What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-02-25 compared with 2021-02-22 · 64 added, 104 removed, 704 unchanged (19% of the section changed)

15 unchanged sentences

The Company’s internal control over financial reporting as of December 31, 2021 has been audited by Grant Thornton LLP, an independent registered public accounting firm as stated in its report which is included herein.

Changes in Internal Control Over Financial Reporting – Except for the design, implementation, and testing of Millis Transfer internal controls, there were no other changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) that occurred during the twelve months ended December 31, 2020 that have materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

Changes in Internal Control Over Financial Reporting – There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) that occurred during the twelve months ended December 31, 2021 that have materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

5 unchanged sentences

Information on our website is not incorporated by reference into this Annual Report.

Environmental and Sustainability

We have adopted an "Environmental and Sustainability Mission".

This document portrays our commitment to the environment and sustainability through our long track record of successful business practices.

Heartland's sustainability efforts are endorsed and overseen by senior management throughout the Company.

EXECUTIVE COMPENSATION

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Financial Statements and Schedules.

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 )

Consolidated Balance Sheets - as of December 31, 202 1 and 20 20

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Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q, for the quarter ended September 30, 2018.

Heartland Express, Inc.

2021 Restricted Stock Award Plan.

Incorporated by reference to Appendix A to the Company’s Schedule 14A filed April 2, 2021.

Second Amendment to Credit Agreement, dated August 31, 2021, by and between Wells Fargo Bank, National Association and Heartland Express, Inc.

of Iowa, Heartland Express, Inc., Heartland Express Maintenance Services, Inc., Heartland Express Services, Inc., Millis Transfer, LLC, and Midwest Holding Group, LLC.

Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended September 30, 2021.

Subsidiaries of the Registrant.

Consent of Grant Thornton LLP.

Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

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Gordon Director February 25, 2022

/s/ Tahira K.

Hira Director February 19, 2021

Millis Director February 25, 2022

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Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

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The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

Auto Liability and Workers’ Compensation Claims Reserve Accrual

As described further in Notes 1 and 7 to the consolidated financial statements, the Company is self-insured for a portion of its risk related to auto liability and workers’ compensation.

As described further in the notes to the consolidated financial statements, the Company is self-insured for a portion of its risk related to auto liability and workers’ compensation.

Self-insurance results when the Company insures itself by maintaining funds to cover possible losses rather than by purchasing an insurance policy.

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These estimates rely on the assumption that historical claim patterns are an accurate representation for future claims that have been incurred but not completely paid.

The principal considerations for assessing auto liability and workers’ compensation claims as a critical audit matter are the high level of estimation uncertainty related to determining the severity of these types of claims, as well as the inherent subjectivity in management’s judgment in estimating the total costs to settle or dispose of these claims.

Our audit procedures related to this critical audit matter included the following, among others:

claims, as well as the inherent subjectivity in management’s judgment in estimating the total costs to settle or dispose of these claims.

Our audit procedures related to the critical audit matter included the following, among others.

• We tested the effectiveness of controls over auto liability and workers’ compensation claims, including the completeness and accuracy of claim expenses and payments.

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Buildings 95,305 86,712

Leasehold improvements — 437

Furniture and fixtures 5,365 4,807

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Dividends on common stock, $0.08 per share — — ( 6,563 ) — ( 6,563 )

Repurchases of common stock — — — ( 25,087 ) ( 25,087 )

Issuance of common stock for acquisition — 113 — 637 750

Stock-based compensation, net of tax — 574 — 959 1,533

2 unchanged sentences

Dividends on common stock, $0.08 per share — — ( 6,502 ) — ( 6,502 )

Issuance of common stock for acquisition — 113 — 637 750

Repurchases of common stock — — — ( 26,139 ) ( 26,139 )

Stock-based compensation, net of tax — 189 — 1,321 1,510

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Heartland Express, Inc.

is a holding company incorporated in Nevada, which owns all of the stock of Heartland Express, Inc.

is a holding company incorporated in Nevada, which directly or indirectly owns all of the stock of Heartland Express, Inc.

of Iowa, Heartland Express Services, Inc., Heartland Express Maintenance Services, Inc., Midwest Holding Group, LLC and Millis Transfer, LLC.

On December 31, 2018, A & M Express, Inc.

was merged into Heartland Express, Inc.

On August 26, 2019, Heartland Express, Inc.

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Cash equivalents are short-term, highly liquid investments with insignificant interest rate risk and original maturities of three months or less at acquisition.

The Company has deposits that potentially subject it to concentration of credit risk consisting of cash equivalents.

Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.

At December 31, 2021, the Company had $ 37.5 million in excess of the FDIC insured limit, subsequently reduced to $ 12.4 million in February 2022.

At December 31, 2021 and 2020, restricted and designated cash and investments totaled $ 16.0 million and $ 17.3 million, respectively.

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Investment income received on held-to-maturity municipal bond investments is generally exempt from federal income taxes and is recognized as earned.

Trade Receivables and Allowance for Doubtful Accounts

Trade Receivables

The Company recognizes revenue over time as control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

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Land improvements and buildings 5-30

Leasehold improvements 5-25

Furniture and fixtures 3-5

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As of September 30, 2021, the Company’s assessment of qualitative factors informed its conclusion that a goodwill impairment did not occur.

The significant qualitative factors considered include an increase in the Company’s revenue and continued strong cash flow.

The significant qualitative factors considered include an increase in the Company’s earnings and continued strong cash flow.

Our reporting unit had fair value significantly in excess of its carrying value.

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Insurance accruals are not discounted.

In addition to internally developed reserves and estimates, we utilize an actuarial specialist to provide an independent annual assessment of the internally developed accident and workers' compensation accruals.

In addition to internally developed reserves and estimates, we utilize an actuarial specialist to provide an independent annual assessment and quarterly monitoring reports of the internally developed accident and workers' compensation accruals.

The cost of cargo and BI/PD insurance and claims are included in insurance and claims expense, while the costs of workers’ compensation insurance and claims are included in salaries, wages, and benefits in the consolidated statements of comprehensive income.

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Stock-Based Compensation

We have a stock-based compensation plan that provides for the grants of restricted stock awards to our employees.

We have stock-based compensation plans that provide for the grants of restricted stock awards to our employees, directors and consultants.

We account for restricted stock awards using the fair value method of accounting for stock-based compensation.

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Compensation expense for restricted stock grants is recognized over the requisite service period of each award and is included in salaries, wages and benefits in the consolidated statements of comprehensive income.

Total compensation of $ 13.6 million related to all awards granted under the program has been amortized over the requisite service period for each separate vesting period as if the award is, in substance, multiple awards between 2011 and 2023.

Total compensation of $ 14.2 million related to all awards granted under the 2011 and 2021 Restricted Stock Award Plans has been amortized over the requisite service period for each separate vesting period as if the award is, in substance, multiple awards between 2011 and 2023.

Earnings per Share

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Diluted earnings per share is based on the basic weighted earnings per share with additional weighted common shares for common stock equivalents.

During the years ended December 31, 2020, 2019, and 2018, we granted restricted shares of common stock to certain of our employees under the Company's 2011 Restricted Stock Award Plan.

During the years ended December 31, 2021, 2020, and 2019, we granted restricted shares of common stock to certain of our employees, and in 2021 certain Directors, under the Company's restricted stock award plans.

A reconciliation of the numerator (net income) and denominator (weighted average number of shares outstanding) of the basic and diluted earnings per share (“EPS”) for 2021, 2020, and 2019 is as follows (in thousands, except per share data):

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We have not recorded a valuation allowance against any deferred tax assets at December 31, 2021 and 2020.

management’s opinion, it is more likely than not that we will be able to utilize these deferred tax assets in future periods as a result of our history of profitability, taxable income, and reversal of deferred tax liabilities.

Pursuant to the authoritative accounting guidance on income taxes, when establishing a valuation allowance, we consider future sources of taxable income such as “future reversals of existing taxable temporary differences and carry-forwards” and “tax planning strategies”.

In management’s opinion, it is more likely than not that we will be able to utilize these deferred tax assets in future periods as a result of our history of profitability, taxable income, and reversal of deferred tax liabilities.

planning strategies”.

In the event we determine that the deferred tax assets will not be realized in the future, the valuation adjustment to the deferred tax assets is charged to earnings or accumulated other comprehensive loss based on the nature of the asset giving rise to the deferred tax asset and the facts and circumstances resulting in that conclusion.

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New Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326):

In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments".

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Our five largest customers accounted for approximately 33 % and 30 % of gross accounts receivable as of December 31, 2021 and 2020, respectively.

There was no single customer that accounted for more than 10 % of operating revenues for the year ended December 31, 2020.

During the years ended December 31, 2019 and December 31, 2018, there was one customer that accounted for more than 10 % of operating revenues at 10.9 % and 12.5 %, respectively.

There was one customer that accounted for 10.0 % of operating revenues for the year ended December 31, 2021 and no customers exceeded 10 %.

This customer had accounts receivable of $ 6.1 million as of December 31, 2021.

During the year ended December 31, 2020 there was no single customer that accounted for more than 10 % of operating revenues.

During the year ended December 31, 2019, there was one customer that accounted for more than 10 % of operating revenues at 10.9 %.

Revenue Recognition

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The Acquisition and Merger Agreement contains customary representations, warranties, covenants, escrow, and indemnification provisions.

The following unaudited pro forma financial information for the years ended December 31, 2018 and December 31, 2019, assume that the acquisition of Millis occurred as of January 1, 2018.

The following unaudited pro forma financial information for the year ended December 31, 2019, assumes that the acquisition of Millis occurred as of January 1, 2019.

Pro forma adjustments reflected in the financial information below relate to accounting policy changes, such as changes in depreciation expense of revenue equipment, amortization of intangible assets, and accounting for certain operations and maintenance costs, along with other adjustments for terminal rent expense to align Millis results with those of the Company and income tax effects for the periods presented.

The net effect of these pro forma adjustments increased net income by $ 3.0 million and $ 3.6 million for the periods ended December 31, 2019 and 2018, respectively.

Year ended Year ended

December 31, 2019 December 31, 2018

The net effect of these pro forma adjustments increased net income by $ 3.0 million for the period ended December 31, 2019.

December 31, 2019

(in thousands)

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The results of the acquired businesses have been included in the consolidated financial statements since the date of acquisition.

Millis represented 21.1 % of consolidated total assets as of December 31, 2019, and represented 8.8 % of operating revenue for the twelve months ended December 31, 2019.

Millis represented 8.8 % of operating revenue for the twelve months ended December 31, 2019.

Millis acquisition related expenses of $ 0.5 million are included in the consolidated statement of comprehensive income within the other operating expenses line item for the twelve months ended December 31, 2019.

The allocation of the Millis purchase price is detailed in the tables below.

The goodwill recognized represents expected synergies from combining the operations of the Company with Millis Transfer, as well as other intangible assets that did not meet the criteria for separate recognition.

Goodwill and intangible assets recognized in the transaction are not deductible for tax purposes.

The assets and liabilities associated with Millis Transfer were recorded at their fair values as of the acquisition date and the amounts are as follows:

MILLIS TRANSFER ACQUISITION DATE FAIR MARKET VALUES (in thousands)

Trade and other accounts receivable $ 14,474

Other current assets 1,656

Property and equipment 117,060

Other non-current assets 802

Intangible assets 15,300

Goodwill 35,885

Total assets 185,177

Accounts payable, accrued expenses, and current portion of long-term debt ( 31,737 )

Insurance accruals ( 4,371 )

Long-term debt ( 70,191 )

Deferred taxes ( 16,201 )

Total cash paid and common stock issued $ 62,677

MILLIS TRANSFER TOTAL PURCHASE PRICE CONSIDERATION (in thousands)

Cash paid pursuant to Stock Purchase Agreement $ 61,927

Common stock issued pursuant to the Acquisition and Merger Agreement 750

Total cash paid and common stock issued $ 62,677

Intangible Assets and Goodwill

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Future amortization expense for intangible assets is estimated at $ 2.3 million for 2022, $ 2.2 million for 2023, $ 1.9 million for 2024, $ 1.9 million for 2025, and $ 1.9 million for 2026.

Changes in carrying amount of goodwill during the twelve months ended December 31, 2020 and December 31, 2019 were as follows:

(in thousands)

Balance at December 31, 2018 $ 132,410

Acquisition 35,885

Balance at December 31, 2019 $ 168,295

Acquisition —

Balance at December 31, 2020 $ 168,295

There were no changes in the carrying amount of goodwill during the twelve months ended December 31, 2021 and 2020.

Long-Term Debt

1 unchanged sentence

of Iowa, (the "Borrower"), a wholly owned subsidiary of the Company, entered into a Credit Agreement with Wells Fargo Bank, National Association, (the “Bank”).

Pursuant to the Credit Agreement, the Bank provided a five-year, $ 250.0 million unsecured revolving line of credit, which was used to assist in the repayment of all debt acquired at the time of acquisition, and which may be used for future working capital, equipment financing, and general corporate purposes.

The Bank's original commitment decreased to $ 175.0 million on November 1, 2016 through October 31, 2018.

However, on August 31, 2018, Borrower and the Bank entered into the First Amendment to this Credit Agreement.

The First Amendment (i) provides for a $ 100.0 million unsecured revolving line of credit (the “Revolver”), which may be used for working capital, equipment financing, permitted acquisitions, and general corporate purposes, (ii) provides an uncommitted accordion feature, which allows the Company a one-time request, at the discretion of the Bank, to increase the Revolver by up to an additional $ 100.0 million, (iii) increases the letter of credit subfeature of the Credit Agreement from $ 20.0 million to $ 30.0 million, and (iv) extends the maturity of the Credit Agreement to August 31, 2021, subject to the Borrower’s ability to terminate the commitment at any time at no additional cost to the Borrower.

On August 31, 2021, the Borrower and the Bank entered into the Second Amendment to this Credit Agreement.

The Second Amendment (i) provides for a $ 25.0 million Revolver, which may be used for working capital, equipment financing, permitted acquisitions, and general corporate purposes, (ii) provides an uncommitted accordion feature, which allows the Company a one-time request, at the discretion of the Bank, to increase the Revolver by up to an additional $ 100.0 million, (iii) decreases the letter of credit subfeature of the Credit Agreement from $ 30.0 million to $ 20.0 million, and (iv) extends the maturity of the Existing Credit Agreement to August 31, 2023, subject to the Borrower’s ability to terminate the commitment at any time at no additional cost to the Borrower.

The Credit Agreement is unsecured, with a negative pledge against all assets of our consolidated group, except for debt associated with permitted acquisitions, new purchase-money debt and capital lease obligations as described in the Credit Agreement.

Borrowings under the Credit Agreement can either be, at the Borrower's election, (i) one-month or three-month LIBOR (Index) plus a spread between 0.700 % and 0.900 % per annum, based on the Company's consolidated funded debt to adjusted EBITDA ratio or (ii) Prime (Index) plus 0.0 %.

The weighted average variable annual percentage rate is not calculated since no amounts were borrowed and outstanding at December 31, 2020.

There is a commitment fee on the unused portion of the Revolver between 0.0725 % and 0.1750 % per annum, based on the Company's consolidated funded debt to adjusted EBITDA ratio.

Interest on outstanding indebtedness under the Second Amendment is based on the Secured Overnight Financing Rate (“SOFR”) plus a spread based on the Company’s consolidated funded debt to adjusted EBITDA ratio.

A non-usage fee is payable on the unused portion of the Revolver based on the Company’s consolidated funded debt to adjusted EBITDA ratio.

The Credit Agreement contains customary financial covenants including, but not limited to, (i) a maximum adjusted leverage ratio of 2 :1, measured quarterly on a trailing twelve month basis, (ii) a minimum net income requirement of $ 1.00 , measured quarterly on a trailing twelve month basis, (iii) a minimum tangible net worth of $ 250.0 million requirement, measured quarterly, and (iv) limitations on other indebtedness and liens.

The Credit Agreement also includes customary events of default, covenants, representations and warranties, and indemnification provisions.

We were in compliance with the respective financial covenants as of and for the year ended December 31, 2020 and December 31, 2019.

We were in compliance with the respective financial covenants as of and for the years ended December 31, 2021 and December 31, 2020.

We had no long term debt outstanding at December 31, 2021 or 2020.

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The State of Iowa initially required us to deposit $ 0.7 million into a trust fund as part of the self-insurance program.

Earnings on this account become part of the required deposit and as of December 31, 2020 and 2019 total deposits in this account were $ 1.5 million.

As of December 31, 2021 and 2020 total deposits in this account were $ 1.5 million.

This deposit is in municipal bonds classified as held-to-maturity and is recorded in other non-current assets on the consolidated balance sheets.

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State net operating loss carryforward 46 —

Federal net operating loss carryover and credits — 8,793

Indirect tax benefits of unrecognized tax benefits 981 1,037

Other 227 221

Total gross deferred tax assets 18,458 22,278

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(in thousands)

Federal tax at statutory rate (21%, 21%, 21% respectively) $ 19,795 $ 20,406 $ 19,302

Federal tax at statutory rate (21%) $ 22,270 $ 19,795 $ 20,406

State taxes, net of federal benefit 4,452 5,678 3,561

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Of this amount, $ 3.7 million and $ 3.9 million represents the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate as of December 31, 2021 and December 31, 2020, respectively.

Unrecognized tax benefits were a net decrease of $ 0.1 million and a net increase of $ 0.4 million during the years ended December 31, 2020 and 2019, respectively, due mainly to the expiration of certain statutes of limitation net of additions and settlements with respective states.

This had the effect of decreasing the effective state tax rate in 2020 and increasing the effective state rate during 2019.

Unrecognized tax benefits were a net decrease of $ 0.2 million and $ 0.1 million during the years ended December 31, 2021 and 2020, respectively, due mainly to the expiration of certain statutes of limitation and reductions to prior year tax positions, net of current year additions with respective states.

This had the effect of decreasing the effective state tax rate in 2021 and 2020.

The total net amount of accrued interest and penalties for such unrecognized tax benefits was $ 0.8 million and $ 0.9 million at December 31, 2021 and December 31, 2020, respectively, and is included in income taxes payable in the consolidated balance sheets.

Net interest and penalties included in income tax expense for the years ended December 31, 2020, 2019 and 2018 was approximately $ 0.1 million, zero , and a benefit of $ 1.4 million, respectively.

Net interest and penalties included in income tax expense for the years ended December 31, 2021, 2020 and 2019 was a benefit of approximately zero , $ 0.1 million, and zero , respectively.

Income tax expense is increased each period for the accrual of interest on outstanding positions and penalties when the uncertain tax position is initially recorded.

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Additions based on tax positions related to current year 446 767

Additions for tax positions of prior years — 124

Reductions for tax positions of prior years ( 179 ) ( 216 )

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Tax years 2011 and forward are subject to audit by state tax authorities depending on the tax code and administrative practice of each state.

We have a stock repurchase program with 5.4 million shares remaining authorized for repurchase as of December 31, 2020.

There were 1.5 million shares repurchased in the open market during the year ended December 31, 2020, none in 2019, and 1.4 million in 2018.

Repurchases are expected to continue from time to time, as determined by market conditions, cash flow requirements, securities law limitations, and other factors, until the number of shares authorized have been repurchased, or until the authorization is terminated.

We have a stock repurchase program with 6.6 million shares remaining authorized for repurchase as of December 31, 2021, following the additional authorization of 3.0 million shares by our Board of Directors on August 20, 2021.

There were 1.8 million shares repurchased in the open market during the year ended December 31, 2021, 1.5 million in 2020, and none in 2019.

Repurchases are expected to continue from time to time, as determined by market conditions, cash flow requirements, securities

law limitations, and other factors, until the number of shares authorized have been repurchased, or until the authorization is terminated.

The share repurchase authorization is discretionary and has no expiration date.

During the years ended December 31, 2020, 2019 and 2018 our Board of Directors declared regular quarterly dividends totaling $ 6.5 million, $ 6.6 million, and $ 6.6 million for each year, respectively.

During the years ended December 31, 2021, 2020 and 2019 our Board of Directors declared dividends totaling $ 45.9 million, $ 6.5 million, and $ 6.6 million for each year, respectively.

The 2021 dividends included a $0.50 per share special dividend totaling $ 39.5 million and regular quarterly dividends totaling $ 6.4 million, while the 2020 and 2019 dividends were regular quarterly dividends.

Future payment of cash dividends and the amount of such dividends will depend upon our financial conditions, our results of operations, our cash requirements, our tax treatment, and certain corporate law requirements, as well as factors deemed relevant by our Board of Directors.

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The 2011 Plan has 0.1 million shares that remain available for the purpose of making restricted stock grants at December 31, 2021.

In May 2021, at the 2021 Annual Meeting of Stockholders, the approval of the Heartland Express, Inc.

2021 Restricted Stock Award Plan (the "2021 Plan") was ratified.

The 2021 Plan made available up to 0.6 million shares for the purpose of making restricted stock grants to our eligible employees, directors and consultants.

2,000 shares from the 2021 Plan were granted and vested during the year ended December 31, 2021.

There were no shares granted during the period 2011 to 2018 that remain unvested at December 31, 2021.

Shares granted in 2019 through 2021 have various vesting terms that range from immediate to four years from the date of grant and have share prices ranging between $ 16.58 and $ 22.10 .

Compensation expense associated with these awards is based on the market value of our stock on the grant date.

Compensation expense associated with restricted stock awards is included in salaries, wages and benefits in the consolidated statements of comprehensive income.

Compensation expense associated with restricted stock awards to employees is included in salaries, wages and benefits while awards to directors or consultants is included in other operating expenses in the consolidated statements of comprehensive income.

There were no significant assumptions made in determining fair value.

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The total estimated purchase commitments for tractors (net of tractor sale commitments) and trailer equipment at December 31, 2021, was $ 25.8 million.

Quarterly Financial Information (Unaudited)

First Second Third Fourth

(In Thousands, Except Per Share Data)

Year ended December 31, 2020

Operating revenue $ 166,318 $ 160,873 $ 162,282 $ 155,789

Operating income 17,326 24,989 27,339 23,765

Income before income taxes 17,703 25,146 27,510 23,902

Net income 13,238 19,182 20,714 17,672

Net income per share, basic 0.16 0.24 0.25 0.22

Net income per share, diluted 0.16 0.24 0.25 0.22

Year ended December 31, 2019

Operating revenue $ 139,536 $ 142,144 $ 147,908 $ 167,227

Operating income 20,843 29,030 26,739 17,663

Income before income taxes 21,988 30,259 27,415 17,516

Net income 17,318 22,361 20,501 12,787

Net income per share, basic 0.21 0.27 0.25 0.16

Net income per share, diluted 0.21 0.27 0.25 0.16

Subsequent Events

No events occurred requiring disclosure other than the repurchase of 0.7 million shares of our common stock for $ 12.9 million subsequent to December 31, 2020.

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures