)
EVP and President of
Intermodal
2020
301,490
—
2019
2018
523,991
2,475,442
500,630
1,746,255
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,098,500
—
—
490,805
—
—
—
490,805
—
—
487,730
—
—
—
490,805
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
33,855 7,453,372
132,542 6,588,249
25,010 6,846,236
5,139,790 7,589,703
18,939 2,533,873
18,720 2,754,398
6,934 1,372,466
27,341 3,349,444
27,517 2,541,011
20,483 2,754,143
19,846 3,341,949
22,121 2,534,432
18,430 2,737,920
25,523 2,529,042
2,830,463 3,131,953
18,360 3,017,793
19,872 2,757,562
(1) Non-equity incentive plan compensation (paid as a bonus) and salary amounts shown above are reported as gross earnings. Totals
may include amounts transferred into the deferred compensation plan and/or into the Company’s 401(k) plan. All non-equity awards
are reported in the year in which they are earned.
(2) Amounts reflect grant date fair value of each individual’s specific award, which will be earned over the vesting period (two to ten
years) and the achievement of operating income, EBITDA, or ROIC performance goals established by the Compensation Committee
at the time of grant. No stock options were granted during 2020, 2019, or 2018.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
65
EXECUTIVE COMPENSATION
(3) Mr. Mee retired from the Company on April 1, 2020. Pursuant to Mr. Mee’s retirement agreement dated February 14, 2020, Mr. Mee’s
outstanding unvested awards of performance-based restricted share units granted prior to January 1, 2020, were accelerated and
vested automatically on April 1, 2020, without regard to performance conditions, the value of which is included in Mr. Mee’s “All Other
Compensation” for 2020 and quantified in the table below. The share units granted to Mr. Mee in January 2020 were automatically
forfeited upon his retirement. Excluding the grant date fair value of the forfeited January 2020 share unit awards, Mr. Mee’s total
compensation for 2020 was $5,292,595.
(4) Mr. Kuhlow became interim Chief Financial Officer effective March 1, 2020, and was named Chief Financial Officer and Executive Vice
President effective December 1, 2020.
(5) Mr. Field was promoted to President of Intermodal and Executive Vice President effective April 1, 2020.
(6) Mr. Matthews retired from the Company on July 16, 2020. Pursuant to Mr. Matthews’ retirement agreement dated February 14,
2020, Mr. Matthews’ outstanding unvested awards of performance-based restricted share units were accelerated and vested
automatically on July 16, 2020, without regard to performance conditions, the value of which is included in Mr. Matthews’ “All Other
Compensation” for 2020 and quantified in the table below. Mr. Matthews did not receive any share unit awards for 2020.
Components of All Other Compensation for Calendar Year 2020
Name
John N. Roberts, III
David G. Mee
John Kuhlow
Shelley Simpson
Nicholas Hobbs
Darren Field
Terrence D. Matthews
Perquisites and
Other Personal
Benefits
($)
Company
Contributions
to 401(k) Plan
($)
Restricted
Share Units
Accelerated
Vesting ($) (1)
25,305
20,114
—
18,791
11,296
23,586
8,600
8,550
—
6,934
8,550
8,550
1,937
4,513
Total
($)
33,855
—
5,119,676
5,139,790
—
—
—
—
6,934
27,341
19,846
25,523
2,817,350
2,830,463
(1) David G. Mee’s and Terrence D. Matthews’ retirement agreements provided for accelerated vesting of 56,571 restricted share units
and 21,255 restricted share units, respectively, upon their retirement.
66
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE COMPENSATION
Components of Perquisites for Calendar Year 2020
Personal
Administrative
Support
($)
Security
Services
($)
Personal
Use of
Company
Plane
($) (1)
Legal and
Accounting
Fees
($)
Total
Perquisites and
Other Personal
Benefits
($)
Club
Dues
($)
Name
John N. Roberts, III
4,205
2,267
—
10,000
8,833
David G. Mee
John Kuhlow
Shelley Simpson
Nicholas Hobbs
Darren Field
Terrence D. Matthews
—
—
—
—
—
—
—
—
—
—
—
—
17,496
—
—
—
—
—
2,618
—
10,000
8,791
1,750
9,546
14,045
590
8,951
—
1,945
6,655
25,305
20,114
—
18,791
11,296
23,586
8,600
(1) The value of personal aircraft usage reported above is based on the Company’s actual invoiced amount from NetJets for the
variable costs incurred on each trip. Since the Company’s aircraft is used primarily for business travel, this methodology excludes
fixed costs that do not change based on usage, such as depreciation and management fees. In addition to the above, on certain
occasions, an executive’s spouse or other family member may accompany the executive on a flight when such person is invited
to attend the event for appropriate business purposes. No additional direct operating cost is incurred in such situations under the
foregoing methodology; however, the value of personal use of Company aircraft is imputed for federal income tax purposes as
income to the NEO. David G. Mee and Terrence D. Matthews had such imputed income in 2020. This value is calculated pursuant
to Internal Revenue Service guidelines using Standard Industry Fare Level rates, which are determined by the U.S. Department
of Transportation. Also, throughout 2020, John N. Roberts, III maintained a personal account with NetJets that was linked to the
Company’s direct NetJets agreement and allowed Mr. Roberts to receive a discounted monthly management fee, at no Incremental
cost to the Company.
Grants of Plan-Based Awards for 2020
The following table reflects estimated possible payouts under equity and non-equity incentive plans to the NEOs
during 2020. The Company’s non-equity incentive-based awards are granted to the NEOs based upon pre-
established performance goals set annually by the Compensation Committee with a performance period equal
to the calendar year for which the performance goals are set. Equity-based awards are subject to performance
periods ranging from one to three years, as further described on page 52 under “Long-Term Compensation
Analyses and Policies.”
The MIP is an annual plan consisting of equity-based awards only. The number of performance-based or time-
based restricted share units awarded is measured based on the executive’s level of responsibility and other
matters described on page 61 under “Long-Term, Equity-Based Award.” Dividends are not paid on awards of
performance-based or time-vested restricted share units.
In 2020, NEOs were eligible to earn cash bonuses under the non-equity incentive award plans based on the
Company’s operating income, revenue, and EBT for the calendar year. Due to his previously announced retirement
effective July 16, 2020, Terrence D. Matthews was not eligible to receive a cash bonus under the non-equity
incentive award plans. Please refer to page 60 under “Annual Bonus Award” for further detail.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
67
EXECUTIVE COMPENSATION
Estimated Possible Payouts Under
Non-Equity Incentive Awards
Estimated Future Payouts Under
Equity Incentive Plan Awards
All Other
Stock
Awards
All Other
Option
Awards
Name/Award Grant Date
Threshold
($)
Target
($)
Maximum
($) (1)
Threshold
(#)
Target
(#) (2)
Maximum
(#)
Number of
Shares of
Stock or
Units
(#)
Number of
Securities
Underlying
Options
(#)
Exercise or
Base Price
of Option
Awards
($/Sh)
Grant Date
Fair Value of
Stock and
Option Awards
($) (3)
John. N.
Roberts, III
AOI
EBITDA
ROIC
Bridge
CBP
PGI
David G.
Mee
AOI
EBITDA
ROIC
Bridge
CBP
PGI
John
Kuhlow
1/22/20
1/22/20
1/22/20
1/22/20
—
—
—
—
—
—
—
—
—
—
—
—
1/22/20
183,000
183,000
503,250
1/22/20
665,000
665,000
1,110,000
9,424
37,699
37,699
3,142
6,283
2,850
—
—
6,284
9,426
6,283
12,566
8,550
8,550
—
—
—
—
1/22/20
1/22/20
1/22/20
1/22/20
—
—
—
—
—
—
—
—
—
—
—
—
1/22/20
108,000
108,000
297,000
1/22/20
234,000
234,000
472,800
3,278
13,113
13,113
1,093
2,185
1,093
—
—
2,186
2,185
3,278
—
—
3,279
4,370
3,278
—
—
Time
CBP
PGI
Shelley
Simpson
AOI
EBITDA
ROIC
Bridge
Promo.
11/20/20
1/22/20
—
—
—
—
—
—
1/22/20
44,400
44,400
122,100
1/22/20
80,000
80,000
160,000
1/22/20
1/22/20
1/22/20
1/22/20
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Promo.
11/20/20
1/22/20
108,000
108,000
297,000
1/22/20
234,000
234,000
472,800
CBP
PGI
68
2,490
7,471
7,471
—
—
—
—
—
—
—
—
—
3,278
13,113
13,113
1,093
2,185
1,092
1,245
—
—
2,186
2,185
3,278
3,735
—
—
3,279
4,370
3,278
3,735
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,512
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
4,171,017
695,262
695,151
945,972
—
—
1,450,822
241,859
241,749
362,678
—
—
967,121
167,288
—
—
1,450,822
241,859
241,748
362,678
483,496
—
—
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE COMPENSATION
Estimated Future Payouts Under
Non-Equity Incentive Awards
Estimated Future Payouts Under
Equity Incentive Plan Awards
All Other
Stock
Awards
All Other
Option
Awards
Name/Award Grant Date
Threshold
($)
Target
($)
Maximum
($) (1)
Threshold
(#)
Target
(#) (2)
Maximum
(#)
Number of
Shares of
Stock or
Units
(#)
Number of
Securities
Underlying
Options
(#)
Exercise or
Base Price
of Option
Awards
($/Sh)
Grant Date
Fair Value of
Stock and
Option Awards
($) (3)
Nicholas
Hobbs
AOI
EBITDA
ROIC
Bridge
1/22/20
1/22/20
1/22/20
1/22/20
Promo.
11/20/20
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
CBP
PGI
Darren
Field
AOI
EBITDA
ROIC
Bridge
Promo.
CBP
PGI
1/22/20
108,000
108,000
297,000
1/22/20
234,000
234,000
472,800
1/22/20
1/22/20
1/22/20
1/22/20
1/22/20
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1/22/20
80,000
80,000
220,000
1/22/20
148,500
148,500
296,333
3,278
13,113
13,113
1,093
2,185
1,092
1,245
—
—
1,639
547
1,093
547
874
—
—
2,186
2,185
3,278
3,735
—
—
6,556
1,093
1,093
1,643
8,742
—
—
3,279
4,370
3,278
3,735
—
—
6,556
1,640
2,186
1,643
8,742
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,450,822
241,859
241,748
362,678
483,496
—
—
725,355
120,930
120,930
181,782
967,214
—
—
(1) This column reflects the maximum non-equity incentive award each NEO was eligible to receive for 2020 under the percentage
assigned to each NEO for the cash bonus pools. The actual awards earned are reported in the Summary Compensation Table shown
on page 65 of this Proxy Statement.
(2) This column reflects the number of performance-based or time-based restricted share units that were granted to the NEOs in 2020.
(3) The fair value of the awards was based on a 3.20% discount from the Company’s closing stock price of $114.30 on January 22, 2020,
measured at the target performance level, except for awards granted to Mr. Kuhlow, Mr. Hobbs, and Ms. Simpson upon their promotions,
which were based on a 3.28% discount from the Company’s closing stock price of $133.84 on November 20, 2020. The discount
represents the present value of expected dividends to be paid on the Company’s common stock, using the current dividend rate and
the risk-free interest rate, over the vesting period. The Company believes that this discount is appropriate to value the performance-
based restricted share units, as the units do not collect or accrue dividends until the awards vest and are settled with Company stock.
Performance-based restricted share units subject to EBITDA and ROIC are recorded at their target of 100% of the units granted.
Key to Plan-Based Awards Table:
AOI
Annual Operating Income
Performance-Based Units
ROIC
Annual ROIC Performance-
Based Units
Promo.
Promotion Operating Income
Performance-Based Units
EBITDA
Annual EBITDA Performance-
Based Units
Bridge
Bridge Operating Income
Performance-Based Units
Time
Time-Based Units
CBP
PGI
Company Bonus
Plan
Performance
Growth Incentive
Plan
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
69
EXECUTIVE COMPENSATION
Outstanding Equity Awards at Calendar Year-end 2020
As of December 31, 2020, there were no outstanding stock options held by the NEOs. The following table sets
forth information concerning restricted share units held by the NEOs as of December 31, 2020.
Name
John N. Roberts, III
John Kuhlow
Number of
Shares or
Units of Stock
That Have Not
Vested
(#) (1)
Market Value
of Shares
or Units of
Stock That
Have Not
Vested ($) (2)
Equity Incentive Plan
Awards: Number of
Unearned Shares, Units
or Other Rights That
Have Not Vested
(#) (1)
Equity Incentive Plan
Awards: Market or Payout
Value of Unearned Shares,
Units or Other Rights That
Have Not Vested
($) (2)
12,371
15,917
42,325
37,699
8,550
12,567
1,690,497
2,175,058
5,783,711
5,151,568
1,168,358
1,717,281
6,670
411
510
1,031
1,210
911,456
56,163
69,692
140,886
165,347
Shelley Simpson
3,000
20,000
409,950
2,733,000
7,471
1,020,912
Nicholas Hobbs
20,000
2,733,000
Darren Field
2,748
375,514
3,048
5,699
15,153
13,113
3,278
4,371
3,735
3,048
5,699
15,153
13,113
3,278
4,371
3,735
885
7,162
6,556
8,742
1,643
2,186
416,509
778,768
2,070,657
1,791,891
447,939
597,297
510,388
416,509
778,768
2,070,657
1,791,891
447,939
597,297
510,388
120,935
978,687
895,877
1,194,594
224,516
298,717
(1) Restricted share units are time-vested or performance-based awards. Effective vesting dates, pending achievement of required
performance goals set for performance-based awards, are noted below. Performance-based restricted share units subject to EBITDA
and ROIC are recorded at their target of 100% of the units granted.
70
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
Time-Based Awards
John Kuhlow
Shelley Simpson
Nicholas Hobbs
Darren Field
Performance-Based Awards
John N. Roberts, III
John Kuhlow
Shelley Simpson
Nicholas Hobbs
EXECUTIVE COMPENSATION
Shares Vesting
Vesting Date
Shares Vesting
Vesting Date
3,330
3,340
411
255
255
343
3,000
6,666
6,666
6,667
687
687
7/15/21
7/15/22
7/15/21
10/31/21
10/31/22
10/31/21
7/15/21
7/15/21
7/15/21
7/15/22
1/31/21
1/31/22
344
344
302
302
303
303
6,667
6,667
6,667
687
687
10/31/22
10/31/23
10/31/21
10/31/22
10/31/23
10/31/24
7/15/22
7/15/23
7/15/23
1/31/23
1/31/24
Shares Vesting
Vesting Date
Shares Vesting
Vesting Date
12,371
7,958
7,959
14,108
14,108
14,109
9,424
2,490
2,490
3,048
2,849
2,850
5,051
5,051
5,051
3,278
3,278
3,048
2,849
2,850
5,051
5,051
5,051
3,278
3,278
7/15/21
1/31/21
1/31/22
1/31/21
1/31/22
1/31/23
1/31/21
1/31/26
1/31/27
7/15/21
1/31/21
1/31/22
1/31/21
1/31/22
1/31/23
1/31/21
1/31/22
7/15/21
1/31/21
1/31/22
1/31/21
1/31/22
1/31/23
1/31/21
1/31/22
9,425
9,425
9,425
2,850
5,700
12,567
2,491
3,278
3,279
1,092
2,186
4,371
1,245
1,245
1,245
3,278
3,279
1,092
2,186
4,371
1,245
1,245
1,245
1/31/22
1/31/23
1/31/24
1/31/21
1/31/22
1/31/23
1/31/28
1/31/23
1/31/24
1/31/21
1/31/22
1/31/23
1/31/26
1/31/27
1/31/28
1/31/23
1/31/24
1/31/21
1/31/22
1/31/23
1/31/26
1/31/27
1/31/28
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
71
EXECUTIVE COMPENSATION
Darren Field
442
443
2,364
2,364
2,434
1,639
1,639
1,639
1,639
547
1,096
1/31/21
1/31/22
1/31/24
1/31/25
1/31/26
1/31/21
1/31/22
1/31/23
1/31/24
1/31/21
1/31/22
2,186
874
874
874
874
874
874
874
874
875
875
1/31/23
1/31/21
1/31/22
1/31/23
1/31/24
1/31/25
1/31/26
1/31/27
1/31/28
1/31/29
1/31/30
(2) Values are based on the last closing market price of $136.65 on December 31, 2020.
Restricted Share Units Vested for 2020
The following table sets forth information concerning restricted share units vested during 2020.
Name
John N. Roberts, III
Total
David G. Mee
Total
John Kuhlow
Number of Shares
Acquired on Vesting
(#)
Value Realized on
Vesting
($) (1) (2)
14,108
11,692
12,371
7,959
46,130
13,537
6,667
20,000
3,111
6,096
8,128
5,699
2,849
1,522,676
1,523,935
1,612,436
859,016
5,518,063
1,225,099
719,569
1,810,000
281,546
551,688
735,584
515,760
307,492
66,087
6,146,737
302
343
3,330
440
411
36,765
41,757
434,032
57,350
53,570
72
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
Total
Shelley Simpson
Total
Nicholas Hobbs
Total
Darren Field
Total
Terrence D. Matthews
EXECUTIVE COMPENSATION
255
5,081
5,051
3,000
3,888
4,978
3,048
2,849
31,044
654,518
545,154
391,020
506,762
648,833
397,276
307,493
22,814
2,796,538
5,051
3,000
3,888
4,978
3,048
2,849
545,154
391,020
506,762
648,833
397,276
307,493
22,814
2,796,538
687
600
2,000
443
3,730
12,556
12,555
3,000
3,000
5,699
2,849
74,148
78,204
260,680
47,813
460,845
1,664,298
1,355,061
391,020
397,650
755,402
307,493
Total
39,659
4,870,924
(1) Value realized on the acquired shares shown above is gross earnings. Values are earned over multiple years. The receipt of vested
shares in calendar year 2020 should not be interpreted to mean that all value was earned in the year the shares were received. Each
executive retained a portion of the available vested shares as shown below:
John N. Roberts, III
David G. Mee
John Kuhlow
Shelley Simpson
Nicholas Hobbs
Darren Field
Terrence D. Matthews
24,436
40,216
3,327
12,352
12,281
2,909
21,679
(2) Values represent the fair market value of the underlying common stock on the date of vesting.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
73
EXECUTIVE COMPENSATION
Components of Nonqualified Deferred Compensation for Calendar Year 2020
We have a nonqualified deferred compensation plan that allows eligible employees to defer a portion of their
compensation. Participants can elect to defer up to a maximum of 50% of their base salary as well as up to
85% of their bonus for the year. The compensation deferred under this plan is credited with earnings or losses of
investments elected by plan participants. Each participant is fully vested in all deferred compensation and earnings;
however, these amounts are subject to general creditor claims until actually distributed to the employee. A
participant may elect to receive deferred amounts in one payment or in quarterly installments payable over a period
of two to 25 years upon reaching the age of 55, having 15 years of service, or becoming disabled. Our total liability
under this plan was $23,078,077 as of December 31, 2020, and $20,410,750 as of December 31, 2019. These
amounts are included in other long-term liabilities in our Consolidated Balance Sheets. Participant withholdings
are held by a trustee and invested as directed by participants. These investments are included in “other assets”
in our Consolidated Balance Sheets and totaled $23,078,077 as of December 31, 2020, and $20,410,750 as of
December 31, 2019.
Name
John N. Roberts, III
David G. Mee
John Kuhlow
Shelley Simpson
Nicholas Hobbs
Darren Field
Executive
Contributions
in 2020
($) (1)
Registrant
Contributions
in 2020
($)
Aggregate
Earnings
in 2020
($)
Aggregate
Withdrawals
and
Distributions
($)
Aggregate
Balance
at December
31, 2020
($) (1)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
279,937
—
—
—
—
—
—
—
—
—
—
—
—
—
5,284,234
Terrence D. Matthews
150,433
(1) Amounts of executive contributions are included as part of the NEO’s salary in the Summary Compensation Table detailed above.
Total executive contributions for the three-year period ending December 31, 2020 were $668,515 for Mr. Matthews.
74
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
EXECUTIVE COMPENSATION
Potential Post-Employment Benefits
The Company generally does not have employment contracts or predetermined personal severance agreements
with any of its executives. However, in 2020 the Company entered into an Executive Retirement Agreement with
David G. Mee (Mr. Mee’s Retirement Agreement). Under the terms of Mr. Mee’s Retirement Agreement, which was
effective as of February 14, 2020, Mr. Mee’s outstanding unvested awards of performance-based restricted share
units granted prior to January 1, 2020, were accelerated and vested automatically on April 1, 2020, without regard
to performance conditions, and he became entitled to health insurance coverage under the Company’s health
insurance plans in accordance with COBRA. Upon Mr. Mee’s retirement, he received 56,571 shares, collectively
valued at $5,119,676 as of April 1, 2020. The receipt of these equity awards and benefits were subject to Mr.
Mee’s compliance with certain non-competition, non-solicitation, and non-interference covenants described in Mr.
Mee’s Retirement Agreement for a specified period following his retirement. Mr. Mee’s Retirement Agreement also
included a customary release of claims in favor of the Company.
Also in 2020, the Company entered into an Executive Retirement Agreement with Terrence D. Matthews (Mr.
Matthews’ Retirement Agreement). Under the terms of Mr. Matthews’ Retirement Agreement, which was effective
as of February 14, 2020, certain outstanding unvested awards of performance-based restricted share units that
were scheduled to vest in 2020 and 2021, were accelerated and vested automatically on July 16, 2020, without
regard to performance conditions, and he became entitled to health insurance coverage under the Company’s
health insurance plans in accordance with COBRA. Upon Mr. Matthews’ retirement, he received 21,255 shares,
collectively valued at $2,817,350 as of July 16, 2020. The receipt of these equity awards and benefits were subject
to Mr. Matthews’ compliance with certain non-competition, non-solicitation, and non-interference covenants
described in Mr. Matthews’ Retirement Agreement for a specified period following his retirement. Mr. Matthews’
Retirement Agreement also included a customary release of claims in favor of the Company.
Additionally, according to the terms of the awards granted under the previously mentioned MIP, all outstanding
restricted share units are subject to accelerated or immediate vesting upon the occurrence of a double triggering
event, which requires both a “change in control” and the NEO’s retirement, termination by the Company without
cause, or resignation for good reason.
Generally, a “change in control” is deemed to occur when more than 30% of the outstanding shares of common
stock of the Company change ownership in a transaction that is not a merger, reorganization or consolidation,
when the persons who constitute the Company’s incumbent board of directors cease to constitute a majority
of the board, or upon the consummation of a merger, reorganization, consolidation or similar form of corporate
transactions involving the Company that requires the approval of the Company’s stockholders where more than
50% of the outstanding shares change ownership or a complete liquidation or dissolution of the Company or the
sale or disposition of all or substantially all of the assets of the Company. The awards granted under the previously
mentioned MIP are also subject to certain non-competition covenants for a specified period following cessation of
employment with the Company.
Potential benefits to an NEO due to his or her separation of service without cause, retirement, or resignation for good
reason following a “change in control” are shown below. The amounts represent the immediate vesting of all outstanding
restricted share units and are valued using the last closing market price of $136.65 on December 31, 2020.
John N. Roberts, III
John Kuhlow
Shelley Simpson
Nicholas Hobbs
Darren Field
$17,686,473
2,364,456
9,756,399
9,346,449
4,088,840
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
75
EXECUTIVE COMPENSATION
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
(the Dodd-Frank Act), we are providing the following information about the relationship of the annual total
compensation of our “median employee” and the annual total compensation of our CEO.
For 2020, our last completed fiscal year:
•
The median of the annual total compensation of all of the Company’s employees, other than our CEO, was
$67,154.
The annual total compensation of our CEO was $7,453,372.
•
• Based on this information, the ratio for 2020 of the annual total compensation of our CEO to the median of the
annual total compensation of all other employees was 111 to 1.
In determining the median of the annual total compensation of all of the Company’s employees, other than our
CEO, we are required to identify the Company’s “median employee.” Item 402(u) of Regulation S-K requires us
to identify the Company’s median employee once every three years, unless a change in employee population
or compensation arrangements is likely to result in a significant change in our CEO pay ratio disclosures. The
Company last identified its median employee in 2017. Accordingly, for the 2020 pay ratio calculation, we
performed the following to identify the median employee in 2020:
• We conducted a full analysis of our employee population as of our determination date of November 30, 2020.
• We excluded employees residing in Mexico and Canada from our calculation under the De Minimis Exemption.
Employees located in Mexico and Canada constituted 0.07% and 0.02% of our total employee population,
respectively, which consisted of 21 individuals in Mexico and 5 individuals in Canada as of our determination
date.
• Our employee population, after taking into consideration the aforementioned adjustments, consisted of 29,070
individuals. Of these employees, 28,798 individuals were full-time (or full-time equivalent) employees, with the
remainder employed on a part-time (less than 30 hours per week) basis. 99.91% of our employees (29,070
individuals) were located in the United States.
• We used a definition that was not total compensation and instead chose the aggregate of the employee’s
base pay and cash incentive bonuses paid during the period of January 1, 2020, through November 30,
2020. These balances were then annualized, with any anomalous reported earnings being replaced with a
substantially similar employee balance. Reasons for the replacement of anomalous earnings were primarily
due to a lack of adequate length of employment history with the company or the employee incurring a leave of
absence during the analysis period.
• Using this methodology, we determined that the “median employee” was a local driver.
To determine the annual total compensation of the “median employee” for 2020, we identified and calculated the
elements of compensation for this identified employee in accordance with the requirements of Item 402(c)(2)(x) of
Regulation S-K.
76
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
COMPENSATION
COMMITTEE REPORT
Prior to the Company’s 2020 Annual Meeting of Stockholders held on April 23, 2020, the 2020 Compensation
Committee was composed of Coleman H. Peterson, Chairman, Francesca M. Edwardson, Sharilyn S. Gasaway,
and Gary C. George. Effective upon election of directors at the 2020 Annual Meeting of Stockholders, the 2020
Compensation Committee was composed of James L. Robo, Chairman, Sharilyn S. Gasaway, Gary C. George,
and Gale V. King. None of these directors has been an officer or employee of the Company and all such directors
have been determined by the Board to be independent or were determined by the Board to be independent
during the time in which he or she served on the Compensation Committee. Additionally, all such members of the
Compensation Committee qualified during their service on the committee or currently qualify, as applicable, as
“nonemployee directors” for purposes of Rule 16b-3 of the Exchange Act and as “outside directors” for purposes
of Section 162(m) of the Code.
The Compensation Committee met three times in 2020 to discuss, among other items, the salaries, bonuses,
and other compensation of the senior executive officers and other key employees of the Company, including the
Chairman of the Board and the Chief Executive Officer. The Compensation Committee did not act by unanimous
consent at any time in 2020.
The Compensation Committee has reviewed and discussed the preceding CD&A with management, and based
upon such review and discussions, the Compensation Committee recommended to the Board that the CD&A be
included in the Company’s Proxy Statement.
J.B. Hunt Transport Services, Inc.
2020 Executive Compensation Committee
James L. Robo, Chairman
Sharilyn S. Gasaway
Gary C. George
Gale V. King
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
77
PROPOSAL TWO
ADVISORY VOTE ON
EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or Dodd-Frank Act, enables our
stockholders to vote to approve, on an advisory (nonbinding) basis, the compensation of our NEOs as disclosed
in the Proxy Statement in accordance with SEC rules. At our Annual Meeting in 2017, our stockholders voted to
recommend that the Company hold future “say-on-pay” votes annually until the Company is next required to hold
an advisory vote on the frequency with which the Company will hold future “say-on-pay” votes, which will be in
2023. Accordingly, we are providing a vote on the resolution set forth below as required by the Dodd-Frank Act
and Section 14A of the Securities Exchange Act of 1934.
As discussed in our Compensation Discussion and Analysis (CD&A) on page 47, our executive compensation
programs for our NEOs, as well as other executives, are designed to be competitive within the transportation
industry and to link executive compensation with the creation of stockholder value. The overall compensation
philosophy is guided by the following principles:
• Compensation levels should be sufficiently competitive to attract and retain key talent. The
Company aims to attract, motivate, and retain high-performance talent to achieve and maintain a leading
position in its industry. Our total compensation package should be strongly competitive with other
transportation companies.
• Compensation should relate directly to performance and responsibility. Total compensation should be
tied to and vary with performance and responsibility, both at the Company and individual level, in achieving
financial, operational, and strategic objectives. Differentiated pay for high-performing individuals should be
proportional to their contributions to the Company’s success.
• Short-term incentive compensation should constitute a significant portion of total executive
compensation. A large portion of total compensation should be tied to performance, and therefore at risk,
as position and responsibility increase. Individuals with greater roles and the ability to directly impact strategic
direction and long-term results should bear a greater proportion of the risk.
• Long-term incentive compensation, the Company’s MIP, should be closely aligned with
stockholders’ interests. Awards of long-term compensation encourage executive officers to focus on
the Company’s long-range growth and development and incent them to manage from the perspective of
stockholders with a meaningful stake in the Company, as well as to focus on long-term career orientation.
Participants in the MIP are expected to own Company stock. The expectations are discussed in the CD&A
under the caption “Stock Ownership Guidelines.”
Generally, the Company’s compensation program consists of an annual base salary, short-term cash incentive
awards, and an annual long-term, performance-based equity-based award. The Compensation Committee,
with recommendations from management, works to create what it believes is the best mix of these components
in delivering total direct compensation. Base salaries are not directly related to specific measures of corporate
performance, but are determined by the relevance of experience, the scope and complexity of the position, current
job responsibilities, retention, and peer group salaries. The short-term cash incentive awards are tied to operating
income, revenue, and EBT. The long-term, equity-based awards utilize restricted share units. The restricted share
units awarded to the Company’s NEOs are performance-based restricted share units, which vest over multiple
78
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
years upon the Company’s attainment of predetermined operating metrics established and approved by the
Compensation Committee. Equity awards granted to our NEOs in 2020 and prior years vest annually subject to
attainment of annual operating income goals. In 2020, the Compensation Committee adopted an additional three-
year performance period for a portion of the NEO equity awards based on cumulative EBITDA and ROIC goals.
We believe that the Company’s executive compensation programs have been effective in incenting the achievement
of our positive results. We are asking our stockholders to indicate their support for our NEO compensation as
described in the Proxy Statement. This proposal, commonly known as a “say on pay” proposal, gives you as a
stockholder the opportunity to express your views regarding our fiscal year 2020 executive compensation policies
and procedures for NEOs. The vote is not intended to address any specific item of compensation, but rather the
overall compensation of our NEOs and the policies and procedures described in the Proxy Statement. Accordingly,
we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:
RESOLVED, that the stockholders of J.B. Hunt Transport Services, Inc. approve, on an advisory
basis, the compensation of the NEOs as disclosed pursuant to Item 402 of Regulation S-K in the
Compensation Discussion and Analysis, compensation tables, and related narrative discussion in the
Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders.
Although this is an advisory vote that will not be binding on the Compensation Committee or the Board, we
will carefully review the results of the vote. The Compensation Committee will consider stockholders’ concerns
and take them into account when designing future executive compensation programs. The Board therefore
recommends that you indicate your support of the Company’s executive compensation in fiscal year 2020, as
outlined in the above resolution.
PROPOSAL 2
The Board of Directors unanimously recommends a vote FOR
proposal number two
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
79
REPORT OF THE
AUDIT COMMITTEE
The Audit Committee
The 2020 Audit Committee was composed of Sharilyn S. Gasaway, Chairman, Douglas G. Duncan, and Francesca
M. Edwardson. Ms. Gasaway and Mr. Duncan each served as a member of the Audit Committee during the full
2020 calendar year, while Ms. Edwardson joined the Audit Committee immediately after our 2020 Annual Meeting.
The Company’s Board has determined that all members of the Audit Committee satisfy the independence and
other requirements for audit committee membership pursuant to the NASDAQ corporate governance listing
standards and has also determined that Ms. Gasaway and Mr. Duncan each have the attributes of an audit
committee financial expert as defined by SEC requirements.
The Audit Committee operates under a written charter adopted by the Board. A copy of the Audit Committee
Charter is available on the “Corporate Governance” page of the “Corporate Responsibility” section of the
Company’s website at jbhunt.com. In carrying out its responsibilities, the Audit Committee, among other things:
• monitors the integrity of the financial reporting process, systems of internal accounting controls, and financial
statements and reports of the Company,
appoints, retains, compensates, and oversees the Company’s independent auditors, including reviewing the
qualifications, performance, and independence of the independent auditors,
reviews and preapproves all audit, attest, and review services and permitted non-audit services,
oversees the performance of the Company’s internal audit function, and
oversees the Company’s compliance with legal and regulatory requirements.
•
•
•
•
In 2020, the Audit Committee met eight times. The Audit Committee schedules its meetings with a view to ensure
that it devotes appropriate attention to all of its responsibilities and duties. The Audit Committee’s meetings
include, whenever appropriate, executive sessions with the Company’s independent auditors and the Company’s
internal auditors, in each case outside the presence of the Company’s management.
In performing its oversight role, the Audit Committee reviewed the audited consolidated financial statements for the
2020 calendar year and met and held discussions with management, the Company’s internal auditors and Ernst
& Young LLP, the Company’s independent registered public accounting firm, to discuss those financial statements
and the audit related thereto. Management has represented to the Audit Committee that the Company’s
consolidated financial statements were prepared in accordance with generally accepted accounting principles.
The Audit Committee discussed with the independent auditors matters required to be discussed by Auditing Standard
1301 of the Public Company Accounting Oversight Board, as may be modified, supplemented, or amended, which
includes, among other items, matters related to the conduct of the audit of the Company’s consolidated financial
statements. The independent auditors also provided the Audit Committee with written disclosures and the letter required
by Rule 3526 of the Public Company Accounting Oversight Board, as may be modified, supplemented, or amended,
which relates to the auditors’ independence from the Company and its related entities, and the Audit Committee
discussed with the independent auditors their independence.
80
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
Based on the Audit Committee’s discussions with management, the internal auditors, and the independent auditors as
described above, and upon its review of the representation of management and the independent auditors and the reports
of the independent auditors, the Audit Committee recommended to the Board that the Company’s audited consolidated
financial statements be included in the Company’s Annual Report on Form 10-K for the calendar year ended December
31, 2020, as filed with the SEC.
J.B. Hunt Transport Services, Inc.
2020 Audit Committee Members
Sharilyn S. Gasaway, Chairman
Douglas G. Duncan
Francesca M. Edwardson
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
81
PROPOSAL THREE
RATIFICATION OF
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee has selected Ernst & Young LLP (E&Y) as the Company’s independent registered public
accounting firm to examine the consolidated financial statements of the Company for the 2021 calendar year.
The Board seeks an indication from our stockholders of their approval or disapproval of the Audit Committee’s
selection of E&Y as the Company’s independent registered public accounting firm for the 2021 calendar year.
E&Y has been our independent auditor since 2005. No relationships exist other than the usual relationships
between auditor and client. Representatives of E&Y are expected to be present at the Annual Meeting to
respond to appropriate questions and will have the opportunity to make a statement if they desire to do so. If our
stockholders do not ratify the appointment of E&Y at the Annual Meeting, the Audit Committee will consider such
event in its selection of the Company’s independent registered public accounting firm for the 2021 calendar year.
Additionally, even if the appointment is ratified, the Audit Committee, at its discretion, may direct the appointment
of a different independent registered public accounting firm at any time during the 2021 calendar year if it
determines that such a change would be in the best interests of the Company and its stockholders.
PROPOSAL 3
The Board of Directors unanimously recommends a vote FOR
ratification of the appointment of Ernst & Young LLP as the company’s
independent registered public accounting firm for the 2021 calendar
year
AUDIT AND NON-AUDIT FEES
The Audit Committee preapproves the audit and non-audit services to be rendered to the Company, as well as
the fees associated with such services. Generally, management will submit to the Audit Committee a detailed list
of services that it recommends the Audit Committee engage the independent auditors to provide for the calendar
year. The Audit Committee is informed from time to time regarding the non-audit services actually provided
pursuant to the preapproval process. During the year, the Audit Committee periodically reviews the types of
services and dollar amounts approved and adjusts such amounts, as it deems appropriate. Unless a service to be
provided by the independent auditors has received general preapproval, it will require specific preapproval by the
Audit Committee. The Audit Committee also periodically reviews all non-audit services to ensure that such services
do not impair the independence of the Company’s independent registered public accounting firm. The Audit
Committee approved all services provided by E&Y for the 2020 and 2019 calendar years. These services included
the audit of the Company’s annual financial statements, audit of the Company’s internal control over financial
82
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
reporting, review of the Company’s quarterly financial statements, audit of the Company’s employee benefit
plan, consent for and review of registration statements filed by the Company with the SEC, and tax consultation
services. See “Report of Audit Committee” set forth earlier for a discussion of auditor independence.
The following table shows the fees billed by E&Y for audit and other services provided to the Company for the
2020 and 2019 calendar years, respectively:
Audit fees (1)
Audit-related fees (2)
Tax fees (3)
All other fees
2020 ($)
1,392,000
30,500
251,801
—
2019 ($)
1,550,100
29,000
342,061
—
(1) Audit fees consisted of the audit of the Company’s annual financial statements, including the audit of the effectiveness of internal
control over financial reporting, the review of the Company’s quarterly reports on Form 10-Q, and consent for and review of
registration statements filed by the Company with the SEC.
(2) Audit-related fees consisted of an audit of the Employee Benefit Plan.
(3) Tax fees consisted principally of federal and state income tax consulting.
The Audit Committee has considered whether the non-audit services provided by E&Y, including the services
rendered in connection with income tax consultation, were compatible with maintaining E&Y’s independence and
has determined that the nature and substance of the limited non-audit services did not impair the status of E&Y as
the Company’s independent registered public accounting firm. E&Y did not bill the Company for any other services
during calendar years 2020 and 2019.
Policy on Audit Committee Preapproval of Audit and Permissible Non-Audit Services
of Independent Auditor
The Audit Committee has the responsibility of appointing, setting compensation for, and overseeing the work of
the independent auditor and has established a policy to preapprove all audit and permissible non-audit services
provided by the independent auditor.
Prior to the engagement of the independent auditor for next year’s audit, management will submit to the Audit
Committee for approval an aggregate of services expected to be rendered during that year for each of four
categories of services:
• Audit services include audit work performed related to the financial statements, as well as work that
generally only the independent auditor can reasonably be expected to provide, including comfort letters,
statutory audits, attestation services, and consultation regarding financial accounting and/or reporting
standards.
• Audit-related services are for assurance and related services that are traditionally performed by the
independent auditor, including due diligence related to mergers and acquisitions, employee benefit plan audits,
and special procedures required to meet certain regulatory requirements.
• Tax services include all services performed by the independent auditor’s tax personnel except those services
specifically related to the audit of the financial statements, including fees in the areas of tax compliance, tax
planning, and tax advice.
• Other services are those not captured in the other categories. The Company generally does not request
such services from the independent auditor.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
83
Prior to the engagement, the Audit Committee preapproves these services by category of service. The fees are
budgeted, and the Audit Committee requires the independent auditor and management to report actual fees
versus the budget periodically throughout the year by category of service. During the year, circumstances may
arise that make it necessary to engage the independent auditor for additional services not contemplated in the
original preapproval. In those instances, the Audit Committee requires specific preapproval before engaging the
independent auditor.
The Audit Committee may delegate preapproval authority to one or more of its members. The member(s) to whom
such authority is delegated must report, for informational purposes only, the preapproval decisions to the Audit
Committee at its next scheduled meeting.
84
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING
ARE URGED TO VOTE BY TELEPHONE, MAIL, OR INTERNET
IF YOU VOTE BY TELEPHONE OR THE INTERNET, DO NOT RETURN
YOUR PROXY CARD
By Order of the Board of Directors
JENNIFER R. BOATTINI
Corporate Secretary
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
85
QUESTIONS AND ANSWERS
ABOUT THE PROXY MATERIALS
AND THE ANNUAL MEETING
When And Where Is The Annual Meeting?
Date:
Time:
Location:
Thursday, April 22, 2021
10 a.m. Central Daylight Time
J.B. Hunt Transport Services, Inc.
Corporate Offices
Elevation Auditorium
615 J.B. Hunt Corporate Drive
Lowell, Arkansas 72745
What Matters Will Be Voted Upon At The Annual Meeting?
At the Annual Meeting, you will be asked to:
• Consider and vote upon a proposal to elect nominees Douglas G. Duncan, Francesca M. Edwardson, Wayne
Garrison, Sharilyn S. Gasaway, Gary C. George, Thad Hill, Bryan Hunt, Gale V. King, John N. Roberts, III,
James L. Robo, and Kirk Thompson as directors to hold office for a term of one year, expiring at the close of
the Annual Meeting of Stockholders in 2022.
• Consider and approve an advisory resolution regarding the Company’s compensation of its named executive
officers.
• Consider and vote upon a proposal to ratify the appointment of E&Y as the Company’s independent registered
public accounting firm for the 2021 calendar year.
Transact such other business as may properly come before the Annual Meeting or any adjournments thereof.
•
What Constitutes A Quorum?
The presence, either in person or by proxy, of the holders of at least a majority of our issued and outstanding
shares of common stock entitled to vote is required to constitute a quorum for the transaction of business at the
Annual Meeting. Abstentions and broker non-votes, which are described in more detail below, are counted as
shares present at the Annual Meeting for purposes of determining whether a quorum exists.
Who Is Entitled To Vote?
Only stockholders of record of the Company’s common stock at the close of business on Tuesday, February 16,
2021, which is the “record date,” are entitled to notice of, and to vote at, the Annual Meeting. Shares that may be
voted include shares that are held:
(1) directly by the stockholder of record, and
(2) beneficially through a broker, bank, or other nominee.
Each share of our common stock will be entitled to one vote on all matters submitted for a vote at the Annual Meeting.
86
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
As of the record date, there were 105,705,006 shares of our common stock issued and outstanding and entitled to be
voted at the Annual Meeting.
What Is The Difference Between Holding Shares
As A “Registered Owner” And A “Beneficial Owner”?
Most of the Company’s stockholders hold their shares through a broker, bank, or other nominee rather than
directly in their own name. As summarized below, there are some distinctions between registered shares and those
owned beneficially:
• Registered Owners – If your shares are registered directly in your name with our transfer agent,
Computershare Trust Company N.A., you are, with respect to those shares, the stockholder of record. As
the stockholder of record, you have the right to grant your voting proxy directly to the Company or to vote in
person at the Annual Meeting.
• Beneficial Owners – If your shares are held in a brokerage account, bank, or by another nominee, you are, with
respect to those shares, the “beneficial owner” of shares held in “street name.” As the beneficial owner, you
have the right to direct your broker, bank, or other nominee on how to vote or to vote in person at the Annual
Meeting. However, because you are not a stockholder of record, you may not vote these shares in person at
the Annual Meeting unless you obtain a “legal proxy” from your broker, bank, or other nominee (who is the
stockholder of record) giving you the right to vote the shares.
What Stockholder Approval Is Necessary For Approval Of The Proposals?
• Election of Directors
Each director shall be elected by a vote of the majority of votes cast with respect to that director. This means
that a director must receive “for” votes from more than 50% of the number of shares voted with respect
to that director. However, if the number of nominees is greater than the number of directors to be elected,
the directors will be elected by the vote of a plurality of the shares represented in person or by proxy at any
stockholder meeting. For purposes of this vote, a failure to vote, a vote to abstain, or withholding your vote
(or direction to your broker to do so) is not counted as a vote cast and, therefore, will have no effect on the
outcome of this vote.
• Advisory vote on the resolution to approve the Company’s compensation of its named executive officers
Approval of this resolution requires the affirmative vote of a majority of the votes cast at the Annual Meeting.
For purposes of this vote, a failure to vote, a vote to abstain, or withholding your vote (or direction to your
broker to do so) is not counted as a vote cast and, therefore, will have no effect on the outcome of this vote.
While this vote is required by law, it will neither be binding on the Company or the Board, nor will it create
or imply any change in the fiduciary duties of, or impose any additional fiduciary duty on, the Company or
the Board. However, the Compensation Committee will take into account the outcome of the vote when
considering future executive compensation decisions.
• Ratification of the appointment of E&Y as the Company’s independent registered public accounting firm
Ratification of the Audit Committee’s appointment of E&Y as the Company’s independent registered public accounting
firm requires the affirmative vote of a majority of the votes cast at the Annual Meeting. For purposes of this vote, a failure
to vote, a vote to abstain, or withholding your vote (or direction to your broker to do so) is not counted as a vote cast and,
therefore, will have no effect on the outcome of this vote. Stockholder ratification is not required for the appointment of the
Company’s independent registered public accounting firm. However, we are submitting the proposal to solicit the opinion
of our stockholders.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
87
QUESTIONS AND ANSWERS ABOUT THE PROXY
MATERIALS AND THE ANNUAL MEETING
As of the record date, directors and executive officers of the Company beneficially owned an aggregate 3,480,369
shares of common stock representing 3.3% of our common stock issued and outstanding and, therefore, 3.3%
of the voting power entitled to vote at the Annual Meeting. The Company believes that its directors and executive
officers currently intend to vote their shares as follows:
• FOR the election of directors for one (1) year
• FOR the resolution approving the Company’s compensation of its named executive officers
• FOR ratification of the appointment of E&Y as the Company’s independent registered public accounting firm
for the 2021 calendar year
May I Vote My Shares In Person At The Annual Meeting?
If you are the registered owner of shares of the Company’s common stock on the record date, you have the right to
vote your shares in person at the Annual Meeting.
If you are the beneficial owner of shares of the Company’s common stock on the record date, you may vote these
shares in person at the Annual Meeting if you request and obtain a legal proxy from your broker, bank, or other
nominee (the stockholder of record) giving you the right to vote the shares at the Annual Meeting, complete such legal
proxy, and present it to the Company at the Annual Meeting.
Even if you plan to attend the Annual Meeting, we recommend that you submit your proxy card or voting instructions
so that your vote will be counted if you later decide not to attend the Annual Meeting.
How Can I Vote My Shares Without Attending The Annual Meeting?
If you are a registered owner, you may instruct the named proxy holders on how to vote your shares by completing,
signing, dating, and returning the enclosed proxy card in the postage-paid envelope provided with this Proxy
Statement, or by using the Internet voting site or the toll-free telephone number listed on the proxy card. Specific
instructions for using the Internet and telephone voting systems are provided on the proxy card. The Internet and
telephone voting systems will be available until 11:59 p.m. Central Daylight Time on Wednesday, April 21, 2021 (the
day before the Annual Meeting).
If you are the beneficial owner of shares held in “street name,” you should instruct your broker, bank, or other nominee
on how to vote your shares. Your broker, bank or other nominee has enclosed with this Proxy Statement a voting
instruction card for you to use in directing your nominee on how to vote your shares. The instructions from your
nominee will indicate whether Internet or telephone voting is available and, if so, will provide details regarding how to
use those systems.
88
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
QUESTIONS AND ANSWERS ABOUT THE PROXY
MATERIALS AND THE ANNUAL MEETING
If My Shares Are Held In “Street Name,” Will My Broker,
Bank Or Other Nominee Vote My Shares For Me?
If you hold shares in street name through a broker, bank, or other nominee, your broker, bank, or nominee may
not be permitted to exercise voting discretion with respect to some of the matters to be acted upon at the Annual
Meeting. Under current stock exchange rules, brokers who do not have instructions from their customers may
not use their discretion in voting their customers’ shares on certain specific matters that are not considered to be
“routine” matters, including the election of directors, executive compensation, and other significant matters. The
proposals in this Proxy Statement regarding the election of directors and the advisory vote concerning executive
compensation are not considered to be routine matters. Therefore, without your specific instructions, your shares
will not be voted on these matters and will not be counted in determining the number of shares necessary for
approval. Shares represented by such “broker non-votes,” however, will be counted in determining whether there is a
quorum. You should follow the directions provided by your nominee regarding instructions on how to vote your shares.
Ratification of the appointment of E&Y as the Company’s independent registered public accounting firm is considered
a routine matter and, therefore, if beneficial owners fail to give voting instructions, brokers, banks, and other nominees
will have the discretionary authority to vote shares of our common stock with respect to this proposal.
What Is A Broker Non-Vote?
Generally, a “broker non-vote” occurs when a broker, bank, or other nominee that holds shares in “street name” for a
customer is precluded from exercising voting discretion on a particular proposal because:
1.
2.
the beneficial owner has not instructed the nominee on how to vote, and
the nominee lacks discretionary voting power to vote such issues.
Under NASDAQ rules, a nominee does not have discretionary voting power with respect to the approval of
“nonroutine” matters absent specific voting instructions from the beneficial owners of such shares.
How Will My Proxy Be Voted?
Shares represented by a properly executed proxy (in paper form, by Internet, or by telephone) that is received
in a timely manner, and not subsequently revoked, will be voted at the Annual Meeting or any adjournment or
postponement thereof in the manner directed on the proxy. Kirk Thompson and John N. Roberts, III are named as
proxies in the proxy form and have been designated by the Board as the directors’ proxies to represent you and
vote your shares at the Annual Meeting. All shares represented by a properly executed proxy on which no choice is
specified will be voted:
1.
2.
3.
4.
FOR the election of the nominees for director named in this Proxy Statement,
FOR the resolution approving the Company’s compensation of its named executive officers,
FOR ratification of the appointment of E&Y as the Company’s independent registered public accounting firm
for the 2021 calendar year, and
in accordance with the proxy holders’ best judgment as to any other business that properly comes before the
Annual Meeting.
This Proxy Statement is considered to be voting instructions for the trustees of the J.B. Hunt Transport Services,
Inc. Employee Retirement Plan for our common stock allocated to individual accounts under this plan. If account
information is the same, participants in the plan (who are stockholders of record) will receive a single proxy representing
all of their shares. If a plan participant does not submit a proxy to us, the trustees of the plan in which shares are
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
89
QUESTIONS AND ANSWERS ABOUT THE PROXY
MATERIALS AND THE ANNUAL MEETING
allocated to his or her individual account will vote such shares in the same proportion as the total shares in such plan
for which directions have been received.
May I Revoke My Proxy And Change My Vote?
Yes. You may revoke your proxy and change your vote at any time prior to the vote at the Annual Meeting.
If you are the registered owner, you may revoke your proxy and change your vote by:
1. submitting a new proxy bearing a later date (which automatically revokes the earlier proxy),
2. giving notice of your changed vote to us in writing mailed to the attention of Jennifer R. Boattini, Corporate
Secretary, at our executive offices, or
3. attending the Annual Meeting and giving oral notice of your intention to vote in person.
You should be aware that simply attending the Annual Meeting will not in and of itself constitute a revocation of
your proxy.
Who Will Pay The Costs Of Soliciting Proxies?
Proxies will be solicited initially by mail. Further solicitation may be made in person or by telephone, electronic
mail, or facsimile. The Company will bear the expense of preparing, printing, and mailing this Proxy Statement
and accompanying materials to our stockholders. Upon request, the Company will reimburse brokers, banks, and
other nominees for reasonable expenses incurred in forwarding copies of the proxy materials relating to the Annual
Meeting to the beneficial owners of our common stock.
In 2020, the Company retained Broadridge, an independent proxy solicitation firm, to assist in soliciting proxies
from stockholders. The Company paid Broadridge a fee of approximately $83,000 as compensation for its
services and was reimbursed for its out-of-pocket expenses. The fee amount was not contingent on the number
of stockholder votes cast in favor of any proposal, and Broadridge is prohibited from making any recommendation
to our stockholders to either accept or reject any proposal or otherwise express an opinion concerning a proposal.
Proxy solicitation fees in 2021 are expected to be comparable to those paid in 2020.
What Other Business Will Be Presented At The Annual Meeting?
As of the date of this Proxy Statement, the Board knows of no other business that may properly be, or is likely
to be, brought before the Annual Meeting. If any other matters should arise at the Annual Meeting, the persons
named as proxy holders, Kirk Thompson and John N. Roberts, III, will have the discretion to vote your shares
on any additional matters properly presented for a vote at the meeting. If, for any unforeseen reason, any of the
director nominees are not available to serve as a director, the named proxy holders will vote your proxy for such
other director candidate or candidates as may be nominated by the Board.
90
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
QUESTIONS AND ANSWERS ABOUT THE PROXY
MATERIALS AND THE ANNUAL MEETING
What Is The Deadline For Stockholder Proposals
For The 2022 Annual Meeting?
In order for a stockholder proposal to be eligible to be included in the Company’s Proxy Statement and proxy card
for the 2022 Annual Meeting of Stockholders, the proposal:
1. must be received by the Company at its executive offices, 615 J.B. Hunt Corporate Drive, Lowell, Arkansas
72745, Attention: Corporate Secretary, on or before November 18, 2021, and
2. must concern a matter that may be properly considered and acted upon at the Annual Meeting in accordance
with applicable laws, regulations and the Company’s Bylaws and policies, and must otherwise comply with
Rule 14a-8 of the Securities Exchange Act of 1934, as amended.
In connection with our 2022 Annual Meeting of Stockholders, if we do not receive notice of a matter or proposal to
be considered by February 2, 2022, then the persons appointed by our Board of Directors to act as proxy holders
for such Annual Meeting (named in the form of proxy) will be allowed to use their discretionary voting authority with
respect to any such matter or proposal properly presented for a vote at such meeting.
Where Can I Find The Voting Results Of The Annual Meeting?
The Company will publish final voting results of the Annual Meeting on a Form 8-K within four business days after
the annual stockholders meeting on April 22, 2021.
What Should I Do If I Receive More Than One Set Of Voting Materials?
You may receive more than one set of voting materials, including multiple copies of this Proxy Statement and
multiple proxies or voting instruction cards. For example, if you hold your shares in more than one brokerage
account, you may receive a separate voting instruction card for each brokerage account. If you are a registered
owner and your shares are registered in more than one name, you will receive more than one proxy card. Please
vote each proxy and instruction card that you receive.
What Is Householding?
In an effort to reduce printing costs and postage fees, the Company has adopted a practice approved by the
Securities and Exchange Commission (the SEC) called “householding.” Under this practice, certain stockholders who
have the same address and last name will receive only one copy of this Proxy Statement and the Company’s Annual
Report, unless one or more of these stockholders notifies the Company that he or she wishes to continue receiving
individual copies. Stockholders who participate in householding will continue to receive separate proxy cards.
If you share an address with another stockholder and received only one copy of this Proxy Statement and the
Company’s Annual Report and would like to request a separate copy of these materials, or if you do not wish to
participate in householding in the future, please:
1. mail such request to J.B. Hunt Transport Services, Inc., Attention: Corporate Secretary, 615 J.B. Hunt
Corporate Drive, Lowell, Arkansas 72745, or
2. call the Corporate Secretary toll-free at 800-643-3622.
Similarly, you may also contact the Company if you received multiple copies of the Company’s proxy materials and
would prefer to receive a single copy in the future.
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
91
QUESTIONS AND ANSWERS ABOUT THE PROXY
MATERIALS AND THE ANNUAL MEETING
Will I Be Able To Access The Annual Meeting Remotely?
Yes. Due to the ongoing public health impact of the COVID-19 pandemic, the Company will provide live audio
conference call access for stockholders to listen remotely to the 2021 Annual Meeting. Stockholders as of the
record date who wish to remotely listen to the meeting must register before 10:00 a.m. (CDT) on April 21, 2021,
to receive a dial-in number, personal access code, and meeting agenda. The registration link will be provided by
press release in advance of that date. The Company encourages you to take advantage of this remote opportunity
considering current public health conditions.
What Safety Protocols Will Be In Place For In-Person
Attendees In Light Of The COVID-19 Pandemic?
To protect the health and safety of those attending the 2021 Annual Meeting in person, only stockholders as
of the record date and pre-authorized employees of the Company will be entitled to attend the meeting or any
adjournments thereof in person. All in-person attendees must:
1. Respond to the Company’s COVID-19 visitor screening questionnaire prior to attendance and upon arrival;
2. Wear a face covering at all times while inside the Company’s corporate buildings; and
3. Maintain a minimum six-foot distance from others at all times while inside the Company’s corporate buildings.
In-person attendees, excluding pre-authorized employees, must notify the Company of their intention to attend the
2021 Annual Meeting in-person before 10:00 a.m. (CDT) on April 21, 2021, by emailing Amy.Bain@jbhunt.com or
calling 479-820-8111.
What Do I Need To Do Now?
First, read this Proxy Statement carefully. Then, if you are a registered owner, you should, as soon as possible, submit
your proxy by executing and returning the proxy card or by voting electronically via the Internet or by telephone. If you
are the beneficial owner of shares held in “street name,” then you should follow the voting instructions of your broker,
bank, or other nominee. Your shares will be voted in accordance with the directions you specify. If you submit an
executed proxy card to the Company, but fail to specify voting directions, your shares will be voted:
1.
2.
3.
FOR the election of the nominees for director named in this Proxy Statement,
FOR the resolution approving the Company’s compensation of its named executive officers,
FOR ratification of the appointment of E&Y as the Company’s independent registered public accounting firm
for the 2021 calendar year,
Who Can Help Answer My Questions?
If you have questions concerning a proposal or the Annual Meeting, if you would like additional copies of this Proxy
Statement, or if you need directions to or special assistance at the Annual Meeting, please call the Corporate
Secretary toll-free at 800-643-3622. In addition, information regarding the Annual Meeting is available at our
website, jbhunt.com.
92
J.B. HUNT TRANSPORT SERVICES, INC. Proxy Statement
J.B. HUNT TRANSPORT SERVICES, INC.
2020 ANNUAL REPORT
94
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
_X_ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
OR
_ _ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO _______
Commission file number
0-11757
J.B. HUNT TRANSPORT SERVICES, INC.
(Exact name of registrant as specified in its charter)
Arkansas
(State or other jurisdiction of incorporation or organization)
615 J.B. Hunt Corporate Drive
Lowell, Arkansas
(Address of principal executive offices)
71-0335111
(I.R.S. Employer Identification No.)
72745-0130
(ZIP Code)
Registrant’s telephone number, including area code: 479-820-0000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
JBHT
NASDAQ
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes __X__ No _____
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
Yes _____ No __X__
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes __X__ No _____
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files).
Yes __X__ No _____
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-
accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer __X__ Accelerated filer _____ Non-accelerated filer _____ Smaller reporting company _____ 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. [ ]
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b))
by the registered public accounting firm that prepared or issued its audit report. [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes _____ No __X__
The aggregate market value of 83,657,096 shares of the registrant’s $0.01 par value common stock held by non-affiliates as of
June 30, 2020, was $10.1 billion (based upon $120.34 per share).
As of February 16, 2021, the number of outstanding shares of the registrant’s common stock was 105,705,006.
DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the Notice and Proxy Statement for the Annual Meeting of Stockholders, to be held April 22, 2021, are
incorporated by reference in Part III of this Form 10-K.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
95
FORWARD-LOOKING STATEMENTS
This report, including documents which are incorporated by reference and other documents which we file
periodically with the Securities and Exchange Commission (SEC), contains statements that may be considered to
be “forward-looking statements.” Such statements relate to our predictions concerning future events or operations
and are within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. When we use words like “may,” “plan,” “contemplate,” “anticipate,”
“believe,” “intend,” “continue,” “expect,” “project,” “goals,” “strategy,” “future,” “predict,” “seek,” “estimate,” “likely,”
“could,” “should,” “would,” and similar expressions, you should consider them as identifying forward-looking
statements, although we may use other phrasing. Forward-looking statements are inherently uncertain, subject to
risks, and should be viewed with caution. These statements are based on our belief or interpretation of information
currently available. Stockholders and prospective investors are cautioned that actual results and future events
may differ materially from these forward-looking statements as a result of many factors. Some of the factors and
events that are not within our control and that could have a material impact on future operating results include
the following: general economic and business conditions; potential business or operational disruptions resulting
from the ongoing effects of the novel coronavirus (COVID-19) pandemic, including any future spikes or outbreaks
of the virus, as well as government actions taken in response to the pandemic; competition and competitive rate
fluctuations; excess capacity in the intermodal or trucking industries; a loss of one or more major customers; cost
and availability of diesel fuel; interference with or termination of our relationships with certain railroads; rail service
delays; disruptions to U.S. port-of-call activity; ability to attract and retain qualified drivers, delivery personnel,
independent contractors, and third-party carriers; retention of key employees; insurance costs and availability;
litigation and claims expense; determination that independent contractors are employees; new or different
environmental or other laws and regulations; volatile financial credit markets or interest rates; terrorist attacks
or actions; acts of war; adverse weather conditions; disruption or failure of information systems; operational
disruption or adverse effects of business acquisitions; increased costs for new revenue equipment; increased
tariffs assessed on or disruptions in the procurement of imported revenue equipment; decreases in the value of
used equipment; and the ability of revenue equipment manufacturers to perform in accordance with agreements
for guaranteed equipment trade-in values.
You should understand that many important factors, in addition to those listed above, could impact us financially.
Our operating results may fluctuate as a result of these and other risk factors or events as described in our filings
with the SEC. Some important factors that could cause our actual results to differ from estimates or projections
contained in the forward-looking statements are described under “Risk Factors” in Item 1A. We assume no
obligation to update any forward-looking statement to the extent we become aware that it will not be achieved for
any reason.
96
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
PART I
Item 1. Business
OVERVIEW
We are one of the largest surface transportation, delivery, and logistics companies in North America. J.B. Hunt
Transport Services, Inc. is a publicly held holding company that, together with our wholly owned subsidiaries,
provides safe and reliable transportation and delivery services to a diverse group of customers and consumers
throughout the continental United States, Canada, and Mexico. Unless otherwise indicated by the context,
“we,” “us,” “our,” the “Company”, and “JBHT” refer to J.B. Hunt Transport Services, Inc. and its consolidated
subsidiaries. We were incorporated in Arkansas on August 10, 1961, and have been a publicly held company
since our initial public offering in 1983. Our service offerings include transportation of full-truckload containerized
freight, which we directly transport utilizing our company-controlled revenue equipment and company drivers or
independent contractors. We have arrangements with most of the major North American rail carriers to transport
freight in containers or trailers, while we perform the majority of the pickup and delivery services. We also provide
customized freight movement, revenue equipment, labor, systems, and delivery services that are tailored to meet
individual customers’ requirements and typically involve long-term contracts. These arrangements are generally
referred to as dedicated services and may include multiple pickups and drops, freight handling, specialized
equipment, and freight network design. In addition, we provide local and home delivery services, generally
referred to as final-mile delivery services, to customers through a network of cross-dock and other delivery system
locations throughout the continental United States. Utilizing a network of thousands of reliable third-party carriers,
we also provide comprehensive transportation and logistics services. In addition to dry-van, full-load operations,
these unrelated outside carriers also provide flatbed, refrigerated, less-than-truckload (LTL), and other specialized
equipment, drivers, and services. Also, we utilize a combination of company-owned and contracted power units
to provide traditional over-the-road full truckload delivery services. Our customers, who include many Fortune 500
companies, have extremely diverse businesses. Many of them are served by J.B. Hunt 360°®, an online platform
that offers shippers and carriers greater access, visibility and transparency of the supply chain.
We believe our ability to offer multiple services, utilizing our five business segments and a full complement of
logistics services through third parties, represents a competitive advantage. These segments include Intermodal
(JBI), Dedicated Contract Services® (DCS), Integrated Capacity Solutions™ (ICS), Final Mile Services® (FMS) and
Truckload (JBT). Our business usually involves slightly higher freight volumes in August through early November.
Meanwhile, DCS and FMS are subject to less seasonal variation than our other segments.
Our operations continue to be impacted by the COVID-19 global pandemic. Due to the nature of our business
and the large portion of our workforce consisting of drivers and other non-office personnel, fewer than 25%
of our total employees have been able to work remotely; however, we remain committed to the safety of our
workforce, suppliers, and customers while continuing to meet our customers’ needs. In March 2020, we began
our COVID-19 response activities which have been expanded and will continue as necessary until the risks related
to COVID-19 dissipate. Our COVID-19 safety response activities at our home office campus and all other field
locations throughout North America include requiring remote working when possible, expanded health and safety
policies, facility modifications, increased security coverage, and purchase and distribution of personal protective
equipment and supplies. We are reviewing and analyzing both external and internal COVID-related data on a daily
basis in anticipation of the full return to work phase of our COVID-19 response. Thus far throughout the pandemic,
we have been pleased with the continued performance of our employees, particularly our drivers, who have been
consistently available to serve our customers.
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Additional general information about us is available at jbhunt.com. We make a number of reports and other
information available free of charge on our website, including our annual report on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable
after such material is electronically filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934. Our website also contains corporate governance guidelines, our code of ethics,
our whistleblower policy, Board committee charters, and other corporate policies. The information on our website
is not, and shall not be deemed to be, a part of this annual report on Form 10-K or incorporated into any other
filings we make with the SEC.
OUR MISSION AND STRATEGY
Our Mission: To create the most efficient transportation network in North America.
We forge long-term relationships with key customers that include supply chain management as an integral part of
their strategies. Working in concert, we strive to drive out excess cost, add value and function as an extension of
their enterprises. Our strategy is based on utilizing an integrated, multimodal approach to provide capacity-oriented
solutions centered on delivering customer value and industry-leading service. We believe our unique operating
strategy can add value to customers and increase our profits and returns to stockholders.
We continually analyze opportunities for additional capital investment and where management’s resources should
be focused to provide more benefits to our customers. These actions should, in turn, yield increasing returns to
our stockholders.
Increasingly, our customers are seeking energy-efficient transportation solutions to reduce both cost and greenhouse-
gas emissions. Our Company’s mission, to create the most efficient transportation network in North America, focuses
on delivering both for our customers across all of our business segments. We seek to accomplish this by maintaining
a modern fleet to maximize fuel efficiency, converting loads from truck to rail with our intermodal service, and
introducing technologies to optimize freight flows in the supply chain by eliminating waste. Additionally, we continue
to test and explore the usage of alternative fuel vehicles. Efforts to improve fleet fuel efficiency and reduce greenhouse
gas emissions are ongoing. We are an Environmental Protection Agency (EPA) SmartWay® Transport Partner, and
proud to have been awarded the EPA’s SmartWay® Excellence Award each of the last eleven years.
As always, we continue to ingrain safety into our corporate culture and strive to conduct all of our operations as
safely as possible.
OPERATING SEGMENTS
Segment information is also included in Note 14 to our Consolidated Financial Statements.
JBI Segment
The transportation service offerings of our JBI segment utilize arrangements with most major North American
rail carriers to provide intermodal freight solutions for our customers throughout the continental United States,
Canada, and Mexico. Our JBI segment began operations in 1989, forming a unique partnership with what is now
the BNSF Railway Company (BNSF); this was a watershed event in the industry and the first agreement that linked
major rail and truckload carriers in a joint service environment. Throughout the years that followed, JBI established
multiple agreements with other Class I railroads. JBI draws on the intermodal services of these rail carriers for the
underlying linehaul movement of its equipment between rail ramps. The origin and destination pickup and delivery
services (drayage) are handled by our company-owned tractors for the majority of our intermodal loads, while third-
party dray carriers are used where economical. By performing our own drayage services, we are able to provide a
cost-competitive, seamless coordination of the combined rail and dray movements for our customers.
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JBI operates 98,689 pieces of company-owned trailing equipment systemwide. The fleet primarily consists of 53-
foot, high-cube containers and is designed to take advantage of intermodal double-stack economics and superior
ride quality. We own and maintain our own chassis fleet, consisting of 83,259 units. The containers and chassis
are uniquely designed so that they may only be paired together, which we feel creates an operational competitive
advantage. JBI also manages a fleet of 5,166 company-owned tractors, 497 independent contractor trucks, and
6,745 company drivers. At December 31, 2020, the total JBI employee count was 7,673. Revenue for the JBI
segment in 2020 was $4.68 billion.
DCS Segment
DCS focuses on private fleet conversion and creation in replenishment and specialized equipment. We specialize in
the design, development, and execution of supply chain solutions that support a variety of transportation networks.
Contracts with our customers are long-term, ranging from three to 10 years, with the average being approximately
five years. Pricing of our contracts typically involves cost-plus arrangements, with our fixed costs being recovered
regardless of equipment utilization, but is customized based on invested capital and duration.
At December 31, 2020, this segment operated 9,408 company-owned trucks, 498 customer-owned trucks,
and 5 independent contractor trucks. DCS also operates 19,573 owned pieces of trailing equipment and 7,717
customer-owned trailers. The DCS segment employed 12,785 people, including 11,039 drivers, at December 31,
2020. DCS revenue for 2020 was $2.20 billion.
ICS Segment
ICS provides traditional freight brokerage and transportation logistics solutions to customers through relationships
with thousands of third-party carriers and integration with our owned equipment. By leveraging the J.B.
Hunt brand, systems, and network, we provide a broader service offering to customers by providing flatbed,
refrigerated, expedited, and LTL, as well as a variety of dry-van and intermodal solutions. Furthermore, we offer
an online multimodal marketplace via J.B. Hunt 360° that matches the right load with the right carrier and the
best mode. ICS also provides single-source logistics management for customers desiring to outsource their
transportation functions and utilize our proven supply chain technology and design expertise to improve efficiency.
ICS operates multiple remote sales offices or branches, as well as on-site logistics personnel working in direct
contact with customers.
At December 31, 2020, the ICS segment employed 1,011 people, with a carrier base of approximately 100,200.
ICS revenue for 2020 was $1.66 billion.
FMS Segment
FMS provides final-mile delivery services to customers through a nationwide network of cross-dock and other
delivery system network locations, with 98% of the continental U.S. population living within 150 miles of a network
location. FMS provides both asset and non-asset big and bulky delivery and installation services, as well as
fulfillment and retail-pooling distributions services. FMS contracts with customers range from one to five years, with
the average being approximately three years.
At December 31, 2020, this segment operated 1,255 company-owned trucks, 265 customer-owned trucks, and
33 independent contractor trucks. FMS also operates 963 owned pieces of trailing equipment and 159 customer-
owned trailers. The FMS segment employed 2,929 people, including 1,625 drivers and 207 delivery and material
assistants, at December 31, 2020. FMS revenue for 2020 was $689 million.
JBT Segment
The service offering in this segment is full-load, dry-van freight, utilizing tractors and trailers operating over roads
and highways. We typically pick up freight at the dock or specified location of the shipper and transport the load
directly to the location of the consignee. We use our company-owned tractors and employee drivers or independent
contractors who agree to transport freight in our trailers.
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At December 31, 2020, the JBT segment operated 798 company-owned tractors and employed 1,049 people,
797 of whom were drivers. At December 31, 2020, we had 971 independent contractors operating in the JBT
segment. JBT revenue for 2020 was $463 million.
Marketing and Operations
We transport, or arrange for the transportation of, a wide range of freight, including general merchandise, specialty
consumer items, appliances, forest and paper products, food and beverages, building materials, soaps and
cosmetics, automotive parts, agricultural products, electronics, and chemicals. Our customer base includes a large
number of Fortune 500 companies. We provide many transportation services that meet the supply chain logistics
needs of shippers.
We generally market all of our service offerings through a nationwide sales and marketing network. We use specific
sales forces in DCS and FMS due to the length, complexity, and specialization of the sales cycle. In addition to
our sales teams, J.B. Hunt 360° offers instant access to a wide array of technology-driven solutions for customers
and carriers. Through the platform, businesses of all sizes can quote and book shipments, view analytics, and gain
visibility into freight movement. In accordance with our typical arrangements, we bill the customer for all services,
and we, in turn, pay all third parties for their portion of transportation services provided.
Human Capital Resources
General
Despite operating nearly 150,000 pieces of transportation equipment, our single greatest asset and one of the
factors differentiating us from our competitors is our service-oriented people. J.B. Hunt strives to provide a
supportive and safe work environment for its employees, where diverse and innovative ideas can be fostered to
solve problems and provide value-added services for our customers. In addition to our employees, our customers,
vendors, and communities in which we operate also share diverse backgrounds and an equally diverse range
of interests and passions. J.B. Hunt puts forth its best effort to support initiatives reflecting the company values
which, are shared by its stakeholders.
As of December 31, 2020, we had 30,309 employees, which consisted of 20,206 company drivers, 8,779 office
personnel, 1,114 maintenance technicians, and 210 delivery and material assistants. We also had arrangements
with 1,506 independent contractors to transport freight in our trailing equipment. None of our employees are
represented by unions or covered by collective bargaining agreements.
In managing the Company’s business, management focuses on various human capital measures and objectives
designed to address the development, attraction, and retention of personnel. These include competitive
compensation and benefits, paid time off, employee retirement plan, bonus and other incentive compensation plans,
modern equipment and support, leadership development, and tuition assistance as well as those described below.
Diversity and Inclusion
We hold strongly to the principle that a qualified, diverse, and inclusive workforce helps us represent the broad
cross-section of ideas, values, and beliefs of our employees, customers, suppliers, and communities. In 2017,
we established our Diversity and Inclusion initiative which reaches enterprise-wide and aims to create an inclusive
culture and environment where employees from all backgrounds can succeed and be heard. Employees are
evaluated and hired nationally in accordance with established criteria and regulatory requirements specific to their
anticipated role within the Company.
In addition, the Company’s Employee Resource Groups (ERG) offer opportunities for employee professional
development, community engagement, and networking. Comprised of groups for women, Latinos, veterans,
LGBTQIA+, and African Americans, our ERGs promote camaraderie within the workforce and allow employees
with similar interests to build meaningful work relationships.
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Employee Safety and Health
The health and well-being of our workforce is a priority as we continue to ingrain safety into our corporate
culture and strive to conduct all our operations as safely as possible. J.B. Hunt employees participate in regular
job-specific safety training programs. In addition, J.B. Hunt’s Million Mile Safe Driving and Recognition Awards
Program has recognized and rewarded our drivers who dedicate themselves to accident-free driving. Since its
inception in 1996, the program has awarded more than $31 million to over 3,900 drivers.
We believe that access to quality healthcare is also an important part of this priority, and we have programs
in place that focus on improving the quality of care that our employees and their families receive. Paid leave is
another key component of this focus and the Company offers benefit plans that comply with all applicable laws.
In response to COVID-19, we implemented safety response activities at our home office campus and all other field
locations throughout North America which included requiring remote working when possible, expanded health
and safety policies, facility modifications, increased security coverage, and purchase and distribution of personal
protective equipment and supplies. Due to the nature of our business and the large portion of our workforce
consisting of drivers and other non-office personnel, fewer than 25% of our total employees have been able to
work remotely; however, we remain committed to the safety of our workforce, suppliers, and customers while
continuing to meet our customers’ needs.
Revenue Equipment
Our JBI segment utilizes uniquely designed high-cube containers and chassis, which can only be paired with each
other and can be separated to allow the containers to be double-stacked on rail cars. The composition of our DCS
trailing fleet varies with specific customer requirements and may include dry-vans, flatbeds, temperature-controlled,
curtain-side vans, and dump trailers. We primarily utilize third-party carriers’ tractor and trailing equipment for our
ICS segment. Our FMS segment primarily utilizes straight trucks or similar equipment through third-party carriers,
while the JBT segment operates primarily 53-foot dry-van trailers.
As of December 31, 2020, our company-owned tractor and truck fleet consisted of 16,627 units. In addition, we
had 1,506 independent contractors who operate their own tractors but transport freight in our trailing equipment.
We operate with standardized tractors in as many fleets as possible, particularly in our JBI and JBT fleets. Due to
our customers’ preferences and the actual business application, our DCS fleet is extremely diversified. We believe
operating with relatively newer revenue equipment provides better customer service, attracts quality drivers, and
lowers maintenance expense. At December 31, 2020, the average age of our combined tractor fleet was 2.3
years, while our containers averaged 7.7 years of age and our trailers averaged 6.7 years. We perform routine
servicing and preventive maintenance on our equipment at our regional terminal facilities.
Competition and the Industry
The freight transportation markets in which we operate are frequently referred to as highly fragmented and
competitive. Our JBI segment competes with other intermodal marketing companies; other full-load carriers that
utilize railroads for a portion of the transportation service; and, to a certain extent, some railroads directly. The
diversified nature of the services provided by our DCS and FMS segments attracts competition from customers’
private fleets, other private fleet outsourcing companies, equipment leasing companies, local and regional delivery
service providers, and some truckload carriers. Our ICS segment utilizes the fragmented nature of the truck
industry and competes with other non-asset-based logistics companies and freight brokers, as well as full-load
carriers. The full-load freight competition of our JBT segment includes thousands of carriers, many of which are
very small. While we compete with a number of smaller carriers on a regional basis, only a limited number of
companies represent competition in all markets across the country.
We compete with other transportation service companies primarily in terms of price, on-time pickup and delivery
service, availability and type of equipment capacity, and availability of carriers for logistics services.
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Regulation
Our operations as a for-hire motor carrier are subject to regulation by the U.S. Department of Transportation
(DOT) and the Federal Motor Carrier Safety Administration (FMCSA), and certain business is also subject to
state rules and regulations. The DOT periodically conducts reviews and audits to ensure our compliance with
federal safety requirements, and we report certain accident and other information to the DOT. Our operations into
and out of Canada and Mexico are subject to regulation by those countries. We are also subject to a variety of
requirements of national, state, and local governments, including the U.S. Environmental Protection Agency and
the Occupational Safety and Health Administration.
We are subject to various environmental laws and regulations dealing with the handling of hazardous materials,
underground fuel storage tanks, and discharge and retention of storm water. These laws and regulations have the
effect of increasing the costs, risks and liabilities associated with our applicable operations. We are also subject
to existing and potential future laws and regulations with regards to public policy on climate change. If current
regulatory requirements become more stringent or new environmental laws and regulations regarding climate
change are introduced, we could be required to make significant expenditures or abandon certain activities.
We continue to monitor the actions of the FMCSA and other regulatory agencies and evaluate all proposed rules to
determine their impact on our operations.
Item 1A. Risk Factors
In addition to the factors outlined previously in this Form 10-K regarding forward-looking statements and other
comments regarding risks and uncertainties, the following risk factors should be carefully considered when
evaluating our business. Our business, financial condition or financial results could be materially and adversely
affected by any of these risks.
Risks Related to Our Industry
Our business is significantly impacted by economic conditions, customer business cycles and seasonal
factors.
Our business is dependent on the freight shipping needs of our customers, which can be heavily impacted by
economic conditions and other factors affecting their businesses. Recessionary economic cycles and downturns
in customers’ business cycles, particularly in market segments and industries where we have a significant
concentration of customers, may substantially reduce freight volumes for which our customers need transportation
services and lead to excess capacity in the industry and resulting pressure on the rates we are able to obtain for
our services. Adverse economic conditions may also require us to increase our reserve for bad debt losses. In
addition, our results of operations may be affected by seasonal factors. Customers tend to reduce shipments after
the winter holiday season, and our operating expenses tend to be higher in the winter months, primarily due to
colder weather, which causes higher fuel consumption from increased idle time and higher maintenance costs. Any
of these factors could have a significant adverse effect on our financial condition and results of operations.
Our business is significantly impacted by the effects of national or international health pandemics on
general economic conditions and the operations of our customers and third-party suppliers and service
providers.
Our operations can be heavily impacted by the effects of a widespread outbreak of contagious disease, principally
the recent outbreak of the COVID-19 virus. This virus has spread throughout multiple countries, including the
United States, and in March 2020, the World Health Organization designated COVID-19 as a pandemic. The
effects of COVID-19 have and may continue to disrupt or restrict the freight shipping activities of some of our
customers, on which our business is dependent. In addition, adverse economic conditions caused by COVID-19
may also require us to increase our reserve for bad debt losses. Furthermore, the continuation of COVID-19 related
social and economic disruptions may lead to other events which could negatively impact our operations including
service limitations of our third-party purchased transportation providers, reduced availability of drivers and other
key employees, disruptions in the procurement of revenue equipment, restrictions at U.S. ports of call, excess
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capacity or rate reductions within the intermodal or trucking industries, inability of suppliers to continue activities,
or volatile financial credit markets. The extent to which the COVID-19 outbreak will impact general economic and
business conditions is highly uncertain and unpredictable; however, any of these factors could have a significant
adverse effect on our financial condition and results of operations.
Extreme or unusual weather conditions can disrupt our operations, impact freight volumes, and increase
our costs, all of which could have a material adverse effect on our business results.
Certain weather conditions such as ice and snow can disrupt our operations. Increases in the cost of our
operations, such as towing and other maintenance activities, frequently occur during the winter months. Natural
disasters such as hurricanes and flooding can also impact freight volumes and increase our costs.
Our operations are subject to various environmental laws and regulations, including legislative and
regulatory responses to climate change. Compliance with environmental requirements could result
in significant expenditures and the violation of these regulations could result in substantial fines or
penalties.
We are subject to various environmental laws and regulations dealing with the handling of hazardous materials,
underground fuel storage tanks, and discharge and retention of storm water. We operate in industrial areas, where
truck terminals and other industrial activities are located and where groundwater or other forms of environmental
contamination have occurred. Our operations involve the risks of fuel spillage or seepage, environmental damage,
and hazardous waste disposal, among others. We also maintain bulk fuel storage and fuel islands at several of
our facilities. If a spill or other accident involving hazardous substances occurs, or if we are found to be in violation
of applicable laws or regulations, it could have a material adverse effect on our business and operating results.
If we should fail to comply with applicable environmental regulations, we could be subject to substantial fines or
penalties and to civil and criminal liability.
We are also subject to existing and potential future laws and regulations with regards to public policy on climate
change. If current regulatory requirements become more stringent or new environmental laws and regulations
regarding climate change are introduced, we could be required to make significant expenditures or abandon
certain activities, which could have a material adverse effect on our business and operating results.
We depend on third parties in the operation of our business.
Our JBI business segment utilizes railroads in the performance of its transportation services. The majority of these
services are provided pursuant to contractual relationships with the railroads. While we have agreements with a
number of Class I railroads, the majority of our business travels on the BNSF and the Norfolk Southern railways.
A material change in the relationship with, the ability to utilize one or more of these railroads or the overall service
levels provided by these railroads could have a material adverse effect on our business and operating results. In
addition, a portion of the freight we deliver is imported to the United States through ports of call that are subject
to labor union contracts. Work stoppages or other disruptions at any of these ports could have a material adverse
effect on our business.
We also utilize independent contractors and third-party carriers to complete our services. These third parties are
subject to similar regulation requirements, which may have a more significant impact on their operations, causing
them to exit the transportation industry. Aside from when these third parties may use our trailing equipment to fulfill
loads, we do not own the revenue equipment or control the drivers delivering these loads. The inability to obtain
reliable third-party carriers and independent contractors could have a material adverse effect on our operating
results and business growth.
Rapid changes in fuel costs could impact our periodic financial results.
Fuel costs can be very volatile. We have a fuel surcharge revenue program in place with the majority of our
customers, which has historically enabled us to recover the majority of higher fuel costs. Most of these programs
automatically adjust weekly depending on the cost of fuel. However, there can be timing differences between
a change in our fuel cost and the timing of the fuel surcharges billed to our customers. In addition, we incur
additional costs when fuel price increases cannot be fully recovered due to our engines being idled during cold or
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warm weather and empty or out-of-route miles that cannot be billed to customers. Rapid increases in fuel costs or
shortages of fuel could have a material adverse effect on our operations or future profitability. As of December 31,
2020, we had no derivative financial instruments to reduce our exposure to fuel-price fluctuations.
Insurance and claims expenses could significantly reduce our earnings.
Our future insurance and claims expenses might exceed historical levels, which could reduce our earnings. If the
number or severity of claims for which we are self-insured increases, our operating results could be adversely
affected. We have policies in place for 2021 with substantially the same terms as our 2020 policies for personal
injury, property damage, workers’ compensation, and cargo loss or damage. We purchase insurance coverage for
the amounts above which we are self-insured. If these expenses increase and we are unable to offset the increase
with higher freight rates, our earnings could be materially and adversely affected.
We operate in a regulated industry, and increased direct and indirect costs of compliance with, or liability
for violation of, existing or future regulations could have a material adverse effect on our business.
The DOT, FMCSA, and various state agencies exercise broad powers over our business, generally governing matters
including authorization to engage in motor carrier service, equipment operation, safety, and financial reporting. We
are audited periodically by the DOT to ensure that we are in compliance with various safety, hours-of-service, and
other rules and regulations. If we were found to be out of compliance, the DOT could restrict or otherwise impact
our operations. Our failure to comply with any applicable laws, rules or regulations to which we are subject, whether
actual or alleged, could expose us to fines, penalties or potential litigation liabilities, including costs, settlements and
judgments. Further, these agencies could institute new laws, rules or regulations or issue interpretation changes to
existing regulations at any time. Compliance with new laws, rules or regulations could substantially impair labor and
equipment productivity, increase our costs or impact our ability to offer certain services.
Difficulty in attracting and retaining drivers and delivery personnel could affect our profitability and ability
to grow.
If we are unable to attract and retain the necessary quality and number of employees, we could be required
to significantly increase our employee compensation package, let revenue equipment sit idle, dispose of the
equipment altogether, or rely more on higher-cost third-party carriers, which could adversely affect our growth and
profitability. In addition, our growth could be limited by an inability to attract third-party carriers upon whom we rely
to provide transportation services.
We operate in a competitive and highly fragmented industry. Numerous factors could impair our ability to
maintain our current profitability and to compete with other carriers and private fleets.
We compete with many other transportation service providers of varying sizes and, to a lesser extent, with LTL
carriers and railroads, some of which have more equipment and greater capital resources than we do. Additionally,
some of our competitors periodically reduce their freight rates to gain business, especially during times of reduced
growth rates in the economy, which may limit our ability to maintain or increase freight rates or to maintain our
profit margins.
In an effort to reduce the number of carriers it uses, a customer often selects so-called “core carriers” as approved
transportation service providers, and in some instances, we may not be selected. Many customers periodically
accept bids from multiple carriers for their shipping needs, and this process may depress freight rates or result in
the loss of some business to competitors. Also, certain customers that operate private fleets to transport their own
freight could decide to expand their operations, thereby reducing their need for our services.
Risks Related to Our Business
We derive a significant portion of our revenue from a few major customers, the loss of one or more of
which could have a material adverse effect on our business.
For the calendar year ended December 31, 2020, our top 10 customers, based on revenue, accounted for
approximately 37% of our revenue. One customer accounted for approximately 10% of our total revenue for the
year ended December 31, 2020. Our JBI, ICS, and JBT segments typically do not have long-term contracts with
their customers. While our DCS segment business may involve long-term written contracts, those contracts may
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contain cancellation clauses, and there is no assurance that our current customers will continue to utilize our
services or continue at the same levels. A reduction in or termination of our services by one or more of our major
customers could have a material adverse effect on our business and operating results.
A determination that independent contractors are employees could expose us to various liabilities and
additional costs.
Federal and state legislation as well as tax and other regulatory authorities have sought to assert that independent
contractors in the transportation service industry are employees rather than independent contractors. An
example of such legislation recently enacted in California is currently under a judicial stay with respect to trucking
companies while a legal challenge to the law is pending. There can be no assurance that interpretations that
support the independent contractor status will not change, that other federal or state legislation will not be
enacted or that various authorities will not successfully assert a position that re-classifies independent contractors
to be employees. If our independent contractors are determined to be our employees, that determination could
materially increase our exposure under a variety of federal and state tax, workers’ compensation, unemployment
benefits, labor, employment and tort laws, as well as our potential liability for employee benefits. In addition, such
changes may be applied retroactively, and if so, we may be required to pay additional amounts to compensate for
prior periods. Any of the above increased costs would adversely affect our business and operating results.
We may be subject to litigation claims that could result in significant expenditures.
We by the nature of our operations are exposed to the potential for a variety of litigation, including personal injury
claims, vehicular collisions and accidents, alleged violations of federal and state labor and employment laws, such
as class-action lawsuits alleging wage and hour violations and improper pay, commercial and contract disputes,
cargo loss and property damage claims. While we purchase insurance coverage at levels we deem adequate,
future litigation may exceed our insurance coverage or may not be covered by insurance. We accrue a provision
for a litigation matter according to applicable accounting standards based on the ongoing assessment of the
strengths and weaknesses of the litigation, its likelihood of success, and an evaluation of the possible range of
loss. Our inability to defend ourselves against a significant litigation claim could have a material adverse effect on
our financial results.
We rely significantly on our information technology systems, a disruption, failure or security breach of
which could have a material adverse effect on our business.
We rely on information technology throughout all areas of our business to initiate, track, and complete customer
orders; process financial and nonfinancial data; compile results of operations for internal and external reporting;
and achieve operating efficiencies and growth. We have also invested significantly in the development of our
Marketplace for J.B. Hunt 360° online freight matching platform, through which we are generating an increasing
amount of revenue. Each of our information technology systems may be susceptible to various interruptions,
including equipment or network failures, failed upgrades or replacement of software, user error, power outages,
natural disasters, cyber-attacks, theft or misuse of data, terrorist attacks, computer viruses, hackers, or other
security breaches. We have mitigated our exposure to these risks through the establishment and maintenance
of technology security programs and disaster recovery plans, but these mitigating activities may not be sufficient.
A significant disruption, failure or security breach in our information technology systems could have a material
adverse effect on our business, which could include operational disruptions, loss of confidential information,
external reporting delays or errors, legal claims, or damage to our business reputation. We also could experience
an inability to keep pace with technological advances, resulting in our information technology platforms becoming
obsolete or our competitors developing related or similar service offerings more effective than ours.
Acquisitions or business combinations may disrupt or have a material adverse effect on our operations
or earnings.
A substantial portion of the growth of our FMS segment has resulted from strategic acquisitions, and our future
growth strategy for FMS and possibly other operating segments may involve the acquisition of one or more
businesses. We could have difficulty integrating acquired companies’ assets, personnel and operations with our
own. Regardless of whether we are successful in making an acquisition or completing a business combination,
the negotiations could disrupt our ongoing business, distract our management and employees, and increase
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our operating costs. Acquisitions and business combinations are accompanied by a number of inherent risks,
including, without limitation, the difficulty of integrating acquired companies and operations; potential disruption of
our ongoing businesses and distraction of our management or the management of acquired companies; difficulties
in maintaining controls, procedures and policies; potential impairment of relationships with employees and partners
as a result of any integration of new management personnel; potential inability to manage an increased number of
locations and employees; failure to realize expected efficiencies, synergies and cost savings; or the effect of any
government regulations which relate to the businesses acquired.
Our business could be materially impacted if and to the extent that we are unable to succeed in addressing any
of these risks or other problems encountered in connection with an acquisition or business combination involving
FMS or other segments, many of which cannot be presently identified.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We own our corporate headquarters in Lowell, Arkansas. In addition, we own or lease buildings in Lowell that
we utilize for administrative support and warehousing. We also own or lease 50 other significant facilities across
the United States where we perform maintenance on our equipment, provide bulk fuel, and employ personnel to
support operations. These facilities vary in size from 2 to 39 acres. Each of our business segments utilizes these
facilities. In addition, we have 120 leased or owned facilities in our FMS cross-dock and other delivery system
networks, with the remaining three locations outsourced, and multiple leased or owned remote sales offices or
branches in our ICS segment. We also own or lease multiple small facilities, offices, and parking yards throughout
the country that support our customers’ business needs.
A summary of our principal facilities in locations throughout the U.S. follows:
Type
Acreage
Maintenance and support facilities
Cross-dock and delivery system facilities
Corporate headquarters campus, Lowell, Arkansas
Branch sales offices
Other facilities, offices, and parking yards
499
20
119
—
409
Maintenance Shop/
Cross-dock Facility
(square feet)
Office Space
(square feet)
1,078,000
3,528,000
—
—
117,000
188,000
130,000
607,000
52,000
262,000
106
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
Item 3. Legal Proceedings
In January 2017 we exercised our right to utilize the arbitration process to review the division of revenue collected
beginning May 1, 2016, as well as to clarify other issues, under our Joint Service Agreement with BNSF. BNSF
requested the same. In October 2019 the arbitrators issued a Final Award and we recorded pretax charges in the
third quarter 2019 of $26.8 million related to certain charges claimed by BNSF and $17.4 million for legal fees,
cost and interest claimed by BNSF, for a total of $44.2 million. On January 17, 2020, we filed under seal in the
United States District Court for the Western District of Arkansas (the Arkansas Federal Court) a motion to confirm
and enforce the Final Award, seeking the Court’s specific enforcement of certain confidential contractual rights
the arbitrators decided in our favor. BNSF moved to confirm the Final Award in the United States District Court for
the District of Columbia, but that requested relief was ultimately denied and dismissed as moot. During the first
quarter 2020, we recorded an $8.2 million pretax charge resulting from an adjusted calculation of the revenue
divisions owed to BNSF under the Final Award. On July 21, 2020, the Arkansas Federal Court granted our motion
in part, entering a judgment confirming the arbitration awards. In a sealed opinion, the Court denied our request
for additional enforcement relief but did not foreclose our right to pursue post-confirmation enforcement in court
or in arbitration if warranted. We have filed an appeal with the United States Court of Appeals for the Eighth Circuit
seeking review of the Arkansas Federal Court’s denial.
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.
Item 4. Mine Safety Disclosures
Not applicable.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
107
PART II
Item 5. Market For Registrant’s Common Equity, Related Stockholder
Matters And Issuer Purchases Of Equity Securities
Our common stock is traded on the NASDAQ Global Select Market (NASDAQ) under the symbol “JBHT.” At
December 31, 2020, we were authorized to issue up to 1 billion shares of our common stock, and 167.1 million
shares were issued. We had 105.7 million and 106.2 million shares outstanding as of December 31, 2020 and
2019 respectively. On February 16, 2021, we had 988 stockholders of record of our common stock.
Dividend Policy
Our dividend policy is subject to review and revision by the Board of Directors, and payments are dependent upon
our financial condition, liquidity, earnings, capital requirements, and any other factors the Board of Directors may
deem relevant. On January 21, 2021, we announced an increase in our quarterly cash dividend from $0.27 to
$0.28 per share, which was paid February 19, 2021, to stockholders of record on February 5, 2021. We currently
intend to continue paying cash dividends on a quarterly basis. However, no assurance can be given that future
dividends will be paid.
Purchases of Equity Securities
The following table summarizes purchases of our common stock during the three months ended December 31,
2020:
Period
Number of
Common
Shares
Purchased
Average
Price Paid
Per Common
Share
Purchased
Total Number
of Shares
Purchased as
Part of a Publicly
Announced
Plan(1)
Maximum Dollar
Amount of Shares
That May Yet Be
Purchased
Under the Plan
(in millions)(1)
October 1 through October 31, 2020
143,912
$
120.59
143,912 $
November 1 through November 30, 2020
December 1 through December 31, 2020
—
—
—
—
—
—
Total
143,912
$
120.59
143,912 $
503
503
503
503
(1) On April 20, 2017, our Board of Directors authorized the purchase of up to $500 million of our common stock. On January 22, 2020,
our Board of Directors authorized an additional purchase of up to $500 million of our common stock. This stock repurchase program
has no expiration date.
108
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
Stock Performance Graph
The following graph compares the cumulative 5-year total return of stockholders of our common stock with
the cumulative total returns of the S&P 500 index and a customized peer group. The peer group consists of 14
companies: C.H. Robinson Worldwide Inc., CSX Corporation, Expeditors International of Washington Inc., Hub
Group Inc., Kansas City Southern, Knight-Swift Transportation Holdings Inc., Norfolk Southern Corporation, Old
Dominion Freight Line Inc., Republic Services Inc., Ryder System Inc., Schneider National Inc., Stericycle Inc.,
Waste Management Inc., and XPO Logistics Inc. The graph assumes the value of the investment in our common
stock, in the index, and in the peer group (including reinvestment of dividends) was $100 on December 31, 2015
and tracks it through December 31, 2020. The stock price performance included in this graph is not necessarily
indicative of future stock price performance.
Comparison of 5 Year Cumulative Total Return
Among J.B. Hunt Transport Services, Inc., the S&P 500 Index, and a Peer Group
$300
$250
$200
$150
$100
$50
$0
12/15
12/16
12/17
12/18
12/19
12/20
J.B. Hunt Transport Services, Inc.
S&P 500
Peer Group
Years Ended December 31,
2015
2016
2017
2018
2019
2020
J.B. Hunt Transport Services, Inc.
$
100.00
$
133.79
$
160.01
$
130.55
$
165.49
$
195.45
S&P 500
Peer Group
100.00
111.96
136.40
130.42
171.49
203.04
100.00
128.31
172.63
171.77
220.44
269.20
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
109
Item 6. Selected Financial Data
The following selected financial data should be read in conjunction with the Consolidated Financial Statements and
notes thereto, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and other
financial data included elsewhere in this annual report.
(Dollars in millions, except per share amounts)
Earnings data for the years ended December 31,
2020
2019
2018
2017
2016
Operating revenues
Operating income
Net earnings
Basic earnings per share
Diluted earnings per share
Cash dividends per share
Operating expenses as a percentage
of operating revenues:
$
9,637
$
9,165
$
8,615 $
7,190 $
6,555
713
506
4.79
4.74
1.08
734
516
4.81
4.77
1.04
681
490
4.48
4.43
0.96
624
686
6.24
6.18
0.92
721
432
3.84
3.81
0.88
Rents and purchased transportation
51.4%
49.4%
51.5%
50.8%
49.7%
Salaries, wages and employee benefits
24.4
23.7
22.4
22.4
22.4
Depreciation and amortization
Fuel and fuel taxes
Operating supplies and expenses
General and administrative expenses,
net of asset dispositions
Insurance and claims
Operating taxes and licenses
Communication and utilities
Total operating expenses
Operating income
Net interest expense
Earnings before income taxes
Income taxes
Net earnings
Balance sheet data as of December 31,
Working capital ratio
Total assets (millions)
Stockholders’ equity (millions)
Current portion of long-term debt (millions)
Total debt (millions)
Total debt to equity
5.5
3.7
3.5
1.8
1.4
0.6
0.3
5.4
5.1
3.6
2.1
1.7
0.6
0.4
5.1
5.3
3.5
1.8
1.5
0.6
0.4
5.3
4.8
3.6
1.8
1.7
0.6
0.3
92.6
92.0
92.1
91.3
7.4
0.5
6.9
1.6
8.0
0.6
7.4
1.8
7.9
0.5
7.4
1.7
8.7
0.4
8.3
(1.2)
5.5
4.3
3.6
1.3
1.2
0.7
0.3
89.0
11.0
0.4
10.6
4.0
5.3 %
5.6%
5.7%
9.5%
6.6%
2020
1.70
5,928
2,600
—
$
$
2019
1.43
5,471
2,267
$
$
$
$
2018
1.11
2017
1.45
2016
1.65
5,092 $
4,465 $
3,951
2,101 $
1,839 $
1,414
— $
251
—
$
1,305
$
1,296
$
1,149 $
1,086 $
0.50
0.57
0.55
0.59
—
986
0.70
Total debt as a percentage of total capital
33 %
36%
35%
37%
41%
110
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion of our results of operations and financial condition should be read in conjunction with our
financial statements and related notes in Item 8. This discussion contains forward-looking statements. Please see
“Forward-looking Statements” and “Risk Factors” for a discussion of items, uncertainties, assumptions and risks
associated with these statements.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of our financial statements in accordance with U.S. generally accepted accounting principles
requires us to make estimates and assumptions that impact the amounts reported in our Consolidated Financial
Statements and accompanying notes. Therefore, the reported amounts of assets, liabilities, revenues, expenses
and associated disclosures of contingent liabilities are affected by these estimates. We evaluate these estimates
on an ongoing basis, utilizing historical experience, consultation with third parties and other methods considered
reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from our estimates.
Any effects on our business, financial position or results of operations resulting from revisions to these estimates
are recognized in the accounting period in which the facts that give rise to the revision become known. We
consider our critical accounting policies and estimates to be those that require us to make more significant
judgments and estimates when we prepare our financial statements and include the following:
Workers’ Compensation and Accident Costs
We purchase insurance coverage for a portion of expenses related to employee injuries, vehicular collisions,
accidents, and cargo damage. Certain insurance arrangements include a level of self-insurance (deductible)
coverage applicable to each claim. We have umbrella policies to limit our exposure to catastrophic claim costs. We
are substantially self-insured for loss of and damage to our owned and leased revenue equipment.
The amounts of self-insurance change from time to time based on measurement dates, policy expiration dates,
and claim type. For 2018, we were self-insured for $500,000 per occurrence for personal injury and property
damage and self-insured for $100,000 per workers’ compensation claim. For 2019 and 2020, we were self-
insured for $500,000 per occurrence for personal injury and property damage and fully insured for workers’
compensation claims for nearly all states. We have policies in place for 2021 with substantially the same terms as
our 2020 policies for personal injury, property damage, workers’ compensation, and cargo loss or damage.
Our claims accrual policy for all self-insured claims is to recognize a liability at the time of the incident based on
our analysis of the nature and severity of the claims and analyses provided by third-party claims administrators, as
well as legal, economic, and regulatory factors. Our safety and claims personnel work directly with representatives
from the insurance companies to continually update the estimated cost of each claim. The ultimate cost of a
claim develops over time as additional information regarding the nature, timing, and extent of damages claimed
becomes available. Accordingly, we use an actuarial method to develop current claim information to derive an
estimate of our ultimate claim liability. This process involves the use of loss-development factors based on our
historical claims experience and includes a contractual premium adjustment factor, if applicable. In doing so, the
recorded liability considers future claims growth and provides a reserve for incurred-but-not-reported claims. We
do not discount our estimated losses. At December 31, 2020, we had an accrual of approximately $257 million for
estimated claims. In addition, we record receivables for amounts expected to be reimbursed for payments made
in excess of self-insurance levels on covered claims. At December 31, 2020, we have recorded $304 million of
expected reimbursement for covered excess claims, other insurance deposits, and prepaid insurance premiums.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
111
Revenue Equipment
We operate a significant number of tractors, trucks, containers, chassis, and trailers in connection with our
business. This equipment may be purchased or acquired under lease agreements. In addition, we may rent
revenue equipment from various third parties under short-term rental arrangements. Purchased revenue equipment
is depreciated on the straight-line method over the estimated useful life to an estimated salvage or trade-in value.
We periodically review the useful lives and salvage values of our revenue equipment and evaluate our long-lived
assets for impairment. We have not identified any impairment to our assets at December 31, 2020.
We have agreements with our primary tractor suppliers for residual or trade-in values for certain new equipment.
We have utilized these trade-in values, as well as other operational information such as anticipated annual miles, in
accounting for depreciation expense.
Revenue Recognition
We record revenues on the gross basis at amounts charged to our customers because we control and are
primarily responsible for the fulfillment of promised services. Accordingly, we serve as a principal in the transaction.
We invoice our customers, and we maintain discretion over pricing. Additionally, we are responsible for selection of
third-party transportation providers to the extent used to satisfy customer freight requirements.
We recognize revenue from customer contracts based on relative transit time in each reporting period and as other
performance obligations are provided, with related expenses recognized as incurred. Accordingly, a portion of the
total revenue that will be billed to the customer is recognized in each reporting period based on the percentage of
the freight pickup and delivery performance obligation that has been completed at the end of the reporting period.
Our trade accounts receivable includes accounts receivable reduced by an allowance for uncollectible accounts.
Receivables are recorded at amounts billed to customers when loads are delivered or services are performed. The
allowance for uncollectible accounts is calculated over the life of the underlying receivable and is based on historical
experience; any known trends or uncertainties related to customer billing and account collectability; current economic
conditions; and reasonable and supportable economic forecasts, each applied to segregated risk pools based on the
business segment that generated the receivable. The adequacy of our allowance is reviewed quarterly.
Income Taxes
We account for income taxes under the liability method. Our deferred tax assets and liabilities represent items
that will result in a tax deduction or taxable income in future years for which we have already recorded the related
tax expense or benefit in our statement of earnings. Deferred tax accounts arise as a result of timing differences
between when items are recognized in our Consolidated Financial Statements and when they are recognized in
our tax returns. We assess the likelihood that deferred tax assets will be recovered from future taxable income or
the reversal of temporary timing differences. To the extent we believe recovery does not meet the more-likely-than-
not threshold, a valuation allowance is established. To the extent we establish a valuation allowance, we include an
expense as part of our income tax provision.
Significant judgment is required in determining and assessing the impact of complex tax laws and certain tax-
related contingencies on our provision for income taxes. As part of our calculation of the provision for income
taxes, we assess whether the benefits of our tax positions are at least more likely than not to be sustained upon
audit based on the technical merits of the tax position. For tax positions that are not more likely than not to be
sustained upon audit, we accrue the largest amount of the benefit that is not more likely than not to be sustained
in our Consolidated Financial Statements. Such accruals require us to make estimates and judgments, whereby
actual results could vary materially from these estimates. Further, a number of years may elapse before a particular
matter for which we have established an accrual is audited and resolved. See Note 7, Income Taxes, in our
Consolidated Financial Statements for a discussion of our current tax contingencies.
112
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
RESULTS OF OPERATIONS
The following table sets forth items in our Consolidated Statements of Earnings as a percentage of operating
revenues and the percentage increase or decrease of those items compared with the prior year.
Percentage of
Operating Revenues
2020
2019
2018
Percentage Change
Between Years
2020 vs.
2019
2019 vs.
2018
100.0%
100.0%
100.0%
5.1%
6.4%
51.4
24.4
5.5
3.7
3.5
1.8
1.4
0.6
0.3
49.4
23.7
5.4
5.1
3.6
2.1
1.7
0.6
0.4
51.5
22.4
5.1
5.3
3.5
1.8
1.5
0.6
0.4
7.4
0.5
6.9
1.6
8.0
0.6
7.4
1.8
7.9
0.5
7.4
1.7
9.4
8.3
5.7
(22.8)
0.4
(6.2)
(14.5)
(1.8)
(3.7)
5.8
(2.8)
(11.0)
(2.2)
(2.8)
2.1
12.5
14.5
0.9
9.7
17.6
21.5
8.3
12.6
6.3
7.8
31.7
6.3
8.8
5.3%
5.6%
5.7%
(2.0)%
5.5%
Operating revenues
Operating expenses:
Rents and purchased transportation
Salaries, wages and employee benefits
Depreciation and amortization
Fuel and fuel taxes
Operating supplies and expenses
General and administrative expenses,
net of asset dispositions
Insurance and claims
Operating taxes and licenses
Communication and utilities
Operating income
Net interest expense
Earnings before income taxes
Income taxes
Net earnings
2020 COMPARED WITH 2019
Total operating expenses
92.6
92.0
92.1
Consolidated Operating Revenues
Our total consolidated operating revenues increased 5.1% to $9.64 billion in 2020, compared to $9.17 billion
in 2019, primarily due to increased ICS revenue per load, the December 2019 acquisition and new contractual
business onboarded throughout 2020 in FMS, and increased load volumes in JBT and DCS. The increase in
revenue was partially offset by a decrease in JBI revenue per load. Fuel surcharge revenues decreased 27.4% to
$757 million in 2020, compared to $1.04 billion in 2019. If fuel surcharge revenues were excluded from both years,
our 2020 revenue increased 9.3% over 2019.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
113
Consolidated Operating Expenses
Our 2020 consolidated operating expenses increased 5.8% from 2019, while year-over-year revenue increased
5.1%, resulting in a 2020 operating ratio of 92.6% compared to 92.0% in 2019.
Rents and purchased transportation costs increased 9.4% in 2020, primarily due to increased load volume and
third-party rail and truck purchased transportation rates in JBI and ICS and an increase in the use of third-party
truck carriers by FMS and JBT during 2020, partially offset by JBI 2019 rail purchased transportation costs
including a $26.8 million charge resulting from the issuance of an award regarding our arbitration with BNSF.
Salaries, wages and employee benefit costs increased 8.3% in 2020 from 2019. This increase was primarily
related to increases in driver pay and office personnel compensation due to a tighter supply of qualified drivers
and an increase in the number of employees as well as higher cost of employee group medical benefits compared
to 2019. In addition, 2020 included a $12.3 million one-time COVID-19 related bonus paid to employee drivers
and other key field personnel. Depreciation and amortization expense increased 5.7% in 2020, primarily due
to equipment purchases related to new DCS long-term customer contracts and the addition of standard and
specialized trailing equipment within our JBI segment.
Fuel and fuel taxes expense decreased 22.8% in 2020 compared with 2019, due primarily to a decrease in the
price of fuel during 2020. We have fuel surcharge programs in place with the majority of our customers. These
programs typically involve a specified computation based on the change in national, regional, or local fuel prices.
While these programs may address fuel cost changes as frequently as weekly, most also reflect a specified miles-
per-gallon factor and require a certain minimum change in fuel costs to trigger a change in fuel surcharge revenue.
As a result, some of these programs have a time lag between when fuel costs change and when this change is
reflected in revenues. Due to these programs, this lag negatively impacts operating income in times of rapidly
increasing fuel costs and positively impacts operating income when fuel costs decrease rapidly. It is not meaningful
to compare the amount of fuel surcharge revenue or the change in fuel surcharge revenue between reporting
periods to fuel and fuel taxes expense, or the change of fuel expense between periods, as a significant portion
of fuel cost is included in our payments to railroads, dray carriers and other third parties. These payments are
classified as purchased transportation expense.
Operating supplies and expenses were virtually flat in 2020 compared with 2019, driven primarily by higher
operating supplies and building maintenance costs in response to COVID-19, increased toll costs, and higher
equipment maintenance costs, offset by reduced travel and entertainment expenses. General and administrative
expenses decreased 6.2% from 2019, primarily due to decreased professional fees, lower advertising costs, lower
driver hiring expenses and, decreased net loss from the sale or disposal of assets, partially offset by increased
technology spend on the J.B. Hunt 360° platform and legacy system upgrades, higher bad debt expenses, and
increased building rental expenses. Additionally, net losses from sale or disposal of assets were $4.4 million in
2020, compared to net losses of $13.1 million in 2019. Insurance and claims expense decreased 14.5% in 2020,
primarily due to the absence of a $20 million FMS claim settlement charge and $17.4 million in reserve charges
in 2019 for arbitration related legal fees, cost and interest claimed by BNSF, partially offset by an increase in
insurance premiums in 2020.
Net interest expense for 2020 decreased by 11.0% compared with 2019, due to lower effective interest rates on
our debt. Income tax expense decreased 2.8% in 2020, due primarily to decreased taxable earnings in 2020. Our
effective income tax rate was 24.0% in 2020 and 24.2% in 2019.
114
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
Segments
We operated five business segments during calendar year 2020. The operation of each of these businesses
is described in our Notes to Consolidated Financial Statements. The following tables summarize financial and
operating data by segment:
JBI
DCS
ICS
FMS
JBT
Total segment revenues
Intersegment eliminations
Total
JBI
DCS
ICS
FMS
JBT
Total
Operating Revenue by Segment
Years Ended December 31, (in millions)
2020
2019
2018
$ 4,675
$ 4,745
$ 4,717
2,196
1,658
689
463
9,681
(44)
2,128
1,348
567
389
9,177
(12)
1,788
1,335
375
417
8,632
(17)
$ 9,637
$ 9,165
$ 8,615
Operating Income by Segment
Years Ended December 31, (in millions)
2020
$ 428
314
(45)
(1)
17
2019
$ 447
278
(11)
(9)
29
2018
$ 401
195
50
(2)
37
$ 713
$ 734
$ 681
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
115
OPERATING DATA BY SEGMENT
JBI
Loads
Average length of haul (miles)
Revenue per load
Average tractors during the period(1)
Tractors (end of period)
Trailing equipment (end of period)
Average effective trailing equipment usage
DCS
Loads
Average length of haul (miles)
Revenue per truck per week(2)
Average trucks during the period(3)
Trucks (end of period)
Trailing equipment (end of period)
ICS
Loads
Revenue per load
Gross profit margin
Employee count (end of period)
Approximate number of third-party carriers (end of period)
Marketplace for J.B. Hunt 360° revenue (millions)
FMS
Stops
Average trucks during the period(3)
JBT
Loads
Loaded miles (000)
Nonpaid empty mile percentage
Revenue per tractor per week(2)
Average tractors during the period(1)
Tractors (end of period)
Company-owned
Independent contractor
Total tractors
Trailers (end of period)
Years Ended December 31,
2020
2019
2018
2,019,391
1,979,169
2,049,014
1,690
$ 2,315
5,530
5,663
98,689
90,514
1,679
$ 2,397
5,635
5,559
96,743
86,836
1,648
$ 2,302
5,551
5,650
94,902
88,739
3,676,212
3,353,553
2,728,683
160
$ 4,373
9,743
9,911
27,290
168
$ 4,378
9,471
9,779
27,015
177
$ 4,272
8,130
8,929
25,721
1,265,897
1,243,992
1,234,632
$ 1,310
$ 1,084
$ 1,081
9.9%
13.1%
15.4%
1,011
100,200
$1,142.2
1,213
84,400
$839.8
1,142
73,100
$557.8
5,771,533
4,432,591
2,162,040
1,405
1,254
1,134
406,550
171,141
346,459
143,511
355,038
151,322
18.8%
18.9%
16.7%
$ 3,978
1,837
798
971
1,769
8,567
$ 3,917
1,958
845
986
1,831
6,975
$ 4,148
1,990
1,139
973
2,112
6,800
(1) Includes company-owned and independent contractor tractors
(2) Using weighted workdays
(3) Includes company-owned, independent contractor, and customer-owned trucks
116
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
JBI Segment
JBI segment revenue decreased 1% to $4.68 billion in 2020, from $4.74 billion in 2019. This decrease in revenue
was primarily a result of a 3% decrease in revenue per load, which is the combination of changes in freight mix,
customer rates, and fuel surcharge revenue, partially offset by a 2% increase in load volume. Eastern network
load volumes decreased 1% and transcontinental loads increased 4% compared to 2019. Average length of
haul increased 1% in 2020 when compared to 2019. Revenue per load excluding fuel surcharges increased
approximately 1% compared to 2019.
Operating income of the JBI segment decreased to $428 million in 2020, from $447 million in 2019. Benefits from
increased load volume in 2020 were more than offset by higher rail purchased transportation costs, COVID-19
related network inefficiencies, higher personnel costs, which included a one-time COVID-19 related bonus paid to
employee drivers and other key field personnel, and higher dray costs resulting from disruptions in rail capacity and
a constricted labor and truck capacity environment. Operating income for JBI in 2019 was impacted by a $26.8
million charge to rail purchase transportation expense resulting from the issuance of a final award regarding our
arbitration with BNSF and a $17.4 million charge to insurance and claims expense, for arbitration related legal fees,
cost and interest claimed by BNSF.
DCS Segment
DCS segment revenue increased 3% to $2.20 billion in 2020, from $2.13 billion in 2019. Productivity, defined as
revenue per truck per week, remained flat when compared to 2019. Productivity excluding fuel surcharge revenue
increased 2% from 2019. The increase in productivity was primarily a result of better utilization of assets between
customer accounts, contracted customer rate increases, and increased customer supply chain fluidity. Customer
retention rates remain above 98%.
Operating income of our DCS segment increased to $314 million in 2020, from $278 million in 2019. The
increase is primarily due to increased fleet productivity, the absence of significant new customer implementation
costs throughout the majority of the year, lower driver related turnover costs, and lower travel and entertainment
expenses. Operating income was partially offset by higher non-driver personnel costs, a one-time COVID-19
related bonus and higher equipment ownership costs when compared to 2019.
ICS Segment
ICS segment revenue increased 23% to $1.66 billion in 2020, from $1.35 billion in 2019. Overall volumes increased
2%, with truckload volumes increasing 15% when compared to 2019. Revenue per load increased 21% when
compared to 2019 primarily due to customer mix changes and higher spot and contractual pricing. Contractual
business was approximately 60% of the total load volume and 43% of the total revenue in the 2020, compared to
65% of the total load volume and 49% of the total revenue in 2019.
ICS segment incurred an operating loss of $45 million in 2020, compared to operating loss of $11 million in
2019. The increase in operating loss was primarily due to lower gross profit margins and increased technology
spending as the Marketplace for J.B. Hunt 360° continues to expand in functionality and capacity. Gross profit
margin decreased to 9.9% in the current year versus 13.1% last year primarily due to a more competitive pricing
environment and constricted supply dynamics compared to 2019. Approximately $1.14 billion of ICS revenue for
2020 was executed through the Marketplace for J.B. Hunt 360° compared to $840 million in 2019. ICS’s carrier
base increased 19%, and the employee count decreased 17% when compared to 2019.
FMS Segment
FMS revenue increased 22% to $689 million in 2020 from $567 million in 2019, primarily due to two business
acquisitions completed in 2019 and an increase in new customer contracts throughout 2020, partially offset by the
temporary suspension of operations at various customer sites in 2020 as a result of the effects of the COVID-19
pandemic. Stop count for 2020 increased 30%, and productivity, defined as revenue per stop, decreased 7%
compared to 2019. The reduction in productivity was primarily due to a change in the mix of service methods to
a more asset-light model resulting from the 2019 business acquisitions and a shift in the mix of services provided
during 2020 as customers were affected by COVID-19 within our FMS network.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
117
FMS segment had an operating loss of $1 million in 2020 compared to an operating loss of $9 million in 2019. The
current period operating loss was primarily due to increased costs to expand and improve, through service quality
performance controls, the FMS network, lost revenue resulting from the temporary suspension of operations at
several customer sites in response to COVID-19, higher bad debt expense, higher personnel costs, which included
a one-time COVID-19 related bonus, higher COVID-19 related operating supplies expense an increase in noncash
amortization expense attributable to the 2019 business acquisitions. FMS segment operating loss for 2019
included a $20 million insurance claim settlement charge.
JBT Segment
JBT segment revenue increased 19% to $463 million in 2020, from $389 million in 2019. Excluding fuel surcharges,
revenue for 2020 increased 23% compared to 2019, primarily due to a 17% increase in load volume and a 5%
increase in revenue excluding fuel surcharge revenue per load compared to 2019. The 2020 growth in load count
was partially due to the continued expansion of 360box which leverages the J.B. Hunt 360° platform. At the end of
2020, JBT operated 1,769 tractors and 8,567 trailers compared to 1,831 and 6,975 at the end of 2019.
JBT segment had operating income of $17 million in 2020 compared with $29 million in 2019. The decrease in
operating income was driven primarily by higher purchased transportation expense and higher non-driver personnel
cost and technology modernization expenses for the continued expansion of 360box compared to 2019.
2019 COMPARED WITH 2018
Consolidated Operating Revenues
Our total consolidated operating revenues increased 6.4% to $9.17 billion in 2019, compared to $8.61 billion in
2018, primarily due to increased revenue in DCS related to an increase in revenue producing trucks, higher truck
productivity, defined as revenue per truck per week, and an acquisition in the first quarter 2019. The increase in
revenue was further attributable to increased load volumes in ICS and higher revenue per load in JBI, partially
offset by a decrease in JBI load volumes and a reduction in rates per loaded mile and the number of operating
tractors in JBT. Fuel surcharge revenues decreased 1.4% to $1.04 billion in 2019, compared to $1.06 billion in
2018. If fuel surcharge revenues were excluded from both years, our 2019 revenue increased 7.5% over 2018.
Consolidated Operating Expenses
Our 2019 consolidated operating expenses increased 6.3% from 2018, while year-over-year revenue increased
6.4%, resulting in a 2019 operating ratio of 92.0% compared to 92.1% in 2018.
Rents and purchased transportation costs increased 2.1% in 2019, primarily due to increased rail and truck
purchased transportation rates within JBI and ICS segments and JBI rail purchased transportation costs, including
a $26.8 million charge in 2019, resulting from the issuance of an award regarding our arbitration with BNSF. The
current year increase in rents and purchased transportation costs was partially offset by a $152.3 million BNSF
arbitration related charge recorded by JBI in 2018. Salaries, wages and employee benefit costs increased 12.5% in
2019 from 2018. This increase was primarily related to increases in driver pay and office personnel compensation
due to an increase in the number of employees and a tighter supply of qualified drivers. Depreciation and
amortization expense increased 14.5% in 2019, primarily due to equipment purchased related to new DCS long-
term customer contracts.
Fuel and fuel taxes expense increased 0.9% in 2019 compared with 2018, due primarily to an increase in road
miles, partially offset by a decrease in the price of fuel during 2019. Operating supplies and expenses increased
9.7%, driven primarily by higher equipment maintenance and tire expenses due to increased equipment counts,
increased toll costs, higher travel costs, and higher facility maintenance expenses. General and administrative
expenses increased 17.6% from 2018, primarily due to increased technology spend on the J.B. Hunt 360°
platform and legacy system upgrades, higher FMS network facility costs, and increased advertising expenses.
Additionally, net losses from sale or disposal of assets were $13.1 million in 2019, compared to net losses of $12.1
million in 2018. Insurance and claims expense increased 21.5% in 2019, primarily due to 2019 including a $17.4
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J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
million reserve charge for arbitration related legal fees, costs and interest claimed by BNSF and the inclusion of
a $20.0 million FMS claim charge within DCS, partially offset by 2018 including specific reserve charges for the
settlement of lawsuits with current and former drivers.
Net interest expense for 2019 increased by 31.7% compared with 2018, due to an increase in average debt levels
and higher effective interest rates on our debt.
Our effective income tax rate was 24.2% in 2019 and 23.6% in 2018. The increase in 2019 was primarily due to
a reduction in discreet tax benefits recognized related to share-based compensation vesting, partially offset by
favorable settlements of state income tax audits during 2019.
JBI Segment
JBI segment revenue increased 1% to $4.74 billion in 2019, from $4.72 billion in 2018. This increase in revenue
was primarily a result of a 4% increase in revenue per load, which is the combination of changes in freight mix,
customer rates, and fuel surcharge revenue, partially offset by a 3% decrease in load volume. Eastern network
load volumes decreased 9% and transcontinental loads increased 1% compared to 2018. Average length of
haul increased 2% in 2019 when compared to 2018. Revenue per load excluding fuel surcharges increased
approximately 6% compared to 2018.
Operating income of the JBI segment increased to $447 million in 2019, from $401 million in 2018. Benefits from
customer rate increases and freight mix were partially offset by decreased volumes, which includes volume lost to
rail rationalization, increased rail purchased transportation costs, higher equipment ownership and maintenance
costs, increased technology modernization expenses, lower box turns, higher box repositioning costs and
increased driver wages and recruiting costs. Current year operating income was further impacted by a $26.8
million charge to rail purchase transportation expense resulting from the issuance of an award regarding our
arbitration with BNSF and a $17.4 million charge to insurance and claims expense, for arbitration related legal fees,
costs and interest claimed by BNSF. JBI recorded $152.3 million of additional BNSF arbitration related charges in
2018. Excluding these 2018 charges and the 2019 arbitration related charges of $44.2 million, operating income
for 2019, decreased 11% when compared to 2018.
DCS Segment
DCS segment revenue increased 19% to $2.13 billion in 2019, from $1.79 billion in 2018. Productivity, defined as
revenue per truck per week, increased 2% when compared to 2018. Productivity excluding fuel surcharge revenue
increased 3% from 2018. The increase in productivity was primarily a result of better integration of assets between
customer accounts, customer rate increases, and increased customer supply chain fluidity during 2019 compared to
2018. DCS ended 2019 with a net additional 850 revenue-producing trucks when compared to 2018. Approximately
69% of these additions represent private fleet conversion. Customer retention rates for 2019 remained above 98%.
Operating income of our DCS segment increased to $278 million in 2019, from $195 million in 2018. The increase is
primarily due to increased productivity and additional trucks under contract, partially offset by increased driver wages
and recruiting costs, higher non-driver personnel costs, and higher equipment ownership costs compared to 2018.
ICS Segment
ICS segment revenue increased 1% to $1.35 billion in 2019, from $1.33 billion in 2018. Overall volumes increased
1%. Revenue per load remained flat when compared to 2018 primarily due to customer mix changes, a lower spot
pricing market and a competitive pricing environment for contractual truckload business, when compared to 2018.
Contractual business was approximately 71% of the total load volume and 59% of the total revenue in the 2019,
compared to 70% of the total load volume and 48% of the total revenue in 2018.
ICS segment incurred an operating loss of $11 million in 2019, compared to operating income of $50 million in
2018. The decrease in operating income was primarily due to lower gross profit margins, increased expenses to
expand capacity and functionality of the Marketplace for J.B. Hunt 360°, higher personnel costs, and increased
digital marketing expenses. Gross profit margin decreased to 13.1% in the current year versus 15.4% last year
primarily due to weaker spot market activity and lower contractual rates on committed business compared to
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
119
2018. Approximately $840 million of ICS revenue for 2019 was executed through the Marketplace for J.B. Hunt
360° compared to $558 million in 2018. ICS’s carrier base increased 15%, and the employee count increased 6%
when compared to 2018.
FMS Segment
FMS revenue increased 51% to $567 million in 2019 from $375 million in 2018, primarily due to the business
acquisition completed in the first quarter of 2019 and an increase in new customer contracts throughout 2019.
Stop count for 2019 increased 105%, while productivity, defined as revenue per stop, decreased 26% compared
to 2018. The reduction in productivity was primarily due to a change in the mix of service methods to a more
asset-light model resulting from the 2019 business acquisition.
FMS segment had an operating loss of $9 million in 2019 compared to an operating loss of $2 million in 2018. The
benefit of increased revenue was more than offset by higher insurance and claims costs, which included a $20
million insurance claim charge in 2019, higher costs from the expanded FMS network and additional non-cash
amortization expense of $3.8 million compared to 2018.
JBT Segment
JBT segment revenue decreased 7% to $389 million in 2019, from $417 million in 2018. Excluding fuel surcharges,
revenue for 2019 decreased 6% compared to 2018, primarily due to a 1% decrease in rates per loaded mile, a
3% decrease in length of haul and a 2% decrease in load volumes, compared to 2018. At the end of 2019, JBT
operated 1,831 tractors compared to 2,112 at the end of 2018.
JBT segment had operating income of $29 million in 2019 compared with $37 million in 2018. The decrease in
operating income was driven primarily by lower spot market activity, higher empty miles per load, increased driver
wages and recruiting costs, and the reduction in overall load volumes.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities remained virtually flat totaling $1.12 billion in 2020, compared to $1.10
billion in 2019, due to the timing of general working capital activities, offset by the decrease in earnings.
Net cash used in investing activities totaled $613 million in 2020, compared with $804 million in 2019. The
decrease resulted primarily from a decrease in equipment purchases, net of proceeds from the sale of equipment
in 2020 and from 2019 including the completion of two business acquisitions.
Net cash used in financing activities was $232 million in 2020, compared with $267 million in 2019. This decrease
resulted primarily from a decrease in treasury stock purchased in 2020. In addition, net cash used in financing
activities for 2019 included the full retirement of our $250 million of 2.40% senior notes that matured in March
2019, partially offset by our issuance of $700 million of 3.875% senior notes due March 2026.
Our dividend policy is subject to review and revision by the Board of Directors, and payments are dependent upon
our financial condition, liquidity, earnings, capital requirements, and other factors the Board of Directors may deem
relevant. We paid a $0.24 per share quarterly dividend in 2018, a $0.26 per share quarterly dividend in 2019, and a
$0.27 per share quarterly dividend in 2020. On January 21, 2021, we announced an increase in our quarterly cash
dividend from $0.27 to $0.28 per share, which was paid February 19, 2021, to stockholders of record on February
5, 2021. We currently intend to continue paying cash dividends on a quarterly basis. However, no assurance can
be given that future dividends will be paid.
Liquidity
Our need for capital has typically resulted from the acquisition of containers and chassis, trucks, tractors and
trailers required to support our growth and the replacement of older equipment as well as periodic business
acquisitions. We are frequently able to accelerate or postpone a portion of equipment replacements or other
capital expenditures depending on market and overall economic conditions. During 2020, we postponed a
portion of our equipment purchases in order to increase our available cash in light of the economic disruption
and uncertainty resulting from COVID-19. In recent years, we have obtained capital through cash generated from
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J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
operations, revolving lines of credit and long-term debt issuances. We have also periodically utilized operating
leases to acquire revenue equipment. During the fourth quarter of 2020, we completed a business acquisition.
See Note 12, Acquisition, in the Notes to Consolidated Financial Statements for further discussion. We used our
existing cash to finance this transaction and to provide any necessary liquidity for current and future operations.
We believe our liquid assets, cash generated from operations, and revolving line of credit will provide sufficient
funds for our operating and capital requirements for the foreseeable future. Should COVID-19 related economic
conditions warrant, we believe we have sufficient credit resources available to meet our near and long-term
operating and capital needs. At December 31, 2020, we had a cash balance of $313 million and we had no
outstanding balance on our revolving line of credit, which authorizes us to borrow up to $750 million under a senior
revolving line of credit, and is supported by a credit agreement with a group of banks that expires in September
2023. This senior credit facility allows us to request an increase in the total commitment by up to $250 million and
to request a one-year extension of the maturity date. The applicable interest rate under this agreement is based on
either the Prime Rate, the Federal Funds Rate or LIBOR, depending upon the specific type of borrowing, plus an
applicable margin based on our credit rating and other fees.
We are continually evaluating the possible effects of current economic conditions and reasonable and supportable
economic forecasts on operational cash flows, including the risks of declines in the overall freight market and our
customers’ liquidity and ability to pay. We regularly monitor working capital and maintain frequent communication
with our customers, suppliers and service providers. During 2020, operational cost reduction activities consisted
primarily of canceling non-essential travel and hiring activities and the delay of other discretionary spending, which
we will continue to do as necessary. A large portion of our cost structure is variable. Purchased transportation
expense represents more than half of our total costs but is heavily tied to load volumes. Our second largest cost
item is salaries and wages, the largest portion of which is driver pay, which includes a large variable component.
Currently, we have made no adjustments to our costs that we consider more fixed in nature. However, we continue
to monitor the environment and are prepared to adjust if necessary.
Our senior notes consist of three separate issuances. The first is $250 million of 3.85% senior notes due March
2024, which was issued in March 2014. Interest payments under this note are due semiannually in March and
September of each year, beginning September 2014. The second is $350 million of 3.30% senior notes due
August 2022, issued in August 2015. Interest payments under this note are due semiannually in February and
August of each year, beginning February 2016. The third is $700 million of 3.875% senior notes due March 2026,
issued in March 2019. Interest payments under this note are due semiannually in March and September of each
year, beginning September 2019. We may redeem for cash some or all of the notes based on a redemption price
set forth in the note indenture. We currently have an interest rate swap agreement which effectively convert our
$350 million of 3.30% fixed-rate senior notes due August 2022 to a variable rate, resulting in an interest rates of
1.58% at December 31, 2020. The applicable interest rate under this swap agreement is based on LIBOR plus an
established margin.
Our financing arrangements require us to maintain certain covenants and financial ratios. At December 31, 2020,
we were well above compliance with all covenants and financial ratios, and we fully intend and expect to emerge
from the current COVID-19 related economic environment with our investment-grade rating intact.
We are currently committed to spend a total of approximately $1.12 billion, net of proceeds from sales or trade-
ins, during 2021 and 2022, which is primarily related to the acquisition of tractors, containers, chassis, and other
trailing equipment.
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements, other than our net purchase commitments of $1.12 billion, as of
December 31, 2020.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
121
Contractual Obligations and Commitments
The following table summarizes our expected obligations and commitments (in millions) as of December 31, 2020:
700.0
4.5
—
Total
Operating leases
$
144.9
$
Long-term debt obligations
Interest payments on debt (1)
1,300.0
180.6
2021
49.1
—
42.3
2022-2023
2024-2025
2026 and
thereafter
$
61.5
$
18.8
$
15.5
350.0
77.1
250.0
56.7
Commitments to acquire revenue
equipment and facilities
1,123.0
774.0
349.0
—
Total
$
2,748.5
$
865.4
$
837.6
$
325.5
$
720.0
(1) Interest payments on debt are based on the debt balance and applicable rate at December 31, 2020.
We had standby letters of credit outstanding of approximately $3.8 million at December 31, 2020, that expire at
various dates in 2021, which are related to certain operating agreements and our self-insured retention levels for
casualty claims. We plan to renew these letters of credit in accordance with our third-party agreements. The table
above excludes $71.7 million of liabilities related to uncertain tax positions, including interest and penalties, as we
are unable to reasonably estimate the ultimate timing of settlement. See Note 7, Income Taxes, in the Notes to
Consolidated Financial Statements for further discussion.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk can be quantified by measuring the financial impact of a near-term adverse increase in short-term
interest rates on variable-rate debt outstanding. Our total long-term debt consists of both fixed and variable interest
rate facilities. Our senior notes have fixed interest rates ranging from 3.30% to 3.875%. These fixed-rate facilities
reduce the impact of changes to market interest rates on future interest expense. Our senior revolving line of credit
has variable interest rates, which are based on the Prime Rate, the Federal Funds Rate, or LIBOR, depending upon
the specific type of borrowing, plus any applicable margins. We currently have an interest rate swap agreement
which effectively converts our $350 million of 3.30% fixed-rate senior notes due August 2022 to a variable rate. The
applicable interest rate under this swap agreement is based on LIBOR plus an established margin. Our earnings
would be affected by changes in these short-term variable interest rates. At our current level of borrowing, a one-
percentage-point increase in our applicable rate would reduce annual pretax earnings by $3.5 million.
Although we conduct business in foreign countries, international operations are not material to our consolidated
financial position, results of operations, or cash flows. Additionally, foreign currency transaction gains and losses
were not material to our results of operations for the year ended December 31, 2020. Accordingly, we are not
currently subject to material foreign currency exchange rate risks from the effects that exchange rate movements
of foreign currencies would have on our future costs or on future cash flows we would receive from our foreign
investment. To date, we have not entered into any foreign currency forward exchange contracts or other derivative
financial instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates.
The price and availability of diesel fuel are subject to fluctuations due to changes in the level of global oil
production, seasonality, weather, and other market factors. Historically, we have been able to recover a majority
of fuel-price increases from our customers in the form of fuel surcharges. We cannot predict the extent to which
volatile fluctuations in fuel prices will continue in the future or the extent to which fuel surcharges could be collected
to offset fuel-price increases. As of December 31, 2020, we had no derivative financial instruments to reduce our
exposure to fuel-price fluctuations.
122
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
Item 8. Financial Statements and Supplementary Data
Our Consolidated Financial Statements, Notes to Consolidated Financial Statements, and reports thereon of our
independent registered public accounting firm as specified by this Item are presented following Item 15 of this
report and include:
Reports of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2020 and 2019
Consolidated Statements of Earnings for years ended December 31, 2020, 2019, and 2018
Consolidated Statements of Stockholders’ Equity for years ended December 31, 2020, 2019, and 2018
Consolidated Statements of Cash Flows for years ended December 31, 2020, 2019, and 2018
Notes to Consolidated Financial Statements
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
We maintain controls and procedures designed to ensure that the information we are required to disclose in the
reports we file with the SEC is recorded, processed, summarized and reported, within the time periods specified
in the SEC rules, and that such information is accumulated and communicated to our management, including
our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. As of the end of the period covered by this report, we carried out an evaluation, under the supervision
and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based upon that evaluation,
our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were
effective as of December 31, 2020.
The certifications of our Chief Executive Officer and Chief Financial Officer required under Section 302 of the
Sarbanes-Oxley Act have been filed as Exhibits 31.1 and 31.2 to this report.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining effective internal control over financial reporting as
defined in Rules 13a-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting
is designed to provide reasonable assurance to our management and Board of Directors regarding the preparation
and fair presentation of published financial statements.
Because of its inherent limitation, internal control over financial reporting may not prevent or detect misstatements.
Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020.
In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013 Framework). Based on
our assessment, we believe that as of December 31, 2020, our internal control over financial reporting is effective
based on those criteria.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
123
The effectiveness of internal control over financial reporting as of December 31, 2020, has been audited by
Ernst & Young LLP, an independent registered public accounting firm that also audited our Consolidated
Financial Statements. Ernst & Young LLP’s report on internal control over financial reporting is included herein
(following Item 15).
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting during the fourth quarter ended
December 31, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
Item 9B. Other Information
None.
124
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required for Item 10 is hereby incorporated by reference from the Notice and Proxy Statement for
the Annual Meeting of Stockholders to be held April 22, 2021.
Item 11. Executive Compensation
The information required for Item 11 is hereby incorporated by reference from the Notice and Proxy Statement for
the Annual Meeting of Stockholders to be held April 22, 2021.
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
Except as set forth below, the information required for Item 12 is hereby incorporated by reference from the Notice
and Proxy Statement for the Annual Meeting of Stockholders to be held April 22, 2021.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table summarizes, as of December 31, 2020, information about compensation plans under which
equity securities of the Company are authorized for issuance.
Number of Securities To
Be Issued Upon Exercise
of Outstanding Options,
Warrants, and Rights
Weighted-average
Exercise Price of
Outstanding Options,
Warrants, and Rights
Number of Securities Remaining
Available for Future Issuance
Under Equity Compensation
Plans (Excluding Securities
Reflected in Column (A))
(A)
1,679,071
(B)
$ —(2)
(C)
5,120,327
Plan Category(1)
Equity compensation
plans approved by
security holders
(1) We have no equity compensation plans that are not approved by security holders.
(2) Currently, only restricted share units remain outstanding under our equity compensation plan. Upon vesting, restricted share units are
settled with shares of our common stock on a one-for-one basis and, accordingly, do not include an exercise price.
Item 13. Certain Relationships and Related Transactions, and Director
Independence
The information required for Item 13 is hereby incorporated by reference from the Notice and Proxy Statement for
the Annual Meeting of Stockholders to be held April 22, 2021.
Item 14. Principal Accounting Fees and Services
The information required for Item 14 is hereby incorporated by reference from the Notice and Proxy Statement for
the Annual Meeting of Stockholders to be held April 22, 2021.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
125
PART IV
Item 15. Exhibits, Financial Statement Schedules
(A) Financial Statements, Financial Statement Schedules and Exhibits:
(1) Financial Statements
The financial statements included in Item 8 above are filed as part of this annual report.
(2) Financial Statement Schedules
Schedule II – Valuation and Qualifying Accounts (in millions)
Allowance for Doubtful
Accounts and Other
Receivables for the Years
Ended:
December 31, 2018
December 31, 2019
December 31, 2020
Balance at
Beginning of Year
Charged to
Expense
Write-Offs, Net
of Recoveries
Balance at
End of Year
15.9
23.9
13.3
8.9
2.8
5.6
(0.9)
(13.4)
(0.5)
23.9
13.3
18.4
The above schedule reports allowances related to trade accounts receivable and other receivables.
All other schedules have been omitted either because they are not applicable or because the required
information is included in our Consolidated Financial Statements or the notes thereto.
(3) Exhibits
126
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
Exhibit
Number Description
3.1
3.2
4.1
4.2
4.3
4.4
4.5
4.6
10.1
10.2
10.3
10.4
10.5*
10.6*
10.7
10.8
21.1
22.1
23.1
31.1
31.2
32.1
Amended and Restated Articles of Incorporation of J.B. Hunt Transport Services, Inc. dated May 19, 1988
(incorporated by reference from Exhibit 3.1 of the Company’s quarterly report on Form 10-Q for the period ended
March 31, 2005, filed April 29, 2005)
Amended and Restated Bylaws of J.B. Hunt Transport Services, Inc. dated April 23, 2015 (incorporated by
reference from Exhibit 3.1 of the Company’s current report on Form 8-K, filed April 27, 2015)
Description of Capital Stock of J.B. Hunt Transport Services, Inc.
Indenture (incorporated by reference from Exhibit 4.1 of the Company’s registration statement on Form S-3ASR
(File No. 333-169365), filed September 14, 2010)
Third Supplemental Indenture (incorporated by reference from Exhibit 4.4 of the Company’s current report on Form
8-K, filed March 6, 2014)
Fourth Supplemental Indenture (incorporated by reference from Exhibit 4.3 of the Company’s current report on
Form 8-K, filed August 6, 2015)
Base Indenture, dated as of March 1, 2019 (incorporated by reference from Exhibit 4.1 of the Company’s current
report on Form 8-K, filed March 1, 2019)
First Supplemental Indenture, dated as of March 1, 2019 (incorporated by reference from Exhibit 4.2 of the
Company’s current report on Form 8-K, filed March 1, 2019)
Third Amended and Restated Management Incentive Plan (incorporated by reference from Appendix A of the
Company’s definitive proxy statement on Schedule 14A, filed March 9, 2017)
Amendment to J.B. Hunt Transport Services, Inc. Third Amended and Restated Management Incentive Plan
(incorporated by reference from Exhibit 10.2 of the Company’s current report on Form 8-K, filed April 22, 2019)
Summary of Compensation Arrangements with Named Executive Officers for 2020 (incorporated by reference from
Exhibit 99.1 of the Company’s current report on Form 8-K/A, filed February 3, 2020)
Summary of Compensation Arrangements with Named Executive Officers for 2021 (incorporated by reference from
Exhibit 99.1 of the Company’s current report on Form 8-K, filed January 25, 2021)
Executive Retirement Agreement with David G. Mee, dated February 6, 2020 (incorporated by reference from
Exhibit 10.1 of the Company’s current report on Form 8-K, filed February 10, 2020)
Executive Retirement Agreement with Terrance D. Matthews, dated February 6, 2020 (incorporated by reference
from Exhibit 10.2 of the Company’s current report on Form 8-K, filed February 10, 2020)
Credit Agreement and related documents (incorporated by reference from Exhibit 10.1 of the Company’s current
report on Form 8-K, filed September 28, 2018)
First Amendment to Credit Agreement, dated as of March 1, 2019 (incorporated by reference from Exhibit 10.2 of
the Company’s current report on Form 8-K, filed March 1, 2019)
Subsidiaries of J.B. Hunt Transport Services, Inc.
List of Guarantor Subsidiaries of J.B. Hunt Transport Services, Inc.
Consent of Ernst & Young LLP
Rule 13a-14(a)/15d-14(a) Certification
Rule 13a-14(a)/15d-14(a) Certification
Section 1350 Certification
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (embedded within the Inline XBRL Document)
* Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
127
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, in the City of
Lowell, Arkansas, on the 22nd day of February 2021.
J.B. HUNT TRANSPORT SERVICES, INC.
(Registrant)
By:
/s/ John N. Roberts, III
John N. Roberts, III
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on the 22nd day of February 2021, on behalf of the registrant and in the capacities indicated.
/s/ John N. Roberts, III
John N. Roberts, III
President and Chief Executive Officer, Member
of the Board of Directors
(Principal Executive Officer)
/s/ John Kuhlow
John Kuhlow
/s/ Kirk Thompson
Kirk Thompson
/s/ James L. Robo
James L. Robo
/s/ Douglas G. Duncan
Douglas G. Duncan
/s/ Francesca M. Edwardson
Francesca M. Edwardson
/s/ Wayne Garrison
Wayne Garrison
/s/ Sharilyn S. Gasaway
Sharilyn S. Gasaway
/s/ Gary C. George
Gary C. George
/s/ J. Bryan Hunt, Jr.
J. Bryan Hunt, Jr.
/s/ Gale V. King
Gale V. King
Chief Financial Officer,
Executive Vice President
(Principal Financial and Accounting Officer)
Chairman of the Board of Directors
Member of the Board of Directors
(Lead Director)
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
Member of the Board of Directors
128
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
INDEX TO CONSOLIDATED FINANCIAL INFORMATION
Management’s Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting
Consolidated Balance Sheets as of December 31, 2020 and 2019
Consolidated Statements of Earnings for years ended December 31, 2020, 2019, and 2018
Consolidated Statements of Stockholders’ Equity for years ended December 31, 2020, 2019, and 2018
Consolidated Statements of Cash Flows for years ended December 31, 2020, 2019, and 2018
Notes to Consolidated Financial Statements
PAGE
130
131
133
134
135
136
137
138
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
129
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
We are responsible for the preparation, integrity, and fair presentation of our Consolidated Financial Statements
and related information appearing in this report. We take these responsibilities very seriously and are committed to
maintaining controls and procedures that are designed to ensure that we collect the information we are required to
disclose in our reports to the SEC and to process, summarize, and disclose this information within the time periods
specified by the SEC.
Based on an evaluation of our disclosure controls and procedures as of the end of the period covered by this report,
conducted by our management and with the participation of our Chief Executive Officer and Chief Financial Officer,
we believe our controls and procedures are effective to ensure that we are able to collect, process, and disclose the
information we are required to disclose in our reports filed with the SEC within the required time periods.
We are responsible for establishing and maintaining effective internal control over financial reporting as defined in
Rules 13a-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is designed
to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair
presentation of published financial statements. Because of its inherent limitation, internal control over financial
reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement preparation and presentation. We assessed
the effectiveness of our internal control over financial reporting as of December 31, 2020. In making this assessment,
we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
in Internal Control – Integrated Framework (2013 Framework). Based on our assessment, we believe that as of
December 31, 2020, our internal control over financial reporting is effective based on those criteria.
The effectiveness of internal control over financial reporting as of December 31, 2020, has been audited by Ernst
& Young LLP, an independent registered public accounting firm that also audited our Consolidated Financial
Statements. Ernst & Young LLP’s report on internal control over financial reporting is included herein.
/s/ John N. Roberts, III
John N. Roberts, III
President and Chief Executive Officer
(Principal Executive Officer)
/s/ John Kuhlow
John Kuhlow
Chief Financial Officer,
Executive Vice President
(Principal Financial and Accounting
Officer)
130
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of J.B. Hunt Transport Services, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of J.B. Hunt Transport Services, Inc. (the
Company) as of December 31, 2020 and 2019, the related consolidated statements of earnings, stockholders’
equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes
and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated
financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects,
the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally
accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020,
based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework), and our report dated February 22, 2021, expressed
an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates
to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of critical audit matter does not alter in any way our opinion on
the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter
below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
131
Claims Accruals
Description of the
Matter
At December 31, 2020, the Company’s aggregate claims accrual was $257 million,
which is primarily related to casualty and workers’ compensation claims, inclusive of
amounts expected to be paid by the Company’s insurers above its self-insured retention
limits. As explained in Note 2 of the financial statements, the Company recognizes a
liability at the time of the incident based upon the nature and severity of the claim and
analyses provided by third-party claims administrators. The Company uses an actuarial
method to develop currently known claim information to derive an estimate of the
ultimate claim liability to account for estimated incurred but not reported losses (“IBNR”).
Auditing the Company’s claims accruals is complex and involves significant
measurement uncertainty associated with the estimate, the application of significant
management judgment, and the use of various actuarial methods. In addition, the
estimate for claims accruals is sensitive to significant management assumptions,
including the frequency and severity assumptions used to derive the computation of the
IBNR, and the case reserves and loss development factors for reported claims.
How We Addressed
the Matter in Our Audit
We obtained an understanding, evaluated the design and tested the operating
effectiveness of internal controls over the claims accrual process, including
management’s assessment of the assumptions and data underlying the IBNR reserve.
To evaluate the claims accruals, our audit procedures included, among others, testing
the completeness and accuracy of the underlying claims by performing a test of details
over a representative sample. Furthermore, we involved our actuarial specialist to assist
in our evaluation of the methodologies applied by management in determining the
calculated reserve. We compared the Company’s reserved amount to a range which our
actuarial specialist developed based on independently selected assumptions.
/s/ Ernst & Young LLP
We have served as the Company’s
auditor since 2005.
Rogers, Arkansas
February 22, 2021
132
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of J.B. Hunt Transport Services, Inc.
Opinion on Internal Control over Financial Reporting
We have audited J.B. Hunt Transport Services, Inc.’s internal control over financial reporting as of December
31, 2020, based on criteria established in Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, J.B.
Hunt Transport Services, Inc. (the Company) maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2020, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated balance sheets as of December 31, 2020 and 2019, the related
consolidated statements of earnings, stockholders’ equity and cash flows for each of the three years in the period
ended December 31, 2020, and the related notes and financial statement schedule listed in the Index at Item 15(a)
(collectively referred to as the “financial statements”) of the Company and our report dated February 22, 2021,
expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of
the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Rogers, Arkansas
February 22, 2021
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
133
J.B. HUNT TRANSPORT SERVICES, INC.
Consolidated Balance Sheets
December 31, 2020 and 2019
(in thousands, except share data)
Assets
Current assets:
Cash and cash equivalents
Trade accounts receivable, net
Other receivables
Inventories
Prepaid expenses
Total current assets
Property and equipment, at cost:
Revenue and service equipment
Land
Structures and improvements
Software, office equipment and furniture
Total property and equipment
Less accumulated depreciation
Net property and equipment
Goodwill
Other intangible assets, net
Other assets
Total assets
Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable
Claims accruals
Accrued payroll and payroll taxes
Other accrued expenses
Total current liabilities
Long-term debt
Other long-term liabilities
Deferred income taxes
Total liabilities
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $100 par value. 10 million shares authorized;
none outstanding
Common stock, $.01 par value. 1 billion shares authorized;
(167,099,432 shares issued at December 31, 2020 and 2019,
of which 105,653,644 and 106,212,908 shares were outstanding
at December 31, 2020 and 2019, respectively)
Additional paid-in capital
Retained earnings
Treasury stock, at cost (61,445,788 shares at December 31, 2020,
and 60,886,524 shares at December 31, 2019)
Total stockholders’ equity
Total liabilities and stockholders’ equity
See Notes to Consolidated Financial Statements.
$
$
$
2020
2019
$
313,302
1,124,403
185,849
23,804
194,759
1,842,117
4,991,662
62,145
307,869
547,034
5,908,710
2,219,816
3,688,894
105,367
106,755
185,215
35,000
1,011,829
230,331
21,106
183,033
1,481,299
4,837,747
58,692
302,184
442,183
5,640,806
2,019,940
3,620,866
96,326
106,506
165,857
5,928,348
$
5,470,854
$
587,510
276,056
130,943
90,294
1,084,803
1,305,424
245,961
692,022
3,328,210
602,601
279,590
68,220
85,355
1,035,766
1,295,740
173,241
699,078
3,203,825
—
—
1,671
1,671
408,244
4,984,739
374,049
4,592,938
(2,794,516)
(2,701,629)
2,600,138
$
5,928,348
$
2,267,029
5,470,854
134
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
J.B. HUNT TRANSPORT SERVICES, INC.
Consolidated Statements of Earnings
Years Ended December 31, 2020, 2019 and 2018
(in thousands, except per share amounts)
Operating revenues, excluding fuel surcharge revenues
$
8,879,653
$
8,122,600
$
7,557,648
2020
2019
2018
Fuel surcharge revenues
Total operating revenues
Operating expenses:
756,920
1,042,658
1,057,226
9,636,573
9,165,258
8,614,874
Rents and purchased transportation
4,954,123
4,528,812
4,434,540
Salaries, wages and employee benefits
2,347,716
2,167,851
1,926,213
Depreciation and amortization
527,375
499,145
435,893
Fuel and fuel taxes
357,483
463,195
459,011
Operating supplies and expenses
334,350
333,113
303,529
General and administrative expenses, net of asset
dispositions
Insurance and claims
Operating taxes and licenses
Communication and utilities
180,083
191,933
163,270
134,482
157,251
129,406
54,331
33,511
55,336
34,797
51,080
30,911
Total operating expenses
8,923,454
8,431,433
7,933,853
Operating income
Interest income
Interest expense
713,119
733,825
681,021
486
47,580
1,754
54,684
224
40,427
Earnings before income taxes
666,025
680,895
640,818
Income taxes
Net earnings
Weighted average basic shares outstanding
Basic earnings per share
Weighted average diluted shares outstanding
Diluted earnings per share
Dividends declared per common share
See Notes to Consolidated Financial Statements.
159,990
164,575
151,233
506,035
$
516,320
$
489,585
105,700
107,329
109,375
4.79
$
4.81
$
4.48
106,766
108,307
110,428
4.74
1.08
$
$
4.77
1.04
$
$
4.43
0.96
$
$
$
$
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
135
J.B. HUNT TRANSPORT SERVICES, INC.
Consolidated Statements of Stockholders’ Equity
Years Ended December 31, 2020, 2019 and 2018
(in thousands, except per share amounts)
Balances at December 31, 2017
$
1,671 $
310,811 $
3,803,844 $ (2,277,001) $
1,839,325
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Stockholders’
Equity
Comprehensive income:
Net earnings
Cash dividend declared and paid
($0.96 per share)
Purchase of treasury shares
Share-based compensation
Restricted share issuances, net of
stock repurchased for payroll taxes
and other
—
—
—
—
—
—
—
—
47,369
(17,723)
489,585
(104,994)
—
—
489,585
(104,994)
—
—
—
(150,338)
(150,338)
—
47,369
(1,840)
(19,563)
Balances at December 31, 2018
$
1,671 $
340,457 $
4,188,435 $ (2,429,179) $
2,101,384
Comprehensive income:
Net earnings
Cash dividend declared and paid
($1.04 per share)
Purchase of treasury shares
Share-based compensation
Restricted share issuances, net of
stock repurchased for payroll taxes
and other
—
—
—
—
—
—
—
—
53,324
(19,732)
516,320
(111,817)
—
—
516,320
(111,817)
—
—
—
(275,657)
(275,657)
—
53,324
3,207
(16,525)
Balances at December 31, 2019
$
1,671 $
374,049 $
4,592,938 $ (2,701,629) $
2,267,029
Comprehensive income:
Net earnings
Cash dividend declared and paid
($1.08 per share)
Purchase of treasury shares
Share-based compensation
Restricted share issuances, net of
stock repurchased for payroll taxes
and other
—
—
—
—
—
—
—
—
60,698
(26,503)
506,035
(114,234)
—
—
506,035
(114,234)
—
—
—
(92,548)
(92,548)
—
60,698
(339)
(26,842)
Balances at December 31, 2020
$
1,671 $
408,244 $
4,984,739 $ (2,794,516) $
2,600,138
See Notes to Consolidated Financial Statements.
136
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
J.B. HUNT TRANSPORT SERVICES, INC.
Consolidated Statements of Cash Flows
Years Ended December 31, 2020, 2019 and 2018
(in thousands)
Cash flows from operating activities:
Net earnings
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization
Noncash lease expense
Share-based compensation
Loss on sale of revenue equipment and other
Deferred income taxes
Changes in operating assets and liabilities:
Trade accounts receivable
Income taxes receivable or payable
Other current assets
Trade accounts payable
Claims accruals
Accrued payroll and other accrued expenses
Net cash provided by operating activities
Cash flows from investing activities:
Additions to property and equipment
Proceeds from sale of equipment
Business acquisition
Change in other assets
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from long-term debt
Payments on long-term debt
Proceeds from revolving lines of credit and other
Payments on revolving lines of credit and other
Purchase of treasury stock
Stock repurchased for payroll taxes and other
Dividends paid
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest
Income taxes
Noncash investing activities
Accruals for equipment received
See Notes to Consolidated Financial Statements.
2020
2019
2018
$
506,035
$
516,320
$
489,585
527,375
499,145
435,893
45,985
60,698
4,389
(7,056)
(109,758)
57,851
(18,038)
(5,482)
(9,072)
69,932
39,517
53,324
13,057
55,617
50,310
41,447
(4,975)
(85,327)
(20,727)
(59,361)
—
47,369
12,107
101,591
(130,931)
(41,071)
(6,133)
98,037
21,580
59,814
1,122,859
1,098,347
1,087,841
(738,545)
137,776
(12,136)
(52)
(854,115)
165,918
(115,654)
(111)
(612,957)
(803,962)
—
—
222,124
(220,100)
(92,548)
(26,842)
(114,234)
(231,600)
278,302
35,000
700,000
(250,000)
1,591,014
(1,904,000)
(275,657)
(16,525)
(111,817)
(266,985)
27,400
7,600
313,302
$
35,000
$
(995,650)
110,165
—
(1,288)
(886,773)
—
—
3,204,715
(3,137,900)
(150,338)
(19,563)
(104,994)
(208,080)
(7,012)
14,612
7,600
48,351
95,454
12,533
$
$
$
46,721
71,681
25,505
$
$
$
39,901
83,822
49,390
$
$
$
$
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
137
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Business
J.B. Hunt Transport Services, Inc. is one of the largest surface transportation and delivery service companies in
North America. We operate five distinct, but complementary, business segments and provide a wide range of
general and specifically tailored freight and logistics services to our customers. We generate revenues from the
actual movement of freight from shippers to consignees, customized labor and delivery services, and serving
as a logistics provider by offering or arranging for others to provide the transportation service. Unless otherwise
indicated by the context, “we,” “us,” “our” and “JBHT” refer to J.B. Hunt Transport Services, Inc. and its
consolidated subsidiaries.
2. Summary of Significant Accounting Policies
Basis of Consolidation
Our Consolidated Financial Statements include all of our wholly owned subsidiaries. Intercompany balances and
transactions have been eliminated in consolidation. J.B. Hunt Transport Services, Inc. is a parent-level holding
company with no significant assets or operations. J.B. Hunt Transport, Inc. is a wholly owned subsidiary of J.B.
Hunt Transport Services, Inc. and is the primary operating subsidiary. All other subsidiaries of J.B. Hunt Transport
Services, Inc. are insignificant.
Use of Estimates
The Consolidated Financial Statements contained in this report have been prepared in conformity with accounting
principles generally accepted in the United States of America. The preparation of these statements requires us to
make estimates and assumptions that directly affect the amounts reported in such statements and accompanying
notes. We evaluate these estimates on an ongoing basis utilizing historical experience, consulting with experts and
using other methods we consider reasonable in the particular circumstances. Nevertheless, our actual results may
differ significantly from our estimates.
We believe certain accounting policies and estimates are of more significance in our financial statement preparation
process than others. We believe the most critical accounting policies and estimates include the economic useful
lives and salvage values of our assets, provisions for uncollectible accounts receivable, estimates of exposures
under our insurance and claims policies, and estimates for taxes. To the extent that actual, final outcomes are
different from our estimates, or that additional facts and circumstances cause us to revise our estimates, our
earnings during that accounting period will be affected.
The novel coronavirus (COVID-19) pandemic has created and may continue to create significant uncertainty in
macro-economic conditions, which may cause a global economic recession, business slowdowns or shutdowns,
depressed demand for our transportation and logistics businesses, and adversely impact our results of operations.
We expect uncertainties around our key accounting estimates to continue to evolve depending on the duration and
degree of impact associated with the COVID-19 pandemic. Our estimates may change, as new events occur and
additional information is obtained, which are recognized or disclosed in our Consolidated Financial Statements as
soon as they become known and may have a material impact on our financial statements.
Cash and Cash Equivalents
Cash in excess of current operating requirements is invested in short-term, highly liquid investments. We consider
all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
Accounts Receivable and Allowance
Our trade accounts receivable includes accounts receivable reduced by an allowance for uncollectible accounts.
Receivables are recorded at amounts billed to customers when loads are delivered or services are performed.
The allowance for uncollectible accounts is calculated over the life of the underlying receivable and is based on
historical experience; any known trends or uncertainties related to customer billing and account collectability;
current economic conditions; and reasonable and supportable economic forecasts, each applied to segregated
risk pools based on the business segment that generated the receivable. The adequacy of our allowance is
138
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
reviewed quarterly. Balances are charged against the allowance when it is determined the receivable will not
be recovered. The allowance for uncollectible accounts for our trade accounts receivable was $18.4 million
at December 31, 2020 and $13.3 million at December 31, 2019. During 2020, the allowance for uncollectible
accounts increased by $5.6 million and was reduced $0.5 million by write-offs.
Inventory
Our inventories consist primarily of revenue equipment parts, tires, supplies, and fuel and are valued using the
lower of average cost or market.
Investments in Marketable Equity Securities
Our investments consist of marketable equity securities stated at fair value and are designated as either trading
securities or available-for-sale securities at the time of purchase based upon the intended holding period. Changes
in the fair value of our trading securities are recognized currently in “general and administrative expenses, net of
asset dispositions” in our Consolidated Statements of Earnings. Changes in the fair value of our available-for-sale
securities are recognized in “accumulated other comprehensive income” on our Consolidated Balance Sheets,
unless we determine that an unrealized loss is other-than-temporary. If we determine that an unrealized loss is
other-than-temporary, we recognize the loss in earnings. Cost basis is determined using average cost.
At December 31, 2020 and 2019, we had no available-for-sale securities. See Note 8, Employee Benefit Plans, for
a discussion of our trading securities.
Property and Equipment
Depreciation of property and equipment is calculated on the straight-line method over the estimated useful lives of
4 to 10 years for tractors, 7 to 20 years for trailing equipment, 10 to 40 years for structures and improvements, 3
to 7 years for computer hardware and software, and 3 to 10 years for furniture and other office equipment. Salvage
values are typically 10% to 30% of original cost for tractors and trailing equipment and reflect any agreements with
tractor suppliers for residual or trade-in values for certain new equipment. We periodically review these useful lives
and salvage values. We capitalize tires placed in service on new revenue equipment as a part of the equipment cost.
Replacement tires and costs for recapping tires are expensed at the time the tires are placed in service. Gains and
losses on the sale or other disposition of equipment are recognized at the time of the disposition and are classified in
general and administrative expenses, net of asset dispositions in the Consolidated Statements of Earnings.
We continually evaluate the carrying value of our assets for events or changes in circumstances that indicate the
carrying value may not be recoverable. Recoverability of assets to be held and used is measured by comparing
the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the
carrying amount or fair value less cost to sell.
Leases
We recognize a right-of-use asset and a lease liability on the effective date of a lease agreement. Right-of-
use assets represent our right to use an underlying asset over the lease term and lease liabilities represent the
obligation to make lease payments resulting from the lease agreement. We initially record these assets and
liabilities based on the present value of lease payments over the lease term calculated using our incremental
borrowing rate applicable to the leased asset or the implicit rate within the agreement if it is readily determinable.
Lease agreements with lease and non-lease components are combined as a single lease component. Right-of-use
assets additionally include net prepaid lease expenses. Options to extend or terminate an agreement are included
in the lease term when it becomes reasonably certain the option will be exercised. Leases with an initial term of 12
months or less, short-term leases, are not recorded on the balance sheet. Lease expense for short-term and long-
term operating leases is recognized on a straight-line basis over the lease term, while variable lease payments are
expensed as incurred.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
139
Revenue Recognition
We record revenues on the gross basis at amounts charged to our customers because we control and are
primarily responsible for the fulfillment of promised services. Accordingly, we serve as a principal in the transaction.
We invoice our customers, and we maintain discretion over pricing. Additionally, we are responsible for selection of
third-party transportation providers to the extent used to satisfy customer freight requirements.
Our revenue is earned through the service offerings of our five reportable business segments. See Note 14,
Business Segments, for revenue reported by segment. All revenue transactions between reporting segments are
eliminated in consolidation.
Intermodal (JBI) - JBI segment includes freight that is transported by rail over at least some portion of the
movement and also includes certain repositioning truck freight moved by JBI equipment or third-party carriers,
when such highway movement is intended to direct JBI equipment back toward intermodal operations. JBI
performs these services primarily through contractual rate quotes with customers that are held static for a period
of time, usually one year.
Dedicated Contract Services® (DCS) - DCS segment business includes company-owned and customer-owned,
DCS-operated revenue equipment and employee drivers assigned to a specific customer, traffic lane, or service.
DCS operations usually include formal, written longer-term agreements or contracts that govern services
performed and applicable rates.
Integrated Capacity Solutions™ (ICS) - ICS provides non-asset and asset-light transportation solutions to
customers through relationships with third-party carriers and integration with company-owned equipment. ICS
services include flatbed, refrigerated, and less-than-truckload (LTL), as well as a variety of dry-van and intermodal
solutions. ICS performs these services through customer contractual rate quotes as well as spot quotes that are
one-time rate quotes issued for a single transaction or group of transactions.
Final Mile Services® (FMS) - FMS provides final-mile delivery services to customers through a nationwide network
of cross-dock and other delivery system network locations. FMS provides both asset and non-asset big and bulky
delivery and installation services, as well as fulfillment and retail-pooling distributions services. FMS operations
usually include formal, written agreements or contracts that govern services performed and applicable rates.
Truckload (JBT) - JBT business includes full-load, dry-van freight that is typically transported utilizing company-
owned or company-controlled revenue equipment. This freight is typically transported over roads and highways
and does not move by rail. JBT utilizes both contractual rate quotes and spot rate quotes with customers.
We recognize revenue from customer contracts based on relative transit time in each reporting period and as other
performance obligations are provided, with related expenses recognized as incurred. Accordingly, a portion of the
total revenue that will be billed to the customer is recognized in each reporting period based on the percentage of
the freight pickup and delivery performance obligation that has been completed at the end of the reporting period.
Derivative Instruments
We periodically utilize derivative instruments to manage exposure to changes in interest rates. At inception of
a derivative contract, we document relationships between derivative instruments and hedged items, as well as
our risk-management objective and strategy for undertaking various derivative transactions, and assess hedge
effectiveness. If it is determined that a derivative is not highly effective as a hedge, or if a derivative ceases to be a
highly effective hedge, we discontinue hedge accounting prospectively.
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J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
Income Taxes
Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment
date. We record valuation allowances for deferred tax assets to the extent we believe these assets are not more
likely than not to be realized through the reversal of existing taxable temporary differences, projected future taxable
income, or tax-planning strategies. We record a liability for unrecognized tax benefits when the benefits of tax
positions taken on a tax return are not more likely than not to be sustained upon audit. Interest and penalties
related to uncertain tax positions are classified as interest expense in the Consolidated Statements of Earnings.
Earnings Per Share
We compute basic earnings per share by dividing net earnings available to common stockholders by the actual
weighted average number of common shares outstanding for the reporting period. Diluted earnings per share
reflect the potential dilution that could occur if holders of unvested restricted and performance share units
converted their holdings into common stock. Outstanding unvested restricted share units represent the dilutive
effects on weighted average shares. A reconciliation of the number of shares used in computing basic and diluted
earnings per share is shown below (in thousands):
Years ended December 31,
2020
2019
2018
Weighted average shares outstanding – basic
105,700
107,329
109,375
Effect of common stock equivalents
1,066
978
1,053
Weighted average shares outstanding – diluted
106,766
108,307
110,428
Concentrations of Credit Risk
Financial instruments, which potentially subject us to concentrations of credit risk, include trade receivables.
For each of the years ended December 31, 2020, 2019, and 2018, our top 10 customers, based on revenue,
accounted for approximately 37%, 32%, and 30% of our total revenue. Our top 10 customers, based on revenue,
accounted for approximately 37% and 34% of our total trade accounts receivable at December 31, 2020 and
2019, respectively. One customer accounted for approximately 10%, 8%, and 6% of our total revenue for the
years ended December 31, 2020, 2019, and 2018, respectively. With the exception of FMS and JBT, each of our
three remaining business segments conducts business with this customer.
Share-based Compensation
We have a share-based compensation plan covering certain employees, including officers and directors. We
account for share-based compensation utilizing the fair value recognition provisions of current accounting
standards for share-based payments. We currently utilize restricted share units and performance share units.
Issuances of our stock upon restricted share unit and performance share unit vesting are made from treasury
stock. Our restricted share unit and performance share unit awards may include both graded-vesting and cliff-
vesting awards and therefore vest in increments during the requisite service period or at the end of the requisite
service period, as appropriate for each type of vesting. We recognize compensation expense on a straight-line
basis over the requisite service periods within each award. The benefit for the forfeiture of an award is recorded in
the period in which it occurs.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
141
Claims Accruals
We purchase insurance coverage for a portion of expenses related to employee injuries, vehicular collisions,
accidents, and cargo damage. We are substantially self-insured for loss of and damage to our owned and leased
revenue equipment. Certain insurance arrangements include a level of self-insurance (deductible) coverage
applicable to each claim. We have umbrella policies to limit our exposure to catastrophic claim costs.
The amounts of self-insurance change from time to time based on measurement dates, policy expiration dates,
and claim type. For 2018, we were self-insured for $500,000 per occurrence for personal injury and property
damage and self-insured for $100,000 per workers’ compensation claim. For 2019 and 2020, we were self-
insured for $500,000 per occurrence for personal injury and property damage and fully insured for workers’
compensation claims for nearly all states. We have policies in place for 2021 with substantially the same terms as
our 2020 policies for personal injury, property damage, workers’ compensation, and cargo loss or damage.
Our claims accrual policy for all self-insured claims is to recognize a liability at the time of the incident based on
our analysis of the nature and severity of the claims and analyses provided by third-party claims administrators, as
well as legal, economic, and regulatory factors. Our safety and claims personnel work directly with representatives
from the insurance companies to continually update the estimated cost of each claim. The ultimate cost of a claim
develops over time as additional information regarding the nature, timing, and extent of damages claimed becomes
available. Accordingly, we use an actuarial method to develop current claim information to derive an estimate of
our ultimate claim liability. This process involves the use of loss-development factors based on our historical claims
experience and includes a contractual premium adjustment factor, if applicable. In doing so, the recorded liability
considers future claims growth and provides a reserve for incurred-but-not-reported claims. We do not discount
our estimated losses. At December 31, 2020 and 2019, we had an accrual of approximately $257 million and
$263 million, respectively, for estimated claims, which are recorded in claims accruals in our Consolidated Balance
Sheets. In addition, we record receivables for amounts expected to be reimbursed for payments made in excess
of self-insurance levels on covered claims. At December 31, 2020 and 2019, we have recorded $304 million and
$281 million, respectively, of expected reimbursement for covered excess claims, other insurance deposits, and
prepaid insurance premiums. Of these total asset balances, $167 million and $157 million have been included in
other receivables, with the remaining balance included in prepaid expenses in our Consolidated Balance Sheets at
December 31, 2020 and 2019, respectively.
Business Combinations
The purchase price of our acquisitions is the aggregate of the consideration transferred, including liabilities
incurred, measured at the acquisition date. We allocate the purchase price of acquisitions to tangible and
intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. This
assignment of fair values to the assets acquired and liabilities assumed requires the use of estimates, judgments,
inputs, and assumptions. The excess of the purchase price over those estimated fair values is recorded as
goodwill. Changes to the acquisition date provisional fair values prior to the end of the measurement period are
recorded as adjustments to the associated goodwill. Acquisition-related expenses and restructuring costs, if any,
are expensed as incurred.
Goodwill and Other Intangible Assets
Goodwill represents the excess of cost over the fair value of net identifiable tangible and intangible assets acquired
in a business combination. Goodwill and intangible assets with indefinite lives are not amortized. Goodwill is
reviewed, using a market based approach, for potential impairment as of October 1st on an annual basis or,
more frequently, if circumstances indicate a potential impairment is present. Intangible assets with finite lives are
amortized on the straight-line method over the estimated useful lives of 2 to 15 years.
Accounting Pronouncements Adopted in 2020
In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)
2016-13, Financial Instruments – Credit Losses, which replaced the existing incurred loss methodology used for
establishing a provision against financial assets, including accounts receivable, with a forward-looking expected
loss methodology for accounts receivable, loans and other financial instruments. We adopted the new standard on
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J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
January 1, 2020, using the cumulative-effect method. The adoption of the new guidance did not have a material
impact on our financial statements.
3. Financing Arrangements
Outstanding borrowings, net of unamortized discount, unamortized debt issuance cost, and fair value swap, under
our current financing arrangements consist of the following (in millions):
Senior notes
December 31,
2020
2019
1,305.4
1,295.7
Aggregate maturities of long-term debt subsequent to December 31, 2020, are as follows: $361.3 million in 2022,
$249.1 in 2024, and $695.0 million thereafter.
Senior Revolving Line of Credit
At December 31, 2020, we were authorized to borrow up to $750 million under a senior revolving line of credit, which
is supported by a credit agreement with a group of banks and expires in September 2023. This senior credit facility
allows us to request an increase in the total commitment by up to $250 million and to request a one-year extension
of the maturity date. The applicable interest rate under this agreement is based on either the Prime Rate, the Federal
Funds Rate or LIBOR, depending upon the specific type of borrowing, plus an applicable margin based on our credit
rating and other fees. At December 31, 2020, we had no outstanding borrowings under this agreement.
Senior Notes
Our senior notes consist of three separate issuances. The first is $250 million of 3.85% senior notes due March
2024, which was issued in March 2014. Interest payments under this note are due semiannually in March and
September of each year, beginning September 2014. The second is $350 million of 3.30% senior notes due
August 2022, issued in August 2015. Interest payments under this note are due semiannually in February and
August of each year, beginning February 2016. The third is $700 million of 3.875% senior notes due March 2026,
issued in March 2019. Interest payments under this note are due semiannually in March and September of each
year, beginning September 2019. All three senior notes were issued by J.B. Hunt Transport Services, Inc., a
parent-level holding company with no significant assets or operations. The notes are guaranteed on a full and
unconditional basis by a wholly-owned 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 February 2014 and January 2019. All 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. See Note 4, Derivative Financial Instruments, for terms of an interest rate swap
entered into on the $350 million of 3.30% senior notes due August 2022.
Our financing arrangements require us to maintain certain covenants and financial ratios. We were in compliance
with all covenants and financial ratios at December 31, 2020.
4. Derivative Financial Instruments
We periodically utilize derivative instruments for hedging and non-trading purposes to manage exposure to
changes in interest rates and to maintain an appropriate mix of fixed and variable-rate debt. At inception of a
derivative contract, we document relationships between derivative instruments and hedged items, as well as
our risk-management objective and strategy for undertaking various derivative transactions, and assess hedge
effectiveness. If it is determined that a derivative is not highly effective as a hedge, or if a derivative ceases to be a
highly effective hedge, we discontinue hedge accounting prospectively.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
143
We entered into a receive fixed-rate and pay variable-rate interest rate swap agreement simultaneously with the
issuance of our $350 million of 3.30% senior notes due August 2022, to effectively convert this fixed-rate debt to
variable-rate. The notional amount of this interest rate swap agreement equals that of the corresponding fixed-rate
debt. The applicable interest rate under this agreement is based on LIBOR plus an established margin, resulting
in an interest rate of 1.58% for our $350 million of 3.30% senior notes at December 31, 2020. The swap expires
when the corresponding senior notes are due. The fair value of this swap is recorded in other assets in our
Consolidated Balance Sheet at December 31, 2020. See Note 9, Fair Value Measurements, for disclosure of fair
value. This derivative meets the required criteria to be designated as a fair value hedge, and as the specific terms
and notional amount of this derivative instrument match those of the fixed-rate debt being hedged, this derivative
instrument is assumed to perfectly hedge the related debt against changes in fair value due to changes in the
benchmark interest rate. Accordingly, any change in the fair value of this interest rate swap recorded in earnings is
offset by a corresponding change in the fair value of the related debt.
5. Capital Stock
We have one class of preferred stock and one class of common stock. We had no outstanding shares of preferred
stock at December 31, 2020 or 2019. Holders of shares of common stock are entitled to receive dividends when
and if declared by the Board of Directors and are entitled to one vote per share on all matters submitted to a
vote of the stockholders. On January 21, 2021, we announced an increase in our quarterly cash dividend from
$0.27 to $0.28 per share, which was paid February 19, 2021, to stockholders of record on February 5, 2021. At
December 31, 2020, we had 1.7 million shares of common stock to be issued upon the vesting of equity awards
and 5.1 million shares reserved for future issuance pursuant to share-based payment plans. During calendar year
2020, we purchased approximately 942,000 shares, or $92.5 million, of our common stock in accordance with
plans authorized by our Board. At December 31, 2020, we had $503 million available under an authorized plan to
purchase our common stock.
6. Share-based Compensation
We maintain a Management Incentive Plan (the “Plan”) that provides various share-based financial methods to
compensate our key employees with shares of our common stock or common stock equivalents. Under the Plan,
as amended, we have, from time to time, utilized restricted share units, performance share units, restricted shares,
and non-statutory stock options to compensate our employees and directors. We currently are utilizing restricted
and performance share units.
Our restricted share units have various vesting schedules generally ranging from 3 to 10 years when awarded.
These restricted share units do not contain rights to vote or receive dividends until the vesting date. Unvested
restricted share units are forfeited if the employee terminates for any reason other than death, disability, or special
circumstances as determined by the Compensation Committee. Restricted share units are valued based on the fair
value of the award on the grant date, adjusted for dividend estimates based on grant date dividend rates.
Our performance share units vest based on the passage of time (generally 2 to 10 years) and achievement of
performance criteria. Performance share units do not contain rights to vote or receive dividends until the vesting
date. Unvested performance share units are forfeited if the employee terminates for any reason other than death,
disability, or special circumstances as determined by the Compensation Committee. Performance shares are
valued based on the fair value of the award on the grant date, adjusted for dividend estimates based on grant date
dividend rates.
An employee is allowed to surrender shares of common stock received upon vesting to satisfy tax withholding
obligations incident to the vesting of restricted share units and performance share units.
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J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
We account for our restricted share units and performance share units in accordance with current accounting
standards for share-based payments. These standards require that the cost of all share-based payments to
employees be recognized in our Consolidated Financial Statements based on the grant date fair value of those
awards. This cost is recognized over the period for which an employee is required to provide service in exchange
for the award, subject to the attainment of performance metrics established for performance share units. The
quantity of performance share units for which it is probable that the performance conditions will be achieved is
estimated each reporting period, with any necessary adjustments recorded as a cumulative cost adjustment in the
current period. Share-based compensation expense is recorded in salaries, wages, and employee benefits in our
Consolidated Statements of Earnings, along with other compensation expenses to employees. The following table
summarizes the components of our share-based compensation program expense (in thousands):
Years ended December 31,
2020
2019
2018
Restricted share units
Pretax compensation expense
Tax benefit
Restricted share units, net of tax
Performance share units
Pretax compensation expense
Tax benefit
$
47,044
$
38,632
11,300
9,337
$
35,744
$
29,295
$
13,654
$
14,692
3,280
3,551
Performance share awards, net of tax
$
10,374
$
11,141
A summary of our restricted share units and performance share units is as follows:
$
$
$
$
32,797
7,740
25,057
14,572
3,439
11,133
Restricted Share Units
Unvested at December 31, 2017
Granted
Vested
Forfeited
Unvested at December 31, 2018
Granted
Vested
Forfeited
Unvested at December 31, 2019
Granted
Vested
Forfeited
Unvested at December 31, 2020
Number of
Shares
1,242,528
370,669
(337,512)
(29,850)
1,245,835
440,255
(341,218)
(31,454)
1,313,418
511,859
(457,437)
(22,694)
1,345,146
Weighted Average
Grant Date Fair Value
$ 74.71
119.82
79.02
83.69
$ 86.80
99.60
85.61
93.91
$ 91.22
110.49
93.78
102.03
$ 97.22
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
145
Performance Share Units
Unvested at December 31, 2017
Granted
Vested
Forfeited
Unvested at December 31, 2018
Granted
Vested
Forfeited
Unvested at December 31, 2019
Granted
Vested
Forfeited
Unvested at December 31, 2020
Number of
Shares
Weighted Average
Grant Date Fair Value
328,187
150,763
(118,438)
—
360,512
142,156
(127,140)
—
375,528
202,023
(145,038)
(98,588)
333,925
$ 71.68
122.57
69.29
—
$ 93.74
98.58
93.46
—
$ 95.67
112.87
89.75
110.19
$ 109.57
At December 31, 2020, we had $64.5 million and $17.1 million of total unrecognized compensation expense
related to restricted share units and performance share units, respectively, that is expected to be recognized on
a straight-line basis over the remaining weighted average vesting period of approximately 3.0 years for restricted
share units and 2.9 years for performance share units.
The aggregate intrinsic value of restricted and performance share units vested during the years ended December
31, 2020, 2019, and 2018, was $73.0 million, $47.0 million, and $55.1 million, respectively. The aggregate intrinsic
value of unvested restricted and performance share units was $229.4 million at December 31, 2020. The total fair
value of shares vested for restricted and performance share units during the years ended December 31, 2020,
2019, and 2018, was $56.3 million, $41.1 million, and $35.0 million, respectively.
7. Income Taxes
Income tax expense attributable to earnings before income taxes consists of (in thousands):
Years ended December 31,
2020
2019
2018
Current:
Federal
State and local
Deferred:
Federal
State and local
$
138,952
$
87,977
$
28,094
167,046
(2,392)
(4,664)
(7,056)
20,981
108,958
51,229
4,388
55,617
Total tax expense/(benefit)
$
159,990
$
164,575
$
22,904
26,738
49,642
97,670
3,921
101,591
151,233
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J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
Income tax expense attributable to earnings before income taxes differed from the amounts computed using the
statutory federal income tax rate of 21% as follows (in thousands):
Income tax at federal statutory rate
$ 139,865
$ 142,988
$ 134,572
Years ended December 31,
2020
2019
2018
State tax, net of federal effect
Federal tax reform
Benefit of stock compensation
199/R&D credit
Nondeductible meals and entertainment
Change in effective state tax rate, net of federal benefit
Other, net
Total tax expense
20,071
19,293
24,627
—
—
(3,503)
(1,238)
—
1,344
98
2,115
(200)
1,688
1,562
482
(3,219)
(4,919)
1,000
1,071
(1,469)
(430)
$ 159,990
$ 164,575
$ 151,233
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
147
Income taxes receivable was $3.1 million and $60.9 million at December 31, 2020 and 2019, respectively. These
amounts have been included in other receivables in our Consolidated Balance Sheets. The tax effects of temporary
differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December
31, 2020 and 2019, are presented below (in thousands):
Deferred tax assets:
Insurance accruals
Allowance for doubtful accounts
Compensation accrual
CARES Act payroll tax deferral
Deferred compensation accrual
Federal benefit of state uncertain tax positions
Lease liabilities
State NOL carry-forward
Other
Total gross deferred tax assets
Valuation allowance
Total deferred tax assets, net of valuation allowance
Deferred tax liabilities:
December 31,
2020
2019
$
24,304
$
27,180
9,270
10,809
19,931
25,702
10,312
32,625
8,460
4,237
145,650
(8,460)
137,190
8,052
4,925
—
24,521
9,867
30,251
7,495
6,357
118,648
(7,495)
111,153
Plant and equipment, principally due to differences in depreciation
748,883
729,016
Prepaid permits and insurance, principally due to expensing for income tax
purposes
Lease right-of-use assets
Other
Total gross deferred tax liabilities
Net deferred tax liability
42,126
32,952
5,251
39,285
30,014
11,916
829,212
810,231
$
692,022
$
699,078
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J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
Guidance on accounting for uncertainty in income taxes prescribes recognition and measurement criteria and
requires that we assess whether the benefits of our tax positions taken are more likely than not of being sustained
under tax audits. We have made adjustments to the balance of unrecognized tax benefits, a component of other
long-term liabilities on our Consolidated Balance Sheets, as follows (in millions):
Beginning balance
Additions based on tax positions related to the current year
Additions/(reductions) based on tax positions taken in prior years
Reductions due to settlements
Reductions due to lapse of applicable statute of limitations
Ending balance
December 31,
2020
2019
2018
$ 50.6
$ 52.2
$ 45.3
9.8
13.9
(1.0)
(7.2)
11.0
(6.5)
—
(6.1)
13.9
(2.4)
—
(4.6)
$ 66.1
$ 50.6
$ 52.2
At December 31, 2020 and 2019, we had a total of $66.1 million and $50.6 million, respectively, in gross
unrecognized tax benefits. Of these amounts, $57.1 million and $41.8 million represent the amount of
unrecognized tax benefits that, if recognized, would impact our effective tax rate in 2020 and 2019, respectively.
Interest and penalties related to income taxes are classified as interest expense in our Consolidated Statements of
Earnings. The amount of accrued interest and penalties recognized during the years ended December 31, 2020,
2019, and 2018, was $2.9 million, $3.2 million, and $2.4 million, respectively. Future changes to unrecognized
tax benefits will be recognized as income tax expense and interest expense, as appropriate. The total amount of
accrued interest and penalties for such unrecognized tax benefits at December 31, 2020 and 2019, was $5.6
million and $4.8 million, respectively.
Tax years 2017 and forward remain subject to examination by federal tax jurisdictions, while tax years 2010 and
forward remain open for state jurisdictions.
8. Employee Benefit Plans
We maintain a defined contribution employee retirement plan, which includes a 401(k) option, under which all
employees are eligible to participate. We match a specified percentage of employee contributions, subject to
certain limitations. For the years ended December 31, 2020, 2019, and 2018, our matching contributions to the
plan were $24.5 million, $20.8 million, and $19.7 million, respectively.
We have a nonqualified deferred compensation plan that allows eligible employees to defer a portion of their
compensation. The compensation deferred under this plan is credited with earnings or losses on investments
elected by plan participants. Each participant is fully vested in all deferred compensation and earnings; however,
these amounts are subject to general creditor claims until actually distributed to the employee. A participant may
elect to receive deferred amounts in one payment or in quarterly installments payable over a period of 2 to 25
years upon reaching age 55, having 15 years of service, or becoming disabled. Our total liability under this plan
was $23.1 million as of December 31, 2020, and $20.4 million as of December 31, 2019. These amounts are
included in other long-term liabilities in our Consolidated Balance Sheets. Participant withholdings are held by a
trustee and invested in equity securities as directed by participants. These investments are classified as trading
securities and recorded at fair value. Realized and unrealized gains and losses are recognized currently in earnings.
The investments are included in other assets in our Consolidated Balance Sheets and totaled $23.1 million as of
December 31, 2020, and $20.4 million as of December 31, 2019.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
149
9. Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Recurring Basis
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). The following are assets and liabilities
measured at fair value on a recurring basis (in millions):
Trading investments
Interest rate swap
Senior notes, net of unamortized discount and debt
issuance costs
Asset/(Liability)
Balance
December 31,
2020
23.1
12.5
(361.3)
$
$
$
2019
Input Level
$
$
$
20.4
4.8
(353.1)
1
2
2
The fair value of trading investments has been measured using the market approach (Level 1) and reflect quoted
market prices. The fair values of interest rate swap and corresponding senior notes have been measured using the
income approach (Level 2), which include relevant interest rate curve inputs. Trading investments and the interest
rate swap are classified in other assets in our Consolidated Balance Sheets. The senior notes are classified in long-
term debt in our Consolidated Balance Sheets.
Financial Instruments
The carrying amount of our senior revolving line of credit and remaining senior notes not measured at fair value
on a recurring basis was $944.1 million and $942.6 million at December 31, 2020 and 2019, 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 $1.09 billion and $1.03 billion at December 31, 2020 and 2019,
respectively.
The carrying amounts of all other instruments at December 31, 2020 and 2019, approximate their fair value due to
the short maturity of these instruments.
10. Commitments and Contingencies
At December 31, 2020, we had outstanding commitments of approximately $1.12 billion, net of proceeds from
sales or trade-ins during 2021 and 2022, which is primarily related to the acquisition of tractors, containers,
chassis, and other trailing equipment.
During 2020, we issued financial standby letters of credit as a guaranty of our performance under certain operating
agreements and self-insurance arrangements. If we default on our commitments under the agreements or other
arrangements, we are required to perform under these guaranties. The undiscounted maximum amount of our
obligation to make future payments in the event of defaults is approximately $3.8 million as of December 31, 2020.
In January 2017 we exercised our right to utilize the arbitration process to review the division of revenue collected
beginning May 1, 2016, as well as to clarify other issues, under our Joint Service Agreement with BNSF Railway
Company (BNSF). BNSF requested the same. In October 2019 the arbitrators issued a Final Award and we
recorded pretax charges in the third quarter 2019 of $26.8 million related to certain charges claimed by BNSF
and $17.4 million for legal fees, cost and interest claimed by BNSF, for a total of $44.2 million. On January 17,
2020, we filed under seal in the United States District Court for the Western District of Arkansas (the Arkansas
Federal Court) a motion to confirm and enforce the Final Award, seeking the Court’s specific enforcement of
certain confidential contractual rights the arbitrators decided in our favor. BNSF moved to confirm the Final Award
in the United States District Court for the District of Columbia, but that requested relief was ultimately denied and
150
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
dismissed as moot. During the first quarter 2020, we recorded an $8.2 million pretax charge resulting from an
adjusted calculation of the revenue divisions owed to BNSF under the Final Award. On July 21, 2020, the Arkansas
Federal Court granted our motion in part, entering a judgment confirming the arbitration awards. In a sealed
opinion, the Court denied our request for additional enforcement relief but did not foreclose our right to pursue
post-confirmation enforcement in court or in arbitration if warranted. We have filed an appeal with the United
States Court of Appeals for the Eighth Circuit seeking review of the Arkansas Federal Court’s denial.
As the result of state use tax audits, we have been assessed amounts owed for which we are vigorously appealing.
If our appeals fail, we could be forced to settle these assessments for a material amount.
In June 2019, we recorded pre-tax charges of $20 million for the settlement of a casualty claim within our DCS
segment.
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.
11. Leases
As of December 31, 2020, we had various obligations remaining under operating lease arrangements related
primarily to the rental of maintenance and support facilities, cross-dock and delivery system facilities, office space,
parking yards and equipment. Many of these leases include one or more options, at our discretion, to renew and
extend the agreement beyond the current lease expiration date or to terminate the agreement prior to the lease
expiration date. These options are included in the calculation of our operating lease right-of-use asset and liability
when it becomes reasonably certain the option will be exercised. Our lease obligations typically do not include
options to purchase the leased property, nor do they contain residual value guarantees or material restrictive
covenants. Operating leases with an initial term of more than 12 months are included in our Consolidated Balance
Sheets as discounted liabilities and corresponding right-of-use assets consisting of the following (in millions):
Right-of-use assets
Lease liabilities, current
Lease liabilities, long-term
Asset/(Liability)
Balance
December 31
2020
$ 136.8
$ (48.3)
$ (87.2)
2019
$ 125.5
$ (44.4)
$ (80.1)
Right-of-use assets are classified in other assets in our Consolidated Balance Sheets. Operating lease liability,
current is classified in other accrued expenses, while operating lease liability, long-term is classified in other long-
term liabilities in our Consolidated Balance Sheets.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
151
As of December 31, 2020, the weighted-average remaining lease term for our outstanding operating lease
obligations was 4.3 years and the weighted-average discount rate was 3.05%. Future minimum lease payments
under these operating leases as of December 31, 2020, are as follows (in millions):
Year one
Year two
Year three
Year four
Year five
Thereafter
Total lease payments
Less interest
$
49.1
37.6
23.9
12.4
6.4
15.5
144.9
(9.4)
Present value of lease liabilities
$
135.5
During the years ended December 31, 2020 and 2019, cash paid for amounts included in the measurement of
operating lease liabilities was $49.7 million and $44.5 million, while $50.2 million and $43.5 million of operating
lease expense was recognized on a straight-line basis, respectively. Operating lease expense is recorded in general
and administrative expenses, net of asset dispositions in our Consolidated Statements of Earnings. During the
years ended December 31, 2020 and 2019, a total of $57.0 million and $61.6 million of right-of-use assets were
obtained in exchange for new operating lease liabilities, of which, $4.4 million and $19.1 million were obtained
through business combinations.
152
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
12. Acquisition
On November 20, 2020, we entered into an asset purchase agreement to acquire substantially all of the assets
and assume certain specified liabilities of Mass Movement, Inc. (Mass Movement), subject to customary closing
conditions. The closing of the transaction was effective on November 30, 2020, with a purchase price of $25.5
million. Of this total purchase price, $13.5 million was deferred and is subject to an agreed-upon future earn-
out calculation based on established cumulative earnings before interest, taxes, depreciation, and amortization
(EBITDA) targets reported for the acquired operations in 2021 through 2023. This deferred portion of the purchase
price is classified in trade accounts payable and other long-term liabilities in our Consolidated Balance Sheets.
Total consideration paid in cash under the Mass Movement agreement at closing was $12.1 million and consisted
of the remaining agreed upon purchase price of $12.0 million adjusted for estimated working capital adjustments
and other employee related liabilities. Accordingly, total consideration given under the Mass Movement agreement
was $25.6 million. Transaction costs incurred were not material. The Mass Movement acquisition was accounted
for as a business combination and operates within our FMS business segment. Assets acquired and liabilities
assumed were recorded in our Consolidated Balance Sheet at their estimated fair values, as of the closing date,
using cost, market data and valuation techniques that reflect management’s judgment and estimates. As a result
of the acquisition, we recorded approximately $14.0 million of finite-lived intangible assets and approximately $8.8
million of goodwill. Goodwill consists of acquiring and retaining the Mass Movement existing network and expected
synergies from the combination of operations. The following table outlines the consideration transferred and
preliminary purchase price allocation at their respective estimated fair values as of November 30, 2020 (in millions):
Consideration
Accounts receivable
Property and equipment
Right-of-use assets
Intangibles
Accounts payable and accrued liabilities
Lease liabilities
Goodwill
$
25.6
2.8
0.3
4.4
14.0
(0.4)
(4.4)
8.8
$
On January 7, 2019, we entered into an asset purchase agreement to acquire substantially all of the assets and
assume certain specified liabilities of the affiliated entities of Cory 1st Choice Home Delivery (“Cory”), subject to
customary closing conditions. The closing of the transaction was effective on February 15, 2019, with a purchase
price of $100 million. Total consideration paid in cash under the Cory agreement was $98.2 million and consisted
of the agreed upon purchase price adjusted for estimated working capital adjustments. In addition, we incurred
approximately $2.9 million in transaction costs which are recorded in general and administrative expenses, net
of asset dispositions in our Consolidated Statements of Earnings. The Cory acquisition was accounted for as a
business combination and operates within our FMS business segment. Assets acquired and liabilities assumed
were recorded in our Consolidated Balance Sheet at their estimated fair values, as of the closing date, using
cost, market data and valuation techniques that reflect management’s judgment and estimates. As a result of
the acquisition, we recorded approximately $45.8 million of finite-lived intangible assets and approximately $48.2
million of goodwill. Goodwill consists of acquiring and retaining the Cory existing network and expected synergies
from the combination of operations.
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
153
On November 26, 2019, we entered into an asset purchase agreement to acquire substantially all of the assets
and assume certain specified liabilities of the affiliated entities of RDI Last Mile Co. (RDI), subject to customary
closing conditions. The closing of the transaction was effective on December 31, 2019, with a purchase price
of $17.5 million. Total consideration paid in cash under the RDI agreement was $17.4 million and consisted of
the agreed upon purchase price adjusted for estimated working capital adjustments. In addition, we incurred
approximately $0.5 million in transaction costs which are recorded in general and administrative expenses, net
of asset dispositions in our Consolidated Statements of Earnings. The RDI acquisition was accounted for as a
business combination and operates within our FMS business segment. Assets acquired and liabilities assumed
were recorded in our Consolidated Balance Sheet at their estimated fair values, as of the closing date, using
cost, market data and valuation techniques that reflect management’s judgment and estimates. As a result of
the acquisition, we recorded approximately $8.1 million of finite-lived intangible assets and approximately $8.4
million of goodwill, $0.3 million of which was recorded in 2020 as a result of the finalization of our purchase price
allocation. Goodwill consists of acquiring and retaining the RDI existing network and expected synergies from the
combination of operations.
13. Goodwill and Other Intangible Assets
As discussed in Note 12, Acquisitions, in 2020, we recorded additional goodwill totaling approximately $9.1 million
and additional finite-lived intangible assets of approximately $14.0 million. We recorded additional goodwill of
approximately $56.2 million in 2019. Total goodwill was $105.4 million, $96.3, and $40.1 million at December 31,
2020, 2019, and 2018 respectively. All goodwill is assigned to our FMS business segment. No impairment losses
have been recorded for goodwill as of December 31, 2020. Prior to the Mass Movement acquisition, our intangible
assets consisted of those arising from previous business acquisitions and our purchased local distribution center
(LDC) network access, both within our FMS segment. Identifiable intangible assets consist of the following (in
millions):
December 31,
2020
2019
Weighted Average
Amortization
Period
Finite-lived intangibles:
Customer relationships
$
131.7
$
118.6
Non-competition agreements
Trade names
LDC Network
Total finite-lived intangibles
Less accumulated amortization
7.9
3.8
10.5
153.9
(47.1)
Total identifiable intangible assets, net
$
106.8
$
6.9
3.8
10.5
139.8
(33.3)
106.5
11.0
6.6
2.0
10.0
Our finite-lived intangible assets have no assigned residual values.
During the years ending December 31, 2020, 2019, and 2018, intangible asset amortization expense was $13.8
million, $12.4 million and $8.6 million, respectively. Estimated amortization expense for our finite-lived intangible
assets is expected to be approximately $14.0 million for 2021 and $13.7 million for 2022 through 2024, and $13.6
million for 2025. Actual amounts of amortization expense may differ from estimated amounts due to additional
intangible asset acquisitions, impairment or accelerated amortization of intangible assets, and other events.
154
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
14. Segment Information
In March 2020, we changed the way we internally evaluate the operating performance of our business units and
adopted a new segment reporting structure. As part of this new structure, we separated our DCS segment into
two reportable segments: DCS and FMS. Accordingly, we are reporting five distinct business segments for the
years ended December 31, 2020, 2019, and 2018, which are based primarily on the services each segment
provides. The JBI segment includes freight that is transported by rail over at least some portion of the movement
and also includes certain repositioning truck freight moved by JBI equipment or third-party carriers, when such
highway movement is intended to direct JBI equipment back toward intermodal operations. DCS segment
business includes company-owned and customer-owned, DCS-operated revenue equipment and employee
drivers assigned to a specific customer, traffic lane, or service. DCS operations usually include formal, written
longer-term agreements or contracts that govern services performed and applicable rates. ICS provides non-asset
and asset-light transportation solutions to customers through relationships with third-party carriers and integration
with company-owned equipment. ICS services include flatbed, refrigerated, and LTL, as well as a variety of dry-van
and intermodal solutions. FMS provides final-mile delivery services to customers through a nationwide network
of cross-dock and other delivery system network locations. FMS provides both asset and non-asset big and
bulky delivery and installation services, as well as fulfillment and retail-pooling distributions services. JBT business
includes full-load, dry-van freight that is transported utilizing company-owned revenue equipment or third-party
carriers utilizing company-owned trailing equipment. This freight is typically transported over roads and highways
and does not move by rail. All transactions between reporting segments are eliminated in consolidation.
Our customers are geographically dispersed across the United States. A summary of certain segment information
as of December 31, which has been reclassified to reflect our new segment reporting structure, is presented below
(in millions):
JBI
DCS
ICS
FMS
JBT
Other (includes corporate)
Total
Assets
(Excludes intercompany accounts)
December 31,
2020
$
2,426
1,482
301
486
286
947
2019
$
2,217
1,445
208
432
241
928
$
5,928
$
5,471
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
155
JBI
DCS
ICS
FMS
JBT
Total segment revenues
Intersegment eliminations
Total
JBI
DCS
ICS
FMS
JBT
Total
JBI
DCS
FMS
JBT
Other
Total
Revenues
Years ended December 31,
2020
2019
$
4,675
$
4,745
$
2,196
1,658
689
463
9,681
(44)
2,128
1,348
567
389
9,177
(12)
2018
4,717
1,788
1,335
375
417
8,632
(17)
$
9,637
$
9,165
$
8,615
Operating Income
Years ended December 31,
$
2020
2019
2018
$
$
428
314
(45)
(1)
17
447
278
(11)
(9)
29
401
195
50
(2)
37
$
713
$
734
$
681
Depreciation and Amortization Expense
Years ended December 31,
2020
2019
$
189
$
181
$
224
33
34
47
216
30
33
39
2018
173
176
24
38
25
$
527
$
499
$
436
156
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
15. Quarterly Financial Information (Unaudited)
As further discussed in Note 10, Commitments and Contingencies, our first quarter 2020 and third quarter 2019
operating income, net earnings and earnings per share included the impact of pretax charges for contingent
liabilities. Operating results by quarter for the years ended December 31, 2020 and 2019 are as follows (in
thousands, except per share data):
2020:
Operating revenues
Operating income
Net earnings
Basic earnings per share
Diluted earnings per share
2019:
Operating revenues
Operating income
Net earnings
Basic earnings per share
Diluted earnings per share
Quarter
First
Second
Third
Fourth
$
$
$
$
$
$
$
$
$
$
2,280,826
154,741
104,834
0.99
0.98
2,089,627
167,795
119,601
1.10
1.09
$
$
$
$
$
$
$
$
$
$
2,145,573
175,183
121,698
1.15
1.14
2,261,647
193,093
133,633
1.24
1.23
$
$
$
$
$
$
$
$
$
$
2,472,523
175,503
125,496
1.19
1.18
2,363,660
167,862
118,410
1.11
1.10
$
$
$
$
$
$
$
$
$
$
2,737,652
207,691
154,007
1.46
1.44
2,450,323
205,074
144,676
1.36
1.35
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
157
2020 Percent of Revenue by Industry
Retail
General Merchandise
Food and Kindred Products
28%
16%
16%
Manufacturing
Wholesale Trade
10%
9%
Paper and Allied Products
6%
Electrical Equipment
Chemical and Allied Products
4%
4%
Transportation
3%
Other
2%
Transportation Equipment
2%
158
J.B. HUNT TRANSPORT SERVICES, INC. Annual Report
Stock Exchange Listing
J.B. Hunt Transport Services, Inc.
Class A Common Stock is listed on
NASDAQ National Market System
Stock Symbol
JBHT
Stock Transfer Agent and Registrar
Computershare Trust Company, N.A.
211 Quality Circle, Suite 210
College Station, TX 77845
877-498-8861 for Stockholder Inquiries
computershare.com/investor
STOCKHOLDER INFORMATION
Corporate Address
J.B. Hunt Transport Services, Inc.
615 J.B. Hunt Corporate Drive
Lowell, AR 72745
479-820-0000
Internet Address
jbhunt.com
Auditors
Ernst & Young LLP
Rogers, Arkansas
Counsel
Mitchell, Williams, Selig, Gates & Woodyard PLLC
Little Rock, Arkansas
Annual Meeting
The Annual Meeting of Stockholders will be held
at 10:00 a.m. CDT, on Thursday April 22, 2021 at
the corporate headquarters of J.B. Hunt Transport
Services, Inc., Lowell, Arkansas, located on Interstate
49 at Lowell Exit 78.
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P.O. Box 130
Lowell, Arkansas 72745
jbhunt.com