~ PUBLIC COMPANY PROFILE: J.B. HUNT TRANSPORT SERVICES INC. ~

OUTSTANDING SHARES: (as of Feb. 27, 1998): 35,653,708

COMPANY MARKET VALUE: (based on Sept. 9 closing price of $20.0625: $715,302,517

Management Analysis of Financial Condition & Operations

Operating revenues for the second quarter of 1998 increased about 20 percent to $461 million from $385.2 million in the second quarter of 1997. Revenues from core operations grew 26 percent compared to the second quarter of 1997, net of the flatbed business that was sold in July 1997. Revenues in the dry-van business, which includes intermodal, grew 22 percent during the second quarter, while revenues in the logistics business, which includes dedicated contract services, increased 40 percent.

The growth of dry-van revenues was primarily due to an 18 percent increase in the size of the tractor fleet and a 5 percent increase in tractor utilization. Dry-van truck rates rose about 2 percent, compared with the second quarter of 1997, while intermodal rates declined about 2 percent. The growth of logistics revenue was driven by strong demand from existing customers and contracts, and new business generated during the current quarter.

Total operating expenses for the second quarter of 1998 increased about 14 percent over the comparable period of 1997. Total operating expenses expressed as a percentage of operating revenues (operating ratio) were 93.1 percent for the second quarter of 1998, as compared with 97.6 percent in 1997. Salaries, wages and employee benefits increased about 19 percent, which was in relative perspective with revenue growth. The 33 percent pay increase awarded to certain over-the-road van drivers in February of 1997 does not affect the quarter-to-quarter comparison. The increase in purchased transportation expense was consistent with trends in recent periods and reflects payments to railroads and third-party providers of truck line-haul transportation services.

The decrease of fuel and fuel taxes was primarily due to a 12 percent decrease in fuel cost per gallon. This decrease of fuel expense was partly offset by lower fuel surcharge revenue. Depreciation expense declined slightly in terms of dollar amount between the second quarter of 1998 and 1997, but decreased from 8.6 percent of revenue in 1997 to 7.2 percent in 1998. This decline in percentage rate was primarily due to the amount of revenue growth that was non-asset related, such as logistics and intermodal, and higher gains on asset dispositions recognized during the current quarter.

Gains on asset dispositions reduce depreciation expense and totaled $1.4 million in 1998, compared with a loss of $76,000 in 1997. The 1998 gain amount included approximately $500,000 recognized on the sale of Lake City Express, a small subsidiary which was sold in June 1998. Operating supplies and expenses increased about 1 percent, but declined from 6.1 percent of revenue in 1997 to 5.2 percent in 1998. This decrease in percentage rate was also primarily due to the amount of logistics and intermodal growth, with no corresponding increase in operating supplies and expenses, which costs tend to be driver and tractor related. The significant decrease in insurance and claims costs was a result of fewer vehicle collisions during the second quarter of 1998.

The driver compensation package has been successful in attracting and retaining experienced, professional drivers that are involved in fewer vehicle collisions and lower accident costs. Although general and administrative expenses remained at the same percentage of revenue between the two comparable quarters, the dollar amount of expense increased about 25 percent. This increase was due in part to expenditures for professional services including contracted computer programmers. Interest expense increased about 15 percent primarily due to higher debt levels.

The effective income tax rate was 36 percent during the current quarter, compared with 38 percent in 1997. The reduction in the effective income tax rate related, in part, to taxes applicable to the company’s Mexican operations. As a result of the above, net earnings for the second quarter of 1998 increased to $15.6 million, or diluted earnings per share of 42 cents, compared with 1997 second quarter net earnings of $1.9 million, or 5 cents per diluted share. The decrease in the number of weighted average shares outstanding (before the effect of dilutive stock options) was primarily due to the company’s acquisition of treasury shares. The increase in weighted average shares assuming full dilution results from the increased effect of dilutive stock options caused by the increase in the company’s price of common stock.

EXECUTIVE COMPENSATION

Name/TitletttOther AnnualtAll Other tLong-Term

YeartSalary*tBonustCompensationtCompensation tAwards

J.B. Hunt, senior chairman

1997t$375,000t0t$49,075tN/At$50,653

1996t375,000t0t53,171tN/At47,657

1995t520,673t0tN/AtN/At43,318

Wayne Garrison, chairman

1997t375,000t0tN/AtN/At1,778

1996t375,000t0tN/At2,500,000t10,942

1995t229,327tN/AtN/AtN/At12,243

Kirk Thompson, president/CEO

1997t400,000t10,000tN/At76,000t4,615

1996t400,000t0tN/At75,000t12,500

1995t400,000t0tN/At100,000t12,240

Jerry Walton, CFO/EVP for finance

1997t250,000t6,250tN/At55,000t1,779

1996t250,000t0tN/At10,000t10,667

1995t250,000t0tN/At70,000t12,240

Robert Logan, chief information officer

1997t244,000t6,500tN/At30,000t0

1996tN/AtN/AtN/At50,000t0

1995tN/AtN/AtN/At140,625t0

OFFICERS & DIRECTORS

Name ofttClass A tPercenttValue on

beneficial ownertTitletcommon stocktof claims tSept. 9

J.B. Hunttsenior chairmant14,303,887t40.0t$286,971,733

Wayne Garrisontchairmant1,539,273t4.3t30,881,665

John A. Cooper Jr.tdirectort9,058t*t181,726

Gene Georgetdirectort623,630t1.7t12,511,577

Thomas Hardemantdirectort2,558t*t51,320

Bryan Hunttvice chairmant37,935t1.0t761,001

Johnelle Hunttsecretary/treasurert26,346t*t528,567

Robert E. Logantchief information officert10,000t*t200,625

Lloyd E. Petersontdirectort1,097,062t3.1t22,009,806

Kirk ThompsontCEOt192,985t*t3,871,762

Jerry W. WaltontEVP/CFOt72,254t*t1,449,596

*Less than 1 percent