JBHT » Topics » *4Q 2006 includes a $12.4 million charge for insurance costs

This excerpt taken from the JBHT 8-K filed Jan 30, 2007.

*4Q 2006 includes a $12.4 million charge for insurance costs

LOWELL, ARKANSAS, January 29, 2007 - J. B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced fourth quarter 2006 net earnings of $57.8 million, or diluted earnings per share of 39 cents vs. 2005 fourth quarter earnings of $65.3 million, or 41 cents per diluted share.  Financial results for the current quarter include a $12.4 million pretax charge, or $.05 per diluted share, to increase casualty and workers’ compensation claims reserves.   This $12.4 million pretax charge increased casualty and workers’ compensation claims reserves to reflect the full administrative and termination costs of insurance contracts as the claims are incurred, rather than in the year the contracts terminate.

Total operating revenue for the current quarter was $852 million, a slight decrease from the $858 million for the fourth quarter of 2005.  This decrease in operating revenue was primarily attributable to a reduction in fuel surcharges related to the decline in fuel prices relative to the same period a year ago and moderating demand in our Truck segment.  Current quarter operating revenue, excluding fuel surcharges, increased 1% over the same period of 2005.  This increase in total operating revenue, excluding fuel surcharges, was partly the result of growth in the combined tractor fleet from 11,877 in the fourth quarter of 2005 to 12,127 in the fourth quarter of 2006.  Containers and trailers grew from 49,733 to 52,881 over the same period.  The growth in the fleet was to support additional intermodal and dedicated business.

Operating income for the current quarter declined to $95.4 million vs. $106.6 million for the fourth quarter of 2005.  The $12.4 million charge included $4.7 million of workers’ compensation expense which is classified in salaries, wages and employee benefits costs, and $7.7 million of casualty expense which is classified in insurance and claims costs.  These charges were recognized in each business segment.

“Once again the power and complimentary balance of our economic model was recognized in the fourth quarter.  Outstanding results in both Intermodal and Dedicated Contract Services offset lower operating income from our Truck segment which was facing particularly tough comparisons from the extremely profitable fourth quarter of 2005.  72% of our revenue and 84% of our operating income in the current




quarter was derived from non-traditional truckload services.  Demand for our Intermodal service was at record levels during the quarter and DCS continued to produce good growth and strong results while Truck performance was muted due to softening demand,” said Kirk Thompson, JBHT President and CEO.

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