Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should refer to the attached interim Condensed Consolidated Financial Statements and related notes and also to our Annual Report (Form 10-K) for the year ended December 31, 2025, as you read the following discussion. We may make statements in this report that reflect our current expectation regarding future results of operations, performance, and achievements. These are "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995 and are based on our belief or interpretation of information currently available. 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. Shareholders 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; 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 and costs 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; the impacts of recent or future changes in border or trade policies, including tariffs; terrorist attacks or actions; acts of war; political instability; adverse weather conditions; disruption or failure of information systems due to cybersecurity threats or other incidents; inability to keep pace with technological advances affecting our business and our information technology platforms; potential business or operational disruptions resulting from the effects of a national or international health pandemic; operational disruption or adverse effects of business acquisitions; increased costs for and availability of new revenue equipment; disruptions in the procurement of domestic or 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. Additionally, our business is somewhat seasonal with slightly higher freight volumes typically experienced during August through early November in our full-load transportation business. You should also refer to Part I, Item 1A of our Annual Report (Form 10-K) for the year ended December 31, 2025, for additional information on risk factors and other events that are not within our control. Our future financial and operating results may fluctuate as a result of these and other risk factors or events as described from time to time in our filings with the SEC. 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.

GENERAL

We are one of the largest surface transportation, delivery, and logistics companies in North America. We operate five distinct, but complementary, business segments and provide a wide range of reliable transportation, brokerage, and delivery services to a diverse group of customers and consumers throughout the continental United States, Canada, and Mexico. Our service offerings include transportation of full-truckload containerized freight, which we directly transport utilizing our company-controlled revenue equipment and company drivers, independent contractors, or third-party carriers. 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 or arrange for local and home delivery services, generally referred to as last-mile delivery services, to customers through a network of cross-dock and other delivery system locations throughout the continental United States. Utilizing thousands of reliable third-party carriers, we also provide comprehensive freight transportation brokerage and logistics services. In addition to dry-van, full-load operations, we also arrange for these unrelated outside carriers to provide flatbed, refrigerated, less-than-truckload (LTL), and other specialized equipment, drivers, and services. Also, we utilize 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 account for our business on a calendar year basis, with our full year ending on December 31 and our quarterly reporting periods ending on March 31, June 30, and September 30. The operation of each of our five business segments is described in Note 9, Business Segments, in our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q and in Note 13, Segment Information, of our Annual Report (Form 10-K) for the year ended December 31, 2025.

Critical Accounting Policies and Estimates

The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that impact the amounts reported in our Condensed 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 experts, and other methods considered reasonable in 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.

Information regarding our Critical Accounting Policies and Estimates can be found in our Annual Report (Form 10-K). The critical accounting policies that we believe require us to make more significant judgments and estimates when we prepare our financial statements include those relating to self-insurance accruals, revenue equipment, revenue recognition and income taxes. We have discussed the development and selection of these critical accounting policies and estimates with the Audit Committee of our Board of Directors. In addition, Note 2, Summary of Significant Accounting Policies, to the financial statements in our Annual Report (Form 10-K) for the year ended December 31, 2025, contains a summary of our critical accounting policies. There have been no material changes to the methodology we apply for critical accounting estimates as previously disclosed in our Annual Report on Form 10-K.

RESULTS OF OPERATIONS

Comparison of Three Months Ended September 30, 2026 to Three Months Ended September 30, 2025

		Summary of Operating Segment Results For The Three Months Ended September 30, (in millions)
		Operating Revenues								Operating Income/(Loss)
		2026				2025				2026				2025
JBI		$	1,828			$	1,520			$	147.5			$	125.0
DCS			960				864				81.7				104.3
ICS			434				276				9.6				(0.8	)
FMS			200				206				1.6				6.9
JBT			261				190				7.0				7.4
Other (includes corporate)			-				-				(0.3	)			(0.1	)
Subtotal			3,683				3,056				247.1				242.7
Inter-Segment eliminations			(6	)			(3	)			-				-
Total		$	3,677			$	3,053			$	247.1			$	242.7

Total consolidated operating revenues were $3.68 billion for the third quarter 2026, a 20% increase from $3.05 billion in the third quarter 2025. Third quarter 2026 operating revenues increased primarily due to an increase in volumes and revenue per load in JBI, ICS and JBT, and higher productivity in DCS when compared to the third quarter 2025. These increases were partially offset by fewer stops in FMS. Total consolidated operating revenue, excluding fuel surcharge revenue, increased 13%, when compared to the third quarter 2025.

JBI segment revenue increased 20% to $1.83 billion during the third quarter 2026, compared with $1.52 billion in 2025. During the third quarter of 2026, JBI had an 8% increase in load volumes and an 11% increase in revenue per load, which is determined by the combination of fuel surcharge revenue, freight mix, and customer rates. Transcontinental loads increased 1% during the third quarter 2026, while eastern network load volume, where demand for road-to-rail conversion remained strong, increased 18% as compared to the third quarter 2025. Revenue per load, excluding fuel surcharge revenue, increased 2% compared to the third quarter 2025. JBI segment operating income increased 18% to $147.5 million in the third quarter 2026 from $125.0 million in 2025. The increase is primarily due to improved network balance and increased efficiency throughout our drayage fleet, as well as improvements associated with the initiative to lower our cost to serve and lower container storage expense. These items were partially offset by higher professional driver personnel expense, higher equipment-related cost and increased insurance and group medical claims expense. The current quarter ended with approximately 124,200 units of trailing capacity and 6,400 power units assigned to the dray fleet.

DCS segment revenue increased 11% to $960 million in the third quarter 2026, compared to $864 million in 2025. Productivity, defined as revenue per truck per week, increased 10%, while average truck count increased 1%, when compared to the third quarter 2025. Productivity, excluding fuel surcharge revenue, increased 3%, primarily due to contractual index-based rate increases and a decline in idle equipment. On a net basis, revenue-producing trucks in the fleet at the end of the third quarter 2026 increased by 162 trucks, or 1%, compared to the prior-year period. Customer retention rates are approximately 96%. DCS segment operating income decreased 22% to $81.7 million in the third quarter 2026, from $104.3 million in 2025. The decrease is primarily due to increased professional driver personnel expense, increased group medical claims, higher expenses related to insurance premiums and equipment, and increased new business onboarding expense.

ICS segment revenue increased 57% to $434 million in the third quarter 2026, from $276 million in 2025. Overall volumes increased 22% compared to the third quarter 2025, while revenue per load increased 29%, primarily due to higher contractual and spot rates. Contractual business represented approximately 63% of total load volume and 58% of total revenue in the third quarter 2026, compared to 63% and 64%, respectively, in 2025. The ICS segment had operating income of $9.6 million in the third quarter 2026, compared to an operating loss of $0.8 million in 2025. The increase in operating income is primarily due to increased revenue per load and volumes, partially offset by increases in personnel-related and insurance claims expenses. Gross profit margin decreased to 14.3% in the third quarter 2026, compared to 15.0% in 2025 due to increased purchased transportation expense in the current quarter compared to the prior year.

FMS segment revenue decreased 3% to $200 million in the third quarter 2026 from $206 million in 2025, primarily due to the impact of lost business due to the ongoing internal efforts to improve revenue quality and profitability across certain accounts, partially offset by demand stabilization across many of the end markets served and improved revenue quality across various accounts. FMS segment operating income decreased 76% to $1.6 million in the third quarter of 2026 compared to $6.9 million in 2025. This decrease was primarily due to lower revenue and higher purchased transportation expense, partially offset by lower personnel-related and facility rental expenses and improvements associated with the initiative to lower our cost to serve.

JBT segment revenue increased 37% to $261 million in the third quarter 2026, from $190 million in 2025. Revenue, excluding fuel surcharge revenue, increased 34% primarily due to a 29% increase in revenue per load, excluding fuel surcharge revenue and a 4% increase in load volume compared to third quarter 2025. JBT average effective trailer count decreased to 12,046 in the third quarter 2026, compared to 12,107 in 2025. At the end of the third quarter 2026, the JBT power fleet consisted of 2,221 tractors, compared to 2,091 tractors at September 30, 2025. Trailer turns in the third quarter of 2026 increased 3% compared to third quarter 2025, due to higher load volumes and improvements in network balance. JBT segment operating income decreased 6% to $7.0 million in 2026, compared with $7.4 million during third quarter 2025. The decrease is primarily due to higher third-party capacity costs and increased equipment maintenance costs, partially offset by continued progress on cost management and the benefits of a more balanced network.

Consolidated Operating Expenses

The following table sets forth items in our Condensed Consolidated Statements of Earnings as a percentage of operating revenues and the percentage increase or decrease of those items as compared with the prior period.

		Three Months Ended September 30,
		Dollar Amounts as a Percentage of Total Operating Revenues								Percentage Change of Dollar Amounts Between Quarters
		2026				2025				2026 vs. 2025
Total operating revenues			100.0	%			100.0	%			20.4	%
Operating expenses:
Rents and purchased transportation			47.8				43.6				31.9
Salaries, wages and employee benefits			23.8				26.9				6.6
Fuel and fuel taxes			7.1				5.4				58.8
Depreciation and amortization			5.0				5.9				2.5
Operating supplies and expenses			4.0				4.3				11.5
Insurance and claims			2.7				2.7				23.0
General and administrative expenses, including asset dispositions			2.1				2.3				4.7
Operating taxes and licenses			0.5				0.6				9.6
Communication and utilities			0.3				0.4				(3.1	)
Total operating expenses			93.3				92.1				22.0
Operating income			6.7				7.9				1.8
Net interest expense			0.4				0.5				(12.2	)
Earnings before income taxes			6.3				7.4				2.9
Income taxes			1.6				1.8				9.4
Net earnings			4.7	%			5.6	%			0.9	%

Total operating expenses increased 22%, while operating revenues increased 20.4% during the third quarter 2026 from the comparable period 2025. Operating income increased to $247.1 million during the third quarter 2026 from $242.7 million in 2025.

Rents and purchased transportation costs increased 31.9% in the third quarter 2026. This increase was primarily the result of an increase in JBI, ICS, and JBT load volumes, which increased services provided by third-party carriers and overall increased rail and truck carrier purchased transportation rates during the third quarter 2026 compared to 2025.

Salaries, wages, and employee benefits costs increased 6.6% during the third quarter 2026, compared with 2025. This increase was primarily due to higher driver wages, reduced capital-related wages, and an increase in group medical expense, partially offset by lower office employee headcounts.

Fuel costs increased 58.8% in the third quarter 2026, compared with 2025, due primarily to an increase in the price of fuel. Depreciation and amortization expense increased 2.5% in third quarter 2026 compared with 2025, primarily due to an increase in equipment and technology costs.

Operating supplies and expenses increased 11.5%, driven primarily by higher equipment maintenance costs and increased tire expense. Insurance and claims expenses increased 23% in 2026 compared with 2025, primarily due to higher claim severity, partially offset by lower claim volume. General and administrative expenses increased 4.7% for the current quarter from the comparable period in 2025, primarily due to increased advertising and professional services expenses and increased technology costs, partially offset by lower building and yard rental expense. Net loss from sale or disposal of assets was $3.7 million in 2026, compared to a net loss from sale or disposal of assets of $2.6 million in 2025.

Net interest expense decreased 12.2% in 2026 due to a lower average debt balance, partially offset by an increase in effective interest rates compared to third quarter 2025. Income tax expense increased 9.4% in 2026, compared with 2025, primarily due to higher taxable earnings and a higher effective income tax rate. Our effective income tax rate increased to 25.5% for the third quarter of 2026, compared to 24.0% in 2025, primarily due to the timing of certain discrete items. Our annual tax rate for 2026 is expected to be approximately 24.0%. In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate, adjusted for discrete items. This rate is based on our expected annual income, statutory tax rates, best estimate of nontaxable and nondeductible items of income and expense, and the ultimate outcome of tax audits.

Comparison of Nine Months Ended September 30, 2026 to Nine Months Ended September 30, 2025

		Summary of Operating Segment Results For The Nine Months Ended September 30, (in millions)
		Operating Revenues								Operating Income/(loss)
		2026				2025				2026				2025
JBI		$	5,086			$	4,428			$	412.8			$	315.1
DCS			2,721				2,533				271.6				278.2
ICS			1,145				805				6.6				(7.0	)
FMS			586				618				14.4				19.6
JBT			706				533				8.4				12.8
Other (includes corporate)			-				-				(0.2	)			(0.1	)
Subtotal			10,244				8,917				713.6				618.6
Inter-segment eliminations			(15	)			(15	)			-				-
Total		$	10,229			$	8,902			$	713.6			$	618.6

Total consolidated operating revenues were $10.23 billion for the first nine months of 2026, versus $8.90 billion for the comparable period 2025. Fuel surcharge revenue increased to $1.72 billion during the first nine months of 2026, compared with $1.10 billion in 2025. Total consolidated operating revenue, excluding fuel surcharge revenue, increased 9% when compared to the first nine months of 2025.

JBI segment revenue increased 15% to $5.09 billion during the first nine months of 2026, compared with $4.43 billion in 2025. Load volume during the first nine months of 2026 increased 7% and revenue per load increased 7%, compared to a year ago. Revenue per load, excluding fuel surcharge revenue, increased modestly compared to the first nine months of 2025. JBI segment operating income increased 31% to $412.8 million in the first nine months of 2026, from $315.1 million in 2025. The increase is primarily due to higher revenue, improved network balance and increased efficiency throughout our drayage fleet as well as improvements associated with our overall cost management initiatives and lower container storage expense. These benefits were partially offset by higher professional driver personnel-related expenses, increased equipment maintenance costs, higher insurance claims and premiums expense, and higher group medical expense.

DCS segment revenue increased 7% to $2.72 billion during the first nine months of 2026, from $2.53 billion in 2025. Productivity, defined as revenue per truck per week, increased 7% from a year ago. Productivity, excluding fuel surcharge revenue, for the first nine months of 2026 increased 2% from a year ago. The increase in productivity was primarily due to contractual index-based rate increases and reduced idle equipment during the current period. Operating income of our DCS segment decreased 2% to $271.6 million in the first nine months of 2026, from $278.2 million in 2025. The decrease is primarily due to increased professional driver and non-driver personnel-related expenses, higher insurance claim and premium expense, higher group medical expense, and increased equipment maintenance costs, partially offset by higher revenue and overall cost management initiatives when compared to the first nine months of 2025.

ICS revenue increased 42% to $1.15 billion during the first nine months of 2026, from $805 million in 2025. Overall volumes increased 17%, while revenue per load increased 22% compared to 2025. The ICS segment had operating income of $6.6 million in the first nine months of 2026 compared to an operating loss of $7.0 million in 2025. The increase in operating income is primarily due to a 22% increase in gross profit, driven by higher revenue per load and volumes, partially offset by higher personnel salary and wages expense during the first nine months of 2026. Gross profit margin decreased to 13.1% in the current period compared to 15.3% in 2025.

FMS revenue decreased 5% to $586 million during the first nine months of 2026, from $618 million in 2025, primarily due to the impact of lost business, partially offset by the addition of new customer contracts implemented over the past year. FMS segment had operating income of $14.4 million in the first nine months of 2026 compared to $19.6 million in 2025. This decrease was primarily due to lower revenue and increased purchased transportation expense, partially offset by lower personnel-related costs, decreased insurance claims expense, and decreased facility and equipment rental expense.

JBT segment revenue increased 32% to $706 million for the first nine months of 2026, from $533 million in 2025. Revenue, excluding fuel surcharge revenue, increased 28%, primarily due to a 12% increase in load volume and a 15% increase in revenue per load, excluding fuel surcharge revenue compared to the first nine months of 2025. Operating income of our JBT segment was $8.4 million in the first nine months of 2026, a decrease of 35%, compared to $12.8 million in 2025, primarily due to increased purchased transportation costs and increased equipment maintenance costs, partially offset by continued cost management and improved productivity.

Consolidated Operating Expenses

The following table sets forth items in our Condensed Consolidated Statements of Earnings as a percentage of operating revenues and the percentage increase or decrease of those items as compared with the prior period.

		Nine Months Ended September 30,
		Dollar Amounts as a Percentage of Total Operating Revenues								Percentage Change of Dollar Amounts Between Periods
		2026				2025				2026 vs. 2025
Total operating revenues			100.0	%			100.0	%			14.9	%
Operating expenses:
Rents and purchased transportation			47.3				43.7				24.3
Salaries, wages and employee benefits			24.3				27.4				1.8
Fuel and fuel taxes			6.6				5.4				40.4
Depreciation and amortization			5.3				6.0				1.5
Operating supplies and expenses			4.0				4.3				7.2
Insurance and claims			2.7				2.8				10.2
General and administrative expenses, including asset dispositions			1.9				2.5				(7.8	)
Operating taxes and licenses			0.6				0.6				7.4
Communication and utilities			0.3				0.4				(3.7	)
Total operating expenses			93.0				93.1				14.9
Operating income			7.0				6.9				15.4
Net interest expense			0.5				0.6				(12.8	)
Earnings before income taxes			6.5				6.3				18.3
Income taxes			1.7				1.6				17.1
Net earnings			4.8	%			4.7	%			18.6	%

Total operating expenses and operating revenues increased 14.9%, during the first nine months of 2026, from the comparable period of 2025. Operating income increased to $713.6 million during the first nine months of 2026, from $618.6 million in 2025.

Rents and purchased transportation costs increased 24.3% in 2026. This increase was primarily the result of an increase in JBI, ICS, and JBT load volumes, which increased services provided by third-party carriers and overall increased rail and truck carrier purchased transportation rates, compared to 2025.

Salaries, wages, and employee benefits costs increased 1.8% in 2026 from 2025. This increase was primarily due to higher driver wages, higher incentive compensation, reduced capital-related wages, and an increase in other employee benefits, partially offset by lower office employee wage expenses.

Fuel costs increased 40.4% in 2026, compared with 2025, due primarily to an increase in the price of fuel and increased road miles. Depreciation and amortization expense increased 1.5% in 2026 primarily due to increased equipment and technology costs, partially offset by a prior year increase in the expected useful lives of our trailer fleets.

Operating supplies and expenses increased 7.2%, driven primarily by higher equipment maintenance costs, increased tire expense, and higher tolls expense, partially offset by lower travel and entertainment expenses. Insurance and claims expense increased 10.2% in 2026 compared with 2025, primarily due to higher claim severity and increased insurance policy premiums expense, partially offset by lower claim volume. General and administrative expenses decreased 7.8% from the comparable period in 2025, primarily due to lower building and yard rental expense, lower bad debt expense, and a decrease in net loss from sale or disposal of assets, partially offset by higher driver advertising costs. Net loss from sale or disposal of assets was $7.4 million in 2026, compared to a net loss from sale or disposal of assets of $11.9 million in 2025.

Net interest expense decreased 12.8% in 2026, due primarily to a decrease in our average debt balance in the current year. Income tax expense increased 17.1% during the first nine months of 2026 compared with 2025, primarily due to increased taxable earnings, partially offset by a slightly lower effective income tax rate in the first nine months of 2026. Our effective income tax rate was 25.4% for the first nine months of 2026, compared to 25.6% in 2025 due to discrete tax items. Our annual tax rate for 2026 is expected to be approximately 24.0%. In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate, adjusted for discrete items. This rate is based on our expected annual income, statutory tax rates, best estimate of nontaxable and nondeductible items of income and expense, and the ultimate outcome of tax audits.

Liquidity and Capital Resources

Cash Flow

Net cash provided by operating activities totaled $1.11 billion during the first nine months of 2026, compared with $1.29 billion for the same period 2025. Operating cash flows decreased primarily due to the timing of general working capital activities, partially offset by increased earnings. Net cash used in investing activities totaled $291.1 million in 2026, compared with $490.9 million in 2025. The decrease is primarily due to a decrease in equipment purchases, net of proceeds from the sale of equipment compared to the prior year. Net cash used in financing activities was $830.8 million in 2026, compared with $796.4 million in 2025. This increase resulted primarily from the retirement in March 2026 of our $700 million in senior notes, partially offset by a decrease in treasury stock purchases and net proceeds from our revolving line of credit.

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 and real estate transactions. We are frequently able to accelerate or postpone a portion of equipment replacements or other capital expenditures depending on market and overall economic conditions. In recent years, we have obtained capital through cash generated from operations, revolving lines of credit and long-term debt issuances. We have also periodically utilized operating leases to acquire revenue equipment.

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. At September 30, 2026, we were authorized to borrow through a revolving line of credit, which is supported by a credit agreement with a group of banks. The revolving line of credit authorizes us to borrow up to $1.0 billion under a five-year term expiring November 2030, and allows us to request an increase in the revolving line of credit total commitment by up to $400 million and to request two one-year extensions of the maturity date. In addition, the credit agreement authorized us to borrow up to an additional $700 million through committed term loans during the six-month period beginning November 25, 2025, due November 2028, which we partially exercised in February 2026. The applicable interest rates under this agreement are based on either the Secured Overnight Financing Rate (SOFR), or a Base Rate, depending upon the specific type of borrowing, plus an applicable margin and other fees. At September 30, 2026, we had $81.9 million outstanding on the revolving line of credit and a $300 million balance of term loans, at an average interest rate of 4.85% and a cash balance of $3.8 million.

We continue to evaluate 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, as well as regulatory and other developments that may impact our capital allocation. We regularly monitor working capital and maintain frequent communication with our customers, suppliers and service providers. A large portion of our cost structure is variable. Purchased transportation expense represents more than half of our total costs and 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.

Our financing arrangements require us to maintain certain covenants and financial ratios. At September 30, 2026, we were compliant with all covenants and financial ratios.

Our net capital expenditures were approximately $291.1 million during the first nine months of 2026, compared with $490.9 million for the same period 2025. Our net capital expenditures include net additions to revenue equipment and non-revenue producing assets that are necessary to contribute to and support the future growth of our various business segments. Capital expenditures in the first nine months of 2026 were primarily for tractors, trailing equipment and related enhancements, and real estate. We expect to spend approximately $700 million for net capital expenditures during the full calendar year 2026. We are currently committed to spend approximately $552.1 million, net of proceeds from sales or trade-ins, during the years 2026 and 2027. At September 30, 2026, our aggregate future minimum lease payments under operating lease obligations related primarily to the rental of maintenance and support facilities, cross-dock and delivery system facilities, office space, parking yards, and equipment totaled $321.9 million.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements, other than our net purchase commitments of $552.1 million, as of September 30, 2026.

Risk Factors

You should refer to Part I, Item 1A of our Annual Report (Form 10-K) for the year ended December 31, 2025, under the caption "Risk Factors" for specific details on the following factors and events that are not within our control and could affect our financial results.

Risks Related to Our Industry

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Our business can be significantly impacted by economic conditions, customer business cycles, government policies, and seasonal factors.

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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.

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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.

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We depend on third parties in the operation of our business, particularly rail service providers, transportation equipment manufacturers, third party carriers and independent contractors.

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Rapid changes in fuel costs could impact our periodic financial results.

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Insurance and claims expenses could significantly reduce our earnings.

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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.

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Difficulty in attracting and retaining drivers and delivery personnel could affect our profitability and ability to grow.

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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.

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Our business can be 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.

Risks Related to Our Business

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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.

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A determination that independent contractors are employees could expose us to various liabilities and additional costs.

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We may be subject to litigation claims that could result in significant expenditures.

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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.

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An inability to develop, adopt, and integrate new or enhanced technologies, including rapidly evolving artificial intelligence, could have a material adverse effect on our business.

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Acquisitions or business combinations may disrupt or have a material adverse effect on our operations or earnings.