Hub Group Inc – ‘10-K’ for 12/31/99

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Annual Report   —   Form 10-K
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Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Form 10-K for Hub Group, Inc.                         47    251K 
 2: EX-27       12/31/99 Financials                                    1      6K 

10-K   —   Form 10-K for Hub Group, Inc.
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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 FORM 10-K

(Mark One)                                                                      
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities   
  Exchange Act of 1934 For the fiscal year ended December 31, 1999

OR

 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934                                          

 Commission File No. 0-27754

------------------
 HUB GROUP, INC.

(Exact name of registrant as specified in its charter)

DELAWARE                          36-4007085
(State or other jurisdiction of          (I.R.S. Employer         
incorporation of organization)          Identification No.)     

377 E. BUTTERFIELD ROAD, SUITE 700
 LOMBARD, ILLINOIS 60148
 (Address and zip code of principal executive offices)
(630) 271-3600
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None                

Securities registered pursuant to Section 12(g) of the Act:                     

CLASS A COMMON STOCK, $.01 PAR VALUE

(Title of Class)

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 if disclosure of delinquent filers pursuant to Item      
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements   
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]                                                                  

The aggregate market value of the Registrant's voting stock held by             
non-affiliates on March 27, 2000, based upon the last reported sale price on    
that date on the NASDAQ National Market of $15 7/8 per share, was $110,763,844. 

On March 27, 2000, the Registrant had 7,043,950 outstanding shares of Class A   
common stock, par value $.01 per share, and 662,296 outstanding shares of Class 
B common stock, par value $.01 per share.                                       

 DOCUMENTS INCORPORATED BY REFERENCE

The Registrant's definitive Proxy Statement for the Annual Meeting of           
Stockholders to be held on May 17, 2000, (the "Proxy Statement") is incorporated
by reference in Part III of this Form 10-K to the extent stated herein. Except  
with respect to information specifically incorporated by reference in this Form 
10-K, the Proxy Statement is not deemed to be filed as a part hereof.           

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PART I

ITEM 1.   BUSINESS                                                              

GENERAL                                                                         

  Hub Group, Inc. ("Hub Group" or the "Company") is a Delaware corporation
which was incorporated on March 8, 1995. Since its founding as an intermodal    
marketing company ("IMC") in 1971, Hub Group has grown to become the largest IMC
in the United States and a full service transportation provider, offering       
intermodal, truck brokerage and comprehensive logistics services.               

    The Company operates through an extensive nationwide network of 29 offices
or "Hubs." Each Hub is strategically located in a market that has a significant 
concentration of shipping customers and one or more railheads. Each Hub         
functions essentially as a stand-alone business managed locally by an executive,
known as a "Principal," with significant transportation experience. Local       
management is responsible for operations, customer service and regional         
marketing, while corporate management is responsible for group strategic        
planning and administration, financial services, relationships with the         
railroads and management information systems support. Hub Group also maintains a
National Accounts sales force to provide centralized marketing of the Company's 
services to large and geographically diversified shippers.                      

On March 18, 1996, Hub Group purchased Hub City Terminals, Inc. ("Hub 
Chicago") in a stock-for-stock acquisition. Concurrent with the acquisition of  
Hub Chicago, Hub Group completed the initial public offering of 4,261,250 shares
of its Class A common stock (the "Class A Common Stock"), with net proceeds to  
Hub Group of $52.9 million. Simultaneously with the initial public offering, Hub
Group, through its new wholly owned subsidiary, Hub Chicago, acquired with cash 
the general partnership interests in 26 operating partnerships, each with one or
more offices. In addition, Hub Group directly acquired with cash a controlling  
interest in the Hub Group Distribution Services partnership ("Hub Distribution")
which performs certain specialized logistics functions (each of the 26 operating
partnerships and Hub Distribution are a "Hub Partnership" and collectively are  
the "Hub Partnerships"). With the exception of Hub Distribution, the Company had
the continuing option, exercisable any time after the Principal currently       
associated with a Hub Partnership ceased to be an employee of that Hub          
Partnership, to purchase the limited partnership interest in that Hub           
Partnership. The decision as to whether or when to exercise an option to acquire
the limited partnership interest in a Hub Partnership was made by the           
independent members of the Company's Board of Directors. Unless the context     
otherwise requires, references to "Hub Group" or the "Company" include Hub      
Chicago, the Hub Partnerships and their respective subsidiaries.                

     On April 1, 1999, the Company exercised its option to acquire the remaining
70% minority interests in Hub City Alabama, L.P., Hub City Atlanta, L.P., Hub   
City Boston, L.P., Hub City Canada, L.P., Hub City Cleveland, L.P., Hub City    
Detroit, L.P., Hub City Florida, L.P., Hub City Indianapolis, L.P., Hub City    
Kansas City, L.P., Hub City Mid-Atlantic, L.P., Hub City New York-New Jersey,   
L.P., Hub City New York State, L.P., Hub City Ohio, L.P., Hub City Philadelphia,
L.P., Hub City Pittsburgh, L.P., Hub City Portland, L.P. and Hub City St. Louis,
L.P. (which purchase is referred to herein as the "April Purchase") for an      
aggregate purchase price of approximately $108.7 million in cash.  Except for   
Hub Distribution, of which the Company owns 65%, the Company now wholly-owns all
of the Hub Partnerships and the Company's operations in North America and       
Europe.                                                                         

 On May 1, 1998, the Company formally launched its new Hub Group Premier
Service Network in conjunction with the Burlington Northern and Santa Fe Railway
Company ("BNSF"). During 1998, the Company took on the management of            
approximately 2000 48' x 102" containers and approximately 180 53' x 102"       
containers from BNSF for dedicated use throughout the BNSF intermodal container 
network. On March 1 1999, the Company and BNSF entered into a multi-year        
extension and expansion of this program. In accordance with this new agreement, 
the Company and BNSF added an additional 1000 53' x 102" containers during 1999.

  On June 1, 1999, the Company and the Norfolk Southern Corporation ("NS")
entered into a multi-year agreement expanding the Company's Premier Service     
Network onto NS's rail system. In accordance with this agreement, the Company   
took on the management of 675 53' x 102" containers from the NS during 1999. The
BNSF containers and the NS containers are fully interchangeable across both the 
BNSF and NS rail networks.                                                      

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On December 31, 1999, each of the Hub Partnerships, except for Hub    
Distribution and Hub City Texas, L.P., converted to a limited liability company.
Also on December 31, 1999, Hub Holdings, Inc., a wholly-owned subsidiary of Hub 
Group, merged with and into Hub Chicago, making each limited liability company a
wholly-owned subsidiary of Hub Chicago.                                         

    On March 13, 2000, the Company signed a letter of intent pursuant to which
the Company agreed to sell its 65% interest in Hub Distribution for $65 million 
in cash and warrants to purchase 5% of the outstanding shares of stock of Hub   
Distribution. The sale of this interest is subject to a number of customary     
conditions and there is therefore no guarantee that a transaction will          
ultimately be consummated.                                                      

SERVICES PROVIDED                                                               

The Company's transportation services can be broadly placed into the  
following categories:                                                           

INTERMODAL As an IMC, the Company arranges for the movement of its    
customers' freight in containers and trailers over long distances. Hub Group    
contracts with railroads to provide transportation over the long-haul portion of
the shipment and with local trucking companies, known as "drayage companies,"   
for pickup and delivery. In markets where adequate service is not available, the
Company supplements third party drayage services with Company-owned drayage     
operations. As part of its intermodal services, the Company negotiates rail and 
drayage rates, electronically tracks shipments in transit, consolidates billing 
and handles claims for freight loss or damage on behalf of its customers. The   
Company uses its Hub network, connected through its proprietary advanced        
intermodal management ("AIM") system, to access containers and trailers owned by
leasing companies, railroads and steamship lines. The Company also has exclusive
use of the containers in its Premier Service Network. Because each Hub not only 
handles its own outbound shipments but also handles inbound shipments from other
Hubs, each Hub is able to track trailers and containers entering its service    
area and reuse that equipment to fulfill its customers' outbound shipping       
requirements. This effectively allows the Company to "capture" containers and   
trailers and keep them within the Hub network without having to make a capital  
investment in transportation equipment.                                         

    HIGHWAY SERVICES The Company arranges for the transportation of freight by
truck, providing customers another option for their transportation needs. This  
is accomplished by matching customers' needs with carriers' capacity to provide 
the appropriate service and price combination. The Company has contracts with a 
substantial base of carriers allowing it to meet the varied needs of its        
customers. The Company negotiates rates, tracks shipments in transit,           
consolidates billing and handles claims for freight loss and damage on behalf of
its customers. The Company's brokerage operation also provides customers with   
specialized programs. Through the Dedicated Trucking program, certain carriers  
have informally agreed to move freight for Hub's customers on a continuous      
basis. This arrangement allows Hub to gain control of the trucking equipment to 
effectively meet its customer's needs without owning the equipment. Through the 
Core Carrier-Plus One program, Hub assumes the responsibility for over-the-road 
truckload shipments that the customer's core carriers cannot handle. This       
service supplements the customer's core carrier program and helps ensure the    
timely delivery of the customer's freight.                                      

  LOGISTICS The Company has expanded its service capabilities as customers
increasingly outsource their transportation needs. The Company currently offers 
various logistics services, including comprehensive transportation management,  
arranging for delivery to multiple locations at the shipment's destination,     
third party warehousing and other customized logistics services, as well as     
other non-traditional logistics services such as installation of point of sale  
merchandise displays.                                                           

  When providing complete transportation services, the Company essentially
replaces the customer's transportation department. Once the Company is hired as 
a single source logistics provider, it negotiates with intermodal, railcar,     
truckload and less-than-truckload carriers to move the customer's product       
through the supply chain and then dispatches the move for the customer. Using   
its advanced transportation management software ("ATMS"), the Company           
consolidates orders into full truckload shipments, chooses a shipping route,    
electronically tenders loads to carriers and reports the move to the customer.  

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HUB NETWORK                                                                     

   Over the past 29 years, Hub Group has grown from a single office with two
employees into a network of 27 Hubs in the United States, one Hub in Canada and 
one Hub in Mexico. Hub Group also has several satellite sales offices. In       
developing this network, the Company has carefully selected each location to    
ensure coverage in areas with significant concentrations of shipping customers  
and one or more railheads. Hub Group currently has Hubs in the following cities:

Atlanta          Houston          Milwaukee         St. Louis           
Baltimore        Indianapolis     New Orleans       Salt Lake City      
Boston           Jacksonville     New York City     San Francisco       
Chicago (3)      Kansas City      Philadelphia      Seattle             
Cleveland        Los Angeles      Pittsburgh        Toledo              
Detroit          Memphis          Portland          Toronto             
Grand Rapids     Mexico City      Rochester                             

The entire Hub network is interactively connected through the Company's AIM     
system. This enables Hub Group to move freight into and out of every major city 
in the United States and most locations in Canada and Mexico.                   

 Each Hub manages the freight originating in or destined for its service
area. In a typical intermodal transaction, the customer contacts the local Hub  
to obtain shipping schedules and a price quote for a particular freight         
movement. The local Hub obtains the necessary intermodal equipment, arranges for
it to be delivered to the customer by a drayage company and, after the freight  
is loaded, arranges for the transportation of the container or trailer to the   
rail ramp. Information is entered into the AIM system by the local Hub, which   
monitors the shipment to ensure that it will arrive as scheduled. This          
information is simultaneously transmitted through the AIM system to the Hub     
closest to the point of delivery, which arranges for and confirms delivery by a 
drayage company. This arrangement among the Hubs is transparent to the customer 
and allows the customer to maintain its relationship solely with the originating
Hub.                                                                            

The Company provides brokerage services to its customers in a similar 
manner. In a typical brokerage transaction, the customer contacts the local Hub 
to obtain transit information and a price quote for a particular freight        
movement. The customer then provides appropriate shipping information to the    
local Hub. The local Hub makes the delivery appointment and arranges with the   
appropriate carrier to pick up the freight. Once it receives confirmation that  
the freight has been picked up, the local Hub monitors the movement of the      
freight until it reaches its destination and the delivery has been confirmed. If
the carrier notifies Hub Group that after delivering the load it will need      
additional freight, the Hub located nearest the destination is notified of the  
carrier's availability. Although it is under no obligation to do so, the local  
Hub then may attempt, if requested by the carrier, to secure freight for the    
carrier.                                                                        

MARKETING AND CUSTOMERS                                                         

 The Company believes that fostering long-term customer relationships is
critical to the Company's success. Through these long-term relationships, the   
Company is able to better understand its customer's needs and to tailor         
transportation services for a specific customer, regardless of the customer's   
size or volume. The Company has created a database of current and prospective   
customers, profiling each customer's shipping patterns, which the Company       
periodically updates. This database allows the Company to target its marketing  
to meet each customer's specific requirements.                                  

   The Company currently has full time marketing representatives at each Hub
with primary responsibility for servicing local and regional accounts. These    
sales representatives work from the 29 Hubs and the Company's satellite sales   
offices. This network provides a local marketing contact for small and medium   
shippers in most major metropolitan areas within the United States.             

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     In 1985, the Company established the National Accounts group to service the
needs of the nation's largest shippers. The Company recognized that although    
large shippers originate freight from multiple locations throughout the country,
their logistics function is usually centralized. The Company essentially        
mirrored this structure by servicing national accounts from a central location  
and parceling out the servicing of individual freight shipments to the          
appropriate Hub. There are currently 21 National Accounts sales representatives 
who report to the Company's Executive Vice President of National Accounts. The  
National Accounts sales representatives regularly call on the nation's largest  
shippers to develop business relationships and to expand the Company's          
participation in servicing their transportation needs. When a business          
opportunity is identified by a National Accounts sales representative, the      
Company's market development and pricing personnel and the local Hubs work      
together to provide a transportation solution tailored to the customer's needs. 
Local Hubs provide transportation services to National Accounts customers. After
the plan is implemented, National Accounts' personnel maintain regular contact  
with the shipper to ensure customer satisfaction and to refine the process as   
necessary.                                                                      

This unique combination of local and regional marketing has produced a
large, diverse customer base. The Company services customers in a wide variety  
of industries, including automotive, consumer products, printing, paper, retail,
chemicals and electronics.                                                      

MANAGEMENT INFORMATION SYSTEMS                                                  

 A primary component of the Company's business strategy is the continued
improvement of its AIM system and other technology to ensure that the Company   
will remain a leader among transportation providers in information processing   
for transportation services. The AIM system consists of a network of IBM AS/400 
computers located at the Hubs and linked to a host computer at the Company's    
headquarters. Hub Group uses IBM's Global Network as the nucleus for linking its
computers and databases. This configuration provides a real time environment for
transmitting data among the Hubs and the Company's headquarters using electronic
data interchange ("EDI"), electronic mail and other protocols. It also allows   
Hub to communicate electronically with each railroad, certain drayage companies 
and those customers with EDI capabilities.                                      

   The Company's proprietary AIM system is the primary mechanism used by the
Hubs to process customer transportation requests, schedule and track shipments, 
prepare customer billing, establish account profiles and retain critical        
information for analysis. The AIM system provides connectivity with each of the 
major rail carriers, enabling the Company to electronically schedule and track  
shipments in a real time environment. In addition, the AIM system's EDI features
offer customers with EDI capability a completely paperless process, including   
load tendering, shipment dispatch, shipment tracking, customer billing and      
remittance processing. The Company aggressively pursues opportunities to        
establish EDI interfaces with its customers and carriers.                       

To more effectively manage its highway services business, the Company 
utilizes software that is designed to automate the Company's highway services   
operations. This software processes customer transportation requests, schedules 
and tracks shipments, prepares customer billing, establishes account profiles   
and retains critical information for analysis. It also interfaces with the      
carrier by handling load tendering, shipment dispatch, shipment tracking,       
customer billing and remittance processing.                                     

During 1999 the Company began work on a number of web-based software  
applications. The Company began the process of implementing the first of these  
applications, Vendor Interface, in the fourth quarter of 1999. Vendor Interface 
was designed to allow the Company's drayage partners to interface with the      
Company using the internet rather than phone or faxes. Vendor Interface allows  
the Company to tender loads to draymen, captures event status and helps         
facilitate appropriate payment. Current internet applications are, and future   
internet applications will be, integrated with the AIM system.                  

The Company also purchased a new software package in 1999 designed to 
replace its existing ATMS. This software may be used by the Company when        
offering logistics management services to customers that ship via multiple      
modes, including intermodal, truckload, and less than truckload, allowing the   
Company to optimize mode and carrier selection and routing for its customers.   
The Company has installed this software package and is currently preparing the  
software for its operational applications.                                      

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RELATIONSHIP WITH RAILROADS                                                     

     A key element of the Company's business strategy is to strengthen its close
working relationship with each of the major intermodal railroads in the United  
States. The Company views its relationship with the railroads as a partnership. 
Due to the Company's size and relative importance, many railroads have dedicated
support personnel to focus on the Company's day-to-day service requirements. On 
a regular basis, senior executives of the Company and each of the railroads meet
to discuss major strategic issues concerning intermodal transportation. Several 
of the Company's executive officers, including both the Company's Chairman and  
President, are former railroad employees, which makes them well-suited to       
understand the railroads' service capabilities.                                 

The Company has contracts with each of the following major railroads:           

     Burlington Northern Santa Fe Railway         Kansas City Southern
 Canadian Pacific                             Norfolk Southern
CSX                                          Union Pacific  
Illinois Central                                            

The Company also has contracts with each of the following major fourth-party    
service providers: Mitsui O.S.K. Lines (America) Inc., Pacer International, Inc.
and K-Line America, Inc..                                                       

These contracts govern the transportation services and payment terms  
pursuant to which the Company's intermodal shipments are handled by the         
railroads. The contracts have staggered renewal terms with the earliest         
expiration occurring during 2000. While there can be no assurances that these   
contracts will be renewed, the Company has in the past successfully negotiated  
extensions of these contracts. Transportation rates are market driven and are   
typically negotiated between the Company and the railroads or fourth-party      
service providers on a customer specific basis. Consistent with industry        
practice, many of the rates negotiated by the Company are special commodity     
quotations ("SCQs"), which provide discounts from published price lists based on
competitive market factors and are designed by the railroads or fourth-party    
service providers to attract new business or to retain existing business. SCQ   
rates are generally issued for the account of a single IMC. SCQ rates apply to  
specific customers in specified shipping lanes for a specific period of time,   
usually six to 12 months.                                                       

RELATIONSHIP WITH DRAYAGE COMPANIES                                             

In 1990, the Company instituted its "Quality Drayage Program," which  
consists of agreements and rules that govern the framework pursuant to which the
drayage companies perform services for the Company. Participants in the program 
commit to provide high quality service, clean and safe equipment, maintain a    
defined on-time performance level and follow specified procedures designed to   
minimize freight loss and damage. Whenever possible, the Company uses the       
services of drayage companies that participate in its Quality Drayage Program.  
However, during periods of high demand for drayage services or at the request of
a customer, the Company will use the services of other drayage companies. The   
local Hubs negotiate drayage rates for transportation between specific origin   
and destination points. These rates generally are valid, with minor exceptions  
for fuel surcharge increases, for a period of one year.                         

RELATIONSHIP WITH TRUCKLOAD CARRIERS                                            

    The Company's brokerage operation has a large and growing number of active
carriers in its database which it uses to transport freight. The local Hubs deal
daily with these carriers on an operational level. Hub Highway Services, a      
partnership controlled by the Company, handles the administrative and regulatory
aspects of the carrier relationship. Hub's relationships with its carriers are  
important since these relationships determine pricing, load coverage and overall
service.                                                                        

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RISK MANAGEMENT AND INSURANCE                                                   

 The Company requires all drayage companies participating in the Quality
Drayage Program to carry at least $1.0 million in general liability insurance,  
$1.0 million in truckman's auto liability insurance and to obtain, either on    
their own or through the Company, $1.0 million in cargo insurance. Railroads,   
which are self insured, provide limited cargo protection, generally up to       
$250,000 per shipment, although higher coverage is available on a load-by-load  
basis. To cover freight loss or damage when a carrier's liability cannot be     
established or a carrier's insurance is insufficient to cover the claim, the    
Company carries its own cargo insurance with a limit of $2.0 million per        
container or trailer and a limit of $20 million per occurrence. The Company also
carries general liability insurance with limits of $1.0 million per occurrence  
and $2.0 million in the aggregate with a companion $10.0 million umbrella policy
on this general liability insurance.                                            

GOVERNMENT REGULATION                                                           

Hub Highway Services is licensed by the Department of Transportation  
("DOT") as a broker in arranging for the transportation of general commodities  
by motor vehicle. To the extent that the Hubs perform truck brokerage services, 
they do so under the license granted to Hub Highway Services. The DOT prescribes
qualifications for acting in this capacity, including certain surety bonding    
requirements. While the DOT requires a $10,000 surety bond to maintain this     
license, the Company has voluntarily posted a $300,000 surety bond. To date,    
compliance with these regulations has not had a material adverse effect on the  
Company's results of operations or financial condition. However, the            
transportation industry is subject to legislative or regulatory changes that can
affect the economics of the industry by requiring changes in operating practices
or influencing the demand for, and cost of providing, transportation services.  

COMPETITION                                                                     

 The transportation services industry is highly competitive. The Company
competes against other IMCs, as well as logistics companies, third party        
brokers, over-the-road truckload carriers and railroads that market their own   
intermodal services. There is an emerging trend for larger truckload carriers to
enter into agreements with railroads to market intermodal services nationwide.  
In addition, many existing and start-up companies are using the internet to     
market transportation services. Competition is based primarily on freight rates,
quality of service, reliability, transit time and scope of operations. Several  
transportation service companies and truckload carriers, and all of the major   
railroads, have substantially greater financial and other resources than the    
Company.                                                                        

GENERAL                                                                         

EMPLOYEES As of February 29, 2000, the Company had approximately 1,593
employees. The Company is not a party to any collective bargaining agreement and
considers its relationship with its employees to be satisfactory.               

OTHER No material portion of the Company's operations is subject to   
renegotiation of profits or termination of contracts at the election of the     
federal government. The Company has not spent a material amount on company      
sponsored research and development activities or on customer sponsored research 
activities. None of the Company's patents and trademarks is believed to be      
material to the Company. The Company's business is seasonal to the extent that  
certain customer groups, such as retail, are seasonal.                          

ITEM 2.       PROPERTIES                                                        

    The Company directly, or indirectly through the Hub Partnerships, operates
41 offices throughout the United States and in Canada and Mexico, including the 
Company's headquarters in Lombard, Illinois and its Company-owned drayage       
operations. On March 1, 1999, the Company relocated its National Accounts office
in Stamford, Connecticut to corporate headquarters in Lombard, Illinois. The    
office building used by the Hub located in Toledo is owned, and the remainder   
are leased. Most office leases have initial terms of more than one year, and    
many include options to renew. While some of the Company's leases are           
month-to-month and others expire in the near term, the Company does not believe 
that it will have difficulty in renewing them or in finding alternative office  
space. The Company believes that its offices are adequate for the purposes for  
which they are currently used.                                                  

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ITEM 3.       LEGAL PROCEEDINGS                                                 

The Company is a party to routine litigation incident to its business,
primarily claims for freight lost or damaged in transit or improperly shipped.  
Most of the lawsuits to which the Company is party are covered by insurance and 
are being defended by the Company's insurance carriers. Management does not     
believe that the litigation to which it is currently a party, if determined     
adversely to the Company, would individually or in the aggregate have a         
materially adverse effect on the Company's financial position or results of     
operations. See Item 1 Business - Risk Management and Insurance.                

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS               

     There were no matters submitted to a vote of the Company's security holders
during the fourth quarter of 2000.                                              

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EXECUTIVE OFFICERS OF THE REGISTRANT                                            

     In reliance on General Instruction G to Form 10-K, information on executive
officers of the Registrant is included in this Part I. The table sets forth     
certain information as of March 20, 2000 with respect to each person who is an  
executive officer of the Company.                                               

NAME            AGE                    POSITION                     
------------------   -----    --------------------------------------------------
Phillip C. Yeager     72      Chairman of the Board of Directors                
David P. Yeager       47      Vice Chairman of the Board of Directors and Chief 
Executive Officer   
Thomas L. Hardin      54      President, Chief Operating Officer and Director   
Mark A. Yeager        35      President- Field Operations                       
Daniel F. Hardman     51      President-Chicago Region                          
Jay E. Parker         35      Vice President-Finance, Chief Financial Officer   
and Treasurer       
John T. Donnell       60      Executive Vice President-National Accounts        
Richard M. Rogan      60      President-Hub Highway Services, Executive Vice    
President-Marketing 
Daniel L. Sellers     44      Vice President-Information Services and Chief     
Information Officer 
David C. Zeilstra     30      Vice President, Secretary and General Counsel     

  Phillip C. Yeager, the Company's founder, has been Chairman of the Board
since October 1985. From April 1971 to October 1985, Mr. Yeager served as       
President of Hub Chicago. Mr. Yeager became involved in intermodal              
transportation in 1959, five years after the introduction of intermodal         
transportation in the United States, as an employee of the Pennsylvania and     
Pennsylvania Central Railroads. He spent 19 years with the Pennsylvania and     
Pennsylvania Central Railroads, 12 of which involved intermodal transportation. 
In 1991, Mr. Yeager was named Man of the Year by the Intermodal Transportation  
Association. In 1995, he received the Salzburg Practitioners Award from Syracuse
University in recognition of his lifetime achievements in the transportation    
industry. In October 1996, Mr. Yeager was inducted into the Chicago Area        
Entrepreneurship Hall of Fame sponsored by the University of Illinois at        
Chicago. In March 1997, he received the Presidential Medal from Dowling College 
for his achievements in transportation services. In September 1998 he received  
the Silver Kingpin award from the Intermodal Association of North America and in
February 1999 he was named Transportation Person of the Year by the New York    
Traffic Club. Mr. Yeager graduated from the University of Cincinnati in 1951    
with a Bachelor of Arts degree in Economics. Mr. Yeager is the father of David  
P. Yeager and Mark A. Yeager.                                                   

David P. Yeager has served as the Company's Vice Chairman of the Board
since January 1992 and as Chief Executive Officer of the Company since March    
1995. From October 1985 through December 1991, Mr. Yeager was President of Hub  
Chicago. From 1983 to October 1985, he served as Vice President, Marketing of   
Hub Chicago. Mr. Yeager founded the St. Louis Hub in 1980 and served as its     
President from 1980 to 1983. Mr. Yeager founded the Pittsburgh Hub in 1975 and  
served as its President from 1975 to 1977. Mr. Yeager received a Masters in     
Business Administration degree from the University of Chicago in 1987 and a     
Bachelor of Arts degree from the University of Dayton in 1975. Mr. Yeager is the
son of Phillip C. Yeager and the brother of Mark A. Yeager.  Mr. Yeager also    
serves as a director of SPR Inc.                                                

   Thomas L. Hardin has served as the Company's President since October 1985
and has served as Chief Operating Officer and a director of the Company since   
March 1995. From January 1980 to September 1985, Mr. Hardin was Vice            
President-Operations and from June 1972 to December 1979, he was General Manager
of the Company. Prior to joining the Company, Mr. Hardin worked for the Missouri
Pacific Railroad where he held various marketing and pricing positions. Mr.     
Hardin is presently Chairman of the Intermodal Association of North America.    

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Mark A. Yeager has been the Company's President-Field Operations since
July 1999.  From November 1997 through June 1999 Mr. Yeager was Division        
President, Secretary and General Counsel.  From March 1995 to November 1997,    
Mr. Yeager was Vice President, Secretary and General Counsel.  From May 1992 to 
March 1995, Mr. Yeager served as the Company's Vice President-Quality. Prior to 
joining the Company in 1992, Mr. Yeager was an associate at the law firm of     
Grippo & Elden from January 1991 through May 1992 and an associate at the law   
firm of Sidley & Austin from May 1989 through January 1991. Mr. Yeager received 
a Juris Doctor degree from Georgetown University in 1989 and a Bachelor of Arts 
degree from Indiana University in 1986. Mr. Yeager is the son of Phillip C.     
Yeager and the brother of David P. Yeager.                                      

Daniel F. Hardman has been the President-Chicago Region since February
1996. Mr. Hardman has been employed by the Hub Group since 1982, serving as     
President of Hub Chicago from December 1992 to February 1996, Vice President of 
Hub Chicago from January 1987 to December 1992, General Manager of Sales of Hub 
Chicago from August 1985 to January 1987, President of Hub Charlotte from June  
1984 to August 1985 and Regional Sales Manager of Hub Chicago from December 1982
to June 1984. Mr. Hardman is a former Director of the Intermodal Transportation 
Association and is presently a member of the Chicago Traffic Club and the       
Chicago Intermodal Transportation Association. Mr. Hardman is a 1991 graduate of
the Certificate Program in Business Administration from the University of       
Illinois.                                                                       

Jay E. Parker has been the Company's Vice President of Finance, Chief 
Financial Officer and Treasurer since June 1999. From July 1995 through May 1999
Mr. Parker was the Company's Corporate Controller. Prior to joining the Company,
Mr. Parker was the Director of Financial Reporting at Discovery Zone, Inc. from 
July 1994 through June 1995 and held various positions, including Audit Manager,
with Arthur Andersen from December 1988 through June 1994. Mr. Parker received a
Masters of Accounting Science from Northern Illinois University in 1988, became 
a Certified Public Accountant in 1987 and received a Bachelor of Science degree 
in Finance from Northern Illinois University in 1986.                           

John T. Donnell has been Executive Vice President of National Accounts
since October 1993. From October 1985 through October 1993, Mr. Donnell served  
as Vice President of National Accounts. Prior to joining the Company in 1985,   
Mr. Donnell worked for Transamerica Leasing as Vice President of Marketing where
he was responsible for marketing 40,000 intermodal trailers to the railroads and
the intermodal marketing industry. Mr. Donnell received a Master of Business    
Administration degree from Northwestern University in 1981 and a Bachelor of    
Science degree in Marketing from Northeast Louisiana University in 1961.        

Richard M. Rogan has been Executive Vice President of Marketing since 
November 1997 and President of Hub Highway Services since May 1995. Prior to    
joining the Company, Mr. Rogan was Executive Vice President of National Freight,
Inc. from May 1993 to April 1995. Prior to that, Mr. Rogan was with Burlington  
Motor Carriers, Inc., where he served as President and Chief Executive Officer  
from March 1988 to April 1993 and as an Executive Vice President from July 1985 
to February 1988. Mr. Rogan's transportation career spans 25 years and includes 
earlier assignments with the Illinois Central Railroad, North American Van Lines
and Schneider National. He received a Bachelor of Business Administration degree
from Loyola University of Chicago in 1962 and a Master of Business              
Administration degree from the Wharton School of the University of Pennsylvania 
in 1963. He has served on the Board of Directors of the ATA Foundation as well  
as the Interstate Truckload Carrier Conference ("ITCC"). He is a past Chairman  
of the ITCC Highway Policy Committee and has also served on the Advisory Board  
of the Trucking Profitability Strategies Conference at the University of        
Georgia.                                                                        

Daniel L. Sellers has been the Company's Vice President of Information
Services and Chief Information Officer since December 1998.  Prior to joining   
the Company, Mr. Sellers was Vice President of Information Systems with Humana, 
Inc. from February 1997 to December 1998.  Prior to that, Mr. Sellers was Vice  
President and General Manager of OmniTracs software with Qualcomm, Inc. from    
November 1993 to February 1997.  Mr. Sellers also worked in the transportation  
industry for 15 years with Schneider National, Inc. in a variety of positions,  
including as Vice President and Chief Information Officer of Information        
Systems.  He received a Bachelor of Business Administration from the University 
of Cincinnati in 1978 and a Masters in Business Administration from the         
University of Wisconsin Graduate School of Business in 1983.  Mr. Sellers is a  
past member of the American Trucking Association's Management Systems Council.  

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David C. Zeilstra has been the Company's Vice President, Secretary and
General Counsel since July 1999. From December 1996 through June 1999, Mr.      
Zeilstra was the Company's Assistant General Counsel. Prior to joining the      
Company, Mr. Zeilstra was an associate with the law firm of Mayer, Brown and    
Platt from September 1994 through November 1996. Mr. Zeilstra received a Juris  
Doctor degree from the Duke University School of Law in 1994 and a Bachelor of  
Arts degree from Wheaton College in 1990.                                       

 PART II

ITEM 5.       MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED SHAREHOLDER      
MATTERS                                             

The Class A Common Stock of the Company trades on the NASDAQ National 
Market tier of The NASDAQ Stock Market ("NASDAQ") under the symbol "HUBG." Set  
forth below are the high and low prices for shares of the Class A Common Stock  
of the Company for each full quarterly period in 1998 and 1999.                 

                          1998                        1999
                          ----------                  ----------
                           HIGH       LOW             HIGH         LOW
                            --------   -------         --------    ---------
    First Quarter         $ 30       $ 25            $23 3/4     $18 7/8

Second Quarter        $ 28 1/8   $ 19 3/4        $27 7/8     $21

     Third Quarter         $ 24       $ 15 3/4        $27 1/16    $20 7/16

      Fourth Quarter        $ 20 1/4   $ 12 3/4        $21         $14 11/16

  On March 27, 2000, there were approximately 42 stockholders of record of
the Class A Common Stock and, in addition, there were an estimated 1,500        
beneficial owners of the Class A Common Stock whose shares were held by brokers 
and other fiduciary institutions. On March 27, 2000, there were nine holders of 
record of the Company's Class B common stock (the "Class B Common Stock"        
together with the Class A Common Stock, the "Common Stock").                    

   The Company was incorporated in 1995 and has never paid cash dividends on
either the Class A Common Stock or the Class B Common Stock. The declaration and
payment of dividends by the Company are subject to the discretion of the Board  
of Directors. Any determination as to the payment of dividends will depend upon 
the results of operations, capital requirements and financial condition of the  
Company, and such other factors as the Board of Directors may deem relevant.    
Accordingly, there can be no assurance that the Board of Directors will declare 
or pay dividends on the shares of Common Stock in the future. The certificate of
incorporation of the Company requires that any cash dividends must be paid      
equally on each outstanding share of Class A Common Stock and Class B Common    
Stock. The Company's credit facility and private placement debt prohibit the    
Company from paying dividends on the Common Stock if there has been, or         
immediately following the payment of a dividend would be, a default or an event 
of default under the credit facility or private placement debt. The Company is  
currently in compliance with the covenants contained in the credit facility and 
private placement debt.                                                         

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ITEM 6.        SELECTED FINANCIAL DATA                                          

 SELECTED FINANCIAL DATA
(in thousands except per share data)

                                                        [Enlarge/Download Table]


                                                                        YEARS ENDED DECEMBER 31,                      
                                                    ------------------------------------------------------------------
                                                           1999          1998       1997(1)      1996(2)       1995   
                                                    -------------- ------------- ------------ ------------ -----------
                                                                                                                      
STATEMENT OF OPERATIONS DATA:                                                                                         
Revenue                                               $ 1,296,799   $ 1,145,906   $1,064,479   $ 754,243     $ 81,408 
Net revenue                                               162,415       138,334      129,855      91,564        6,266 
Operating income                                           30,134        26,406       33,495      27,925        2,567 
Income before minority interest and taxes                  23,659        25,324       32,869      27,704        2,638 
Income before taxes                                        18,384        15,205       15,874      11,338        2,638 
Historical net income                                      10,846         8,908        9,525       7,044        2,599 
Historical basic earnings per common share            $      1.41   $      1.16   $     1.48   $    1.41     $   1.56 
Historical diluted earnings per common share          $      1.40   $      1.15   $     1.46   $    1.39     $   1.56 
Pro forma provision for additional income taxes(3)                                                   241        1,016 
Pro forma net income                                                                           $   6,803     $  1,583 
Pro forma basic earnings per common share                                                      $    1.36     $   0.95 
Pro forma diluted earnings per common share                                                    $    1.35     $   0.95 
                                                        [Enlarge/Download Table]


                                                                  AS OF DECEMBER 31,                         
                                           ------------------------------------------------------------------
                                                 1999          1998        1997(1)      1996(2)       1995   
                                           -------------- ------------- ------------ ------------ -----------
                                                                                                             
BALANCE SHEET DATA:                                                                                          
Working capital                              $    21,504   $    20,313   $   15,209   $  15,877     $    804 
Total assets                                     441,609       304,791      267,826     201,225        9,083 
Long-term debt, excluding current portion        131,414        29,589       22,873      28,714            - 
Stockholders' equity                             131,124       119,673      110,462      46,124        1,165 

(1) In September 1997, the Company issued 1,725,000 shares of Class A common    
stock through a secondary offering which resulted in net proceeds of            
approximately $54,763,000. These proceeds were used to purchase the remaining   
70% minority interest in Hub City Los Angeles, L.P. and Hub City Golden Gate,   
L.P. See the Notes to the Company's Consolidated Financial Statements.          

(2) On March 18, 1996, Hub Group, Inc. purchased Hub City Terminals, Inc. ("Hub 
Chicago") in a stock-for-stock acquisition through the issuance of 1,000,000    
shares of the Company's Class A common stock and 662,296 shares of the Company's
Class B common stock. Hub Chicago has been accounted for similar to the pooling 
of interests method of accounting and has been included in all periods presented
on a historical cost basis. Concurrent with the acquisition of Hub Chicago, the 
Company completed the initial public offering of 4,261,250 shares of its Class A
common stock, with net proceeds to the Company of approximately $52,945,000.    
Coincident with the initial public offering, a selling stockholder sold         
1,000,000 shares of the Company's Class A common stock through a secondary      
offering. The Company did not receive any net proceeds from the sale of the     
shares by the selling stockholder. Concurrent with the initial public offering, 
the Company acquired with cash a controlling interest in each of 27 operating   
partnerships. On May 2, 1996, the Company acquired the rights to service the    
customers of American President Lines Domestic Distribution Services. See the   
Notes to the Company's Consolidated Financial Statements.                       

(3) Prior to March 18, 1996, the Company was an S corporation and not subject to
federal corporate income taxes. On March 18, 1996, the Company changed its      
status from an S corporation to a C corporation. The statement of operations    
data reflects a pro forma provision for income taxes as if the Company were     
subject to federal and state corporate income taxes for all periods presented.  
The pro forma provision reflects a combined federal and state tax rate of 40%.  
See the Notes to the Company's Consolidated Financial Statements.               

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ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL             
CONDITION AND RESULTS OF OPERATIONS         

CAPITAL STRUCTURE                                                               

       Hub Group, Inc. (the "Company") was incorporated on March 8, 1995. On
March 18, 1996, Hub Group, Inc. purchased Hub City Terminals, Inc. ("Hub        
Chicago") in a stock-for-stock acquisition through the issuance of 1,000,000    
shares of Class A common stock and 662,296 shares of Class B common stock. Hub  
Chicago has been accounted for similar to the pooling of interests method of    
accounting and has been included in all periods presented on a historical cost  
basis. Concurrent with the acquisition of Hub Chicago in March 1996, Hub Group, 
Inc. completed the initial public offering of 4,261,250 shares of its Class A   
common stock. Coincident with the initial public offering, a selling stockholder
sold 1,000,000 shares of Hub Group, Inc. Class A common stock through a         
secondary offering. In September 1997, Hub Group, Inc. completed a secondary    
offering of 1,725,000 shares of Hub Group, Inc.'s Class A common stock.         

BUSINESS COMBINATIONS                                                           

   On October 31, 1997, the Company acquired the 50% interest in its
international joint venture, HLX Company, LLC ("HLX"), that it did not          
previously own. HLX offers point-to-point international transportation services 
with a focus on the North American movement of import and export freight.       

        On April 1, 1998, the Company acquired all of the outstanding stock of
Quality Intermodal Corporation ("Quality"). Quality primarily offered intermodal
and truckload brokerage services with offices in Houston, Dallas, Los Angeles,  
Chicago, Atlanta, and Philadelphia. The Company absorbed the Quality business   
directly into its existing operations.                                          

   On August 1, 1998, the Company acquired the rights to service the
customers of Corporate Express Distribution Services ("CEDS") as well as certain
fixed assets. The CEDS business is being operated by Hub Group Distribution     
Services ("Hub Distribution"), the Company's niche logistic services provider.  
CEDS was a provider of niche logistic services including a pharmaceutical       
sample delivery operation.                                                      

CALL OPTIONS                                                                    

   On March 1, 1997, the Company exercised its option to purchase an
approximate 44% minority interest in Hub Distribution. The Company paid $1.6    
million in cash.                                                                

  On September 17, 1997, the Company exercised its call options to
acquire the remaining 70% minority interests in Hub City Los Angeles, L.P. and  
Hub City Golden Gate, L.P. The Company paid $59.4 million in cash.              

        On October 31, 1997, the Company exercised its call option to purchase
the remaining 70% minority interest in Hub City New Orleans, L.P. for one       
dollar.                                                                         

         On April 1, 1998, the Company exercised its call options to acquire the
remaining 70% minority interests in Hub City Rio Grande, L.P., Hub City Dallas, 
L.P., and Hub City Houston, L.P. ("Texas Hubs").  The Company paid $6.2 million 
in cash.                                                                        

         On April 1, 1999, Hub Group, Inc. exercised its call options to acquire
the remaining 70% minority interests in Hub City Alabama, L.P., Hub City        
Atlanta, L.P., Hub City Boston, L.P., Hub City Canada, L.P., Hub City Cleveland,
L.P., Hub City Detroit, L.P., Hub City Florida, L.P., Hub City Indianapolis,    
L.P., Hub City Kansas City, L.P., Hub City Mid-Atlantic, L.P., Hub City New     
York/New Jersey, L.P., Hub City New York State, L.P., Hub City Ohio, L.P., Hub  
City Philadelphia, L.P., Hub City Pittsburgh, L.P., Hub City Portland, L.P., and
Hub City St. Louis, L.P. (collectively referred to as the "April 1999           
Purchase").  The Company paid $108.7 million in cash.                           

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RESULTS OF OPERATIONS                                                           

YEAR ENDED DECEMBER 31, 1999, COMPARED TO YEAR ENDED DECEMBER 31, 1998          

REVENUE                                                                         

     Revenue for the Company increased 13.2% to $1,296.8 million in 1999
from $1,145.9 million in 1998. Intermodal revenue increased 6.2% over 1998.     
Management believes that the service disruption from the split-up of Conrail    
which began on June 1, 1999 negatively impacted intermodal revenue growth.      
Truckload brokerage revenue increased 19.3% over 1998. The Company has          
successfully grown truckload brokerage by cross-selling to its intermodal       
customers and employing dedicated and experienced personnel in each Hub.        
Logistics revenue increased 88.3% compared to 1998. This increase was primarily 
due to the increase in revenue from the Company's niche logistic services       
performed by Hub Distribution.                                                  

NET REVENUE                                                                     

   Net revenue increased 17.4% to $162.4 million in 1999 from $138.3
million in 1998. Net revenue as a percentage of revenue increased to 12.5% from 
12.1% in 1998. Management believes the primary cause of this increase is the    
growth in niche logistic services which earns a higher net revenue percentage of
revenue than does the Company's core intermodal and brokerage service offerings.

SALARIES AND BENEFITS                                                           

     Salaries and benefits increased 16.0% to $84.1 million in 1999 from
$72.5 million in 1998. As a percentage of revenue, salaries and benefits        
increased to 6.5% from 6.3% in 1998. The increase in the percentage is primarily
attributed to the increased headcount supporting the Company's information      
technology initiatives and growth in niche logistic services. The Company's     
niche logistic services requires a higher level of salaries and benefits as     
compared to revenue than does the Company's core intermodal and brokerage       
service offerings.                                                              

SELLING, GENERAL AND ADMINISTRATIVE                                             

       Selling, general and administrative expenses increased 16.3% to $38.2
million in 1999 from $32.9 million in 1998. These expenses as a percentage of   
revenue remained constant at 2.9%. While the percentage of revenue is consistent
with the prior year, the $5.3 million increase in expenses is primarily         
attributed to information systems, travel and outside services. The Company's   
increased information systems expenditures related to consulting, Year 2000     
remediation and validation, and enhancements to the Company's operating system. 
Travel and related expenses increased due primarily to a national sales meeting 
held in 1999 that was not held in the previous year and increased expenditures  
to support growth in the Company's niche logistic services. Outside service     
expenditures relate to contracted temporary labor and other services to handle  
increased business for niche logistic services and outside sales commissions.   

DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT                         

      Depreciation and amortization increased 9.5% to $4.0 million in 1999
from $3.7 million in 1998. This expense as a percentage of revenue remained     
constant at 0.3%.                                                               

AMORTIZATION OF GOODWILL                                                        

    Amortization of goodwill increased 74.1% to $5.1 million from $2.9
million in 1998. The expense as a percentage of revenue increased to 0.4% from  
0.3% in 1998. The increase in expense is primarily attributable to the          
amortization of the goodwill associated with the purchase of the remaining 70%  
minority interests in connection with the April 1999 Purchase.                  

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CHANGE IN ESTIMATE/IMPAIRMENT OF PROPERTY AND EQUIPMENT                         

 In the second quarter of 1999, a $0.9 million pretax charge was
recorded due to a change in estimate and an impairment loss relating to certain 
operating software applications. Specifically, $0.7 million of this charge was  
attributable to a change in estimate of the useful life for the Visual Movement 
software previously used primarily for brokerage. The Visual Movement software  
is no longer being used by the Company and was replaced with enhancements to the
Company's proprietary intermodal operating software during the second quarter of
1999. These enhancements allow for greater network visibility of loads in a year
2000 compliant program. The $0.2 million impairment loss related to the         
write-down of a logistics software program. The fair value was determined based 
on the estimated future cash flows attributable to the single customer using    
this program. The Company has installed this software package and is currently  
preparing the software for its operational applications. This new software will 
provide enhanced functionality.                                                 

OTHER INCOME (EXPENSE)                                                          

         Interest expense increased to $8.6 million in 1999 from $2.5 million in
1998. The increase in interest expense is due primarily to the additional debt  
required to fund the purchases of the remaining 70% minority interests in       
connection with the April 1999 Purchase. In addition, debt increased as a result
of the acquisition of Quality and the purchase of the minority interest in the  
Texas Hubs in April 1998.                                                       

        Interest income decreased to $0.9 million in 1999 from $1.0 million in
1998. The primary cause for this decrease is the Company's increased            
concentration of its cash balances to reduce debt and minimize interest expense 
on borrowings.                                                                  

        Other income of $1.2 million in 1999 is primarily due to non-recurring
income recognized upon execution of an agreement with one of the Company's      
vendors.                                                                        

MINORITY INTEREST                                                               

      Minority interest decreased 47.9% to $5.3 million in 1999 from $10.1
million in 1998. Minority interest as a percentage of income before minority    
interest and provision for income taxes was 22.3% in 1999 compared to 40.0% in  
1998. The decrease in the percentage is primarily attributed to the purchase of 
remaining 70% minority interest in connection with the April 1999 Purchase as   
well as the purchase of minority interest in the Texas Hubs in April 1998.      

PROVISION FOR INCOME TAXES                                                      

         The provision for income taxes increased 19.7% to $7.5 million compared
to $6.3 million in 1998. The Company provided for income taxes using an         
effective rate of 41.0% in 1999 versus 41.4% in 1998.                           

NET INCOME                                                                      

     Historical net income increased 21.8% to $10.8 million in 1999 from
$8.9 million in 1998. Historical net income as a percentage of revenue remained 
constant at 0.8%.                                                               

EARNINGS PER COMMON SHARE                                                       

        Basic earnings per common share increased 21.6% to $1.41 from $1.16 in
1998. Diluted earnings per common share increased 21.7% to $1.40 in 1999 from   
$1.15 in 1998.                                                                  

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YEAR ENDED DECEMBER 31, 1998, COMPARED TO YEAR ENDED DECEMBER 31, 1997          

REVENUE                                                                         

         Revenue for the Company increased 7.6% to $1,145.9 million in 1998 from
$1,064.5 million in 1997. Intermodal revenue increased 7.2% over 1997.          
Management believes that the well-publicized railroad service disruptions       
experienced by the intermodal industry during 1998 negatively impacted          
intermodal revenue growth. Truckload brokerage revenue increased 27.3% over     
1997. The Company has successfully maintained its expansion into this service   
offering by employing dedicated and experienced personnel in each Hub. Logistics
revenue decreased 17.4% over revenue for 1997. This decrease was due to the     
Company's cancellation of its contract to provide third-party logistics services
to a significant customer in January 1998. This customer accounted for $32.5    
million of the Company's revenue in 1997.                                       

NET REVENUE                                                                     

  Net revenue increased 6.5% to $138.3 million in 1998 from $129.9
million in 1997. Net revenue as a percentage of revenue decreased slightly to   
12.1% from 12.2% in 1997. Management believes the primary cause of this slight  
decrease is due to the increased transportation costs resulting from the service
disruptions that were prevalent in 1998. At times the Company used higher cost  
alternative routing and incurred accessorials for detention and storage which   
were not passed on to the customer in an effort to maintain the long-term       
relationships the Company enjoys with many of its customers.                    

SALARIES AND BENEFITS                                                           

     Salaries and benefits increased 12.7% to $72.5 million in 1998 over
$64.3 million in 1997. As a percentage of revenue, salaries and benefits        
increased to 6.3% from 6.0% in 1997. The increase in the percentage is          
attributed to the increased number of personnel needed to handle the Company's  
intermodal business. Due to the service disruptions, personnel were required to 
spend significantly more time per load to operate and monitor the transit of    
freight.                                                                        

SELLING, GENERAL AND ADMINISTRATIVE                                             

       Selling, general and administrative expenses increased 19.7% to $32.9
million in 1998 from $27.5 million in 1997. Selling, general and administrative 
expenses as a percentage of revenue increased to 2.9% in 1998 from 2.6% in 1997.
The increase in the percentage is principally attributable to increased spending
related to information systems, rent and equipment leases. Expenditures for     
information systems included consulting costs related to the refinement of the  
Company's information systems strategy and costs for the Year 2000 project. Rent
increased as many of the Company's Hubs were required to obtain larger office   
space to accommodate present operations and future growth. Expenditures for     
equipment leases increased as the Company moved towards leasing, as opposed to  
purchasing, more of its office and computer equipment.                          

DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT                         

         Depreciation and amortization of property and equipment increased 19.1%
to $3.7 million in 1998 from $3.1 million in 1997. This expense as a percentage 
of revenue remained constant at 0.3%.                                           

AMORTIZATION OF GOODWILL                                                        

       Amortization of goodwill increased 91.0% to $2.9 million in 1998 from
$1.5 million in 1997. The expense as a percentage of revenue increased to 0.3%  
from 0.1% in 1997. This increase is attributed primarily to the increase in     
goodwill amortization related to the September 1997 purchase of the minority    
interest in Hub City Los Angeles, L.P. and Hub City Golden Gate, L.P., the April
1998 purchase of the minority interest in the Texas Hubs and the April 1998     
acquisition of Quality.                                                         

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OTHER INCOME (EXPENSE)                                                          

    Interest expense increased 11.5% to $2.5 million in 1998 from $2.2
million in 1997. The increase is primarily attributed to the use of cash and a  
note issued in conjunction with the acquisition of Quality and the purchase of  
the minority interest in the Texas Hubs in April 1998.                          

   Interest income decreased 30.8% to $1.0 million in 1998 from $1.5
million in 1997. The primary cause of this decrease is the Company's increased  
concentration of its cash balances to reduce debt to minimize interest expense  
on borrowings.                                                                  

MINORITY INTEREST                                                               

       Minority interest decreased 40.5% to $10.1 million in 1998 from $17.0
million in 1997. Minority interest as a percentage of income before minority    
interest and provision for income taxes was 40.0% in 1998 as compared to 51.7%  
in 1997. The decrease in the percentage is attributed to purchases of minority  
interest in September 1997 and April 1998.                                      

PROVISION FOR INCOME TAXES                                                      

   Provision for income taxes was $6.3 million in 1997 and 1998. The
Company provided for income taxes at an effective rate of 41.4% in 1998 versus  
40.0% in 1997. The increase in the effective rate was primarily the result of   
the purchases of minority interest in September 1997 and the Quality acquisition
in April 1998. The goodwill related to the Quality acquisition is not tax       
deductible and therefore has the effect of increasing the Company's effective   
rate.                                                                           

NET INCOME                                                                      

        Historical net income decreased 6.5% to $8.9 million in 1998 from $9.5
million in 1997. Because of the severe rail service disruptions in 1998,        
expenses grew faster than revenue in 1998. Although the decrease in minority    
interest offset a substantial portion of the increase in expenses, historical   
net income dropped to 0.8% of revenue in 1998 from 0.9% in 1997.                

EARNINGS PER COMMON SHARE                                                       

       Basic earnings per common share decreased 21.6% to $1.16 in 1998 from
$1.48 in 1997. Diluted earnings per common share decreased 21.2% to $1.15 in    
1998 from $1.46 in 1997. The decrease in net income coupled with the increase in
shares outstanding due to the secondary equity offering in September 1997 caused
the decrease.                                                                   

LIQUIDITY AND CAPITAL RESOURCES                                                 

       On April 30, 1999, the Company borrowed approximately $108 million of
unsecured debt to pay for its purchase of the remaining 70% limited partnership 
interests in connection with the April 1999 Purchase.                           

   On April 30, 1999, the Company closed on a new bank facility with
Harris Trust and Savings Bank ("Harris") which replaced the previous facility.  
The new facility is comprised of $50.0 million in term debt and a $50.0 million 
revolving line of credit. At December 31, 1999, there was $47.5 million of      
outstanding term debt and $34.0 million outstanding and $16.0 million unused and
available under the new line of credit with Harris. Borrowings under the line of
credit are unsecured and have a five-year term with a floating interest rate    
based upon the LIBOR (London Interbank Offered Rate) or Prime Rate. The term    
debt has quarterly payments ranging from $1,250,000 to $2,000,000 with a balloon
payment of $19.0 million due on March 31, 2004. Additionally, the Company closed
and drew down on a $40.0 million bridge facility with Harris on April 30, 1999. 
The bridge facility had a three-month term and bore interest at the bank's prime
rate plus 1%. This bridge facility of $40.0 million was paid off on June 25,    
1999 and replaced with the private placement debt described below.              

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  On June 25, 1999, the Company closed on $50.0 million of private
placement debt (the "Notes"). These Notes are unsecured and have an eight-year  
average life with a coupon interest rate of 8.64% paid quarterly. These Notes   
mature on June 25, 2009, with annual payments of $10.0 million commencing on    
June 25, 2005.                                                                  

      The Company maintains a bank line of credit with Cass Bank and Trust
Company for $5.0 million. The interest rate is set at the bank's discretion at a
rate less than or equal to the bank's prime rate. At December 31, 1999, the rate
was 8.25%. The Company had no outstanding advances on the line at December 31,  
1999.                                                                           

     The Company had capital expenditures of approximately $11.2 million
during 1999 and $4.0 million during 1998. Capital expenditures were principally 
made to enhance the Company's information systems capabilities.                 

OUTLOOK, RISKS AND UNCERTAINTIES                                                

      Except for historical data, the information contained in this Annual
Report constitutes forward-looking statements within the meaning of the Private 
Securities Litigation Reform Act of 1995. Forward-looking statements are        
inherently uncertain and subject to risks. Such statements should be viewed with
caution. Actual results or experience could differ materially from the          
forward-looking statements as a result of many factors. Forward-looking         
statements in this report include, but are not limited to, those contained in   
this "Outlook, Risks and Uncertainties" section regarding expectations, hopes,  
beliefs, estimates, intentions or strategies regarding the future. The Company  
assumes no liability to update any such forward-looking statements. In addition 
to those mentioned elsewhere in this section, such risks and uncertainties      
include the impact of competitive pressures in the marketplace, including the   
entry of new, web-based competitors, the degree and rate of market growth in the
intermodal, brokerage and logistics markets served by the Company, changes in   
rail and truck capacity, further consolidation of rail carriers, rail service   
conditions, changes in governmental regulation, adverse weather conditions, fuel
shortages, changes in the cost of services from rail, drayage and other vendors 
and fluctuations in interest rates.                                             

YEAR 2000                                                                       

  "Year 2000" refers to the issue surrounding the compatibility of
computer and other technology based systems with dates beyond December 31, 1999.
This section will include an assessment of the Company's state of readiness,    
the risks the issues represent, the subsequent results of system assessments    
after December 31, 1999 and the costs to address the issues.                    

STATE OF READINESS                                                              

    Management has broken down its Year 2000 program into four phases.
Those phases are awareness, assessment, renovation and validation. The Company  
contracted with an outside consulting firm to perform a readiness review, which 
was completed in December 1998. This review was instrumental in identifying and 
addressing Year 2000 issues.                                                    

      Management believes that it has identified the risk areas facing the
Company regarding Year 2000 and had broken those areas into seven categories.   
The seven categories are: (i) the Company's main operating system that has been 
created and enhanced in-house, (ii) the Company's ancillary operating software  
applications which were purchased, (iii) desktop hardware and software          
applications, (iv) the Company's financial reporting system, (v) the Company's  
telephone systems, (vi) embedded technology in the Company's office equipment,  
physical environment and drayage tractors and (vii) the state of readiness of   
the Company's customers, transportation service providers and other vendors.    

    The Company's main operating system was renovated. The renovation,
which consisted of reprogramming the source code, has been completed. No        
material failures resulted from the main operating system renovation subsequent 
to December 31, 1999.                                                           

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The Company believes all of its ancillary operating software  
applications have been assessed. All of the supporting vendors have stated that 
their products are Year 2000 compliant. No material failures resulted from      
ancillary operating software applications subsequent to December 31, 1999.      

       The Company's financial reporting system vendor has stated that their
application is Year 2000 compliant. No material failures resulted from the      
financial reporting system subsequent to December 31, 1999.                     

       The Company's desktop hardware and software application assessment is
complete. The Company engaged an outside consulting firm to execute the         
renovation and validation phases. No material failures resulted from the desktop
hardware and software applications subsequent to December 31, 1999.             

        The Company assessed its many telephone systems. No material telephone
system failures resulted subsequent to December 31, 1999.                       

       The Company did not experience any material issues regarding embedded
technology in its office equipment, physical environment and drayage tractors   
subsequent to December 31, 1999.                                                

        The Company identified four categories of key third parties with which
the Company has a material relationship that were assessed. Those categories    
were: (i) significant customers who rely on their computer systems to determine 
their transportation needs, (ii) key vendors such as the railroads and          
significant providers of drayage and over-the-road services, (iii) the Company's
information network communications provider and (iv) significant third party    
freight payment vendors utilized by the Company's customers. The Company        
experienced no material problems in the noted four categories related to Year   
2000 issues subsequent to December 31, 1999.                                    

COSTS                                                                           

        In 1999, the Company expensed approximately $1,900,000 related to Year
2000. In 2000, through January 31st, the Company has expensed an additional     
$69,000 related to testing and monitoring of its systems. These costs include   
not only amounts paid to outside parties but also the payroll costs for those   
employees spending significant amounts of time on Year 2000 issues. The Company 
has spent approximately $ 2.7 million in total related to Year 2000. The Company
does not expect to continue to spend additional funds related to Year 2000 since
no material systems problems were experienced.                                  

BUSINESS COMBINATIONS/DIVESTITURES                                              

      Management believes that future acquisitions or dispositions made by
the Company could significantly impact financial results. Financial results most
likely to be impacted include but are not limited to revenue, net revenue,      
salaries and benefits, selling general and administrative expenses, depreciation
and amortization, interest expense, minority interest, net income and the       
Company's debt level. In this regard, on March 13, 2000, the Company signed a   
letter of intent pursuant to which the Company agreed to sell its 65% interest  
in Hub Distribution for $65 million in cash and warrants to purchase 5% of the  
outstanding shares of stock of Hub Distribution. The sale of this interest is   
subject to a number of customary conditions and there is therefore no guarantee 
that a transaction will ultimately be consummated. Financial results may be     
impacted by additional factors as discussed below.                              

REVENUE                                                                         

       Management believes that the performance of the railroads is the most
significant factor that could negatively influence the Company's revenue growth 
rate. The service disruptions in the intermodal industry due to the split-up of 
Conrail, which began on June 1, 1999, appear to have been significantly         
rectified. Should this trend reverse, the Company believes its intermodal growth
rate would likely be negatively impacted. Should the proposed merger between    
Burlington Northern Santa Fe and Canadian National Railway cause a similar or   
more severe service disruption, the Company believes its intermodal growth rate 
would likely be negatively impacted. Should there be another significant service
disruption, the Company expects there may be some customers who would switch    

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from using the Company's intermodal service to other carriers' over-the-road    
service. The Company expects these customers may choose to continue to utilize  
these carriers even when intermodal service levels are restored. Other factors  
that could negatively influence the Company's growth rate include, but are not  
limited to, the entry of new web-based competitors, inadequate drayage service  
and inadequate equipment supply.                                                

NET REVENUE                                                                     

    Management expects fluctuations in the net revenue percentage from
quarter-to-quarter caused by changes in business mix, highway brokerage margins,
logistics business margins, trailer and container capacity, vendor pricing,     
intermodal industry growth, intermodal industry service levels and accounting   
estimates.                                                                      

SALARIES AND BENEFITS                                                           

         It is anticipated that salaries and benefits as a percentage of revenue
could fluctuate from quarter-to-quarter as there are timing differences between 
revenue increases and changes in levels of staffing. Factors that could affect  
the percentage from staying in the recent historical range are revenue growth   
rates significantly higher or lower than forecasted, a management decision to   
invest in additional personnel to stimulate new or existing businesses, such as 
the Company's current boxcar and flatbed initiative, changes in customer        
requirements and changes in railroad intermodal service levels which could      
result in a lower or higher cost of labor per move.                             

SELLING, GENERAL AND ADMINISTRATIVE                                             

 There are several factors that could cause selling, general and
administrative expenses to increase as a percentage of revenue. As customer     
expectations and the competitive environment require the development of         
web-based business interfaces and the restructuring of the Company's information
systems and related platforms, the Company believes there could be significant  
expenses incurred, some of which would not be capitalized. Costs incurred to    
formulate the Company's strategy as well as any costs that would be identified  
as reengineering or training would be expensed.                                 

DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT                         

         Management estimates that, as a percentage of revenue, depreciation and
amortization of property and equipment will increase in the future. A factor    
that could cause an increase in the percentage is increased software            
amortization related to improving the Company's information systems             
capabilities. Another factor that could cause an increase in the percentage is  
increased depreciation expense if the Company decided to purchase rather than   
lease a greater proportion of assets.                                           

AMORTIZATION OF GOODWILL                                                        

        Management estimates that, as a percentage of revenue, amortization of
goodwill will increase in 2000 based on a full year of goodwill amortization    
related to the April 1999 Purchase. A factor that could cause an increase in the
percentage is if the Company were to make additional acquisitions resulting in  
the recording of goodwill.                                                      

OTHER INCOME (EXPENSE)                                                          

       Management estimates that as a percentage of revenue interest expense
will increase over the prior year due to a full year of debt after financing the
April 1999 Purchase and the recent trend of rising interest rates. This increase
is believed to be offset by debt repayments anticipated in the year 2000.       
Factors that could cause interest to fluctuate higher or lower than forecasted  
are changes in lending rates, anticipated debt repayments, working capital needs
and capital expenditures.                                                       

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     Management estimates that interest income will likely decrease from
current levels. Factors that could cause such a decrease are the possible use of
cash to make debt repayments, fund working capital needs and fund capital       
expenditures.                                                                   

MINORITY INTEREST                                                               

         Management estimates that minority interest will likely decrease in the
future due to the April 1999 Purchase where all of the remaining 70% minority   
interests were acquired. Disproportionate changes in Hub Distribution's profits 
and the 100% owned entities, acquisitions of entities with a minority interest  
or disposition of Hub Distribution could have a material impact and result in   
minority interest percentages of income before minority interest to differ from 
the historical range.                                                           

LIQUIDITY AND CAPITAL RESOURCES                                                 

         The Company believes that cash, cash to be provided by operations, cash
available under its lines of credit and the Company's ability to obtain         
additional credit capacity will be sufficient to meet the Company's short-term  
working capital and capital expenditure needs. The Company believes that the    
aforementioned items are sufficient to meet its anticipated long-term working   
capital, capital expenditure and debt repayment needs.                          

ITEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    

      The Company is exposed to market risk related to changes in interest
rates which may adversely affect its results of operations and financial        
condition. The Company seeks to minimize the risk from interest rate volatility 
through its regular operating and financing activities and, when deemed         
appropriate, through the use of derivative financial instruments. The Company   
does not use financial instruments for trading purposes.                        

         The Company uses both fixed and variable rate debt as described in Note
8. The Company has entered into an interest rate swap agreement designated as a 
hedge on a portion of the Company's variable rate debt. The purpose of the swap 
is to fix the interest rate on a portion of the variable rate debt and reduce   
certain exposures to interest rate fluctuations. At December 31, 1999, the      
Company had an interest rate swap with a notional amount of $25.0 million, a    
weighted average pay rate of 8.37%, a weighted average receive rate of 8.26% and
a maturity date of September 30, 2002. This swap agreement involves the exchange
of amounts based on the variable interest rate for amounts based on the fixed   
interest rate over the life of the agreement, without an exchange of the        
notional amount upon which the payments are based. The differential to be paid  
or received as interest rates change is accrued and recognized as an adjustment 
of interest expense related to the debt.                                        

      The main objective of interest rate risk management is to reduce the
total funding cost to the Company and to alter the interest rate exposure to the
desired risk profile.                                                           

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ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                   

 INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE

Report of Independent Public Accountants                                   22   

Consolidated Balance Sheets - December 31, 1999 and December 31, 1998      23   

Consolidated Statements of Operations - Years ended December 31, 1999,          
December 31, 1998 and December 31, 1997                                   24  

Consolidated Statements of Stockholders' Equity - Years ended December          
31, 1999, December 31, 1998 and December 31, 1997                         25  

Consolidated Statements of Cash Flows - Years ended December 31, 1999,          
December 31, 1998 and December 31, 1997                                   26  

Notes to Consolidated Financial Statements                                 27   

Schedule II - Valuation and Qualifying Accounts                           S-1   

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Hub Group, Inc.:                                         

     We have audited the accompanying consolidated balance sheets of Hub
Group, Inc. (a Delaware corporation) as of December 31, 1999 and 1998 and the   
related consolidated statements of operations, stockholders' equity and cash    
flows for each of the three years in the period ended December 31, 1999. These  
consolidated financial statements and the schedule referred to below are the    
responsibility of the Company's management. Our responsibility is to express an 
opinion on these consolidated financial statements and the schedule based on our
audits.                                                                         

        We conducted our audits in accordance with generally accepted auditing
standard in the United States. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether the financial statements 
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An 
audit also includes assessing the accounting principles used and significant    
estimates made by management, as well as evaluating the overall financial       
statement presentation. We believe that our audits provide a reasonable basis   
for our opinion.                                                                

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Hub Group,  
Inc. as of December 31, 1999 and 1998, and the results of its operations and    
cash flows for each of the three years in the period ended December 31, 1999, in
conformity with generally accepted accounting principles in the United States.  

       Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule on page S-1 is presented for
purposes of complying with the Securities and Exchange Commissions rules and is 
not part of the basic financial statements. This schedule has been subjected to 
the auditing procedures applied in the audit of the basic financial statements  
and, in our opinion, is fairly stated in all material respects in relation to   
the basic financial statements taken as a whole.                                

                         ARTHUR ANDERSEN LLP

Chicago, Illinois                                                               
February 4, 2000                                                                
(except with respect                                                            
to the matter discussed                                                         
in Note 18, as to                                                               
which the date is                                                               
March 15, 2000)                                                                 

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 HUB GROUP, INC.
 CONSOLIDATED BALANCE SHEETS
(in thousands)

                                                        [Enlarge/Download Table]


                                                                               DECEMBER 31,          
                                                                    ---------------------------------
                                                                           1999             1998     
                                                                    ---------------- ----------------
                                                                                                     
ASSETS                                                                                               
    CURRENT ASSETS:                                                                                  
      Cash and cash equivalents                                      $        1,865   $       15,178 
      Accounts receivable, net                                              190,221          148,104 
      Prepaid expenses and other current assets                               2,771            6,036 
                                                                    ---------------- ----------------
         TOTAL CURRENT ASSETS                                               194,857          169,318 

    PROPERTY AND EQUIPMENT, net                                              24,244           19,111 
    GOODWILL, net                                                           219,648          115,858 
    DEFERRED TAXES                                                              898                - 
    OTHER ASSETS                                                              1,962              504 
                                                                    ---------------- ----------------
         TOTAL ASSETS                                                $      441,609   $      304,791 
                                                                    ================ ================

LIABILITIES AND STOCKHOLDERS' EQUITY                                                                 
    CURRENT LIABILITIES:                                                                             
      Accounts payable                                                                               

         Trade                                                       $      141,592   $      123,513 
         Other                                                               11,246            7,909 
      Accrued expenses                                                                               

         Payroll                                                              7,936            6,339 
         Other                                                                6,384            6,332 
      Deferred taxes                                                              -            1,751 
      Current portion of long-term debt                                       6,195            3,161 
                                                                    ---------------- ----------------
           TOTAL CURRENT LIABILITIES                                        173,353          149,005 

    LONG-TERM DEBT, EXCLUDING CURRENT PORTION                               131,414           29,589 
    DEFERRED TAXES                                                            4,959              556 
    CONTINGENCIES AND COMMITMENTS                                                                    
    MINORITY INTEREST                                                           759            5,968 
    STOCKHOLDERS' EQUITY:                                                                            
      Preferred stock                                                             -                - 
      Common stock                                                               77               77 
      Additional paid-in capital                                            110,786          110,181 
      Purchase price in excess of predecessor basis                         (25,764)         (25,764)
      Tax benefit of purchase price in excess of predecessor basis           10,306           10,306 
      Retained earnings                                                      35,719           24,873 
                                                                    ---------------- ----------------
         TOTAL STOCKHOLDERS' EQUITY                                         131,124          119,673 
                                                                    ---------------- ----------------
           TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $      441,609   $      304,791 
                                                                    ================ ================

The accompanying notes to consolidated financial statements are an integral part
of these statements.                                                            

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 HUB GROUP, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

                                                        [Enlarge/Download Table]


                                                                           YEARS ENDED DECEMBER 31,         
                                                                --------------------------------------------
                                                                    1999           1998           1997      
                                                                -------------- -------------- --------------

                                                                                                            
Revenue                                                          $  1,296,799   $  1,145,906   $  1,064,479 

Transportation costs                                                1,134,384      1,007,572        934,624 
                                                                -------------- -------------- --------------
       Net revenue                                                    162,415        138,334        129,855 

Costs and expenses:                                                                                         
     Salaries and benefits                                             84,082         72,465         64,280 
     Selling, general and administrative                               38,232         32,885         27,478 
     Depreciation and amortization of property and equipment            4,014          3,666          3,077 
     Amortization of goodwill                                           5,069          2,912          1,525 
     Change in estimate/impairment of property and equipment              884              -              - 
                                                                -------------- -------------- --------------
       Total costs and expenses                                       132,281        111,928         96,360 

          Operating income                                             30,134         26,406         33,495 
                                                                -------------- -------------- --------------

Other income (expense):                                                                                     
     Interest expense                                                  (8,592)        (2,480)        (2,225)
     Interest income                                                      926          1,014          1,466 
     Other, net                                                         1,191            384            133 
                                                                -------------- -------------- --------------
       Total other expense                                             (6,475)        (1,082)          (626)

Income before minority interest and provision for income taxes         23,659         25,324         32,869 
                                                                -------------- -------------- --------------

Minority interest                                                       5,275         10,119         16,995 
                                                                -------------- -------------- --------------

Income before provision for income taxes                               18,384         15,205         15,874 

Provision for income taxes                                              7,538          6,297          6,349 
                                                                -------------- -------------- --------------

Net income                                                       $     10,846   $      8,908   $      9,525 
                                                                ============== ============== ==============

Basic earnings per common share                                  $       1.41   $       1.16   $       1.48 
                                                                ============== ============== ==============
Diluted earnings per common share                                $       1.40   $       1.15   $       1.46 
                                                                ============== ============== ==============

The accompanying notes to consolidated financial statements are an integral part
of these statements.                                                            

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 HUB GROUP, INC.
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
 For the three years ended December 31, 1999
 (in thousands, except shares)

                                                        [Enlarge/Download Table]


                                                                                          TAX BENEFIT                             
                                                                           PURCHASE       OF PURCHASE                             
                                                                           PRICE IN          PRICE                                
                                        COMMON STOCK        ADDITIONAL     EXCESS OF     IN EXCESS OF                    TOTAL    
                                   -----------------------   PAID-IN      PREDECESSOR     PREDECESSOR    RETAINED    STOCKHOLDERS'
                                     SHARES       AMOUNT     CAPITAL         BASIS           BASIS       EARNINGS       EQUITY    
                                   ------------ ---------- ------------- ------------- --------------- ------------ --------------

                                                                                                                                  
Balance at January 1, 1997           5,923,546   $   59     $  55,083      $ (25,764)       $ 10,306     $ 6,440      $   46,124  
   Net income                               -        -             -              -               -        9,525           9,525  
   Sale of common stock in                                                                                                        
     initial public offering, net           -        -            (45)            -               -           -              (45) 
   Sale of common stock in                                                                                                        
     secondary offering, net         1,725,000       18        54,745             -               -           -           54,763  
   Exercise of non-qualified                                                                                                      
    stock options                        4,700       -             95             -               -           -               95  
                                   ------------ ---------- ------------- -------------- -------------- ------------- -------------
Balance at December 31, 1997         7,653,246       77       109,878        (25,764)         10,306      15,965         110,462  
   Net income                               -        -             -              -               -        8,908           8,908  
   Exercise of non-qualified                                                                                                      
     stock options                      19,000       -            303             -               -           -              303  
                                   ------------ ---------- ------------- -------------- -------------- ------------- -------------
Balance at December 31, 1998         7,672,246       77       110,181        (25,764)         10,306      24,873          119,673 
   Net income                               -        -             -              -               -       10,846           10,846 
   Exercise of non-qualified                                                                                                      
     stock options                      34,000       -            605             -               -           -               605 
                                   ------------ ---------- ------------- -------------- -------------- ------------- -------------
Balance at December 31, 1999         7,706,246   $   77     $ 110,786      $ (25,764)       $ 10,306     $35,719      $   131,124 
                                   ============ ========== ============= ============== ============== ============= =============

The accompanying notes to consolidated financial statements are an integral part
of these statements.                                                            

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 HUB GROUP, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

                                                        [Enlarge/Download Table]


                                                                                           YEARS ENDED DECEMBER 31,          
                                                                               ----------------------------------------------
                                                                                    1999            1998            1997     
                                                                               --------------  --------------  --------------
                                                                                                                             
Cash flows from operating activities:                                                                                        
    Net income                                                                  $     10,846    $     8,908     $     9,525  
    Adjustments to reconcile net income to net cash provided by operating                                                    
       activities:                                                                                                           
         Depreciation and amortization of property and equipment                       5,013          4,743           4,163  
         Amortization of goodwill                                                      5,069          2,913           1,525  
         Change in estimate/impairment of property and equipment                         884              -               -  
         Deferred taxes                                                                1,754          6,008           6,349  
         Minority interest                                                             5,275         10,119          16,995  
         Loss/(Gain) on sale of assets                                                   205            135            (107) 
         Changes in working capital, net of effects of purchase transactions:                                                
          Accounts receivable, net                                                   (42,117)       (11,978)        (13,663) 
          Prepaid expenses and other current assets                                    3,265         (4,018)          1,583  
          Accounts payable                                                            21,416          8,933          11,759  
          Accrued expenses                                                             1,649          2,758           1,023  
          Other assets                                                                (1,458)           167             303  
                                                                               --------------  --------------  --------------
            Net cash provided by operating activities                                 11,801         28,688          39,455  
                                                                               --------------  --------------  --------------
Cash flows from investing activities:                                                                                        

    Cash used in acquisitions, net                                                        -          (3,989)           (164) 
    Purchases of minority interest                                                  (108,710)        (6,730)        (60,955) 
    Purchases of property and equipment, net                                         (11,234)        (3,975)         (8,488) 
                                                                               --------------  --------------  --------------
            Net cash used in investing activities                                   (119,944)       (14,694)        (69,607) 
                                                                               --------------  --------------  --------------
Cash flows from financing activities:                                                                                        

    Proceeds from sale of common stock in initial public offering, net                    -              -              (45) 
    Proceeds from sale of common stock in secondary offering, net                         -              -           54,763  
    Proceeds from sale of common stock                                                   605            303              95  
    Distributions to minority interest                                               (10,484)       (10,939)        (20,921) 
    Payments on long-term debt                                                       (50,930)       (28,843)         (6,409) 
    Proceeds from issuance of long-term debt                                         155,639         28,607             832  
                                                                               --------------  --------------  --------------
            Net cash provided by/(used in) financing activities                       94,830        (10,872)         28,315  
                                                                               --------------  --------------  --------------
Net increase (decrease) in cash and cash equivalents                                 (13,313)         3,122          (1,837) 
Cash and cash equivalents, beginning of period                                        15,178         12,056          13,893  
                                                                               --------------  --------------  --------------
Cash and cash equivalents, end of period                                        $      1,865    $    15,178     $    12,056  
                                                                               ==============  ==============  ==============
Supplemental disclosures of cash flow information                                                                            
    Cash paid for:                                                                                                           
       Interest                                                                 $      8,293    $     2,343     $     2,138  
       Income taxes                                                                    2,474          2,680             386  
    Non-cash financing activity:                                                                                             
       Acquisition purchase price adjustment of note payable                    $        150    $        -      $        -   

The accompanying notes to consolidated financial statements are an integral part
of these statements.                                                            

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 HUB GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING          
POLICIES                                                      

BUSINESS:  Hub Group, Inc. (the "Company") provides intermodal transportation   
services utilizing primarily third party arrangements with railroads and drayage
companies.  The Company also arranges for transportation of freight by truck    
and performs logistics services.                                                

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the  
accounts of Hub Group, Inc. and all entities in which the Company has more than 
a 50% equity ownership or otherwise exercises unilateral control. All           
significant intercompany balances and transactions have been eliminated.        

CASH AND CASH EQUIVALENTS: The Company considers as cash equivalents all highly 
liquid instruments with an original maturity of three months or less. Checks    
outstanding, net, of approximately $13,638,000 and $1,482,000 at December 31,   
1999 and 1998, respectively, are included in accounts payable.                  

RECEIVABLES:  The Company's reserve for uncollectible accounts receivable was   
approximately $2,134,000 and $691,000 at December 31, 1999 and 1998,            
respectively.                                                                   

PROPERTY AND EQUIPMENT: Property and equipment are stated at cost. Depreciation 
of property and equipment is computed using the straight-line and various       
accelerated methods at rates adequate to depreciate the cost of applicable      
assets over their expected useful lives: buildings and improvements, 15 to 40   
years; leasehold improvements, the shorter of useful life or lease term;        
computer equipment and software, 3 to 5 years; furniture and equipment, 3 to 10 
years; and transportation equipment and automobiles, 3 to 12 years. Direct costs
related to internally developed software projects are capitalized and amortized 
over their expected useful life on a straight-line basis not to exceed five     
years, commencing when the asset is placed into service. Maintenance and repairs
are charged to operations as incurred and major improvements are capitalized.   
The cost of assets retired or otherwise disposed of and the accumulated         
depreciation thereon are removed from the accounts with any gain or loss        
realized upon sale or disposal charged or credited to operations.               

GOODWILL: Goodwill is amortized on the straight-line method over 40 years. On an
ongoing basis, the Company estimates the future undiscounted cash flows before  
interest of the operating units to which goodwill relates in order to evaluate  
impairment. If impairment exists, the carrying amount of the goodwill is reduced
by the estimated shortfall of cash flows. The Company has not experienced any   
impairment of goodwill. Accumulated goodwill amortization was $10,032,000 and   
$4,963,000 as of December 31, 1999 and 1998, respectively.                      

CONCENTRATION OF CREDIT RISK: The Company's financial instruments that are      
exposed to concentrations of credit risk consist primarily of cash and cash     
equivalents and accounts receivable. The Company places its cash and temporary  
investments with high quality financial institutions. At times, such investments
may be in excess of the FDIC insurance limit. Temporary investments are valued  
at the lower of cost or market and at the balance sheet dates approximate fair  
market value. The Company primarily serves customers located throughout the     
United States with no significant concentration in any one region. No one       
customer accounted for more than 10% of revenue in 1997, 1998 or 1999. The      
Company reviews a customer's credit history before extending credit. In         
addition, the Company routinely assesses the financial strength of its customers
and, as a consequence, believes that its trade accounts receivable risk is      
limited.                                                                        

REVENUE RECOGNITION:  Revenue represents sales of services to customers.        
Revenue is recognized based on relative transit time.                           

INCOME TAXES: The Company accounts for certain income and expense items         
differently for financial reporting and income tax purposes. Deferred tax assets

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and liabilities are determined based on the difference between the financial    
statement and tax bases of assets and liabilities applying enacted statutory tax
rates in effect for the year in which the differences are expected to reverse.  

EARNINGS PER COMMON SHARE: In accordance with Statement of Financial Accounting 
Standards No. 128 ("Statement 128"), "Earnings per Share", basic earnings per   
common share are based on the average quarterly weighted average number of Class
A and Class B shares of common stock outstanding. Diluted earnings per common   
share are adjusted for the assumed exercise of dilutive stock options. In       
computing the per share effect of assumed exercise, funds which would have been 
received from the exercise of options, including tax benefits assumed to be     
realized, are considered to have been used to purchase shares at current market 
prices, and the resulting net additional shares are included in the calculation 
of weighted average shares outstanding.                                         

USE OF ESTIMATES: The preparation of financial statements in conformity with    
generally accepted accounting principles requires management to make estimates  
and assumptions that affect the reported amounts of assets and liabilities and  
disclosure of contingent assets and liabilities at the date of the financial    
statements and the reported amounts of revenue and expense during the reporting 
period. Actual results could differ from those estimates.                       

RECENT ACCOUNTING PRONOUNCEMENTS: In June 1998, the Financial Accounting        
Standards Board issued Statement of Financial Accounting Standards No. 133      
("Statement 133"), "Accounting for Derivative Instruments and Hedging           
Activities". This standard requires that an entity recognize derivatives as     
either assets or liabilities on its balance sheet and measure those instruments 
at fair value. As a result of Statement of Financial Accounting Standards No.   
137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of
the Effective Date of Statement 133", the Company will adopt this standard in   
the first quarter of 2001. Based on current circumstances, the Company does not 
believe that the application of Statement 133 will have a material effect on the
Company's financial condition or results of operations.                         

RECLASSIFICATIONS:  Certain items previously reported have been reclassified    
to conform with the 1999 presentation.                                          

NOTE 2. CAPITAL STRUCTURE                                                       

   On March 8, 1995, Hub Group, Inc. was incorporated and issued 100
shares of Class A common stock to the sole incorporator. On March 18, 1996, Hub 
Group, Inc. purchased Hub City Terminals, Inc. ("Hub Chicago") in a             
stock-for-stock acquisition through the issuance of 1,000,000 shares of the     
Company's Class A common stock and 662,296 shares of the Company's Class B      
common stock. The rights of holders of Class A common stock and Class B common  
stock are identical, except each share of Class B common stock entitles its     
holder to 20 votes, while each share of Class A common stock entitles its holder
to one vote. Hub Chicago has been accounted for similar to the pooling of       
interests method of accounting.                                                 

  In September 1997, the Company completed a secondary offering of
1,725,000 shares of its Class A common stock. The net proceeds of the offering  
were approximately $54.8 million.                                               

NOTE 3.  BUSINESS COMBINATIONS                                                  

         On October 31, 1997, the Company acquired the remaining 50% interest in
its international logistics joint venture, HLX Company, LLC for $300,000. The   
acquisition was recorded using the purchase method of accounting resulting in   
goodwill of $466,000.                                                           

     On April 1, 1998, the Company acquired all the outstanding stock of
Quality Intermodal Corporation for $4,080,000 in cash and a $6,100,000          
three-year note, bearing interest at an annual rate of 5.6%. The acquisition was
recorded using the purchase method of accounting resulting in preliminary       
goodwill of $9,458,000. The purchase price was subsequently adjusted resulting  
in goodwill of $9,608,000.                                                      

   On August 1, 1998, the Company acquired the rights to service the
customers of Corporate Express Distribution Services as well as certain fixed   
assets for $750,000 in cash. The acquisition was recorded using the purchase    
method of accounting resulting in goodwill of $432,000.                         

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     Results of operations from acquisitions recorded under the purchase
method of accounting are included in the Company's financial statements from    
their respective dates of acquisition. The 1998 purchase price allocations      
presented are preliminary.                                                      

Business acquisitions which involved the use of cash were accounted for as      
follows:                                                                        

                                                                [Download Table]


                                                   YEARS ENDED  DECEMBER 31,   
                                               --------------------------------
                                                     1998            1997      
                                               ---------------- ---------------
                                                            (000'S)            

                                                                               
Accounts receivable                             $      8,453     $      (115)  
Prepaid expenses and other current assets                 57              12   
Property and equipment                                   398              79   
Goodwill                                               9,890             466   
Other assets                                               3              13   
Accounts payable                                      (7,486)           (216)  
Accrued expenses                                        (641)            (75)  
Long-term debt                                        (6,685)             -    
                                               ---------------- ---------------
Cash used in acquisitions, net                  $      3,989     $       164   
                                               ---------------- ---------------

NOTE 4.  EARNINGS PER SHARE                                                     

        The following is a reconciliation of the Company's Earnings Per Share:

                                                        [Enlarge/Download Table]


                                      YEAR ENDED                 YEAR ENDED                  YEAR ENDED      
                                  DECEMBER 31, 1999          DECEMBER 31, 1998           DECEMBER 31, 1997   
                               -------------------------  -------------------------  ------------------------
                                   (000'S)                    (000'S)                   (000'S)              
                               ---------------            --------------             --------------          
                                               Per-Share                  Per-Share                 Per-Share
                                INCOME  SHARES   AMOUNT   INCOME  SHARES    AMOUNT   INCOME  SHARES   AMOUNT 
                               -------  ------ ---------  ------  ------  ---------  ------  ------ ---------
                                                                                                             
HISTORICAL BASIC EPS                                                                                         
   Income available to                                                                                       
      common stockholders      $10,846  7,693     $1.41   $8,908   7,657     $1.16   $9,525   6,420    $1.48 
                               -------  ------ ---------  ------  ------  ---------  ------  ------ ---------
EFFECT OF DILUTIVE SECURITIES                                                                                
   Stock options                    -      67        -        -       72        -        -      114       -  
                               -------  ------ ---------  ------  ------  ---------  ------  ------ ---------
HISTORICAL DILUTED EPS                                                                                       
   Income available to                                                                                       
      common stockholders                                                                                    
      plus assumed exercises   $10,846  7,760     $1.40   $8,908   7,729     $1.15   $9,525   6,534    $1.46 
                               -------  ------ ---------  ------   -----   --------  ------   ----- ---------

NOTE 5.  PURCHASES OF MINORITY INTEREST                                         

     On March 1, 1997, the Company purchased an approximate 44% minority
interest in Hub Group Distribution Services ("Hub Distribution") for            
approximately $1,576,000 in cash.                                               

 On September 17, 1997,  the Company purchased the remaining 70%
minority interests in Hub City Los Angeles, L.P. and Hub City Golden Gate, L.P. 
for approximately $59,379,000 in cash.                                          

       On October 31, 1997, the Company purchased the remaining 70% minority
interest in Hub City New Orleans, L.P. for one dollar.                          

    On April 1, 1998, the Company purchased the remaining 70% minority
interest in Hub City Dallas, L.P., Hub City Houston, L.P. and Hub City Rio      
Grande, L.P. for approximately $6,152,000 in cash.  The purchase price was      
subsequently adjusted, resulting in goodwill of $6,730,000.                     

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    On April 1, 1999, the Company purchased the remaining 70% minority
interests in Hub City Alabama, L.P., Hub City Atlanta, L.P., Hub City Boston,   
L.P., Hub City Canada, L.P., Hub City Cleveland, L.P., Hub City Detroit, L.P.,  
Hub City Florida, L.P., Hub City Indianapolis, L.P., Hub City Kansas City, L.P.,
Hub City Mid-Atlantic, L.P., Hub City New York/New Jersey, L.P., Hub City New   
York State, L.P., Hub City Ohio, L.P., Hub City Philadelphia, L.P., Hub City    
Pittsburgh, L.P., Hub City Portland, L.P., and Hub City St. Louis, L.P. for     
approximately $108,710,000 in cash (collectively referred to as the "April 1999 
Purchase").                                                                     

   As the amount paid for each of the purchases of minority interest
equaled the basis in excess of the fair market value of assets acquired and     
liabilities assumed, the amount paid was recorded as goodwill.                  

NOTE 6.  PROPERTY AND EQUIPMENT                                                 

Property and equipment consist of the following:                                

                                                                [Download Table]


                                                      YEARS ENDED DECEMBER 31,  
                                                   -----------------------------
                                                        1999             1998   
                                                   -------------  --------------
                                                              (000'S)           

                                                                                
Building and improvements                           $        56    $        53  
Leasehold improvements                                    1,526          1,206  
Computer equipment and software                          23,795         15,816  
Furniture and equipment                                   6,365          5,722  
Transportation equipment and automobiles                  4,742          5,318  
                                                   -------------  --------------
                                                         36,484         28,115  
Less:  Accumulated depreciation and amortization        (12,240)        (9,004) 
                                                   -------------  --------------
    PROPERTY AND EQUIPMENT, net                     $    24,244    $    19,111  
                                                   =============  ==============

NOTE 7.  INCOME TAXES                                                           

       The following is a reconciliation of the Company's effective tax rate
to the federal statutory tax rate:                                              

                                                                [Download Table]


                                                  YEARS ENDED DECEMBER 31,      
                                          --------------------------------------
                                              1999          1998         1997   
                                          -----------   -----------   ----------
                                                                                
U.S. federal statutory rate                   35.0%         34.4%        34.5%  
State taxes, net of federal benefit            4.1           5.3          4.9   
Goodwill amortization                          0.5           0.5           -    
Other                                          1.4           1.2          0.6   
                                          -----------   -----------   ----------
Net effective rate                            41.0%         41.4%        40.0%  
                                          -----------   -----------   ----------

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         The following is a summary of the Company's provision for income taxes:

                                                                [Download Table]


                                              YEARS ENDED DECEMBER 31,        
                                   -------------------------------------------
                                         1999          1998           1997    
                                   -------------  -------------  -------------
                                                      (000'S)                 
                                                                              
Current                                                                       
    Federal                         $     5,177    $      250     $       -   
    State and local                         607            39             -   
                                   -------------  -------------  -------------
                                          5,784           289             -   
                                   -------------  -------------  -------------

Deferred                                                                      
    Federal                               1,570         5,206          5,559  
    State and local                         184           802            790  
                                   -------------  -------------  -------------
                                          1,754         6,008          6,349  
                                   -------------  -------------  -------------
              Total provision       $     7,538    $    6,297     $    6,349  
                                   -------------  -------------  -------------

     The following is a summary of the Company's deferred tax assets and
liabilities:                                                                    

                                                        [Enlarge/Download Table]


                                                                YEARS ENDED DECEMBER 31,   
                                                           --------------------------------
                                                                 1999               1998   
                                                           ---------------  ---------------
                                                                       (000'S)             
                                                                                           
Reserve for uncollectible accounts receivable               $       875      $       277   
Accrued compensation                                                588              533   
                                                           ---------------  ---------------
    Current deferred tax asset                                    1,463              810   

Property and equipment                                               -               861   
Other                                                                55               -    
Income tax basis in excess of financial basis of goodwill         9,345           10,178   
                                                           ---------------  ---------------
    Long-term deferred tax asset                                  9,400           11,039   
                                                           ---------------  ---------------
           Total deferred tax asset                         $    10,863      $    11,849   
                                                           ---------------  ---------------

Prepaids                                                    $      (170)     $       (84)  
Receivables                                                        (395)          (2,477)  
                                                           ---------------  ---------------
    Current deferred tax liability                                 (565)          (2,561)  

Property and equipment                                             (132)              -    
Goodwill                                                        (14,227)         (11,595)  
                                                           ---------------  ---------------
    Long-term deferred tax liability                            (14,359)         (11,595)  
                                                           ---------------  ---------------
        Total deferred tax liability                        $   (14,792)     $   (14,156)  
                                                           ---------------  ---------------

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NOTE 8.  LONG-TERM DEBT AND FINANCING ARRANGEMENTS                              

Fair value approximates book value at the balance sheet dates.                  

                                                        [Enlarge/Download Table]


                                                                               YEARS ENDED DECEMBER 31,
                                                                               ------------------------
                                                                                   1999         1998   
                                                                               -----------  -----------
                                                                                        (000'S)        
                                                                                                       
Installment notes payable due through 2004, monthly installments ranging from                          
  $441 to $20,896, including interest ranging from 2.9%                                                
  to 9.5%, collateralized by certain equipment                                  $     748    $   1,793 
Bank lines of credit (see below)                                                   34,000       20,550 
Unsecured balloon notes, interest compounded annually at 5.45%,                                        
  interest and principal due March 2001 (see Note 13)                                  -         2,260 
Note payable due in three equal annual principal payments of $2,000,000                                
  beginning on May 2, 1997; interest is due at the time the principal                                  
  is paid at 6% compounded annually                                                    -         2,000 
Unsecured term notes, with quarterly payments ranging from $1,250,000 to                               
  $2,000,000 with a balloon payment of $19 million due March 31, 2004;                                 
  interest is due quarterly at a floating rate based upon                                              
  LIBOR (London Interbank Offered Rate) or Prime rate (see below).  At                                 
  December 31, 1999, interest rates range from 8.37% to 8.93%                      47,500           -  
Unsecured notes, mature on June 25, 2009 with annual payments                                          
  of $10,000,000 commencing on June 25, 2005; interest is paid quarterly                               
  at 8.64%                                                                         50,000           -  
Unsecured notes payable due in one balloon payment of $5,225,000 on                                    
  April 1, 2001; interest is due annually and is paid at 5.6%                       5,225        5,950 
Note payable due in nine equal monthly payments of $71,160                                             
  beginning on July 1, 1998; interest is 5.9% compounded monthly                       -           141 
Capital lease obligations, collateralized by certain equipment                        136           56 
                                                                               ------------ -----------
Total long-term debt                                                              137,609       32,750 
Less current portion                                                               (6,195)      (3,161)
                                                                               ------------ -----------
                                                                                $ 131,414    $  29,589 
                                                                               ------------ -----------

      Aggregate principal payments, in thousands, due subsequent to December
31, 1999, are as follows:                                                       

2000                                                              $    6,195    
2001                                                                  12,337    
2002                                                                   8,032    
2003                                                                   8,034    
2004 and thereafter                                                  103,011    
                                                              ------------
                                                              $  137,609
                                                              ------------

         On March 18, 1996, the Company assumed a line of credit for $5,000,000.
This line of credit was not used at December 31, 1999. Advances on this line of 
credit at December 31, 1998, were $2,050,000. At December 31, 1999 and December 
31, 1998, the interest rate was 8.25% and 7.5%, respectively. The interest rate 
is established at the bank's discretion at a rate less than or equal to the     
bank's prime rate. Borrowings are secured by certain assets. The line of credit 
has no expiration date.                                                         

     On April 30, 1999, the Company closed on an unsecured $50.0 million
five-year revolving line of credit with a bank. The Company can borrow at the   
prime rate or up to prime plus 1% on a day-to-day basis or may borrow for 30,   
60, 90 or 180 day periods at LIBOR plus 1.25% to 2.50% based on the Company's   
funded debt to EBITDAM (earnings before interest expense, income taxes,         
depreciation, amortization and minority interest) ratio. The credit facility    
also contains certain financial covenants which, among others, requires that the

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Company maintain required levels of EBITDAM, funded debt to EBITDAM, fixed      
charge coverage and current assets to current liabilities. In addition, there   
are limitations on additional indebtedness as well as acquisitions and minority 
interest purchases. The Company was in compliance with these covenants at       
December 31, 1999. Advances on this line of credit at December 31, 1999 were    
$34.0 million with interest rates ranging between 8.64% and 9.5% and are        
classified as long term debt. At December 31, 1999, there was $16.0 million     
unused and available under the line of credit.                                  

         The unsecured term notes have a floating interest rate. The Company can
borrow at the prime rate or up to prime plus 1.25% on a day-to-day basis or may 
borrow for 30, 60, 90 or 180 day periods at LIBOR plus 1.50% to 2.75% based on  
the Company's funded debt to EBITDAM ratio. The unsecured term notes share the  
same financial covenants as noted above for the line of credit.                 

       On April 30, 1999, under the term notes and the $50.0 million line of
credit debt agreement, the Company was required to enter into an interest rate  
swap agreement designated as a hedge on a portion of the Company's variable rate
debt. The purpose of the swap was to fix the interest rate on a portion of the  
variable rate debt and reduce certain exposures to interest rate fluctuations.  
At December 31, 1999, the Company had an interest rate swap with a notional     
amount of $25.0 million, a weighted average pay rate of 8.37%, a weighted       
average receive rate of 8.26% and a maturity date of September 30, 2002. This   
swap agreement involves the exchange of amounts based on the variable interest  
rate for amounts based on the fixed interest rate over the life of the          
agreement, without an exchange of the notional amount upon which the payments   
are based. The differential to be paid or received as interest rates change is  
accrued and recognized as an adjustment of interest expense related to the debt.

  On June 25, 1999, the Company closed on $50.0 million of private
placement debt. These notes are unsecured and have an eight-year average life   
with a coupon interest rate of 8.64% paid quarterly. The notes contain certain  
financial covenants which, among others, requires that the Company maintain     
required levels of funded debt to EBITDA (earnings before interest expense,     
income taxes, depreciation and amortization), fixed charge coverage and current 
assets to current liabilities. In addition, there are limitations on additional 
indebtedness as well as acquisitions and minority interest purchases. The       
Company was in compliance with these covenants at December 31, 1999.            

         On September 17, 1997, the Company closed on an unsecured $36.0 million
five-year revolving line of credit with a bank. The Company could borrow at the 
prime rate on a day-to-day basis or may borrow for 30, 60, 90 or 180 day periods
at LIBOR plus 0.80% to 1.25% based on the Company's funded debt to EBITDA ratio.
The credit facility also contained certain financial covenants which, among     
others, required that the Company maintain required levels of EBITDA, funded    
debt to EBITDA, fixed charge coverage and current assets to current liabilities.
In addition, there were limitations on additional indebtedness as well as       
acquisitions and minority interest purchases. The Company was in compliance with
these covenants at December 31, 1998. Advances on this line of credit at        
December 31, 1998 were $18,500,000 with interest rates ranging between 6.34% and
6.36%. This 1997 line of credit agreement was cancelled in April 1999 when the  
new $50.0 million revolving line of credit described above was obtained.        

   In October 1996, the Company authorized the issuance of a standby
letter of credit for $1,000,000, which has no expiration date.                  

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NOTE 9.  RENTAL EXPENSE AND LEASE COMMITMENTS                                   

        Minimum annual rental commitments, in thousands, at December 31, 1999,
under noncancellable operating leases, principally for real estate and          
equipment, are payable as follows:                                              

2000                                                               $   7,759    
2001                                                                   6,418    
2002                                                                   4,157    
2003                                                                   1,954    
2004                                                                     710    
2005                                                                     167    
                                                               -----------
                                                               $  21,165
                                                               -----------

   Total rental expense was approximately $8,840,000, $7,487,000 and
$4,535,000 for 1999, 1998 and 1997, respectively. Many of the leases contain    
renewal options and escalation clauses which require payments of additional rent
to the extent of increases in the related operating costs.                      

NOTE 10. STOCK-BASED COMPENSATION PLAN                                          

   Concurrent with the initial public offering the Company adopted a
Long-Term Incentive Plan (the "1996 Incentive Plan"). The number of shares of   
Class A Common Stock reserved for issuance under the 1996 Incentive Plan was    
450,000. Concurrent with the secondary offering the Company adopted a second    
Long-Term Incentive Plan (the "1997 Incentive Plan"). The number of shares of   
Class A Common Stock reserved for issuance under the 1997 Incentive Plan was    
150,000. For the purpose of attracting and retaining key executive and          
managerial employees, in 1999 the Company adopted a third Long-Term Incentive   
Plan (the "1999 Incentive Plan"). The number of shares of Class A Common Stock  
reserved for issuance under the 1999 Incentive Plan was 600,000. Under the 1996,
1997 and 1999 Incentive Plans, stock options, stock appreciation rights,        
restricted stock and performance units may be granted for the purpose of        
attracting and motivating key employees and non-employee directors of the       
Company. The options granted to non-employee directors vest ratably over a      
three-year period and expire 10 years after the date of grant. The options      
granted to employees vest over a range of three to five years and expire 10     
years after the date of grant.                                                  

        The Company currently utilizes Accounting Principles Board Opinion No.
25 in its accounting for stock options. In October 1995, the Financial          
Accounting Standards Board issued Statement of Financial Accounting Standards   
No. 123 ("Statement 123"), "Accounting for Stock-based Compensation." The       
accounting method as provided in the pronouncement is not required to be        
adopted; however, it is encouraged. The Company provides the disclosure below in
accordance with Statement 123. Had the Company accounted for its stock options  
in accordance with Statement 123, pro forma net income and pro forma earnings   
per share would have been:                                                      

                                                        [Enlarge/Download Table]


                                                   YEARS ENDED DECEMBER 31,          
                                        ---------------------------------------------
                                              1999          1998             1997    
                                        -------------  --------------  --------------

                                                                                     
Net income as reported (000's)               10,846          8,908           9,525   
Net income pro forma                                                                 
   for Statement 123 (000's)                 10,359          8,501           9,261   
Historical basic earnings per common                                                 
   share pro forma for Statement 123     $     1.35     $     1.11      $     1.44   
Historical diluted earnings per common                                               
   share pro forma for Statement 123     $     1.33     $     1.10      $     1.42   

The pro forma disclosure is not likely to be indicative of pro forma results    
which may be expected in future years because of the fact that options vest over
several years, pro forma compensation expense is recognized as the options vest 
and additional awards may also be granted.                                      

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        For purposes of determining the pro forma effect of these options, the
fair value of each option is estimated on the date of grant based on the        
Black-Scholes single-option pricing model assuming:                             

                                                                [Download Table]


                                           YEARS ENDED DECEMBER 31,       
                                    --------------------------------------
                                        1999         1998         1997    
                                    ------------  ----------  ------------

                                                                          
Dividend yield                          0.00%        0.00%        0.00%   
Risk-free interest rate                 6.25%        5.10%        5.80%   
Volatility factor                      40.00%       40.00%       40.00%   
Expected life in years                  6.0           6.0          6.0    

Information regarding these option plans for 1999, 1998 and 1997 is as follows: 

                                                        [Enlarge/Download Table]


                                          1999                              1998                                1997                
                            ---------------------------------  ----------------------------------  ---------------------------------
                                                WEIGHTED AVG.                       WEIGHTED AVG.                      WEIGHTED AVG.
                                   SHARES      EXERCISE PRICE       SHARES         EXERCISE PRICE       SHARES        EXERCISE PRICE
                            -----------------  --------------  -----------------   --------------  ------------------ --------------

                                                                                                                                    
Options outstanding,                                                                                                                
   beginning of year                 469,300   $     16.58              401,800    $      15.86              357,500   $     14.00  
Options exercised                    (34,000)        14.00              (19,000)          14.00               (4,700)        14.00  
Options granted                      480,000         18.85              161,500           21.91               49,000         29.23  
Options forfeited                    (22,500)        17.97              (75,000)          24.85                   -             -   

Options outstanding,                                                                                                                
   end of year                       892,800   $     17.86              469,300    $      16.58              401,800   $     15.86  
Weighted average fair                                                                                                               
   value of options                                                                                                                 
   granted during the year  $           9.25                   $          10.30                     $          11.02                
Options exercisable at                                                                                                              
   year end                          220,400                            137,200                               71,600                
Option price range at end                                                                                                           
   of year                  $14.00 to $28.16                   $14.00 to $28.16                     $14.00 to $31.25                
Option price for exercised                                                                                                          
   shares                   $          14.00                   $          14.00                     $          14.00                
Options available for                                                                                                               
   grant at end of year              249,500                            107,000                              193,500                

The following table summarizes information about options outstanding at December
31, 1999:                                                                       

                                                        [Enlarge/Download Table]


                       OPTIONS OUTSTANDING                               OPTIONS EXERCISABLE     
------------------------------------------------------------------  -----------------------------
                                    WEIGHTED AVG.    WEIGHTED AVG.                 WEIGHTED AVG. 
    RANGE OF         NUMBER           REMAINING        EXERCISE        NUMBER        EXERCISE    
 EXERCISE PRICES    OF SHARES     CONTRACTUAL LIFE       PRICE       OF SHARES        PRICE      
----------------   -----------   ------------------  -------------  -----------   ---------------

                                                                                                 
$          14.00     268,800               6.19       $    14.00      173,200     $     14.00    
$          18.56      25,000               8.82       $    18.56        5,000     $     18.56    
$          18.75     450,500               9.94       $    18.75           -      $        -     
$          19.25      10,000               9.20       $    19.25           -      $        -     
$          19.94      35,000               8.93       $    19.94       15,000     $     19.94    
$          20.13       5,000               8.57       $    20.13        1,000     $     20.13    
$          20.75       5,000               8.65       $    20.75        1,000     $     20.75    
$          21.06      19,500               9.48       $    21.06           -      $        -     
$          21.75      49,000               7.87       $    21.75       18,600     $     21.75    
$          28.16      25,000               8.17       $    28.16        6,600     $     28.16    
                    ----------   -----------------  -------------    ----------   -------------- 
$14.00 to $28.16     892,800               8.55       $    17.86      220,400     $     15.64    

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NOTE 11. BUSINESS SEGMENT                                                       

      The Company has no separately reportable segments in accordance with
Statement of Financial Accounting Standards No. 131 ("Statement 131")           
"Disclosure About Segments of an Enterprise and Related Information". Under the 
enterprise wide disclosure requirements of Statement 131, the Company reports   
revenue, in thousands, for Intermodal Services, Brokerage Services, and         
Logistics Services as follows:                                                  

                                                                [Download Table]


                                       YEARS ENDED DECEMBER 31,       
                            ------------------------------------------
                                1999            1998           1997   
                            ------------   -------------  ------------

                                                                      
Intermodal Services         $   967,033     $   910,396    $   849,398
Brokerage Services              196,434         164,706        129,356
Logistics Services              133,332          70,804         85,725
                            ------------   -------------  ------------
Total Revenue               $ 1,296,799     $ 1,145,906    $ 1,064,479
                            ------------   -------------  ------------

NOTE 12. PROFIT-SHARING PLAN                                                    

        The Company has numerous profit-sharing plans and trusts under section
401(k) of the Internal Revenue Code. Generally, for every dollar the employee   
contributes, the Company will contribute an additional $.20 up to $100. In      
addition, the Company may make a profit sharing contribution at its discretion. 
Historically, the Company has contributed an amount equal to 3% of each         
participant's compensation up to a maximum of $4,800. The Company's             
contributions to the Plan were approximately $1,645,000, $1,458,000 and         
$1,163,000 for 1999, 1998 and 1997, respectively.                               

NOTE 13. RELATED PARTY TRANSACTIONS                                             

         In connection with the acquisition of a controlling interest in each of
the Hub Partnerships, the Company paid cash to the Class B Common Stock         
("Class B") stockholders, some of whom are officers of the Company, as well as  
officers of the Company who are not Class B stockholders, totaling approximately
$16,571,000.  The Company, related to this acquisition, also assumed balloon    
notes that were payable, in part, to the above related parties totaling         
approximately $4,758,000.  Approximately 33% of the balloon notes payable at    
December 31, 1998 are due to the related parties.  The Class B stockholders have
voting control over the Company.  The same related parties described above also 
continued to receive approximately 33% of minority interest distributions of    
income from the Company up until the remaining 70% minority interest was        
purchased in connection with the April 1999 Purchase.  Furthermore, these       
parties received cash and notes from the Company totaling approximately         
$72,330,000 when it acquired minority interest in Hub City Tennessee, L.P., Hub 
City North Central, L.P., Hub City Los Angeles, L.P., Hub City Golden Gate,     
L.P., Hub Group Distribution Services, Hub City Dallas, L.P., Hub City Houston, 
L.P., Hub City Rio Grande, L.P., Hub City Alabama, L.P.,  Hub City Atlanta,     
L.P., Hub City Boston, L.P., Hub City  Canada, L.P., Hub City Cleveland, L.P.,  
Hub City Detroit, L.P., Hub City Florida, L.P., Hub City Indianapolis, L.P.,    
Hub City Kansas, L.P., Hub City Mid-Atlantic, L.P., Hub City New                
York/New Jersey, L.P., Hub City New York State, L.P., Hub City Ohio, L.P., Hub  
City Philadelphia, L.P., Hub City Pittsburgh, L.P., Hub City Portland, L.P. and 
Hub City St. Louis, L.P.                                                        

NOTE 14. LEGAL MATTERS                                                          

        In the ordinary course of conducting its business, the Company becomes
involved in various lawsuits related to its business. The Company does not      
believe that the ultimate resolution of these matters will be material to its   
business, financial position or results of operations.                          

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NOTE 15. EQUITY                                                                 

                                                                [Download Table]


                                                       DECEMBER 31, 1999        
                                               ---------------------------------
                                                                  ISSUED AND    
                                                  AUTHORIZED      OUTSTANDING   
                                               ---------------- ----------------
                                                                                
Preferred stock, $.01 par value                     2,000,000               -   
Class A common stock, $.01 par value               12,337,700        7,043,950  
Class B common stock, $.01 par value                  662,300          662,296  
                                                                [Download Table]


                                                      DECEMBER 31, 1998         
                                               ---------------------------------
                                                                  ISSUED AND    
                                                 AUTHORIZED       OUTSTANDING   
                                               ---------------- ----------------
                                                                                
Preferred stock, $.01 par value                     2,000,000               -   
Class A common stock, $.01 par value               12,337,700        7,009,950  
Class B common stock, $.01 par value                  662,300          662,296  

NOTE 16. CHANGE IN ESTIMATE/IMPAIRMENT OF PROPERTY AND EQUIPMENT                

 In the second quarter of 1999, a $0.9 million pretax charge was
recorded due to a change in estimate and an impairment loss relating to certain 
operating software applications. Specifically, $0.7 million of this charge was  
attributable to a change in estimate of the useful life for the Visual Movement 
software previously used primarily for brokerage. The Visual Movement software  
is no longer being used by the Company and was replaced with enhancements to the
Company's proprietary intermodal operating software during the second quarter of
1999. These enhancements allow for greater network visibility of loads in a year
2000 compliant program. The $0.2 million impairment loss related to the         
write-down of a logistics software program. The fair value was determined based 
on the estimated future cash flows attributable to the single customer using    
this program. The Company has installed this software package and is currently  
preparing the software for its operational applications. This new software will 
provide enhanced functionality.                                                 

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NOTE 17. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)                          

      The following table sets forth selected quarterly financial data for
each of the quarters in 1999 and 1998 (in thousands, except per share amounts): 

                                                        [Enlarge/Download Table]


                                                              QUARTERS                         
                                       --------------------------------------------------------
                                           FIRST         SECOND        THIRD         FOURTH    
                                       -------------- ------------- ------------- -------------
                                                                                               
Year Ended December 31, 1999:                                                                  
Revenue                                    $ 307,682     $ 319,448     $ 333,337     $ 336,332 
Net revenue                                   39,169        39,045        41,493        42,708 
Operating income                               7,386         5,848         8,578         8,322 
Historical net income                          1,943         2,638         3,199         3,066 
Historical basic earnings per share         $   0.25      $   0.34      $   0.42      $   0.40 
Historical diluted earnings per share       $   0.25      $   0.34      $   0.41      $   0.40 
                                                        [Enlarge/Download Table]


                                                              QUARTERS                         
                                       --------------------------------------------------------
                                           FIRST         SECOND        THIRD         FOURTH    
                                       -------------- ------------- ------------- -------------
                                                                                               
Year Ended December 31, 1998:                                                                  
Revenue                                    $ 255,133     $ 283,051     $ 295,859     $ 311,863 
Net revenue                                   30,447        33,620        36,523        37,744 
Operating income                               4,434         6,773         8,642         6,557 
Historical net income                          1,627         2,076         2,606         2,599 
Historical basic earnings per share         $   0.21      $   0.27      $   0.34      $   0.34 
Historical diluted earnings per share       $   0.21      $   0.27      $   0.34      $   0.34 

NOTE 18. SUBSEQUENT EVENT                                                       

      On March 13, 2000, the Company signed a letter of intent pursuant to
which the Company agreed to sell its 65% interest in Hub Distribution for $65   
million in cash and warrants to purchase 5% of the outstanding shares of stock  
of Hub Distribution. The sale of this interest is subject to a number of        
customary conditions and there is therefore no guarantee that a transaction will
ultimately be consummated.                                                      

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ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND   
FINANCIAL DISCLOSURE                                

None.                                               
PART III

ITEM 10.       DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT               

     The sections entitled "Election of Directors" and "Ownership of the Capital
Stock of the Company" appearing in the Registrant's proxy statement for the     
annual meeting of stockholders to be held on May 17, 2000, sets forth certain   
information with respect to the directors of the Registrant and Section 16      
compliance and is incorporated herein by reference. Certain information with    
respect to persons who are or may be deemed to be executive officers of the     
Registrant is set forth under the caption "Executive Officers of the Registrant"
in Part I of this report.                                                       

ITEM 11.      EXECUTIVE COMPENSATION                                            

 The section entitled "Compensation of Directors and Executive Officers"
appearing in the Registrant's proxy statement for the annual meeting of         
stockholders to be held on May 17, 2000, sets forth certain information with    
respect to the compensation of management of the Registrant and is incorporated 
herein by reference.                                                            

ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT    

The section entitled "Ownership of the Capital Stock of the Company"  
appearing in the Registrant's proxy statement for the annual meeting of         
stockholders to be held on May 17, 2000, sets forth certain information with    
respect to the ownership of the Registrant's Common Stock and is incorporated   
herein by reference.                                                            

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                    

   The section entitled "Certain Transactions" appearing in the Registrant's
proxy statement for the annual meeting of stockholders to be held on May 17,    
2000, sets forth certain information with respect to certain business           
relationships and transactions between the Registrant and its directors and     
officers and it is incorporated herein by reference.                            

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 PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES & REPORTS ON FORM 8-K         

(A)(1) FINANCIAL STATEMENTS                                           

             The following consolidated financial statements of the Registrant
are included under Item 8 of this Form 10-K:                                    

Report of Independent Accountants                   

            Consolidated Balance Sheets - December 31, 1999 and December 31,
1998                                                

            Consolidated Statements of Operations - Years ended December 31,
1999, December 31, 1998 and December 31, 1997       

         Consolidated Statements of Stockholders' Equity - Years ended
      December 31, 1999, December 31, 1998 and December 31, 1997

            Consolidated Statements of Cash Flows - Years ended December 31,
1999, December 31, 1998 and December 31, 1997       

Notes to Consolidated Financial Statements          

(A)(2) FINANCIAL STATEMENT SCHEDULES                                  

         The remaining financial statements and statement schedule for
which provision is made in Regulation S-X are set forth in the Index immediately
preceding such financial statements and statement schedule and are incorporated 
herein by reference.                                                            

(A)(3) EXHIBITS                                                       

            The exhibits included as part of this Form 10-K are set forth in
the Exhibit Index immediately preceding such Exhibits and are incorporated      
herein by reference.                                                            

(B)    REPORTS ON FORM 8-K                                            

None.                                                   

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SIGNATURES

Pursuant to the requirements of Section 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.                       

Date: March 29, 2000                 HUB GROUP, INC.                            

                By /S/ DAVID P. YEAGER
                ----------------------
         David P. Yeager
                                   Chief Executive Officer and Vice Chairman

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and on  
the dates indicated:                                                            

                                                        [Enlarge/Download Table]


                                                Title                                Date      

                                                                                               
 /S/  PHILLIP C. YEAGER     Chairman and Director                                March 29, 2000
--------------------------                                                                     
      Phillip C. Yeager                                                                        

 /S/  DAVID P. YEAGER       Vice Chairman, Chief Executive Officer and Director  March 29, 2000
--------------------------                                                                     
      David P. Yeager                                                                          

 /S/  THOMAS L. HARDIN      President, Chief Operating Officer and Director      March 29, 2000
--------------------------                                                                     
      Thomas L. Hardin                                                                         

 /S/  JAY E. PARKER         Vice President-Finance and Chief Accounting Officer  March 29, 2000
--------------------------                                                                     
      Jay E. Parker         (Principal Financial and Accounting Officer)                       

 /S/  CHARLES R. REAVES     Director                                             March 29, 2000
--------------------------                                                                     
      Charles R. Reaves                                                                        

 /S/  MARTIN P. SLARK       Director                                             March 29, 2000
--------------------------                                                                     
      Martin P. Slark                                                                          

 /S/  GARY D. EPPEN         Director                                             March 29, 2000
--------------------------                                                                     
      Gary D. Eppen                                                                            

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                                                                     SCHEDULE II
 HUB GROUP, INC.
 VALUATION AND QUALIFYING ACCOUNTS

                                                        [Enlarge/Download Table]


                                                        Balance at    Charged to                               
                                                        Beginning      Costs &                     Balance at  
                                                         of Year       Expenses     Deduction      End of Year 
                                                      ------------- ------------- -------------  --------------
                                                                                                               
Year Ended December 31:                                                                                        
     Allowance for uncollectible accounts receivable                                                           
       1999                                              $ 691,000    $2,321,000    $ (878,000)    $ 2,134,000 
       1998                                                303,000     1,523,000    (1,135,000)        691,000 
       1997                                                405,000     1,005,000    (1,107,000)        303,000 

S-1 

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 INDEX TO EXHIBITS

NUMBER                               EXHIBIT                                    
------                               -------                                    

2.1        Purchase Agreement among the Registrant, American President      
             Companies, Ltd. and APL Land Transport Services, Inc. (incorporated
         by reference to the Registrants report on Form 8-K dated May 2,
1996 and filed May 17, 1996, File No. 0-27754)        

2.2        Purchase and Sale Agreement among Hub Holdings, Inc. and Hub City
          North Central, Inc. (incorporated by reference to Exhibit 2.2 to
            the Registrants report on Form 10-K dated March 26, 1997 and filed
March 27, 1997, File No. 000-27754)                   

3.1        Amended Certificate of Incorporation of the Registrant           
  (incorporated by reference to Exhibit 3.1 and 3.3 to the
             Registrant's registration statement on Form S-1, File No. 33-90210)

  3.2        By-Laws of the Registrant (incorporated by reference to Exhibit 3.2
      to the Registrant's registration statement on Form S-1, File
No. 33-90210)                                         

10.1        Form of Amended and Restated Limited Partnership Agreement        
       (incorporated by reference to Exhibit 10.1 to the Registrants
      report on Form 10-K dated March 26, 1997 and filed March 27,
1997, File No. 000-27754)                             

10.2        Amended and Restated Limited Partnership Agreement of Hub City    
        Canada, L.P. (incorporated by reference to Exhibit 10.2 to the
        Registrants report on Form 10-K dated March 26, 1997 and filed
March 27, 1997, File No. 000-27754)                   

10.3        Form of Non-Competition Agreement (incorporated by reference to   
         Exhibit 10.3 to the Registrants report on Form 10-K dated March
26, 1997 and filed March 27,1997, File No. 000-27754) 

10.4        Purchase and Sale Agreement between the Registrant and the        
             Stockholders of Hub City Terminals, Inc. (incorporated by reference
            to Exhibit 10.3 to the Registrant's registration statement on Form
S-1, File No. 33-90210)                               

10.5        Hub Group Distribution Services Purchase and Sale Agreement       
        (incorporated by reference to Exhibit 10.5 to the Registrant's
      report on Form 10-K dated March 26, 1997 and filed March 27,
1997, File No. 000-27754)                             

10.6        Management Agreement (incorporated by reference to Exhibit 10.6   
          to the Registrant's report on Form 10-K dated March 26, 1997 and
filed March 27, 1997, File No. 000-27754)             

10.7        Stockholders' Agreement (incorporated by reference to Exhibit     
           10.7 to the Registrant's report on Form 10-K dated March 26, 1997
and filed March 27, 1997, File No. 000-27754)         

10.8        Credit Agreement dated as of September 27, 1997, among the        
             Registrant, Hub City Terminals, Inc., Hub Holdings, Inc. and Harris
           Trust and Savings Bank (incorporated by reference to Exhibit 10.8
          to the Registrant's report on Form 10-Q dated and filed November
13, 1997, File No. 000-27754)                         

 10.9        $100 million Credit Agreement dated as of April 30, 1999, among the
             Registrant, Hub City Terminals, Inc., Hub Holdings, Inc. and Harris
           Trust and Savings Bank (incorporated by reference to Exhibit 10.9
         to the Registrant's report on Form 10-Q dated and filed May 10,
1999, File No. 000-27754)                             

10.10        $40 million Bridge Credit Agreement dated as of April 30, 1999     
       among the Registrant, Hub City Terminals, Inc., Hub Holdings,
           Inc. and Harris Trust and Savings Bank (incorporated by reference
        to Exhibit 10.10 to the Registrant's report on Form 10-Q dated
and filed May 10, 1999, File No. 000-27754)           

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10.11        $50 million Note Purchase Agreement dated as of June 25, 1999,     
            among the Registrant, Hub City Terminals, Inc., Hub Holdings, Inc.
            and various purchasers (incorporated by reference to Exhibit 10.11
            to the Registrant's report on Form 10-Q dated and filed August 16,
1999, File No. 000-27754)                             

21           Subsidiaries of the Registrant                                     

23.1         Consent of Arthur Andersen LLP                                     

27           Financial Data Schedule                                            

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EXHIBIT 21                                                                      

Subsidiaries of Hub Group, Inc.                                                 

SUBSIDIARIES                          JURISDICTION OF INCORPORATION/ORGANIZATION

Hub City Terminals, Inc.                                 Delaware               
Hub Group Alabama, LLC                                   Delaware               
Hub Group Atlanta, LLC                                   Delaware               
Hub Group Boston, LLC                                    Delaware               
Hub Group Canada, LLC                                    Delaware               
Hub Group Cleveland, LLC                                 Delaware               
Hub Group Detroit, LLC                                   Delaware               
Hub Group Florida, LLC                                   Delaware               
Hub Group Golden Gate, LLC                               Delaware               
Hub Group Indianapolis, LLC                              Delaware               
Hub Group Kansas City, LLC                               Delaware               
Hub Group Los Angeles, LLC                               Delaware               
Hub Group Mid-Atlantic, LLC                              Delaware               
Hub Group New Orleans, LLC                               Delaware               
Hub Group New York State, LLC                            Delaware               
Hub Group New York-New Jersey, LLC                       Delaware               
Hub Group North Central, LLC                             Delaware               
Hub Group Ohio, LLC                                      Delaware               
Hub Group Philadelphia, LLC                              Delaware               
Hub Group Pittsburgh, LLC                                Delaware               
Hub Group Portland, LLC                                  Delaware               
Hub Group St. Louis, LLC                                 Delaware               
Hub Group Tennessee, LLC                                 Delaware               
Hub City Texas, L.P.                                     Delaware               
Hub Group Associates, Inc.                               Illinois               
Hub Highway Services                                     Illinois               
Hub Group Distribution Services                          Illinois               
Q.S. of Illinois, Inc.                                   Illinois               
Q.S.S.C., Inc.                                           Delaware               
Quality Services L.L.C.                                  Missouri               
Quality Services of Kansas, L.L.C.                        Kansas                
Quality Services of New Jersey, L.L.C.                  New Jersey              
Quality Services of Michigan L.L.C.                      Michigan               
Q.S. of Georgia, L.L.C.                                   Georgia               
HLX Company, L.L.C.                                      Delaware               
Hub Chicago Holdings, Inc.                               Delaware               
Quality Intermodal Corporation                             Texas                

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EXHIBIT 23.1                                                                    

 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of our
reports dated February 4, 2000, except with respect to the matter discussed in  
Note 18, as to which the date is March 15, 2000 included in this Form 10-K, into
Hub Group, Inc.'s previously filed Registration Statement File No. 333-6327 of  
Form S-8, and Registrations File No. 333-48185 on Form S-8.                     

                         ARTHUR ANDERSEN LLP

Chicago, Illinois                                                               
March 28, 2000                                                                  

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
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		4/1/01		33
		5/17/00		1		40
Filed on:		3/29/00		42
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For Period End:		12/31/99		1		41			DEF 14A
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		5/2/97		33
		3/27/97		44					10-K
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		3/1/97		13		30
		5/17/96		44					8-K
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		3/18/96		2		33
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