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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission file number: 333-210698

Jack Cooper Holdings Corp.

(Exact name of Registrant as specified in its charter)

(816) 983-4000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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 o  No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o  No x

As of March 31, 2016, there were outstanding 100 shares of the Registrant’s common stock, all of which were issued to the Registrant’s parent company

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INDEX

PART I.  FINANCIAL INFORMATION

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JACK COOPER HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(in thousands)

See accompanying Notes to Condensed Consolidated Financial Statements

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JACK COOPER HOLDINGS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share data)

See accompanying Notes to Condensed Consolidated Financial Statements

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JACK COOPER HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

See accompanying Notes to Condensed Consolidated Financial Statements

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JACK COOPER HOLDINGS, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

NOTE 1: ACCOUNTING POLICIES AND BASIS OF PRESENTATION

The condensed consolidated financial statements include all the accounts of Jack Cooper Holdings Corp. and its subsidiaries (“we,” the “Company” or “JCHC”). All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements, and the notes thereto, included in our Registration Statement on Form S-4 (Commission File Number 333-210698, effective May 11, 2016) (the “Registration Statement”), as filed with the Securities and Exchange Commission, and the prospectus contained therein. In the opinion of management, the unaudited condensed consolidated financial statements reflect all normal, recurring adjustments considered necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. Results of operations for interim periods are not necessarily indicative of results to be expected for a full year.

Organization and Business Overview

The Company is a transportation and logistics provider and a leading over-the-road finished vehicle logistics company in North America. The Company provides premium asset and non-asset based solutions to the global new and used vehicle markets, specializing in light vehicle transportation and other logistics services for major automotive original equipment manufacturers and for fleet ownership and remarketing companies. The Company offers a broad, complementary suite of asset and non-asset based transportation and logistics solutions, and operates through a fleet of 2,347 active rigs and a network of 57 strategically located terminals across North America as of March 31, 2016. The Company believes its scale and full range of over-the-road transportation and value-added logistics services, offered in over 85 locations across the U.S., Canada and Mexico, allow it to operate efficiently and deliver superior customer service, which the Company believes gives it a competitive advantage in maintaining and winning new business.

Revenue

The Company primarily earns revenues under multi-year or single-year contracts from the intrastate and interstate transportation of vehicles. Approximately 45%, 34%, and 13% of the Company’s revenues were from its three largest customers, General Motors Company, Ford Motor Company, and Toyota Motor Sales, USA, Inc., respectively, for the three months ended March 31, 2016, and 38%, 29%, and 16%, respectively, for the three months ended March 31, 2015. These customers also represented approximately 67% and 69% of accounts receivable at March 31, 2016 and December 31, 2015, respectively. The allowance for doubtful accounts totaled $2.4 million and $1.8 million as of March 31, 2016 and December 31, 2015, respectively.

Goodwill and Intangible Assets

Goodwill and other indefinite-life intangible assets not subject to amortization are evaluated annually as of November 30 for impairment, or more frequently if circumstances indicate that impairment may exist. In assessing indefinite lived assets not subject to amortization, the Company assesses qualitative factors to determine if it is more likely than not that the fair value of the indefinite lived assets exceeds its carrying values. If the qualitative assessment is inconclusive, the Company performs Step 1 of a two-step process to compare the fair value of the indefinite lived assets to its carrying values. If Step 1 indicates the fair value is less than the carrying value, the Company performs Step 2 of the assessment to determine the difference between the implied fair value of the indefinite lived assets and the carrying amounts. In assessing goodwill for impairment, the Company initially evaluates qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not conclusive and it is necessary to calculate the fair value of a reporting unit, then a two-step process is utilized to test goodwill for impairment. First, a comparison of the fair value of the applicable reporting unit with the aggregate carrying value, including goodwill, is performed utilizing an income approach and market approach. The income approach develops an estimated fair value based on a discounted cash flow, where the estimated fair value is calculated by discounting projected future cash flows. The market approach compares actual market transactions of businesses that are similar to those of the Company’s reporting units. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, the second step of

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JACK COOPER HOLDINGS, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

the goodwill impairment test is performed to determine the amount of impairment loss. The second step includes comparing the implied fair value of the affected reporting unit’s goodwill with the carrying value of that goodwill. Some of the key assumptions utilized in determining future projected cash flows include estimated growth rates, expected future pricing and costs, the weighted average cost of capital and discount rates, and future capital expenditures requirements. In addition, market multiples of publicly traded guideline companies are also considered.  The Company considers the relative strengths and weaknesses inherent in the valuation methodologies utilized in each approach and consults with a third party valuation specialist to assist in determining the fair value.

Any one event or a combination of events such as a change in the business climate, a negative change in relationships with significant customers, and changes to strategic decisions, could require an interim assessment prior to the next required annual assessment. No impairment was recorded for the three months ended March 31, 2016 and 2015, respectively.

Foreign Currency

The Company’s financial condition and results of operations are recorded in multiple currencies, including the Canadian dollar and the Mexican peso, and the Company has an accounts receivable balance denominated in Nigerian naira. Assets and liabilities of subsidiaries whose functional currency is not the U.S. dollar were translated at the exchange rate in effect at the balance sheet date, and revenues and expenses were translated at average exchange rates for the period. Translation adjustments are included in other comprehensive income (loss). Gains and losses on certain of the Company’s intercompany loans are included in Other, net in the condensed consolidated statements of comprehensive loss due to the intercompany loans not being considered long-term investment in nature.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions about future events relating to the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include those related to workers’ compensation insurance, pension withdrawal liabilities, allowance for doubtful accounts, the recoverability and useful lives of assets, litigation provisions and income taxes. Estimates are revised when facts and circumstances change. As such, actual results could differ materially from those estimates.

Recently Issued Accounting Standards

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting, which provides for simplification of certain aspects of employee share-based payment accounting including income taxes, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard will be effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years and will be applied either prospectively, retrospectively or using a modified retrospective transition approach depending on the area covered in this update. The Company is currently evaluating the effect adoption of this update will have on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases, which requires lessees to recognize a lease liability and a right of use asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with earlier application permitted. This update will be applied using a modified retrospective transition approach for leases existing at, or entered into, after the beginning of the earliest comparative period presented in the financial

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JACK COOPER HOLDINGS, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

statements. The Company is currently evaluating the effect adoption of this update will have on its consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest, which amends the current guidance to change the manner in which debt issuance costs are presented on an entity’s balance sheet. This new guidance requires the Company to present debt issuance costs related to recognized debt liabilities on the balance sheet as a direct deduction from the debt liability, as opposed to the previous guidance that provides for presentation of the cost of issuing debt as a separate asset. ASU 2015-03 required retrospective application to all prior periods presented in the financial statements. This new guidance was effective for the Company in the first quarter of 2016. As a result of adopting this standard on January 1, 2016, deferred financing costs of $10.1 million as of December 31, 2015, previously reported within long-term assets, were reclassified to long-term debt in the consolidated balance sheets. As of March 31, 2016, $9.5 million of deferred financing costs are reported within long-term debt in the consolidated balance sheet.

In February 2015, the FASB issued ASU 2015-02, Consolidation, which amends the current consolidation guidance to change the manner in which a reporting entity assesses certain characteristics used to determine if an entity is a variable interest entity. This new guidance is effective for the Company in the first quarter of 2016, with early adoption permitted, including in any interim period. The Company adopted this guidance on January 1, 2016 and the adoption of this guidance did not have any impact on its financial position, results of operations or cash flows.

In August 2014, the FASB issued guidance on the disclosure of uncertainties about an entity’s ability to continue as a going concern. This standard provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The guidance is effective for annual reporting periods ending after December 15, 2016, and early adoption is permitted. The guidance will be applicable to the Company’s financial statements for fiscal year 2016 and the Company expects to adopt this guidance on January 1, 2017. The Company does not expect the adoption of this guidance to have any impact on its financial position, results of operations or cash flows.

In May 2014, the FASB issued guidance on revenue recognition. This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This guidance also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB agreed to a one-year deferral of the effective date of the new revenue recognition guidance so that it is now effective for interim and annual periods beginning after December 15, 2017. The new guidance will become effective for the Company beginning with the first quarter of 2018 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The Company is currently evaluating the effect adoption of this update will have on its financial position, results of operations and cash flows.

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JACK COOPER HOLDINGS, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

NOTE 2: PROPERTY AND EQUIPMENT

Property and equipment, net were as follows for the periods presented below:

The Company performs periodic reviews of the appropriateness of depreciable lives for each category of property and equipment, taking into consideration actual usage, physical wear and tear, and replacement history to determine remaining life of the asset base. No changes to the remaining useful life of the asset base were made during the three months ended March 31, 2016.

The Company identified certain assets that meet the criteria for assets held for sale classification.  The Company had approximately $1.9 million in assets held for sale as of March 31, 2016 and December 31, 2015 on its condensed consolidated balance sheets. These assets primarily consist of real property at one location that the Company sold for $1.6 million subsequent to March 31, 2016 and carrier revenue equipment that does not fit the Company’s fleet needs.  The Company plans to sell substantially all of the remaining assets during 2016 and, as such, the assets were measured at fair value less cost to sell.

NOTE 3: LINE OF CREDIT

The Company is party to an Amended and Restated Credit Agreement with the lenders party thereto and Wells Fargo Capital Finance, LLC, as agent, dated June 18, 2016 (as amended, modified and supplemented, the “Credit Facility”), which provides a revolving line of credit of $100 million, with the amount available to borrow determined by a borrowing base calculation based on accounts receivable and vehicles owned less letters of credit and other offsets. The Credit Facility matures at the earlier of (i) June 18, 2018 or (ii) the date that is 90 days prior to the then extant maturity date of the Term Loan (as defined in Note 4, which is currently October 18, 2018). As of March 31, 2016 and December 31, 2015, there were $58.4 million and $50.6 million, respectively, in outstanding borrowings under the Credit Facility with a weighted average interest rate of 2.98% and 2.99%, respectively. As of March 31, 2016 and December 31, 2015, the Company had available borrowing capacity of $31.5 million and $39.3 million, respectively, without consideration of the maximum revolver threshold disclosed below. Borrowings under the Credit Facility are reflected within current liabilities on the consolidated balance sheets. Debt issuance costs associated with the Credit Facility of $0.9 million as of March 31, 2016, and $1.0 million as of December 31, 2015 are included within deposits and other assets on the condensed consolidated balance sheets.

All borrowings under the Credit Facility bear interest at the Base Rate plus the Base Rate Margin, or at the Company’s option, at the LIBOR Rate plus the LIBOR Rate Margin (in minimum amounts of $1 million, each such term as defined under the Credit Agreement).

The Credit Facility contains customary representations, warranties and covenants including, but not limited to, certain limitations on the Company’s and its subsidiaries’ ability to incur additional debt, guarantee other obligations, create or incur liens on assets, make investments or acquisitions, make certain dispositions of assets, make optional payments or modifications of certain debt instruments, pay dividends or other payments to the Company’s equity holders, engage in mergers or consolidations, sell assets, change the Company’s line of business and engage in transactions with affiliates. If availability under the Credit Facility falls below 12.50% of the

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JACK COOPER HOLDINGS, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

Maximum Revolver Amount (as defined in the Credit Facility), the Company will be required to maintain a fixed charge coverage maintenance ratio of at least 1.10:1.00 for a specified time. If excess availability under the Credit Facility falls below 12.50% of the Maximum Revolver Amount, the lender may automatically sweep funds from the Company’s cash accounts to pay down the revolver. At March 31, 2016 and December 31, 2015, the Company’s availability under the Credit Facility exceeded the specified threshold amounts and accordingly, the Company was not in a financial covenant period.

During the three months ended March 31, 2016, borrowings under the Credit Facility ranged from $50.0 million to $69.1 million. As of March 31, 2016 and December 31, 2015, the Company had $3.8 million in letters of credit outstanding under the Credit Facility. The Company was in compliance with all applicable covenants under the Credit Facility as of March 31, 2016 and December 31, 2015.

NOTE 4: LONG-TERM DEBT

2020 Notes

The Company has outstanding $375 million principal amount of 9.25% Senior Secured Notes due 2020 (the “2020 Notes”), issued pursuant to an indenture dated June 18, 2013. The outstanding principal balance of the 2020 Notes recorded within long-term debt on the condensed consolidated balances sheets is net of unamortized premium and debt financing costs totaling $2.5 million as of March 31, 2016, and $2.7 million as of December 31, 2015.

Interest on the 2020 Notes is payable semi-annually in cash in arrears on June 1 and December 1 of each year. The indenture governing the 2020 Notes contains certain covenants, including covenants, which, subject to certain exceptions, limit the ability of the Company and its restricted subsidiaries (as defined in the indenture) to incur additional indebtedness, engage in certain asset sales, make certain types of restricted payments, engage in transactions with affiliates and create liens on assets of the Company or the guarantors. The Company was in compliance with all applicable covenants under the indenture governing the 2020 Notes as of March 31, 2016 and December 31, 2015.

As of March 31, 2016, the Company had outstanding $375 million in aggregate principal amount of 2020 Notes on which interest accrued at a rate of 9.25% per year through June 18, 2014. In connection with the issuance of the 2020 Notes, the Company entered into registration rights agreements requiring the Company to exchange the 2020 Notes for notes registered under the Securities Act within 365 days of the initial issuance on June 18, 2013, or pay additional interest of 0.25% per annum for each 90-day period thereafter until registration is completed, not to exceed 1.0% of additional interest per annum. As of March 31, 2016, the 2020 Notes were not registered and were subject to restrictions on transfer and resale, and could only be offered or sold in transactions exempt from or not subject to the registration requirements of the Securities Act. Because the Company did not complete the exchange offer in a timely manner pursuant to the registration rights agreements, interest on the 2020 Notes accrued at 10.25% per annum as of March 31, 2016. As of March 31, 2016 and December 31, 2015, the Company had an additional registration rights interest accrual of $2.7 million.

On May 11, 2016, the Securities and Exchange Commission declared the Registration Statement registering new notes substantially identical to the 2020 Notes effective and on May 12, 2016 the Company launched an offer to exchange the new registered notes for the outstanding 2020 Notes.  The sole purpose of the exchange offer is to fulfill the Company’s obligations under the registration rights agreements entered into with respect to the 2020 Notes.

Term Loan

On March 31, 2015, the Company entered into a senior secured term loan facility (the “Term Loan”) in the principal amount of $62.5 million issued at a 4.0% discount with MSDC JC Investments, LLC (“MSDC”), as agent and lender. MSDC is an affiliate of MSD Credit Opportunity Fund, L.P., a Class B stockholder of Jack Cooper Enterprises, Inc., which is the parent company of JCHC.  The outstanding principal balance recorded within long-term debt on the condensed consolidated balances sheets is net of the unamortized discount and deferred financing costs totaling $3.6 million as of March 31, 2016, and $3.9 million as of December 31, 2015. The proceeds from the

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JACK COOPER HOLDINGS, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

Term Loan were used to pay down outstanding borrowings on the Credit Facility and for general corporate purposes.

Prior to an amendment dated December 23, 2015, and effective January 2, 2016, interest on the Term Loan accrued at a rate of LIBOR plus 6.0% per annum, subject to a LIBOR floor of 3.0% per annum. From January 2, 2016 through maturity, interest on the Term Loan accrues at LIBOR plus 7.0% (10.0% at March 31, 2016), subject to a LIBOR floor of 3.0% per annum. The Term Loan matures on October 18, 2018. Further, if the Term Loan is prepaid with the proceeds of a qualified equity raise, the Company will pay an additional premium equal to the present value of the additional 1.0% interest accruing from January 2, 2016, if paid through the maturity date, as a make whole premium.

The Term Loan is guaranteed by certain domestic subsidiaries of the Company and is secured by substantially all of the assets of the Company and its domestic subsidiaries and a pledge of 65% of the outstanding equity of the Company’s first-tier foreign subsidiaries. MSDC’s liens have first priority status on the ABL Collateral (as defined in the JCHC Indenture) and second priority status on the Notes Collateral (as defined in the indenture governing the 2020 Notes) to the same extent as the liens of the lenders under the Credit Facility in such assets (as contemplated by the Intercreditor Agreement (as defined in the indenture governing the 2020 Notes)), but are junior to the liens of the lenders under the Credit Facility.

In connection with the execution of the Term Loan agreement, on April 2, 2015, the Company entered into an amendment to the Credit Facility (the “Third Amendment”), pursuant to which the Credit Facility was amended to permit the incurrence of the Term Loan under the Credit Agreement. The Third Amendment also imposed an availability block under the Credit Facility of $6.25 million so long as any indebtedness is outstanding under the Term Loan (or MSDC has any commitment to extend credit resulting in incurrence of such indebtedness), and made certain conforming amendments to the covenants with respect to the prepayment, redemption, purchase or acquisition of other indebtedness and to certain of the events of default under the Credit Facility.

NOTE 5: INCOME TAXES

For the three months ended March 31, 2016 and 2015, the Company determined the interim tax expense using an effective tax rate by jurisdiction which was calculated using an estimate of annual earnings and annual tax. The Company’s effective tax rate for the three months ended March 31, 2016 and 2015 was (3.5)% and (1.1)%, respectively. The accounting for income taxes requires deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. There have not been any significant changes in unrecognized income tax benefits since December 31, 2015. As of March 31, 2016 and December 31, 2015, the Company had $88.0 million and $85.4 million, respectively, recorded for valuation allowances.

NOTE 6: COMMITMENTS AND CONTINGENCIES

Letters of Credit

At March 31, 2016 and December 31, 2015, the Company had $3.8 million in outstanding letters of credit to be used as collateral for the Company’s obligation to fund losses under various retrospectively-rated and large deductible insurance programs.

Litigation

As previously reported, the Company was in a dispute with American Zurich Insurance Company and Zurich Services Corporation (collectively referred to herein as “Zurich”) regarding the handling of workers’ compensation claims for the policy period January 1, 2008 through July 26, 2009. On January 4, 2011, the Company entered into a Standstill Agreement with Zurich. The Standstill Agreement expired June 15, 2013, and arbitration resumed. On November 7, 2013, the Company entered into a Payment and Standstill Agreement and Limited Release (the “Second Standstill Agreement”) with Zurich relating to the previously disclosed arbitration. The Second Standstill

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JACK COOPER HOLDINGS, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

Agreement, as amended, provided for another standstill until February 29, 2016 (the “Second Standstill Period”). During the Second Standstill Period, neither Zurich nor the Company could proceed with the arbitration and neither party was permitted to exercise any remedies in respect of the Zurich insurance program covering the period January 1, 2008 through July 26, 2009, whether at law or in equity. During the Second Standstill Period, Jack Cooper made all payments required by the Second Standstill Agreement and maintained a letter of credit in the amount of $3.5 million as collateral.

In March 2016, the Company and Zurich agreed to terms memorializing a settlement of this arbitration and dispute, and in April 2016 the Company and Zurich executed a full settlement agreement with releases and other terms agreeable to both parties. The Company had total reserves of $4.1 million at March 31, 2016 and December 31, 2015, net of liabilities for which corresponding assets are recorded related to insurance recoveries for claims in excess of per claim maximum exposures. Subsequent to March 31, 2016, the Company fully satisfied its obligations to Zurich under the settlement agreement.

From time to time and in the ordinary course of business, the Company is a plaintiff or a defendant in other legal proceedings related to various issues, including workers’ compensation claims, tort claims, contractual disputes, and collections. The Company carries insurance that provides protection against certain types of claims, up to the policy limits of its insurance. It is the opinion of management that none of the other known legal actions will have a material adverse impact on the Company’s financial position, results of operations, or liquidity.

Other Commitments

The Company recorded an estimate for withdrawal liabilities from the Western Conference of Teamsters Pension Trust (the “Western Conference Trust”) due to declines in its contributions to the fund during the periods between 2011 and 2014, and Teamsters of Philadelphia and Vicinity Pension Plan due to declines in its contributions to the fund during the periods since 2009, in the amount of $4.4 million and $3.3 million as of December 31, 2015, respectively, and $2.8 million and $3.1 million as of March 31, 2016, respectively. In March 2016, the Company received a $0.3 million assessment for the full withdrawal as of December 31, 2015 from the Western Conference Trust, which was fully accrued for as of December 31, 2015. The Company has evaluated the liabilities as of March 31, 2016 and has determined that no changes to the estimates of withdrawal liabilities are necessary for either plan.

NOTE 7: FAIR VALUE OF FINANCIAL INSTRUMENTS

GAAP has established a hierarchy for ranking the quality and reliability of the information used to determine fair values and requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities.

Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

Level 3: Unobservable inputs for the asset or liability.

The Company utilizes the best available information in measuring fair value.  Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Cash and cash equivalents, accounts receivable and payables approximate fair value due to their liquid and short term nature. The estimated fair value of the 2020 Notes outstanding at March 31, 2016 and December 31, 2015 was approximately $375.4 million and $370.6 million, respectively. The estimated fair value of the remaining outstanding debt (including the unsecured debt and outstanding balance on the Credit Facility and Term Loan) was approximately $146.7 million and $142.2 million at March 31, 2016 and December 31, 2015, respectively. The fair value is estimated by

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JACK COOPER HOLDINGS, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

comparing interest rates to debt with similar terms and maturities, which represents a level 2 input in the fair value hierarchy.

NOTE 8: GOODWILL AND ACQUIRED INTANGIBLE ASSETS

The Company had total goodwill of $32.2 million as of March 31, 2016 and December 31, 2015, and net intangible assets of $28.0 million and $28.6 million as of March 31, 2016 and December 31, 2015, respectively.

The tables below present the change in carrying values by segment:

NOTE 9: RELATED PARTY TRANSACTIONS

The Company paid EVE Partners, LLC, an affiliate of one of the Company’s directors, less than $0.1 million during the three months ended March 31, 2016 and 2015, for financial advisory services and related travel expenses.

On March 19, 2015, the Company entered into an intercompany promissory note agreement with its parent company, Jack Cooper Enterprises, Inc., in the principal amount of $1.5 million. The proceeds from the intercompany note were used for general corporate purposes. The intercompany note had a maturity date of September 30, 2015 and bore interest at the rate of 8.0% per annum. All outstanding principal and interest was paid on August 14, 2015 with no prepayment penalty.

NOTE 10: SEGMENT REPORTING

The Company had two reportable segments at March 31, 2016 and 2015: the Transport segment and the Logistics segment.

Transport Segment.  The Transport segment provides automotive transportation services to OEMs of cars and light trucks in the U.S. and Canada. Specific services include (i) transportation of new vehicles from OEM assembly centers, vehicle distribution centers and port sites to dealers or other intermediate destinations, in connection with which the Company collects fuel surcharges and (ii) yard management services, including railcar loading and gate releasing services at OEM assembly centers. The consolidated entities that comprise the Transport segment are: Jack Cooper Transport Company, Inc. and its wholly-owned subsidiaries, and Jack Cooper Transport Canada, Inc. and its wholly-owned subsidiaries.

Logistics Segment.  The Logistics segment engages in the global non-asset based automotive supply chain for new and used finished vehicles, including the brokering of transportation of used vehicles and vehicles sold through

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

automotive auction processes in the growing remarketed vehicle sector, in which our customers are typically OEM remarketing departments, automotive auction companies and logistics brokers; brokering of the international shipment of cars and trucks from various ports in the U.S. to various international destinations; vehicle inspection and title storage services for pre-owned and off-lease vehicles; and supply chain management services as well as rail and yard management and port processing. Other items shipped include heavy construction equipment, farm equipment and commercial trucking vehicles. The consolidated entities that comprise the Logistics segment are: Jack Cooper Logistics, LLC and Auto Export Shipping, Inc., and their wholly-owned subsidiaries, including, Axis Logistics Services, Inc., Jack Cooper CT Services, Inc., Jack Cooper Rail & Shuttle, Inc. and five Mexican operating companies.

The following table sets forth the specific financial information about each segment as reviewed by the Company’s management as of and for the three months ended March 31, 2016 and 2015:

Administrative services provided by the corporate office allocated to the individual segments represent corporate services rendered to and costs incurred for each segment including allocation of general corporate management oversight costs.

NOTE 11: CONDENSED CONSOLIDATING SUBSIDIARY GUARANTOR FINANCIAL INFORMATION

The following tables present condensed consolidating financial statements under the equity method of (a) the parent company, Jack Cooper Holdings Corp., as issuer of the 2020 Notes; (b) the subsidiary guarantors of the 2020 Notes; and (c) the subsidiaries that are not guarantors of the 2020 Notes. Separate financial statements of the subsidiary guarantors are not presented because the Company owns all outstanding voting stock of each of the subsidiary guarantors and the guarantee by each subsidiary guarantor is full and unconditional and joint and several. As a result and in accordance with Rule 3-10(f) of Regulation S-X under the Securities Exchange Act of 1934, as amended, the Company includes the following tables in these notes to the consolidated financial statements:

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JACK COOPER HOLDINGS, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

14

Table of Contents

JACK COOPER HOLDINGS, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)

15

Table of Contents

JACK COOPER HOLDINGS, CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2016 and 2015

(Unaudited)