All right. Good morning, everyone. I think we're on our sixth or seventh session here at Barclays' 42nd Annual Industrial Select Conference. I'm Brandon Oglenski, Transport and Airline Analyst, and I'm very happy to have J.B. Hunt up on stage next. We're joined by John Kuhlow, Chief Financial Officer; Brad Hicks, President of Dedicated, right? Yep. And then Brad Delco, SVP of Finance and Strategy and IR. You wear many hats, I believe. Before we get started, just going to do the audience response question very quick. We'll cycle through the first three, if you don't mind queuing up number one. For those in the room, do you currently own J.B. Hunt? Yes, overweight. Two, market weight. Three, underweight. Four, no. We appreciate everyone participating. Do get some good results out of the conference on this. And Brad, we got to get you a remote down there. Question number two, please. What is your general bias towards J.B. Hunt right now? Positive, negative, or neutral? All right. And then question number three. In your opinion, through cycle EPS growth for J.B. Hunt will be above peers, in line with peers, or below peers? All right. Well, thank you, gentlemen, for coming down. Really appreciate you being here. I guess, where can I start? It's been such a difficult freight market now. I feel like we've been talking about this maybe for two and a half or three years at this conference now. Where do we sit in the freight cycle, and when can we finally get some positive momentum just from a macro perspective? Brandon, thank you. First and foremost, thank you for having us, inviting us. I don't know if you picked this timing, but we just left Northwest Arkansas that got hit with 10 inches of snow and freezing temperatures. So it's wonderful to be down here where there's still life. So thank you for that. You know, we said on our Q4 call that we do feel like we're at a point. Depends on how you add it up. I think we're at 31, 32 months of dealing with this freight recession, and so do feel like we're at the bottom, do feel like we're at an inflection point, and just ready to grow and work on our margins and get out of this cycle that we've been dealing with for the last two and a half plus years. And I definitely want to focus on the long term here. But you guys did kind of go out of character this quarter with a quarterly update on where earnings expectations should be, which was just kind of normal seasonality, by the way. But is that playing out the way it is? And we've heard from a lot of railroads earlier that there's a bunch of weather across the country right now. Yeah, I mean, really, we didn't have a crystal ball to the weather that we're experiencing today. It was more just, you know, we had finished up our planning for 2025 and had good visibility into what we were seeing for Q1 and where the market was. And we felt like it was a good opportunity on our call to kind of just realign expectations there. It is very uncharacteristic of us to give guidance. Don't know that we're going to continue that. But it was important for us to really just level set with how we're viewing it, how we're seeing it. We've got a lot of data that shows normal seasonality from Q4 to Q1, and that's really what we pointed to. We were in a meeting earlier, and Brad said, well, winter happens every year, and it does. So that wasn't really what informed us on what we were seeing in Q1. It was more just market dynamics and what we were experiencing. Our largest segment, you know, is with the way the rate structure is. We're kind of under that same for the H1 of the year with the contracts that we have with customers. So that was really just an opportunity for us to kind of level set, get everybody on the same page. I think maybe it goes to just to add a little context too, is listening and talking with our customers and understanding as we work on spring planning and summer planning and knowing where their business is, is another kind of data point that just reinforced kind of some normal seasonal movement from Q4 into Q1 for us as well. Okay, I guess, how do you put that in the context, though? You do have these longer-term margin targets for each of your segments. Are those still valid, especially for intermodal? I think long-term 10%-12% op margin was the range or the target range. Yeah, we think so. I mean, we're not adjusting our targets. Obviously, we've been dealing with just this massive deflationary rate pressure coupled. We've talked publicly a lot about just where the industry is with respect to insurance and claims costs. That's putting pressure just structurally on margins. But we do believe that over the long term, we still like where our margin targets are set at. We feel like those are achievable. It's going to take some time to get back to those ranges, but still feel like for the ROIC targets that we need to manage our business, that we feel like those margins will get us there over the long term. Okay, and maybe just last one on the near term, but can you remind us how your intermodal volumes trended in the Q4? And I think if we look across the public data for the railroads, intermodal still looks pretty strong. Is there a lot of pull forward in that number, or how do we think about? Yeah, I think so we had record-setting volumes in Q3 and then beat those in Q4, and so volume and intermodal has really performed well. There is a lot of talk on the pull forward issue. You know, we're just not hearing that from our customers. Certainly, I'm sure that there are some pockets of it, but by and large, we don't feel like this is a pull forward. We have heard from other CFOs that some are looking at different options on where they can maybe re-source some of the raw materials in contemplation of some tariff moves, and I'm sure there are one-off examples of where customers have done that, but by and large, don't view that as a pull forward. That's not what we're hearing from our customers, and so I think the pull forward has gotten a lot of attention. But if you look at, again, if we were talking about pull forward in Q3, and then we had record-setting volumes in Q4. And so I don't know if you guys have any other comments. I'll just mention we've seen strength in those volumes intermodally on the East Coast as well. And so I think that that's counter to the narrative on the pull forward. I think that the speculation is on pull forward, the vast majority of that would have been coming into the West Coast. And so to John's point, backing up our Q3 strong volumes with even more record-setting volumes in Q4 kind of dispelled the it got pulled forward from Q4 into Q3. And then when you see those data points on our East volumes, I think it serves to reinforce that that's probably not pull forward based on where a lot of that freight originates. I guess along those lines, tariffs is a huge issue at this conference. I'm sure you guys have gotten a few questions on that, as is every management team here. What are you hearing from your customers? Is it delaying actions on their part, or is it, I think you said, even maybe sourcing differently? Yeah. You know, interestingly enough, I don't think we've had a comment or question yet on tariffs, which is kind of surprising. I think everybody has just kind of been a, I hate to say, wait- and see mode, but that's kind of where we're at. I mean, you have one day a tariff is announced, and then 24 hours later, it's paused and delayed. And so I just think the domestic and global economy is not set up to react on some of these tariff things instantaneously. I mean, these are big operations that just don't have the ability to pivot that quickly. And so I think we're hearing some anecdotal one-off, like I mentioned, that people are just kind of thinking about it and wondering where it's going to land and what they can do about it. But we're just going to have to play it out some more and get some finality on it and see what people will do. This will take some time to adapt to those tariffs. I definitely want to ask questions about dedicated and your brokerage business, but just focus on intermodal for a minute. You guys have put a lot of capital into that business the last couple of years. Is there a risk that maybe the industry is just overcapacitated, or is that not in the going forward? Yeah, I certainly think that a lot of what we're dealing with today is a supply-side issue. And so we do have. We've talked publicly that we do have excess equipment for this environment. To your point, we have invested. We did a lot of investment during the pandemic to try to serve our customers as best we could. We do have growth opportunities ahead of us. And so, like I mentioned, we've had a lot of volume in intermodal, but we still have a ways to go to get to where we're fully utilizing and getting the proper returns on those investments. We did give some information on our Q4 call with respect to our CapEx going forward. We are not investing in trailer equipment. We don't feel like we'll need to for some time, but feel really good about the long-term return on this equipment. If you remember, these are 25-plus year assets at this point. And so we build in downturns and cycles in our industry into that valuation. And so over the life of that equipment, feel really good about the returns that they can offer. I'd want to also mention that, and we've stated this before, but we believe there's 7 million-11 million over-the-road shipments that we believe could and should mode convert to intermodal. And so if you think about that as the backdrop, over time, how can we continue to convert that OTR traffic into our intermodal network? We still have a really long runway against the, even though we're a little heavy today in this moment in time, it's still a cheaper option for our customers. It's an efficient option. It's a sustainable option for our customers. And we have heard from many of them this year that are talking about mode conversion, mostly to maybe generate just a little bit of savings against their budget because they anticipate what the total one-way rates are going to do as we get deeper in the year. And so I think that's a positive sign as to how our customers are thinking about intermodal. Service has been much improved with all of our rail providers over the last 12 to 18 months. And so we feel like we're in a really healthy spot with our capacity position to be able to solve for our customers going forward. Brandon, I want to add. I think we've been very disciplined with capacity that has been brought into the domestic. A year ago, we bought a large retailer's entire intermodal fleet, and we haven't really seen that reflected in our numbers. That equipment does need to get retrofitted to fit our chassis equipment, and so it's sitting there right now, kind of silent, parked somewhere. It does cost us a little bit of money to keep that equipment stored, but that equipment's out of the market, and it's not showing up necessarily in our equipment counts that we report quarterly, and so I think there's a lot of concerns about how much capacity we've added to the industry. I think we've probably done more to restrict some of that capacity than maybe what people are really recognizing. So the domestic intermodal market is a fraction of the size of the for-hire truckload market. And I still think the dog wags the tail, the tail doesn't wag the dog. And we've seen, as John alluded to, pretty meaningful deflationary pricing pressure, not just in for-hire trucking, but in domestic intermodal and a lot of different parts of the domestic supply chain. We've also seen hyperinflationary costs in insurance. We've seen inflationary costs with wages and benefits, group medical, also put in sort of that insurance bucket. But if the industry as a whole has seen mid-teens, maybe upper mid-teens pricing pressure over the last 24 months, we've seen about 400 basis points of margin erosion in our intermodal business. And I know the question earlier was, hey, we're not in line with our margin targets. I think we actually have performed extremely well. John talked about, Brad talked about. We just did two consecutive quarters of record intermodal volume, and I think the term we used on our Q4 earnings call is at or near the end of this freight recession, so we're sitting here today with record volume, with plenty of capacity to grow as the cyclical inflection hopefully plays out at some point, and an ability to correct or to fix some of the pricing we need on our book of business, and so we do sit here feeling really good about how we're positioned going forward, and we have capacity to grow, and in 2019, to even call that a freight recession as compared to what we've been going through the last 30-plus months, we didn't have container capacity to grow into. And so really like our position, like how we're going to be able to leverage our investments we've made during this downturn. Thankful that we've had the balance sheet strength to invest like we have during this downturn. And just want to make sure that point is made. We feel really good about how we're positioned moving forward. I guess what's the next step to getting that business priced better? Because your customers must understand too that you guys. Well, we talked about kind of a three-pronged strategy as we go into this bid season. I mean, first and foremost, we'd love just to pull the pricing lever. But we have to compete in the market, and price is a function of what's going on in the market, and we will compete where we need to. But price will be the most important lever to pull in terms of how we can most quickly repair margins and returns. But I would say, and Shelley Simpson, our CEO, got asked this question on our earnings call, what's really something that maybe is more in our control? Well, winning the right freight, making sure we have the right balance in our network, and eliminating the empty movement of containers. We have seen tremendous strength off the West Coast now, 12-plus months, and that has created a lot of imbalances. I think attacking that and making sure we can fill in a lot of our backhaul lanes eliminates a lot of cost. It may not necessarily do a lot to rev per load or rate or yield, but it can do a lot in terms of making us more efficient and productive with our assets and with utilization. And then third, obviously, growing volume. I mean, we are built to grow, and we have invested, and we can scale into these investments. And we'll do that with volume. So I think, again, repeating the three-pronged strategy, yeah, we'd love to get rate, but we're going to have to compete for it. Two, eliminate empties and movement of equipment that's not generating any return. And then number three, try to grow the business. And to me, the best way to accomplish all three of those is to make sure that we're giving world-class service to our customers. So we strive every day to be number one on our customer scorecard. We have a lot of data that is reinforcing that we're doing great work for our customer, and it complements all of those discussions with our customers about getting to that right freight at the right rate and looking for growth. And so if we're doing a great job for our customers, it makes it easier for them to want to grow their wallet share with us. And we feel like we've positioned ourselves, and we've been really intently focused on that the last 18-24 months, is repairing our service and being more consistent for our customers. We have a management meeting every Thursday that we all participate in, and the two staples are safety and service, and that is a key focus point throughout. I guess it sounds like if customers are coming to you on potential conversion opportunities later this year, maybe this bid season's feeling better finally. Still a little too early to really feel where we're exactly at. What I would say is I think it was this conference a year ago, we had some comments that bid season was not going the way we had thought. I would say at this point, it's in line with what our expectations were, so I'll take that as a positive, but honestly, we really need to see what happens in March, June, and even May. I think that'll really shape the totality of this bid season, so a little too early to tell for sure, but thus far, I would say there's nothing to report negatively like we had a year ago, and I'd take that as a positive. Gotcha. Well, Brad, maybe talking about dedicated trucking, and before we get specific to your company, trucking markets are pretty opaque because there's not perfect data out there. We all kind of opine on what we think is happening, but I'm not sure anyone really fully understands it. I guess from your perspective, did we just see a lot of incremental, not only folks going out and contracting new for capacity, but internalizing their own fleet capacity as well, where now we're just on a long tail of supply that's out there that's really hard to measure and just takes time to work through? Yeah, it's very difficult to truly get your hands around that. A few things I would say is no doubt that in the peak of the pandemic, how difficult capacity was to secure. I I think a lot of shippers have really tried to zero in on what is their strategy going to be to prevent them being in that situation again. One of the ways to do that is to look to expand. Maybe they already had some form of dedicated, but where can they expand that? There's always this kind of gray line between what's the right efficiency of a dedicated fleet versus the one-way market. And so some shippers will bloat their dedicated radius at times so that they have that better secured capacity. And I think that continue to make decisions to expand their private fleet rather than outsource. All of those are relative to what they experienced, I think, in the 2021, 2022 window of time. Certain private fleets, that's our primary focus. Some of our competitors, and I can't speak for all how they do it, but some of what they call or choose as dedicated is not the type of business that we would go after in DCS. It is the type of business that we would go after in some part of our company. We think our JBT solution can be a great solution for kind of a committed capacity. That's not really what we're trying to accomplish in DCS. We're really focused on a true private fleet, and we work with that shipper on the value proposition of them outsourcing that to us. And these are some characteristics that play through really in any environment, which I think is a testament to the success we saw last year in our sales. We had a really healthy tractor sales year just north of 1,500 tractors' worth of new business sold. Things like available capital is always a going concern. Do they want to put it in their core business? Do they want to replace their fleet? Risk, John mentioned earlier that we've seen pretty radical change the last three or four years in the risk profile of the trucking industry in total. And that not only affects and impacts them as well. And so we can be a great layer of defense for them with our strength and our insurance and our balance sheet to protect them from the risk. So those play through in really any environment. Capital to go for growth of plants and production facilities. When When it's maybe a tough time, like we've been going through the last 24-36 months, now capital's tight, another great reason to contemplate an outsource. And so it's not a great answer to your question in terms of what's ahead on because it's so difficult. But for what we believe is dedicated for us, we have high confidence in. Again, we had a great sales year. Our losses in the year were a little bit abnormal for us, which is making it hard to see net growth in the business. But to say that we performed at an 89% operating ratio in the environment we've been in with all the inflationary costs and the pressures that we faced, we're really proud of that. It's still not at our targeted range in DCS at 12%-14%. And the losses that we've had really have come in three buckets for us. We have had competitive landscape, and so when we've been up for renewal, that's been a little harder in this window of time. But really, it's organic loss. It's our customers' business is just a little softer today. And so what used to be a 20-tractor fleet is now a 17-tractor fleet because their business and the demand for their services is just down some. So we've been dealing with that. And then we always have some element of bankruptcy in our business, but that was more pronounced inside of 2024. One of the headlines there is that one of our top 10 sized customers went bankrupt. And so that's a little bit abnormal for us. We saw our retention rates measured as retention of revenue dip down to 88% in the Q3. That climbed back to 90% in Q4, and we believe the outlook for that is sometime mid-year, probably more in the Q3, that we'll get that back in that 98% range, so if we can get our retention back to normalized levels with the growth, that will translate to net tractor growth for us and get us back on plan. We highlighted that in Q1 that our plan is to net add 800-1,000 per year. We won't see that in the H1 of the year. That's going to be tempered because we had visibility to losses, but we do believe that we'll get back on that H2 of the year, which will give us some nice momentum going into 2026. I think the value proposition for dedicated is always there. Sometimes it's just the catalyst in the period that we're in. So if during the pandemic it was inability to get equipment, drivers, now it's a little bit more, as Brad mentioned, just the cost of capital. Price of the trucks and equipment continues to go up, and rates are going up, and so it's more expensive for, and if it's not a core piece of that organization's operations, it makes sense to outsource. I do think that more people, and we've seen this happen over a 20-year period, there's more regionalization of freight today than there's ever been, and that's much more conducive to dedicated. So I think that you'll continue to see. You know, it wasn't that many years ago, we used to talk at conferences like this about having about a $60 billion qualified market for what we believe is dedicated. And more recently, that's in the $90 billion range. Some of that is inflation, but some of it is just expansion because everything's more regionalized today than perhaps it was 10 or 20 years ago. And I think that you'll see customers want to get closer to their end user customer so that they can do things like next- day delivery and same- day delivery. You can only do that if you're much more dense and regional in nature, and that's very conducive to the efficiencies of what a dedicated fleet provides. Okay, but it sounds like incrementally, though, there's going to be some customer churn going on or downsizing through the H1 of the year. Yeah, we have cited some losses and reductions that will hamper our ability to show any material growth in the first part of the year. Brandon, I think it's important, and Brad, I hope I don't step on your toes here. We first told the market we had visibility to some fleet losses or churn a little over a year ago. And I would say we sit here today with the same visibility of those fleet losses. And we've now said publicly that that visibility really runs through Q2 of 2025. And so we could have said the same thing a year ago. So I would read that as to, hey, we knew we were going to have some accounts that were winding down. We sit here today with that same visibility without any incremental adds or additions to that time period extending out any further. And so I think it speaks volumes to the strength of that business, the diversification of kind of the customer base, as well as how strong the contractual nature of that business is to give us that sort of visibility 12 months ago, and that same visibility exists here today, so I think very successful in selling the value proposition and the greater density we have in market, core advantage, a key advantage of how we can serve customers uniquely and efficiently. We've had success, like we said last year. I think we're going to continue to have success, and as soon as we sort of put a little bit of a plug into the retention, I think you'll see the business return back to a very normalized growth pattern. If we can queue up question number four, please. Just have a few minutes left here. In your opinion, what should J.B. Hunt do with excess cash? First, two are M&A, three, share repurchase, four, dividends, five, debt paydown, six, internal investment. Really interested in this one. [crosstalk]. [crosstalk]. [crosstalk]. [crosstalk]. [crosstalk]. [crosstalk]. Question number five, please. In your opinion, what multiple J.B. Hunt should trade on in 2025? Appreciate everyone participating. All right. And then question number six. What do you see as the most significant share price headwind facing J.B. Hunt? Core growth, margin performance, capital deployment, or execution and strategy? And Brad, just to wrap it up on dedicated while we get the results here to this question. As you see that churn, you have the new pipeline sales. How does that impact relative profitability as you wind down contracts and then spool up new? Sure. I appreciate the question, Brandon, and when we start up new business, it clearly has a drag. Typically, we're in a loss position for the first three months of a new startup, followed by three months where we get back to like a break even at the six-month, and then you're kind of smooth sailing, so to speak, thereafter, so timing has an impact in a calendar year. When does the growth occur? If more of it's in the H2 of the H1, you're kind of underweighted. What I would say is that when we think about the 12-14, if I just remove the 24 starts, we were well inside of the 12-14 on what I'll call our base business. Now, the base business also had a little bit of a headwind because when we shut down business, usually you don't remain at the target profitability all the way to the last day. You're starting to be less efficient as you near the end, and so when we have that churn, it definitely has a drag as well, so just getting rid of that, we're built to be able to overcome our startup expense. We've proven that in certain years that we can operate in that 12%-14% with good growth. When I had the good growth and the loss, those two together are kind of the double whammy that pulled us back a little bit inside of 2024. If we can just solve for the one, getting our retention rate back to normal, I think that we can largely overcome the startup influence. That being said, I can't predict the timing, and so again, if 80% of our growth in a year is H2 one year versus H1, because at least the ones that start in January, February, and March, they start to really contribute to our success and our profitability the back half of the year. Those that start in August, September, October just have a negative position, and so it really still comes down to that timing. Gotcha. Really do appreciate you having us here today, though, and creating the forum for us. Thank you so much. Thank you, gentlemen. Thanks, Brandon. Thank you. Thank you.