Werner Enterprises Reports Fourth Quarter and Annual 2023 Results

Fourth Quarter 2023 Highlights (all metrics compared to fourth quarter 2022)

  • Total revenues of $821.9 million, down 5%
  • Operating income of $37.9 million, down 57%; non-GAAP adjusted operating income of $39.2 million, down 56%
  • Operating margin of 4.6%, down 570 basis points; non-GAAP adjusted operating margin of 4.8%, down 560 basis points
  • Diluted EPS of $0.37, down 61%; non-GAAP adjusted diluted EPS of $0.39, down 61%

2023 Highlights (all metrics compared to 2022)

  • Total revenues of $3.28 billion, relatively flat
  • Operating income of $176.4 million, down 45%; non-GAAP adjusted operating income of $189.7 million, down 43%
  • Operating margin of 5.4%, down 440 basis points; non-GAAP adjusted operating margin of 5.8%, down 430 basis points
  • Diluted EPS of $1.76, down 53%; non-GAAP adjusted diluted EPS of $1.93, down 48%

Werner Enterprises, Inc. (Nasdaq: WERN), a premier transportation and logistics provider, today reported results for the fourth quarter and year ended December 31, 2023.

“Freight conditions remained challenging in the fourth quarter with ongoing pricing pressure. Despite this, our nearly 14,000 talented Werner team members and cycle-tested management team focused on what we can control. Our Dedicated business proved to be durable and resilient, generating double-digit margins and growing revenue per truck for the 9th year out of the last decade. Our One-Way Trucking business’ miles per truck improved nearly 9% year over year during the quarter, while rate per mile decline was more favorable than industry benchmarks. Logistics volume was strong, and revenue grew over 6% year over year, extending to 13 straight quarters of growth,” said Derek J. Leathers, Chairman and CEO. “We continue to execute on structural cost changes, realizing over $40 million of savings in 2023, helping to partially offset market dynamics and conditions out of our control, such as rate pressure, cost inflation and declining resale values of equipment. During the quarter, operating cash flow remained strong, which we used to reinvest in the business, pay down over $40 million in debt and return value to our shareholders. Improved production, our elevated rigor on operational excellence, cost savings, innovation, and capital deployment positions us well to benefit as the market comes more into balance.”

Total revenues for the quarter were $821.9 million, a decrease of $39.5 million compared to the prior year quarter, due to a $54.7 million decrease in Truckload Transportation Services (“TTS”) revenues, partially offset by Logistics revenues growth of $13.5 million, or 6%, including the ReedTMS acquisition. A significant portion of the TTS revenue decline was due to $24.9 million lower fuel surcharge revenues. Net of trucking fuel surcharge revenues, consolidated total revenues decreased $14.6 million, or 2%, during the quarter.

Operating income of $37.9 million decreased $50.4 million, or 57%, while operating margin of 4.6% decreased 570 basis points. On a non-GAAP basis, adjusted operating income of $39.2 million decreased $50.7 million, or 56%. Adjusted operating margin of 4.8% declined 560 basis points from 10.4% for the same quarter last year.

TTS operating income decreased $46.0 million, and TTS adjusted operating income decreased $45.9 million. Logistics operating income decreased $5.3 million and adjusted operating income decreased $5.0 million. Corporate and Other (including driving schools) operating income increased $0.8 million.

Net interest expense of $7.3 million increased $2.2 million primarily due to higher interest rates for variable rate debt and an increase in average debt outstanding. The effective income tax rate during the quarter was 23.1%, compared to 24.7% in fourth quarter 2022.

During fourth quarter 2023, we had losses on our strategic investments of $0.3 million, compared to losses of $2.2 million, or $0.03 per share, in fourth quarter 2022. Consistent with prior reporting, increases or decreases to the values of these strategic investments are adjusted out for determining non-GAAP adjusted net income and non-GAAP adjusted earnings per share.

Net income attributable to Werner of $23.6 million decreased 61%. On a non-GAAP basis, adjusted net income attributable to Werner of $24.6 million decreased 61%. Diluted EPS of $0.37 decreased 61%. On a non-GAAP basis, adjusted diluted EPS of $0.39 decreased 61%.

Key Consolidated Financial Metrics

 

Three Months Ended

December 31,

 

Year Ended

December 31,

(In thousands, except per share amounts)

2023

 

2022

 

Y/Y

Change

 

2023

 

2022

 

Y/Y

Change

Total revenues

$

821,945

 

 

$

861,491

 

 

(5

)%

 

$

3,283,499

 

 

$

3,289,978

 

 

0

%

Truckload Transportation Services revenues

 

580,093

 

 

 

634,787

 

 

(9

)%

 

 

2,310,810

 

 

 

2,428,686

 

 

(5

)%

Werner Logistics revenues

 

226,963

 

 

 

213,485

 

 

6

%

 

 

910,433

 

 

 

793,492

 

 

15

%

 

Operating income

 

37,932

 

 

 

88,381

 

 

(57

)%

 

 

176,416

 

 

 

323,076

 

 

(45

)%

Operating margin

 

4.6

%

 

 

10.3

%

 

(570) bps

 

 

5.4

%

 

 

9.8

%

 

(440) bps

Net income attributable to Werner

 

23,573

 

 

 

60,166

 

 

(61

)%

 

 

112,382

 

 

 

241,256

 

 

(53

)%

Diluted earnings per share

 

0.37

 

 

 

0.94

 

 

(61

)%

 

 

1.76

 

 

 

3.74

 

 

(53

)%

 

Adjusted operating income (1)

 

39,206

 

 

 

89,917

 

 

(56

)%

 

 

189,705

 

 

 

333,164

 

 

(43

)%

Adjusted operating margin (1)

 

4.8

%

 

 

10.4

%

 

(560) bps

 

 

5.8

%

 

 

10.1

%

 

(430) bps

Adjusted net income attributable to Werner (1)

 

24,639

 

 

 

62,840

 

 

(61

)%

 

 

122,721

 

 

 

239,164

 

 

(49

)%

Adjusted diluted earnings per share (1)

 

0.39

 

 

 

0.99

 

 

(61

)%

 

 

1.93

 

 

 

3.70

 

 

(48

)%

(1) See attached Reconciliation of Non-GAAP Financial Measures - Consolidated.

Truckload Transportation Services (TTS) Segment

  • Revenues of $580.1 million decreased $54.7 million; trucking revenues, net of fuel surcharge, decreased 6%
  • Operating income of $34.3 million decreased $46.0 million; non-GAAP adjusted operating income of $37.2 million decreased $45.9 million due to a lower rate per mile in One-Way Truckload, smaller overall fleet size, and lower gains on the sale of property and equipment
  • Operating margin of 5.9% decreased 680 basis points from 12.7%
  • Non-GAAP adjusted operating margin, net of fuel surcharge, of 7.5% decreased 830 basis points from 15.8%
  • Average segment trucks in service totaled 8,168, a decrease of 541 trucks year over year, or 6%
  • Dedicated unit trucks at quarter end totaled 5,265, or 66% of the total TTS segment fleet, compared to 5,450 trucks, or 63%, a year ago
  • Average revenues per truck per week, net of fuel surcharges, increased 0.2% for TTS and increased 0.9% for Dedicated

During fourth quarter 2023, Dedicated experienced net reduction in average trucks, down 3.3% year over year and down 0.3% sequentially. Dedicated revenue per truck per week increased 0.9% year over year, and despite a highly competitive environment and normal churn, pipeline opportunities remain healthy and client retention remains strong. One-Way Truckload customer freight demand during fourth quarter 2023 was stable with slightly better-than-expected peak volumes, but at significantly reduced pricing compared to the prior-year period. One-Way rate per mile was down 8.6% and fleet size was smaller year over year (down 11.0%), offset with the third consecutive quarter of higher total miles per truck (up 8.7%).

Key Truckload Transportation Services Segment Financial Metrics

 

Three Months Ended

December 31,

 

Year Ended

December 31,

(In thousands)

2023

 

2022

 

Y/Y

Change

 

2023

 

2022

 

Y/Y

Change

Trucking revenues, net of fuel surcharge

$

487,408

 

 

$

518,393

 

 

(6

)%

 

$

1,949,445

 

 

$

1,982,639

 

 

(2

)%

Trucking fuel surcharge revenues

 

84,675

 

 

 

109,611

 

 

(23

)%

 

 

332,388

 

 

 

419,240

 

 

(21

)%

Non-trucking and other revenues

 

8,010

 

 

 

6,783

 

 

18

%

 

 

28,977

 

 

 

26,807

 

 

8

%

Total revenues

$

580,093

 

 

$

634,787

 

 

(9

)%

 

$

2,310,810

 

 

$

2,428,686

 

 

(5

)%

 

Operating income

$

34,339

 

 

$

80,341

 

 

(57

)%

 

$

169,330

 

 

$

294,555

 

 

(43

)%

Operating margin

 

5.9

%

 

 

12.7

%

 

(680) bps

 

 

7.3

%

 

 

12.1

%

 

(480) bps

Operating ratio

 

94.1

%

 

 

87.3

%

 

680 bps

 

 

92.7

%

 

 

87.9

%

 

480 bps

 

Adjusted operating income (1)

$

37,165

 

 

$

83,104

 

 

(55

)%

 

$

180,453

 

 

$

303,902

 

 

(41

)%

Adjusted operating margin (1)

 

6.4

%

 

 

13.1

%

 

(670) bps

 

 

7.8

%

 

 

12.5

%

 

(470) bps

Adjusted operating margin, net of fuel surcharge (1)

 

7.5

%

 

 

15.8

%

 

(830) bps

 

 

9.1

%

 

 

15.1

%

 

(600) bps

Adjusted operating ratio (1)

 

93.6

%

 

 

86.9

%

 

670 bps

 

 

92.2

%

 

 

87.5

%

 

470 bps

Adjusted operating ratio, net of fuel surcharge (1)

 

92.5

%

 

 

84.2

%

 

830 bps

 

 

90.9

%

 

 

84.9

%

 

600 bps

(1) See attached Reconciliation of Non-GAAP Financial Measures - Truckload Transportation Services (TTS) Segment.

Werner Logistics Segment

  • Revenues of $227.0 million increased $13.5 million, or 6%, including ReedTMS acquisition which closed in November 2022
  • Operating income of $4.6 million decreased $5.3 million
  • Operating margin of 2.0% decreased 260 basis points from 4.6%
  • Adjusted operating income of $3.0 million decreased $5.0 million
  • Adjusted operating margin of 1.3% decreased 250 basis points from 3.8%

Truckload Logistics revenues (77% of Logistics revenues) increased 15%, driven by a double-digit increase in shipments (including November 2022 ReedTMS acquisition), partially offset by a decline in revenue per shipment.

Intermodal revenues (12% of Logistics revenues) decreased 27%, due to fewer shipments and lower revenue per shipment year over year; although we achieved the third consecutive quarter of a sequential increase in shipments.

Final Mile revenues (11% of Logistics revenues) increased $1.4 million, or 6%.

Logistics operating income decreased $5.3 million and adjusted operating income decreased $5.0 million in fourth quarter 2023, due to a competitive freight and rate market in fourth quarter 2023 despite generally stronger volume and load growth overall.

Key Werner Logistics Segment Financial Metrics

 

Three Months Ended

December 31,

 

Year Ended

December 31,

(In thousands)

2023

 

2022

 

Y/Y

Change

 

2023

 

2022

 

Y/Y

Change

Total revenues

$

226,963

 

 

$

213,485

 

 

6

%

 

$

910,433

 

 

$

793,492

 

 

15

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Purchased transportation expense

 

193,132

 

 

 

174,463

 

 

11

%

 

 

761,948

 

 

 

653,185

 

 

17

%

Other operating expenses

 

29,256

 

 

 

29,154

 

 

0

%

 

 

132,606

 

 

 

104,123

 

 

27

%

Total operating expenses

 

222,388

 

 

 

203,617

 

 

9

%

 

 

894,554

 

 

 

757,308

 

 

18

%

Operating income

$

4,575

 

 

$

9,868

 

 

(54

)%

 

$

15,879

 

 

$

36,184

 

 

(56

)%

Operating margin

 

2.0

%

 

 

4.6

%

 

(260) bps

 

 

1.7

%

 

 

4.6

%

 

(290) bps

Adjusted operating income (1)

$

3,023

 

 

$

8,028

 

 

(62

)%

 

$

18,045

 

 

$

35,844

 

 

(50

)%

Adjusted operating margin (1)

 

1.3

%

 

 

3.8

%

 

(250) bps

 

 

2.0

%

 

 

4.5

%

 

(250) bps

(1) See attached Reconciliation of Non-GAAP Financial Measures - Werner Logistics Segment.

Cash Flow and Capital Allocation

Cash flow from operations in fourth quarter 2023 was $118.3 million compared to $116.0 million in fourth quarter 2022, an increase of 2%. Operating cash flow margins improved greater than 90 basis points for fourth quarter 2023 to 14% of operating revenues and increased 80 basis points year to date 2023 to 14% of operating revenues.

Net capital expenditures in fourth quarter 2023 were $34.5 million compared to $63.5 million in fourth quarter 2022, a decrease of 46%. We plan to continue to invest in new trucks, trailers and our terminals to improve our driver experience, optimize operational efficiency and more effectively manage our maintenance, safety and fuel costs. The average ages of our truck and trailer fleets were 2.1 years and 4.9 years, respectively, as of December 31, 2023.

Gains on sales of property and equipment in fourth quarter 2023 were $3.1 million, or $0.04 per share, compared to $25.9 million, or $0.30 per share, in fourth quarter 2022. Year over year, we sold 11% fewer trucks and over 60% more trailers and realized substantially lower average gains per truck and trailer. Gains on sales of property and equipment are reflected as a reduction of Other Operating Expenses in our income statement.

We did not repurchase shares of our common stock in fourth quarter 2023. As of December 31, 2023, we had 2.3 million shares remaining under our share repurchase authorization.

As of December 31, 2023, we had $62 million of cash and cash equivalents and $1.5 billion of stockholders’ equity. Total debt outstanding was $649 million at December 31, 2023. After considering letters of credit issued, we had available liquidity consisting of cash and cash equivalents and available borrowing capacity as of December 31, 2023 of $526 million.

Introducing 2024 Guidance

 

2023 Guidance

(as of 11/1/23)

2023 Actual

(as of 12/31/23)

2024 Guidance

(as of 2/6/24)

TTS truck count from BoY to EoY

(5)% to (3)%

(annual)

(7)%

(2023)

(3)% to 0%

(annual)

Net capital expenditures

$425M to $450M

(annual)

$409M

(2023)

$260M to $310M

(annual)

TTS Guidance

 

 

 

Dedicated RPTPW* growth

0% to 3%

(annual)

1.5%

(2023)

0% to 3%

(annual)

One-Way Truckload RPTM* growth

(9)% to (7)%

(4Q23 vs. 4Q22)

(8.6)%

(4Q23 vs. 4Q22)

(6)% to (3)%

(1H24 vs. 1H23)

* Net of fuel surcharge revenues

Assumptions

  • Effective income tax rate of 24.5% to 25.5% in 2024 compared to 24.0% in 2023.
  • Expect average truck age of 2.1 years and average trailer age of 5.0 years as of 12/31/24, compared to 2.1 years and 4.9 years as of 12/31/23, respectively.

Call Information

Werner Enterprises, Inc. will conduct a conference call to discuss fourth quarter 2023 earnings today beginning at 4:00 p.m. CT. The news release, live webcast of the earnings conference call, and accompanying slide presentation will be available at werner.com in the “Investors” section under “News & Events” and then “Events Calendar.” To participate in the conference call, please dial (844) 701-1165 (domestic) or (412) 317-5498 (international). Please mention to the operator that you are dialing in for the Werner Enterprises call.

A replay of the conference call will be available on February 6, 2024 at approximately 6:00 p.m. CT through March 6, 2024 by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international) and using the access code 1321524. A replay of the webcast will also be available at werner.com in the “Investors” section under “News & Events” and then “Events Calendar.”

About Werner Enterprises

Werner Enterprises, Inc. (Nasdaq: WERN) delivers superior truckload transportation and logistics services to customers across the United States, Mexico and Canada. With 2023 revenues of $3.3 billion, an industry-leading modern truck and trailer fleet, nearly 14,000 talented associates and our innovative Werner EDGE® technology, we are an essential solutions provider for customers who value the integrity of their supply chain and require safe and exceptional on-time service. Werner provides Dedicated and One-Way Truckload services as well as Logistics services that include truckload brokerage, freight management, intermodal and final mile. As an industry leader, Werner is deeply committed to promoting sustainability and supporting diversity, equity and inclusion.

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements are based on information presently available to the Company’s management and are current only as of the date made. Actual results could also differ materially from those anticipated as a result of a number of factors, including, but not limited to, those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and subsequently filed Quarterly Reports on Form 10-Q.

For those reasons, undue reliance should not be placed on any forward-looking statement. The Company assumes no duty or obligation to update or revise any forward-looking statement, although it may do so from time to time as management believes is warranted or as may be required by applicable securities law. Any such updates or revisions may be made by filing reports with the U.S. Securities and Exchange Commission (“SEC”), through the issuance of press releases or by other methods of public disclosure.

Consolidated Financial Information

INCOME STATEMENT

(Unaudited)

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2023

 

2022

 

2023

 

2022

 

$

 

%

 

$

 

%

 

$

 

%

 

$

 

%

Operating revenues

$

821,945

 

 

100.0

 

 

$

861,491

 

 

100.0

 

 

$

3,283,499

 

 

100.0

 

 

$

3,289,978

 

 

100.0

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

269,816

 

 

32.8

 

 

 

260,531

 

 

30.2

 

 

 

1,072,558

 

 

32.7

 

 

 

1,020,609

 

 

31.0

 

Fuel

 

85,478

 

 

10.4

 

 

 

111,447

 

 

12.9

 

 

 

345,001

 

 

10.5

 

 

 

437,299

 

 

13.3

 

Supplies and maintenance

 

63,124

 

 

7.7

 

 

 

65,406

 

 

7.6

 

 

 

256,494

 

 

7.8

 

 

 

253,096

 

 

7.7

 

Taxes and licenses

 

25,999

 

 

3.2

 

 

 

25,289

 

 

2.9

 

 

 

102,684

 

 

3.1

 

 

 

97,929

 

 

3.0

 

Insurance and claims

 

33,964

 

 

4.1

 

 

 

44,301

 

 

5.2

 

 

 

138,516

 

 

4.2

 

 

 

147,365

 

 

4.5

 

Depreciation and amortization

 

75,712

 

 

9.2

 

 

 

73,826

 

 

8.6

 

 

 

299,509

 

 

9.1

 

 

 

279,923

 

 

8.5

 

Rent and purchased transportation

 

224,418

 

 

27.3

 

 

 

207,662

 

 

24.1

 

 

 

886,284

 

 

27.0

 

 

 

777,464

 

 

23.6

 

Communications and utilities

 

4,523

 

 

0.6

 

 

 

4,429

 

 

0.5

 

 

 

18,480

 

 

0.6

 

 

 

15,856

 

 

0.5

 

Other

 

979

 

 

0.1

 

 

 

(19,781

)

 

(2.3

)

 

 

(12,443

)

 

(0.4

)

 

 

(62,639

)

 

(1.9

)

Total operating expenses

 

784,013

 

 

95.4

 

 

 

773,110

 

 

89.7

 

 

 

3,107,083

 

 

94.6

 

 

 

2,966,902

 

 

90.2

 

Operating income

 

37,932

 

 

4.6

 

 

 

88,381

 

 

10.3

 

 

 

176,416

 

 

5.4

 

 

 

323,076

 

 

9.8

 

Other expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

8,819

 

 

1.1

 

 

 

5,824

 

 

0.7

 

 

 

33,535

 

 

1.0

 

 

 

11,828

 

 

0.4

 

Interest income

 

(1,523

)

 

(0.2

)

 

 

(751

)

 

(0.1

)

 

 

(6,701

)

 

(0.2

)

 

 

(1,731

)

 

(0.1

)

Loss (gain) on investments in equity securities, net

 

242

 

 

 

 

 

2,208

 

 

0.3

 

 

 

278

 

 

 

 

 

(12,195

)

 

(0.4

)

Loss from equity method investment

 

92

 

 

 

 

 

 

 

 

 

 

1,046

 

 

0.1

 

 

 

 

 

 

Other

 

100

 

 

 

 

 

112

 

 

 

 

 

477

 

 

 

 

 

388

 

 

 

Total other expense (income)

 

7,730

 

 

0.9

 

 

 

7,393

 

 

0.9

 

 

 

28,635

 

 

0.9

 

 

 

(1,710

)

 

(0.1

)

Income before income taxes

 

30,202

 

 

3.7

 

 

 

80,988

 

 

9.4

 

 

 

147,781

 

 

4.5

 

 

 

324,786

 

 

9.9

 

Income tax expense

 

6,970

 

 

0.9

 

 

 

19,977

 

 

2.3

 

 

 

35,491

 

 

1.1

 

 

 

79,206

 

 

2.4

 

Net income

 

23,232

 

 

2.8

 

 

 

61,011

 

 

7.1

 

 

 

112,290

 

 

3.4

 

 

 

245,580

 

 

7.5

 

Net loss (income) attributable to noncontrolling interest

 

341

 

 

0.1

 

 

 

(845

)

 

(0.1

)

 

 

92

 

 

 

 

 

(4,324

)

 

(0.2

)

Net income attributable to Werner

$

23,573

 

 

2.9

 

 

$

60,166

 

 

7.0

 

 

$

112,382

 

 

3.4

 

 

$

241,256

 

 

7.3

 

Diluted shares outstanding

 

63,780

 

 

 

 

 

63,695

 

 

 

 

 

63,718

 

 

 

 

 

64,579

 

 

 

Diluted earnings per share

$

0.37

 

 

 

 

$

0.94

 

 

 

 

$

1.76

 

 

 

 

$

3.74

 

 

 

CONDENSED BALANCE SHEET

(In thousands, except share amounts)

 

 

 

 

 

December 31,

2023

 

December 31,

2022

 

(Unaudited)

 

 

 

 

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

61,723

 

 

$

107,240

 

Accounts receivable, trade, less allowance of $9,337 and $10,271, respectively

 

444,944

 

 

 

518,815

 

Other receivables

 

25,479

 

 

 

29,875

 

Inventories and supplies

 

18,077

 

 

 

14,527

 

Prepaid taxes, licenses and permits

 

16,505

 

 

 

17,699

 

Other current assets

 

67,900

 

 

 

74,459

 

Total current assets

 

634,628

 

 

 

762,615

 

 

Property and equipment

 

2,951,654

 

 

 

2,885,641

 

Less – accumulated depreciation

 

978,698

 

 

 

1,060,365

 

Property and equipment, net

 

1,972,956

 

 

 

1,825,276

 

 

Goodwill

 

129,104

 

 

 

132,717

 

Intangible assets, net

 

86,477

 

 

 

81,502

 

Other non-current assets (1)

 

334,771

 

 

 

295,145

 

Total assets

$

3,157,936

 

 

$

3,097,255

 

 

 

 

 

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

135,990

 

 

$

124,483

 

Current portion of long-term debt

 

2,500

 

 

 

6,250

 

Insurance and claims accruals

 

81,794

 

 

 

78,620

 

Accrued payroll

 

50,549

 

 

 

49,793

 

Accrued expenses

 

30,282

 

 

 

20,358

 

Other current liabilities

 

29,470

 

 

 

30,016

 

Total current liabilities

 

330,585

 

 

 

309,520

 

 

Long-term debt, net of current portion

 

646,250

 

 

 

687,500

 

Other long-term liabilities

 

54,275

 

 

 

59,677

 

Insurance and claims accruals, net of current portion (1)

 

239,700

 

 

 

244,946

 

Deferred income taxes

 

320,180

 

 

 

313,278

 

Total liabilities

 

1,590,990

 

 

 

1,614,921

 

Temporary equity - redeemable noncontrolling interest

 

38,607

 

 

 

38,699

 

 

Stockholders’ equity:

 

 

 

Common stock, $.01 par value, 200,000,000 shares authorized; 80,533,536 shares issued; 63,444,681 and 63,223,003 shares outstanding, respectively

 

805

 

 

 

805

 

Paid-in capital

 

134,894

 

 

 

129,837

 

Retained earnings

 

1,953,385

 

 

 

1,875,873

 

Accumulated other comprehensive loss

 

(9,684

)

 

 

(11,292

)

Treasury stock, at cost; 17,088,855 and 17,310,533 shares, respectively

 

(551,061

)

 

 

(551,588

)

Total stockholders’ equity

 

1,528,339

 

 

 

1,443,635

 

Total liabilities, temporary equity and stockholders’ equity

$

3,157,936

 

 

$

3,097,255

 

(1) Under the terms of our insurance policies, we are the primary obligor of the damage award in a previously disclosed adverse jury verdict, and as such, we have recorded a $79.2 million receivable from our third-party insurance providers in other non-current assets and a corresponding liability of the same amount in the long-term portion of insurance and claims accruals in the unaudited condensed balance sheets as of December 31, 2023 and 2022.

SUPPLEMENTAL INFORMATION

(Unaudited)

(In thousands)

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2023

 

2022

 

2023

 

2022

Capital expenditures, net

$

34,537

 

 

$

63,507

 

 

$

408,698

 

 

$

317,579

 

Cash flow from operations

 

118,347

 

 

 

115,995

 

 

 

474,366

 

 

 

448,711

 

Return on assets (annualized)

 

2.9

%

 

 

8.2

%

 

 

3.6

%

 

 

8.8

%

Return on equity (annualized)

 

6.0

%

 

 

16.8

%

 

 

7.3

%

 

 

17.5

%

Segment Financial and Operating Statistics Information

SEGMENT INFORMATION

(Unaudited)

(In thousands)

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2023

 

2022

 

2023

 

2022

Revenues

 

 

 

 

 

 

 

Truckload Transportation Services

$

580,093

 

 

$

634,787

 

 

$

2,310,810

 

 

$

2,428,686

 

Werner Logistics

 

226,963

 

 

 

213,485

 

 

 

910,433

 

 

 

793,492

 

Other (1)

 

18,974

 

 

 

16,257

 

 

 

78,063

 

 

 

71,185

 

Corporate

 

420

 

 

 

431

 

 

 

1,883

 

 

 

1,833

 

Subtotal

 

826,450

 

 

 

864,960

 

 

 

3,301,189

 

 

 

3,295,196

 

Inter-segment eliminations (2)

 

(4,505

)

 

 

(3,469

)

 

 

(17,690

)

 

 

(5,218

)

Total

$

821,945

 

 

$

861,491

 

 

$

3,283,499

 

 

$

3,289,978

 

 

Operating Income (Loss)

 

 

 

 

 

 

 

Truckload Transportation Services

$

34,339

 

 

$

80,341

 

 

$

169,330

 

 

$

294,555

 

Werner Logistics

 

4,575

 

 

 

9,868

 

 

 

15,879

 

 

 

36,184

 

Other (1)

 

(244

)

 

 

(2,419

)

 

 

69

 

 

 

(2,604

)

Corporate

 

(738

)

 

 

591

 

 

 

(8,862

)

 

 

(5,059

)

Total

$

37,932

 

 

$

88,381

 

 

$

176,416

 

 

$

323,076

 

(1) Other includes our driver training schools, transportation-related activities such as third-party equipment maintenance and equipment leasing, and other business activities.

(2) Inter-segment eliminations represent transactions between reporting segments that are eliminated in consolidation.

OPERATING STATISTICS BY SEGMENT

(Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

 

 

Year Ended

December 31,

 

 

 

2023

 

2022

 

% Chg

 

2023

 

2022

 

% Chg

Truckload Transportation Services segment

 

 

 

 

 

 

 

 

 

 

 

Average trucks in service

 

8,168

 

 

 

8,709

 

 

(6.2

)%

 

 

8,326

 

 

 

8,437

 

 

(1.3

)%

Average revenues per truck per week (1)

$

4,590

 

 

$

4,579

 

 

0.2

%

 

$

4,502

 

 

$

4,519

 

 

(0.4

)%

Total trucks (at quarter end)

 

 

 

 

 

 

 

 

 

 

 

Company

 

7,740

 

 

 

8,305

 

 

(6.8

)%

 

 

7,740

 

 

 

8,305

 

 

(6.8

)%

Independent contractor

 

260

 

 

 

295

 

 

(11.9

)%

 

 

260

 

 

 

295

 

 

(11.9

)%

Total trucks

 

8,000

 

 

 

8,600

 

 

(7.0

)%

 

 

8,000

 

 

 

8,600

 

 

(7.0

)%

Total trailers (at quarter end)

 

27,850

 

 

 

27,650

 

 

0.7

%

 

 

27,850

 

 

 

27,650

 

 

0.7

%

 

One-Way Truckload

 

 

 

 

 

 

 

 

 

 

 

Trucking revenues, net of fuel surcharge (in 000’s)

$

178,118

 

 

$

201,460

 

 

(11.6

)%

 

$

713,762

 

 

$

766,013

 

 

(6.8

)%

Average trucks in service

 

2,929

 

 

 

3,292

 

 

(11.0

)%

 

 

3,042

 

 

 

3,153

 

 

(3.5

)%

Total trucks (at quarter end)

 

2,735

 

 

 

3,150

 

 

(13.2

)%

 

 

2,735

 

 

 

3,150

 

 

(13.2

)%

Average percentage of empty miles

 

14.92

%

 

 

13.58

%

 

9.9

%

 

 

14.36

%

 

 

12.70

%

 

13.1

%

Average revenues per truck per week (1)

$

4,678

 

 

$

4,708

 

 

(0.6

)%

 

$

4,512

 

 

$

4,672

 

 

(3.4

)%

Average % change YOY in revenues per total mile (1)

 

(8.6

)%

 

 

0.4

%

 

 

 

 

(5.5

)%

 

 

8.6

%

 

 

Average % change YOY in total miles per truck per week

 

8.7

%

 

 

(4.6

)%

 

 

 

 

2.2

%

 

 

(7.4

)%

 

 

Average completed trip length in miles (loaded)

 

594

 

 

 

633

 

 

(6.2

)%

 

 

595

 

 

 

675

 

 

(11.9

)%

 

Dedicated

 

 

 

 

 

 

 

 

 

 

 

Trucking revenues, net of fuel surcharge (in 000’s)

$

309,290

 

 

$

316,933

 

 

(2.4

)%

 

$

1,235,683

 

 

$

1,216,626

 

 

1.6

%

Average trucks in service

 

5,239

 

 

 

5,417

 

 

(3.3

)%

 

 

5,284

 

 

 

5,284

 

 

%

Total trucks (at quarter end)

 

5,265

 

 

 

5,450

 

 

(3.4

)%

 

 

5,265

 

 

 

5,450

 

 

(3.4

)%

Average revenues per truck per week (1)

$

4,541

 

 

$

4,501

 

 

0.9

%

 

$

4,496

 

 

$

4,428

 

 

1.5

%

 

Werner Logistics segment

 

 

 

 

 

 

 

 

 

 

 

Average trucks in service

 

39

 

 

 

45

 

 

(13.3

)%

 

 

37

 

 

 

52

 

 

(28.8

)%

Total trucks (at quarter end)

 

35

 

 

 

39

 

 

(10.3

)%

 

 

35

 

 

 

39

 

 

(10.3

)%

Total trailers (at quarter end)

 

2,960

 

 

 

2,315

 

 

27.9

%

 

 

2,960

 

 

 

2,315

 

 

27.9

%

(1) Net of fuel surcharge revenues

Non-GAAP Financial Measures and Reconciliations

To supplement our financial results presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), we provide certain non-GAAP financial measures as defined by the SEC Regulation G, including non-GAAP adjusted operating income; non-GAAP adjusted operating margin; non-GAAP adjusted operating margin, net of fuel surcharge; non-GAAP adjusted net income attributable to Werner; non-GAAP adjusted diluted earnings per share; non-GAAP adjusted operating revenues, net of fuel surcharge; non-GAAP adjusted operating expenses; non-GAAP adjusted operating expenses, net of fuel surcharge; non-GAAP adjusted operating ratio; and non-GAAP adjusted operating ratio, net of fuel surcharge. We believe these non-GAAP financial measures provide a more useful comparison of our performance from period to period because they exclude the effect of items that, in our opinion, do not reflect our core operating performance. Our non-GAAP financial measures are not meant to be considered in isolation or as substitutes for their comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. There are limitations to using non-GAAP financial measures. Although we believe that they improve comparability in analyzing our period to period performance, they could limit comparability to other companies in our industry if those companies define these measures differently. Because of these limitations, our non-GAAP financial measures should not be considered measures of income generated by our business. Management compensates for these limitations by primarily relying on GAAP results and using non-GAAP financial measures on a supplemental basis.

The following tables present reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure as required by SEC Regulation G. In addition, information regarding each of the excluded items as well as our reasons for excluding them from our non-GAAP results is provided below.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED

(unaudited)

(In thousands, except per share amounts)

       

 

Three Months Ended December 31,

Year Ended December 31,

 

2023

 

2022

 

2023

 

2022

Non-GAAP Adjusted Operating Income and

Non-GAAP Adjusted Operating Margin (1)

$

 

% of

Op.

Rev.

 

$

 

% of

Op.

Rev.

 

$

 

% of

Op.

Rev.

 

$

 

% of

Op.

Rev.

Operating income and operating margin – (GAAP)

$

37,932

 

 

 

4.6

%

 

$

88,381

 

 

 

10.3

%

 

$

176,416

 

 

 

5.4

%

 

$

323,076

 

 

 

9.8

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

Insurance and claims (2)

 

1,457

 

 

 

0.2

%

 

 

1,387

 

 

 

0.1

%

 

 

5,664

 

 

 

0.2

%

 

 

5,394

 

 

 

0.2

%

Amortization of intangible assets (3)

 

2,517

 

 

 

0.3

%

 

 

2,036

 

 

 

0.2

%

 

 

10,325

 

 

 

0.3

%

 

 

6,113

 

 

 

0.2

%

Acquisition expenses (4)

 

 

 

 

%

 

 

613

 

 

 

0.1

%

 

 

 

 

 

%

 

 

1,081

 

 

 

%

Contingent consideration adjustments (5)

 

(2,700

)

 

 

(0.3

)%

 

 

(2,500

)

 

 

(0.3

)%

 

 

(2,700

)

 

 

(0.1

)%

 

 

(2,500

)

 

 

(0.1

)%

Non-GAAP adjusted operating income and non-GAAP adjusted operating margin

$

39,206

 

 

 

4.8

%

 

$

89,917

 

 

 

10.4

%

 

$

189,705

 

 

 

5.8

%

 

$

333,164

 

 

 

10.1

%

       

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2023

 

2022

 

2023

 

2022

Non-GAAP Adjusted Net Income

Attributable to Werner and Non-GAAP

Adjusted Diluted EPS (1)

$

 

Diluted

EPS

 

$

 

Diluted

EPS

 

$

 

Diluted

EPS

 

$

 

Diluted

EPS

Net income attributable to Werner and diluted EPS – (GAAP)

$

23,573

 

 

$

0.37

 

 

$

60,166

 

 

$

0.94

 

 

$

112,382

 

 

$

1.76

 

 

$

241,256

 

 

$

3.74

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

   

 

 

 

 

 

 

 

 

Insurance and claims (2)

 

1,457

 

 

 

0.02

 

 

 

1,387

 

 

 

0.02

 

 

 

5,664

 

 

 

0.09

 

 

 

5,394

 

 

 

0.08

 

Amortization of intangible assets, net of amount attributable to noncontrolling interest (3)

 

2,345

 

 

 

0.04

 

 

 

1,864

 

 

 

0.03

 

 

 

9,637

 

 

 

0.15

 

 

 

5,425

 

 

 

0.08

 

Acquisition expenses (4)

 

 

 

 

 

 

 

613

 

 

 

0.01

 

 

 

 

 

 

 

 

 

1,081

 

 

 

0.02

 

Contingent consideration adjustments (5)

 

(2,700

)

 

 

(0.04

)

 

 

(2,500

)

 

 

(0.04

)

 

 

(2,700

)

 

 

(0.04

)

 

 

(2,500

)

 

 

(0.04

)

Loss (gain) on investments in equity securities, net (6)

 

242

 

 

 

 

 

 

2,208

 

 

 

0.04

 

 

 

278

 

 

 

0.01

 

 

 

(12,195

)

 

 

(0.19

)

Loss from equity method investment (7)

 

92

 

 

 

 

 

 

 

 

 

 

 

 

1,046

 

 

 

0.02

 

 

 

 

 

 

 

Income tax effect of above adjustments (8)

 

(370

)

 

 

 

 

 

(898

)

 

 

(0.01

)

 

 

(3,586

)

 

 

(0.06

)

 

 

703

 

 

 

0.01

 

Non-GAAP adjusted net income attributable to Werner and non-GAAP adjusted diluted EPS

$

24,639

 

 

$

0.39

 

 

$

62,840

 

 

$

0.99

 

 

$

122,721

 

 

$

1.93

 

 

$

239,164

 

 

$

3.70

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2023

 

2022

 

2023

 

2022

Non-GAAP Adjusted Operating Revenues, Net of Fuel Surcharge (1)

 

$

 

$

 

$

 

$

Operating revenues – (GAAP)

 

$

821,945

 

 

$

861,491

 

 

$

3,283,499

 

 

$

3,289,978

 

Non-GAAP adjustment:

 

 

 

 

 

 

 

 

Trucking fuel surcharge (9)

 

 

(84,675

)

 

 

(109,611

)

 

 

(332,388

)

 

 

(419,240

)

Non-GAAP Operating revenues, net of fuel surcharge

 

$

737,270

 

 

$

751,880

 

 

$

2,951,111

 

 

$

2,870,738

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – TRUCKLOAD TRANSPORTATION SERVICES (TTS) SEGMENT

(unaudited)

(In thousands)

   

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2023

 

2022

 

2023

 

2022

Non-GAAP Adjusted Operating Income and

Non-GAAP Adjusted Operating Margin (1)

 

$

 

% of

Op.

Rev.

 

$

 

% of

Op.

Rev.

 

$

 

% of

Op.

Rev.

 

$

 

% of

Op.

Rev.

Operating income and operating margin – (GAAP)

 

$

34,339

 

 

5.9

%

 

$

80,341

 

 

12.7

%

 

$

169,330

 

 

7.3

%

 

$

294,555

 

 

12.1

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance and claims (2)

 

 

1,457

 

 

0.3

%

 

 

1,387

 

 

0.2

%

 

 

5,664

 

 

0.3

%

 

 

5,394

 

 

0.2

%

Amortization of intangible assets (3)

 

 

1,369

 

 

0.2

%

 

 

1,376

 

 

0.2

%

 

 

5,459

 

 

0.2

%

 

 

3,953

 

 

0.2

%

Non-GAAP adjusted operating income and non-GAAP adjusted operating margin

 

$

37,165

 

 

6.4

%

 

$

83,104

 

 

13.1

%

 

$

180,453

 

 

7.8

%

 

$

303,902

 

 

12.5

%

   

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2023

 

2022

 

2023

 

2022

Non-GAAP Adjusted Operating Expenses and

Non-GAAP Adjusted Operating Ratio (1)

$

 

% of

Op.

Rev.

 

$

 

% of

Op.

Rev.

 

$

 

% of

Op.

Rev.

 

$

 

% of

Op.

Rev.

Operating expenses and operating ratio – (GAAP)

$

545,754

 

 

94.1

%

 

$

554,446

 

 

87.3

%

 

$

2,141,480

 

 

92.7

%

 

$

2,134,131

 

 

87.9

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance and claims (2)

 

(1,457

)

 

(0.3

)%

 

 

(1,387

)

 

(0.2

)%

 

 

(5,664

)

 

(0.3

)%

 

 

(5,394

)

 

(0.2

)%

Amortization of intangible assets (3)

 

(1,369

)

 

(0.2

)%

 

 

(1,376

)

 

(0.2

)%

 

 

(5,459

)

 

(0.2

)%

 

 

(3,953

)

 

(0.2

)%

Non-GAAP adjusted operating expenses and non-GAAP adjusted operating ratio

$

542,928

 

 

93.6

%

 

$

551,683

 

 

86.9

%

 

$

2,130,357

 

 

92.2

%

 

$

2,124,784

 

 

87.5

%

 

Three Months Ended

December 31,

 

Year Ended

December 31,

Non-GAAP Adjusted Operating Expenses, Net of Fuel Surcharge;

Non-GAAP Adjusted Operating Margin, Net of Fuel Surcharge;

and Non-GAAP Adjusted Operating Ratio, Net of Fuel Surcharge (1)

 

2023

 

2022

 

2023

 

2022

 

$

 

$

 

$

 

$

Operating revenues – (GAAP)

 

$

580,093

 

 

$

634,787

 

 

$

2,310,810

 

 

$

2,428,686

 

Less: Trucking fuel surcharge (9)

 

 

(84,675

)

 

 

(109,611

)

 

 

(332,388

)

 

 

(419,240

)

Operating revenues, net of fuel surcharge – (Non-GAAP)

 

 

495,418

 

 

 

525,176

 

 

 

1,978,422

 

 

 

2,009,446

 

Operating expenses – (GAAP)

 

 

545,754

 

 

 

554,446

 

 

 

2,141,480

 

 

 

2,134,131

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Trucking fuel surcharge (9)

 

 

(84,675

)

 

 

(109,611

)

 

 

(332,388

)

 

 

(419,240

)

Insurance and claims (2)

 

 

(1,457

)

 

 

(1,387

)

 

 

(5,664

)

 

 

(5,394

)

Amortization of intangible assets (3)

 

 

(1,369

)

 

 

(1,376

)

 

 

(5,459

)

 

 

(3,953

)

Non-GAAP adjusted operating expenses, net of fuel surcharge

 

 

458,253

 

 

 

442,072

 

 

 

1,797,969

 

 

 

1,705,544

 

Non-GAAP adjusted operating income

 

$

37,165

 

 

$

83,104

 

 

$

180,453

 

 

$

303,902

 

Non-GAAP adjusted operating margin, net of fuel surcharge

 

 

7.5

%

 

 

15.8

%

 

 

9.1

%

 

 

15.1

%

Non-GAAP adjusted operating ratio, net of fuel surcharge

 

 

92.5

%

 

 

84.2

%

 

 

90.9

%

 

 

84.9

%

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – WERNER LOGISTICS SEGMENT

(unaudited)

(In thousands)

   

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2023

 

2022

 

2023

 

2022

Non-GAAP Adjusted Operating Income and

Non-GAAP Adjusted Operating Margin (1)

 

$

 

% of

Op.

Rev.

 

$

 

% of

Op.

Rev.

 

$

 

% of

Op.

Rev.

 

$

 

% of

Op.

Rev.

Operating income and operating margin – (GAAP)

 

$

4,575

 

 

2.0

%

 

$

9,868

 

 

4.6

%

 

$

15,879

 

 

1.7

%

 

$

36,184

 

 

4.6

%

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets (3)

 

 

1,148

 

 

0.5

%

 

 

660

 

 

0.3

%

 

 

4,866

 

 

0.6

%

 

 

2,160

 

 

0.2

%

Contingent consideration adjustment (5)

 

 

(2,700

)

 

(1.2

)%

 

 

(2,500

)

 

(1.1

)%

 

 

(2,700

)

 

(0.3

)%

 

 

(2,500

)

 

(0.3

)%

Non-GAAP adjusted operating income and non-GAAP adjusted operating margin

 

$

3,023

 

 

1.3

%

 

$

8,028

 

 

3.8

%

 

$

18,045

 

 

2.0

%

 

$

35,844

 

 

4.5

%

(1) Non-GAAP adjusted operating income; non-GAAP adjusted operating margin; non-GAAP adjusted operating margin, net of fuel surcharge; non-GAAP adjusted net income attributable to Werner; non-GAAP adjusted diluted earnings per share; non-GAAP adjusted operating revenues, net of fuel surcharge; non-GAAP adjusted operating expenses; non-GAAP adjusted operating expenses, net of fuel surcharge; non-GAAP adjusted operating ratio; and non-GAAP adjusted operating ratio, net of fuel surcharge should be considered in addition to, rather than as substitutes for, GAAP operating income; GAAP operating margin; GAAP net income attributable to Werner; GAAP diluted earnings per share; GAAP operating revenues; GAAP operating expenses; and GAAP operating ratio, which are their most directly comparable GAAP financial measures.

 

(2) We accrued pre-tax insurance and claims expense for interest related to a previously disclosed excess adverse jury verdict rendered on May 17, 2018 in a lawsuit arising from a December 2014 accident. The Company is appealing this verdict. Additional information about the accident was included in our Current Report on Form 8-K dated May 17, 2018. Under our insurance policies in effect on the date of this accident, our maximum liability for this accident is $10.0 million (plus pre-judgment and post-judgment interest) with premium-based insurance coverage that exceeds the jury verdict amount. We continue to accrue pre-tax insurance and claims expense for interest at $0.5 million per month until such time as the outcome of our appeal is finalized. Management believes excluding the effect of this item provides a more useful comparison of our performance from period to period. This item is included in our Truckload Transportation Services segment in our Segment Information table.

 

(3) Amortization expense related to intangible assets acquired in our business acquisitions is excluded because management does not believe it is indicative of our core operating performance. This item is included in our Truckload Transportation Services and Werner Logistics segments.

 

(4) We incurred business acquisition-related expenses including legal and professional fees. Acquisition-related expenses are excluded as management believes these costs are not representative of the costs of managing our on-going business. The expenses are included within other operating expenses in our Income Statement and in Corporate operating income in our Segment Information table.

 

(5) Contingent consideration, also referred to as earnout, adjustments related to our business acquisitions are excluded because management does not believe these adjustments are indicative of our core operating performance. These adjustments are recorded in other operating expenses in our Income Statement and are included in our Werner Logistics segment.

 

(6) Represents non-operating mark-to-market adjustments for gains/losses on our minority equity investments, which we account for under Accounting Standards Codification (“ASC”) 321, Investments – Equity Securities. Management believes excluding the effect of gains/losses on our investments in equity securities provides a more useful comparison of our performance from period to period. We record changes in the value of our investments in equity securities in other expense (income) in our Income Statement.

 

(7) Represents earnings/losses from our equity method investment, which we account for under ASC 323, Investments - Equity Method and Joint Ventures. Management believes excluding the effect of earnings/losses from our equity method investment provides a more useful comparison of our performance from period to period. We record earnings/losses from our equity method investment in other expense (income) in our Income Statement.

 

(8) The income tax effect of the non-GAAP adjustments is calculated using the incremental income tax rate excluding discrete items, and the income tax effect for 2023 has been updated to reflect the annual incremental income tax rate.

 

(9) Fluctuating fuel prices and fuel surcharge revenues impact the total company operating ratio and the TTS segment operating ratio when fuel surcharges are reported on a gross basis as revenues versus netting the fuel surcharges against fuel expenses. Management believes netting fuel surcharge revenues, which are generally a more volatile source of revenue, against fuel expenses provides a more consistent basis for comparing the results of operations from period to period.

 

Contacts

Christopher D. Wikoff

Executive Vice President, Treasurer and Chief Financial Officer

(402) 894-3700

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