What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2026-03-03 compared with 2025-02-18 · 161 added, 196 removed, 274 unchanged (57% of the section changed)

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of Iowa, Heartland Express Services, Inc., Heartland Express Maintenance Services, Inc.

("Heartland Express"), and Midwest Holding Group, LLC and Millis Transfer, LLC ("Millis Transfer"), and Smith Transport, LLC ("Smith Transport"), and CFI entities, Transportation Resources, Inc.

and Contract Freighters, Inc.

(collectively with certain Mexican entities, "CFI").

(collectively, "Heartland Express"), and Midwest Holding Group, LLC and Millis Transfer, LLC (together, "Millis Transfer"), and Smith Transport, LLC ("Smith Transport"), and certain Mexican entities.

Effective December 31, 2025, we integrated and rebranded U.S.

operations of Contract Freighters, Inc.

("CFI") into Heartland Express.

Effective December 31, 2024, Franklin Logistics, LLC was merged into Smith Transport, LLC.

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and Franklin Logistics, Inc.

were converted to Smith Transport, LLC and

Franklin Logistics, LLC, respectively.

On May 31, 2022, Heartland Express, Inc.

of Iowa acquired Smith Transport, a truckload carrier headquartered in Roaring Spring, Pennsylvania.

On August 31, 2022, Heartland Express, Inc.

of Iowa acquired CFI's non-dedicated U.S.

dry van and temperature-controlled truckload business located in Joplin, Missouri, and certain Mexican entities (collectively "CFI Logistica") operations located in Mexico.

were converted to Smith Transport, LLC and Franklin Logistics, LLC, respectively.

We, together with our subsidiaries, are a short, medium, and long-haul truckload carrier and transportation services provider.

We primarily provide nationwide asset-based dry van truckload service for major shippers across the United States, along with cross-border freight and other transportation services offered through third party partnerships in Mexico.

Prior to 2022 we, together with our subsidiaries, historically were a short-to-medium haul truckload carrier where approximately 99.9% of our operating revenue was derived from shipments within the United States with the remainder being Canada and no operations in Mexico.

With the acquisition of CFI on August 31, 2022, we significantly expanded our scale and our transportation services.

We continue to provide nationwide asset-based dry van truckload service for major shippers from across the U.S.

and now including cross border freight to and from Mexico.

Our logistics revenue within Mexico represents 3.0% of consolidated operating revenue.

Our consolidated average length of haul is under 400 miles.

We continue to focus on providing high quality service to targeted customers with a high density of freight in our regional operating areas.

We focus on providing high quality service to targeted customers with a high density of freight in our operating areas.

We also offer truckload temperature-controlled transportation services and Mexico logistics services, which are not significant to our consolidated operations.

Through the acquisition of CFI, we now provide transportation logistics services across Mexico for our customers and provide cross-border freight services for customer loads moving from the United States into Mexico and loads originating from Mexico into the United States.

We utilize third party service providers for all miles run in Mexico and to move freight across the US-Mexico border while leveraging terminal locations in the US and Mexico near the border to facilitate these moves.

We generally earn revenue based on the number of miles per load delivered and the revenue per mile or per load paid.

We operate our consolidated operations under the brand names of Heartland Express, Millis Transfer, Smith Transport, and CFI.

We operate our consolidated operations under the brand names of Heartland Express, Millis Transfer, Smith Transport, and CFI (for services within Mexico).

We manage our business based on overall corporate operating goals and objectives that are the same for all of our brands.

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Gerdin in 1978 and became publicly traded in November 1986.

Over the thirty-eight years from 1986 to 2024, we have grown our revenues to $1.0 billion from $21.6 million.

Over the thirty-nine years from 1986 to 2025, we have grown our revenues to $805.7 million from $21.6 million.

For the five year period 2021 through 2025 we had the highest revenue, $4.6 billion, of any previous five year period.

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More information regarding our total assets, revenues and profits for the past three years can be found in our “Consolidated Balance Sheets” and “Consolidated Statements of Comprehensive Income” that are included in this report.

We continue to focus on providing quality service to targeted customers with a high density of freight in our regional operating areas.

Organic growth has become increasingly difficult for traditional over-the-road truckload carriers given an ongoing shortage of qualified drivers in the industry that meet our hiring standards.

We have completed two recent strategic acquisitions to assist with the industry challenges, although we have been further challenged by the weak freight environment and the resulting shortage of profitable freight within the last two years.

We have completed strategic acquisitions to assist with the industry challenges, although we have been further challenged by the weak freight environment and the resulting shortage of profitable freight within the last three years.

The profitable freight shortage we anticipate to be a near term challenge whereas we expect the shortage of qualified drivers to be ongoing.

In response, we continue to evaluate and explore different driving options and offerings for our existing and potential new drivers across our unique mix of driver and equipment offerings across Heartland Express, Millis Transfer, Smith Transport, and CFI.

In addition to past organic growth through the development of our regional operating areas, we have completed ten acquisitions since 1986 with the most recent and our fifth acquisition since 2013, CFI, occurring on August 31, 2022 following the acquisition of Smith Transport on May 31, 2022.

and pursue new customer relationships in new markets, as well as expand business relationships with current customers in new markets.

We are highly selective about acquisitions, with our main criteria being (i) safe operations, (ii) high quality professional truck drivers, (iii) fleet profile that is compatible with our philosophy or can be replaced economically, and (iv) freight profile that will allow a path to a low to mid 80s operating ratio upon full integration, application of our cost structure, and freight optimization, including exiting certain business that fails to meet our operating profile.

We have historically been a debt free organization although with the acquisition of CFI we now have debt, although we significantly lowered our debt balance during 2024.

In addition to past organic growth through the development of our operating areas, we have completed ten acquisitions since 1986 with the most recent and our fifth acquisition since 2013, CFI, occurring on August 31, 2022 following the acquisition of Smith Transport on May 31, 2022.

These ten acquisitions have enabled us to solidify our position within existing regions, expand into new operating regions, expand service offerings to address longer length of haul needs from customers, and pursue new customer relationships in new markets, as well as expand business relationships with current customers in new markets.

We have historically been a debt free organization although with the acquisition of CFI we incurred debt but have significantly lowered our debt balance since the acquisition.

We expect to continue to evaluate acquisition candidates presented to us, however, we do not expect to make any significant acquisitions while we are paying down debt.

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Our operations department focuses on the successful execution of customer expectations and providing consistent opportunities for our drivers, in conjunction with maximizing equipment utilization.

These objectives require a combined effort of marketing, regional operations managers, and fleet management.

These objectives require a combined effort of marketing, operations managers, and fleet management.

Our customer service department is responsible for maintaining the continuity between the customer’s needs and our ability to meet those needs by communicating the customer’s expectations to the fleet management group.

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Their responsibilities include meeting the needs of the drivers within the standards that have been set by the organization and communicating the requirements of the customers to the drivers on each order to ensure successful execution.

Serving the short-to-medium haul market permits us to use primarily single rather than team drivers and dispatch most loads directly from origin to destination without an intermediate equipment change other than for driver scheduling purposes.

Primarily serving the short-to-medium haul market permits us to use single rather than team drivers on most loads and dispatch most loads directly from origin to destination without an intermediate equipment change other than for driver scheduling purposes.

During 2025, approximately 77% of our loads were less than 500 miles in length of haul.

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with immaterial revenue derived from Mexico and Canada.

We operate twenty-eight terminal facilities throughout the contiguous U.S.

and one in Mexico following the CFI acquisition, in addition to our terminal and corporate headquarters in North Liberty, Iowa.

These terminal locations are strategically located to concentrate on regional freight movements generally within a 500-mile radius of the terminals.

We operate twenty-five terminal facilities throughout the contiguous U.S.

and one in Mexico, in addition to our terminal and corporate headquarters in North Liberty, Iowa.

These terminal locations are owned facilities and strategically located to concentrate on freight movements generally within a 500-mile radius of the terminals.

This allows us to meet the needs of our customers in those regions while allowing our drivers to primarily stay within an operating region which provides them with more “home time.” This also allows us opportunities to service and maintain revenue equipment across all subsidiaries, at our facilities on a frequent basis.

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In addition to consolidated data on a combined basis that has been historically used, our CODM also makes use of available disaggregated operating segment data as well.

Our reporting units operate centralized computer networks within their respective operations and regular communication to achieve enterprise-wide load coordination.

We are actively working to better integrate computer networks across reporting units.

Our reporting units operate on a centralized computer network which assists with regular communication to achieve enterprise-wide load coordination and other operating efficiencies.

We emphasize customer satisfaction through on-time performance, dependable late-model equipment, and consistent equipment availability to meet the volume requirements of our customers.

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Customers, Marketing, and Safety

We seek to transport freight that will complement traffic in our existing service areas and remain consistent with our focus on short-to-medium haul, regional distribution markets, and cross-border freight to and from Mexico.

We seek to transport freight that will complement traffic in our existing service areas and remain consistent with our focus on short-to-medium haul and cross-border freight to and from Mexico.

Management believes that building lane density in our primary traffic lanes will minimize empty miles and enhance driver “home time.”

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These awards include:

• Home Depot Truckload Carrier of the Year (Medium Fleet)

• Home Depot Truckload Carrier of the Year (Small Fleet)

• NFI US East Carrier of the Year

• DHL Truckload Carrier of the Year

• Uber Freight Award National Truckload Carrier of the Year

• WEX Circle of Excellence

• Henkel Consumer Brands Logistics Award - Asset Excellence

• FedEx Express National Carrier of the Year (13 years in a row)

• FedEx Express Platinum Award (99.98% On-Time Delivery)

• Shaw Floors Outbound "Class B" Carrier of the Year

Smucker Transportation Award Best On Time National Asset Carrier

• Pepsico Transportation – Carrier of the Year – WHD West Division

• Georgia Pacific – OTR Van National Carrier of the Year

• WK Kellogg Co – WKKCC CD&L Supplier Founders Award

• Molson Coors – Transportation Supplier of the Year

• Shaw Industries – Outbound Class B Carrier of the Year

• FedEx Express - Yearly Superior Performance Award FY 25

• Mars Pet Nutrition – Carrier of the Year East

• Tractor Supply – Value Award – Accountability

During 2025, we were also recognized with the following environmental, operational, safety, and community service awards:

• SmartWay - High Performer TL/Dry Van Truck Carrier "All Metrics" Category

• TCA Fleet Safety Award 2023 - 2nd Place (Division VI, 100+ Million Miles)

• Missouri Trucking Association - Safety Award (Over the Road, 15+ Million Miles)

• Newsweek's 2024 Most Trustworthy Companies

• Newsweek's 2025 Most Trustworthy Companies in America

• Logistics Management – Quest for Quality Award – Expedited Motor Carriers

• Wreaths Across America - Honor Fleet

These awards are hard-earned and are a direct reflection upon our outstanding group of employees and our focus on excellence in all areas of our business.

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During 2024, our 25, 10, and 5 largest customers were approximately 60%, 40%, and 26%, of our operating revenues respectively.

Our broad capacity network and customer base has allowed us to remain appropriately diversified as no customer accounted for more than 10% of our operating revenues in 2024, 2023, or 2022.

Our broad capacity network and customer base has allowed us to remain appropriately diversified as only one customer accounted for more than 10% of our operating revenues in 2025, while no customers accounted for more than 10% in 2024 or 2023.

Environmental and Sustainability

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Our efforts have been recognized by the U.S.

EPA SmartWay Excellence Award in seven of the last ten years of award consideration.

Furthermore, we have been recognized as a SmartWay High Performer seven times.

EPA SmartWay Excellence Award seven times.

We have also been recognized as a SmartWay High Performer seven times.

We have adopted a "Human Rights Mission".

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In addition, many of our customers, particularly those in the retail industry where we have a large presence, demand additional capacity during the fourth quarter, which limits our ability to take advantage of more attractive market rates that generally exist during such periods.

Demand for our services may be muted during soft freight environments, like we experienced in the last two years.

Demand for our freight services has been soft for the last two years as there has been a general imbalance of freight movements that have lagged available truck capacity.

Demand for our services may be muted during soft freight environments, like we experienced in the last three years.

Demand for our freight services has been soft for the last three years as there has been a general imbalance of freight movements that have lagged available truck capacity.

We may also suffer from natural disasters and weather-related events, such as tornadoes, hurricanes, blizzards, ice storms, floods, and fires, which may increase in frequency and severity due to climate change, as well as other man-made disasters.

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As of the end of January 2026 there were approximately 3,630 drivers and non-driving personnel.

The decrease in average of the drivers and non-driving personnel during the year ended December 31, 2024 was predominantly due to deteriorating freight demand and lower equipment utilization and cost management following the acquisitions of Smith Transport and CFI in May and August 2022, respectively.

decrease in average of the drivers and non-driving personnel during the year ended December 31, 2025 was predominantly due to weak freight demand and our strategic response to right size.

In addition to company drivers, we also contracted with independent contractors to provide and operate tractors which provides us additional revenue equipment capacity, although not material to our operations.

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For the years ended December 31, 2025 and 2024, independent contractors accounted for approximately 2.0% and 3.8% of our total miles, respectively.

We also utilize third party carriers to facilitate our Mexico logistics operations, following the CFI acquisition.

Independent contractors and third party carriers are presented as rent and purchased transportation costs.

The trucking industry has been faced with a qualified driver shortage.

However, driver availability began to change late in 2022 and into 2023, as a result of the declining freight and economic environments.

This trend continued throughout 2024.

We believe certain drivers have moved from smaller less financially stable carriers to more financially stable carriers and from independent contractors to company drivers.

Although there has been some increased movement of drivers between companies in our industry, the issue of a decreasing amount of overall qualified CDL drivers in our industry continues.

We also utilize third party carriers to facilitate our CFI Mexico logistics operations.

Independent contractors and third party carrier costs are presented as rent and purchased transportation within the Consolidated Statements of Comprehensive Income.

The issue of a decreasing amount of overall qualified CDL drivers in our industry continues.

We continually explore new strategies to attract and retain qualified drivers with changes in market conditions and demands.

We hire the majority of our drivers with at least six months of over-the-road experience and safe driving records.

As discussed below, the Company's driver training program provides an additional source of future potential professional drivers.

We hire the majority of our drivers with at least six to twelve months of over-the-road experience and safe driving records.

As discussed below, the Company's driver training programs provide an additional source of future potential professional drivers.

In order to attract and retain experienced drivers who understand the importance of customer service, we have sought to solidify our position as an industry leader in driver compensation in our operating markets and for the services we provide.

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Our comprehensive driver compensation and benefits program rewards drivers for years of service and safe operating mileage benchmarks, which are critical to our operational and financial performance.

Certain driver pay packages include minimum pay protection provisions, future pay increases based on years of continued service with us, increased rates for accident-free miles of operation, detention pay, and other pay programs to assist drivers with unproductive time associated with circumstances outside of their control, such as inclement weather, equipment breakdowns, and customer issues.

As a result of the freight environment during 2023 and 2024, we paid more through these programs, resulting in an increase of driver pay per mile and as a percentage of revenue.

Drive pay, home time, and other amenities has allowed us to maintain driver turnover rates lower than the industry average.

Certain driver pay packages include future pay increases based on years of continued service with us, increased rates for accident-free miles of operation, detention pay, and other pay programs to assist drivers with unproductive time associated with circumstances outside of their control, such as inclement weather, equipment breakdowns, and customer issues.

Driver pay, home time, and other amenities have allowed us to maintain driver turnover rates lower than the industry average.

We believe that our driver compensation and benefits package is consistently among the best in the industry.

We are committed to investing in our drivers and compensating them for safety as both are key to our operational and financial performance.

Currently over 12% of our driver employees, individually, have achieved 1.0 million safe miles.

In response to the driver shortage in our industry, the Company continues to evaluate and pursue the expansion of driver training schools.

Millis Transfer has operated a driver training school program, Millis Training Institute, since 1989.

Millis Training Institute is a driver training program dedicated to identifying, training, and developing capable individuals into obtaining their commercial driving license and becoming professional truck drivers.

This driver training program currently provides a source of qualified professional drivers for our Company.

The driver training program offers an additional

opportunity to hire professional drivers other than the traditional approach of hiring only experienced over-the-road drivers.

During 2022, we rolled out the first Heartland Training Institute location in Phoenix, Arizona, modeled after the successful program in place at Millis Transfer.

We will continue to evaluate this training program for future expansion.

Further, CFI has a training program for individuals who have obtained their CDL, but have less driving experience, as a source of driver trainees, but does not operate a driver training school program.

Currently over 16% of our driver employees, individually, have achieved 1.0 million or more safe miles.

We also invest a significant amount of capital in our terminal facilities as we strive to offer our driver employees up to date and convenient amenities and safe and secure parking throughout our terminal network across the country while they are away from home.

Over the last three years we have invested $81.8 million in terminal properties, while also divesting of properties for a combined $29.0 million gain.

Millis Training Institute, opened in 1989, and Heartland Training Institute, opened in 2022, are driver training programs dedicated to identifying, training, and developing capable individuals into obtaining their commercial driving license and becoming professional truck drivers.

These driver training programs offer additional opportunities to hire professional drivers other than the traditional approach of hiring only experienced over-the-road drivers.

Current government focus on English proficiency requirements, as well as reviews of CDL status for non-domiciled drivers, will potentially eliminate some level of driver capacity in our industry.

We believe this could help supply and demand dynamics currently being experienced in our industry.

However, due to our comprehensive hiring and safety standards, we continue to experience a challenging driver hiring environment.

We are not a party to a collective bargaining agreement.

We believe that we have good relationships with our employees.

Driver Compensation and Amenities

Our comprehensive driver compensation program rewards drivers for years of service and safe operating mileage benchmarks, which are critical to our operational and financial performance.

Our driver pay package generally includes weekly base pay minimums for mileage based drivers, future pay increases based on years of continued service with us, increased rates for accident-free miles of operation, detention pay, and other pay programs to assist drivers with unproductive time.

We believe that our driver compensation packages, compared to others in our industry, is consistently among the best in the industry.

We are committed to investing in our drivers and compensating them for safety as both are key to our operational and financial performance.

Over the last three years we have invested $90.9 million in terminal properties, in addition to $77.9 million in terminal properties acquired with CFI and Smith Transport acquisitions, while also divesting of properties for a combined $100.2 million gain.

Revenue Equipment

Our industry is very capital intensive as it relates to tractors and trailers.

One of our core operating goals is to maintain a modern fleet of tractor and trailer equipment.

One of our core operating goals is to maintain a modern fleet of predominantly company owned tractor and trailer equipment.

The overall performance and reliability of tractor equipment typically has increased with each new model year of tractors that we have acquired in the last 5 years.

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This is evidenced by us being awarded the U.S.

Environmental Protection Agency SmartWay Excellence Award in seven of the last ten years of award consideration.

Furthermore, we have been recognized as a SmartWay High Performer seven times.

Environmental Protection Agency SmartWay Excellence Award seven times.

We have also been recognized as a SmartWay High Performer seven times.

We have historically owned our tractors and trailers and do not lease revenue equipment, other than when we have acquired companies that have utilized leases.

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One method we use to accomplish these goals is to depreciate our new tractors (excludes assets acquired through an acquisition) for financial reporting purposes using the declining balance method, in which depreciation is higher in early periods and tapers off in later periods.

We believe this method more accurately reflects actual asset values and affords us the flexibility to sell tractors at most points during their life cycle without experiencing losses.

this method more accurately reflects actual asset values and makes it less likely that we will experience losses on sales at most points during their life cycle.

In addition, the decline in depreciation during later periods is typically offset by increased repairs and maintenance expense as the tractors age, which keeps our total operating costs more uniform over the operating life of the equipment.

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The average age of our trailer fleet was 7.3 years at December 31, 2025 compared to 7.4 years at December 31, 2024.

The used equipment market during 2023 and 2024 was not conducive to selling trailer equipment and replacing to lower the average age of trailers.

The "Regulation" section in this Item 1 of Part I of this Annual Report discusses in detail several regulations that have impacted and could continue to affect our cost and use of revenue equipment.

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at which we have negotiated price discounts.

In addition, bulk fuel sites are maintained at twenty-once of our terminal locations.

In addition, bulk fuel sites are maintained at nineteen of our terminal locations.

We strategically manage fuel purchase decisions based on pricing of over-the-road fuel prices, bulk fuel prices, and the routing of equipment.

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Fuel consumed by empty and out-of-route miles and by truck engine idling time is not recoverable and therefore any increases or decreases in fuel costs related to empty and out-of-route miles and idling time will directly impact our operating results.

Even though average fuel prices declined in 2024 compared to 2023, empty route miles were significantly higher in 2024 due to soft freight demand which had an offsetting effect of increasing our net fuel cost.

Due to the freight environment experienced during the last three years, fuel consumption has been negatively impacted by higher non-revenue miles and truck idle time due to lower truck utilization.

Competition and Industry

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We compete with other truckload carriers;

primarily those serving the regional, short-to-medium haul market.

primarily those serving the short-to-medium haul market.

Logistics providers, railroads, less-than-truckload carriers, and private fleets provide additional competition but to a lesser extent.

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We operate in a cyclical industry.

In early 2022, freight demand was initially strong, but demand began to soften in the back half of 2022 and continued to degrade throughout all of 2023 and continued to be weak during 2024.

We expect freight demand to remain challenged in at least the first half of 2025 based upon the freight demand experienced in January and February of 2025 however the freight environment is modestly better than what was experienced throughout much of 2024.

We expect the strategic and operational changes that we have implemented during 2024 will improve our operational readiness ahead of future expected freight demand growth.

However, general consumer product output and inventory volatility, consumer demand, the political landscape, potential tariffs, foreign wars, and disruption in oil and diesel markets all could create additional volatility regarding freight demand during 2025.

Freight demand was degraded throughout all of 2023 and continued to be weak during 2024 and 2025.

While we believe we are seeing positive signs across the transportation industry to reduce excess capacity, which could lead to a positive shift in customer rate and volume negotiations during 2026, the weak freight environment has extended

longer than we previously expected and it remains uncertain when we will see meaningful improvement.

We believe that cost improvements and transportation system changes implemented during 2025 will provide a better cost structure and operating visibility to deliver a path toward operating profitability for our consolidated operations over the next twelve months.

The trucking industry also faces a shortage of qualified drivers, as discussed above under the heading “Drivers, Independent Contractors, and Other Employees.”

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We self-insure a portion of the exposure related to all of the aforementioned risks.

coverage, including self-insurance retention levels, is evaluated on an annual basis.

Insurance coverage, including self-insurance retention levels, is evaluated on an annual basis.

We actively participate in the settlement of each claim incurred.

We act as a self-insurer for auto liability, defined as including property damage, personal injury, or cargo.

We act as a self-insurer for auto liability, defined as including property damage, personal injury, or cargo based on defined insurance retention.

In April 2023, we renewed our primary auto liability insurance with a three year program.

Under the April 2023 renewal, our auto liability retention limit across all operating entities was increased to $3.0 million for any individual claim based on the insured party, accident date, and circumstances of the loss event subject to a $3.5 million corridor for any one accident or combination of accidents that exceed $3.0 million.

In April 2024, an additional corridor was added, where we retain liability of $5.0 million for any one accident or combination of accidents that exceed $10.0 million.

Liabilities in excess of the $3.0 million deductible, the $3.5 million corridor, and the $5.0 million corridor are covered by insurance up to $80.0 million.

We retain any liability in excess of $80.0 million.

Furthermore, under the April 2023 renewal, our premiums are subject to upward or downward adjustments based on claims experience in the $3.0 million to $10.0 million policy during the three year program of April 2023 to March 2026.

The elevated retention limit and the premium adjustment feature could lead to increased volatility in our insurance and claims expense, depending on the frequency and magnitude of claims.

In April 2025, the $5.0 million in excess of $10.0 million layer and the $5.0 million in excess of $15.0 million layer became part of a three year structured program, each with a $5.0 million per occurrence and a $10.0 million aggregate limit per policy year.

For the duration of the three year structured program, the $5.0 million in excess of $10.0 million layer has a $15.0 million aggregate limit and the $5.0 million in excess of $15.0 million layer has a $10.0 million aggregate limit.

Also, in April 2025, an additional corridor was added, where we retain liability of $5.0 million for the first accident or series of accidents that exceed $20.0 million.

We maintain limited excess liability coverage, subject to the foregoing limits and corridors, and retain any liability in excess of the coverage.

Our premiums for certain layers are subject to upward or downward adjustments based on claims experience.

The elevated retention limit and the premium adjustment feature could lead to increased volatility in our insurance and claims expense, depending on the frequency and magnitude of claims, which is exacerbated given significantly increased judgments and settlements of over-the-road accident claims.

We act as a self-insurer for workers’ compensation based on defined insurance retention of $1.0 million.

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We are a common and contract motor carrier regulated by the DOT and various state and local agencies.

We operate under DOT authorities respective to our four individual operating brands.

We operate under DOT authorities respective to our individual operating brands.

The DOT generally governs matters such as safety requirements, registration to engage in motor carrier operations, insurance requirements, and periodic financial reporting.

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Changes to such HOS rules can negatively impact our productivity and affect our operations and profitability by reducing the number of hours per day or week our drivers may operate and/or disrupting our network.

The FMCSA has made changes to the HOS rules in recent years that include greater flexibility to truck drivers regarding their 30-minute rest breaks, an extension of the shorthaul exemption by an additional two hours, and an extension of duty time for drivers encountering adverse weather by up to two hours.

extension of duty time for drivers encountering adverse weather by up to two hours.

Certain industry groups have challenged these rules in court, and while the FMCSA's final rule has been upheld, it remains unclear if industry or other groups will bring additional challenges against the FMCSA's final rule.

Further, in September 2025, the FMCSA adopted two pilot programs to study the effect of increasing the flexibility of the hours-of-service rules to improve driver working conditions and quality of life.

The hours-of-service pilot programs provide participating drivers increased control and flexibility in their schedules by allowing the participating drivers to pause their 14-hour driving window for up to three hours and split their 10-hour off-duty period into more flexible combinations.

Any future changes to HOS rules could materially and adversely affect our operations and profitability.

Future rulemaking relating to electronic logging devices (“ELD”) may occur and any final rules could affect our ELD technology, compliance, usage, and compliance efforts.

There are two methods of evaluating the safety and fitness of carriers.

The first method is the application of a safety rating that is based on an onsite investigation and affects a carrier’s ability to operate in interstate commerce.

We currently have a satisfactory DOT safety rating under this method, for each of our respective DOT authorities, which is the highest available rating under the current safety rating scale.

If we received a conditional or unsatisfactory DOT safety rating, it could adversely affect our business, as some of our existing customer contracts require a satisfactory DOT safety rating.

The DOT evaluates the safety and fitness of carriers based on onsite investigations or a remote compliance reviews.

All of our motor carriers currently have a satisfactory DOT safety rating, which is the highest available rating under the current safety rating scale.

If any of our motor carriers received a conditional or unsatisfactory DOT safety rating, it could disrupt operations and adversely affect our business, as some of our existing customer contracts require a satisfactory DOT safety rating.

In addition to the safety rating system, the FMCSA has adopted the Compliance Safety Accountability (“CSA”) program as an additional safety enforcement and compliance model that evaluates and ranks fleets on certain safety-related standards.

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Generally, these scores do not have a direct impact on a carrier’s safety rating.

However, the occurrence of unfavorable scores in one or more categories may (i) affect driver recruiting and retention by causing high-quality drivers to seek employment with other carriers, (ii) cause our customers to direct their business away from us and to carriers with higher fleet rankings, (iii) subject us to an increase in compliance reviews and roadside inspections, (iv) cause us to incur greater than expected expenses

in our attempts to improve unfavorable scores or (v) increase our insurance costs, any of which could adversely affect our results of operations and profitability.

Under the CSA, these scores were initially made available to the public in five of the seven categories.

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Therefore, it is unclear if, when and to what extent such changes to the CSA program will occur.

In February 2023, the FMCSA published a notice of proposed changes to its Safety Measurement System (“SMS”) methodology, including the BASIC categories.

In August 2023, the FMCSA announced in an advanced notice of proposed rulemaking and request for comments that it was interested in developing a new methodology to determine whether a carrier is fit to operate commercial motor vehicles (“CMV” or “CMVs”).

Additionally, the U.S.

Government Accountability Office made a suggestion in 2023 to the FMCSA to make complaint data public.

In November 2024, the FMCSA published a notice announcing a revised SMS methodology implementing certain changes proposed in the February 2023 notice, including, among other changes, (i) rebranding BASICs as “Compliance Categories” and revising certain categories, (ii) consolidating existing road violations into simplified and distinct violation groups and simplifying the scale used to measure the severity of violations, (iii) adjusting intervention thresholds, and (iv) revising the SMS methodology to focus more heavily on recent violations.

In 2023, the FMCSA announced that it was interested in developing a new methodology to determine whether a carrier is fit to operate commercial motor vehicles (“CMV” or “CMVs”).

In 2024, the FMCSA published a notice announcing a revised Safety Management System (“SMS”) methodology, including, among other changes, (i) rebranding BASICs as “Compliance Categories” and revising certain categories, (ii) consolidating existing road violations into simplified and distinct violation groups and simplifying the scale used to measure the severity of violations, (iii) adjusting intervention thresholds, and (iv) revising the SMS methodology to focus more heavily on recent violations.

Whether this revised SMS methodology will take effect is uncertain;

however, any change which results in the Company or its subsidiaries receiving less favorable scores, or an increased visibility of less favorable scores or of complaints against the Company may have an adverse effect on our operations and financial position.

Moreover, in September 2023, the FMCSA announced a proposal that would allow carriers to undergo an appeal process for requests of data review, which are in relation to such requests through the agency’s DataQs system.

The proposal, if adopted, may provide an opportunity for the Company to appeal in certain scenarios which could result in more favorable outcomes.

Moreover, in 2023, the FMCSA announced a proposal that would allow carriers to undergo an appeal process for requests of data review.

Further, in 2025, the FMCSA announced proposed revisions to their 2023 proposal to improve the impartiality, timeliness, transparency, and fairness of the data review and appeal process.

The revised proposal, if adopted, may provide an opportunity for the Company to appeal in certain scenarios which could result in more favorable outcomes.

Another source of potential changes may be from the FMCSA’s study on the causation of crashes, known as the Crash Causal Factors Program (“CCFP”) which builds upon the FMCSA’s previous Large Truck Crash Causation Study.

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and (iii) query the clearinghouse for each currently employed driver annually.

In November 2024, a new rule referred to by the FMCSA as “Clearinghouse II,” a program that relates to drivers with drug and alcohol violations, took effect.

In 2024, a new rule referred to by the FMCSA as “Clearinghouse II,” a program that relates to drivers with drug and alcohol violations, took effect.

Under Clearinghouse II, a driver with a drug or alcohol violation resulting in a “Prohibited” status in the Clearinghouse may not operate a CMV and must complete the FMCSA’s return-to-duty education, treatment, and testing prior to regaining CMV driving privileges.

With Clearinghouse II now in effect, states will be required to query the Clearinghouse when issuing, renewing, transferring, or upgrading a commercial driver's license and must revoke a driver's commercial driving privileges if such driver is prohibited from driving a motor vehicle for one or more drug or alcohol violations.

It is expected that the effects from the rule may further impair the pool of available drivers.

With Clearinghouse II now in effect, states are required to query the Clearinghouse when issuing, renewing, transferring, or upgrading a commercial driver's license and must revoke a driver's commercial driving privileges if such driver is prohibited from driving a motor vehicle for one or more drug or alcohol violations.

It is anticipated that the FMCSA will propose further changes regarding the Clearinghouse to increase the availability of driver violation information and enhance the efficiency and effectiveness of the Clearinghouse.

It is expected that any additional changes to the rule may further impair the availability of an already weak driver pool.

In 2020, the Department of Health and Human Services (“DHHS”) announced proposed mandatory guidelines to allow employers to drug test truck drivers and other federal workers for pre-employment and random testing using hair specimens.

However, the proposal also requires a second sample using either urine or an oral fluid test if a hair test is positive, if a donor is unable to provide a sufficient amount of hair for faith-based or medical reasons, or due to an insufficient amount or length of hair.

However, the proposal also requires a second sample using either urine or an oral fluid test if a hair test is positive or if a donor is unable to provide a sufficient amount of hair.

The proposal specifically requires that the second test be done simultaneously at the collection event or when directed by the medical review officer after review and verification of laboratory-reported results for the hair specimen.

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In 2022, an industry group known as the Trucking Alliance sought an exemption from the FMCSA that would allow positive hair specimen tests to be uploaded to the Clearinghouse.

This request was denied by the FMCSA, however, noting they cannot act until the DHHS finalizes these guidelines, which have been delayed by the DHHS until May 2025.

This request was denied by the FMCSA, however, noting they cannot act until the DHHS finalizes these guidelines, which have suffered ongoing delays with the DHHS.

Additionally, in 2022 the DOT issued a notice of proposed rulemaking that would include oral fluid testing as an alternative to urine testing for purposes of the DOT’s drug testing program, with a goal of improving the integrity and effectiveness of the drug testing program, along with potential cost savings to regulated parties.

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Any changes to drug testing programs may reduce the number of available drivers.

We currently perform urine testing.

Finally, federal drug regulators have announced a proposal to add fentanyl to a drug testing panel that would detect the use of such drug among safety-sensitive federal employees, which would include truck drivers if adopted by the DOT.

Currently, fentanyl testing is expected to be added to the urine panel beginning as soon as July 2025.

We currently perform urine testing and will continue to monitor any developments in this area to ensure compliance.

Finally, federal drug regulators have announced a proposal to add fentanyl and norfentanyl to a drug testing panel that would detect the use of such drugs among safety-sensitive federal employees, which would include truck drivers if adopted by the DOT.

Currently, fentanyl and norfentanyl testing are expected to be added to the urine panel at some point in the near future.

Other rules have been proposed or made final by the FMCSA, including a rule setting forth minimum driver training standards for new drivers applying for commercial driver’s licenses for the first time and to experienced drivers upgrading their licenses or seeking certain endorsements, including a hazardous materials endorsement, known as the Entry-Level Driver Training regulations.

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We are also required to comply with this rule in the course of operating our driving schools.

The effects of these rules may result in a decrease in fleet production and driver availability or an increase in the time and expense required to operate or expand our driving academies and driver training programs (or both), any of which could adversely affect our business, operations or profitability.

In February 2023, the FMCSA issued a supplemental notice of proposed rulemaking requesting additional information on automated driving systems (“ADS”) and seeking comment on regulatory approaches that would enable it to obtain relevant safety information and the current and anticipated size of the population of carriers operating ADS-equipped CMVs.

Public comment on the supplemental notice closed in March 2023, and it remains to be seen what, if any, final rules will stem therefrom.

In June 2023, the FMCSA and the National Highway Traffic Safety Administration ("NHTSA") issued a joint proposed rule that would require automated emergency braking on all new heavy-duty trucks.

Additionally, in April 2023, NHTSA issued an advance notice of proposed rulemaking that would require side underride guards to be installed on all new heavy-duty trucks.

While a final rule with respect to automatic braking is expected to be issued in 2025, it remains to be seen what, if any, final rules will stem from such proposals.

Our industry is also subject to a number of proposed rules which mandate the use of speed-limiting devices in certain CMVs, including requiring CMVs with a gross weight of more than 26,000 pounds to be equipped with a speed limiter that would limit the vehicle’s speed to no more than 65 M.P.H.

The FMCSA issued a notice of intent to propose a rule during 2023 that will require certain commercial vehicles to be equipped with speed limiters;

however, no final rule was proposed.

It is now expected that the DOT will issue a rule regarding speed-limiting devices in May 2025.

The effect of these rules, to the extent they become effective, could result in a decrease in fleet production and driver availability, either of which could adversely affect our business or operations.

Among other things, the Infrastructure Investment and Jobs Act (“IIJA”), signed into law in 2021, created an apprenticeship program for drivers aged 18 to 20 years old to eventually qualify to drive commercial trucks in interstate commerce.

The FMCSA announced the establishment of this apprenticeship program in 2022 in an effort to begin to help the industry’s ongoing driver shortage.

This program, known as the Safe Driver Apprenticeship Pilot Program (“SDAP”), is open to 18 to 20-year-old drivers who already hold intrastate commercial driver's licenses and sets a strict training regimen for participating drivers and carriers to comply with.

Motor carriers interested in participating must complete an application for participation and submit monthly data on an apprentice’s driver activity, safety outcomes, and additional supporting information.

The SDAP is limited to 3,000 driver-apprentices at any given time, with new driver-apprentices allowed into the program to replace those that leave or age out.

If not renewed, the SDAP is currently set to conclude in November 2025.

In May 2023, the DRIVE Safe Integrity Act of 2023 was introduced, which supports participation in the SDAP and would permit 18- to 20-year-olds to

operate across state lines if data from the SDAP does not indicate such drivers are less safe than current CMV drivers.

Whether this legislation will ultimately become law is uncertain.

It remains unclear whether any regulatory changes will stem from the apprenticeship program.

In December 2025, the FMCSA announced that it could revoke the accreditation of more than 7,000 training schools nationwide for violations regarding the (i) falsification or manipulation of training data, (ii) failure to meet required curriculum standards, facility conditions, or instructor qualifications, or (iii) failure to maintain accurate and complete documentation or refusal to provide records during federal audits or investigations.

Additionally, in May 2025 the FMCSA announced it was strengthening enforcement of its longstanding English proficiency requirements for commercial drivers, which require drivers to be able to (i) read and speak English sufficiently to converse with the general public, (ii) understand highway signs and signals in English, (iii) respond to

official inquiries, and (iv) make entries on reports and records.

Under the strengthened enforcement guidelines, FMCSA inspectors will now place drivers failing to meet the English proficiency requirements out-of-service instead of simply citing non-compliant drivers for violations.

Further, the FMCSA issued an interim rule in September 2025 revising the requirements for the issuance or renewal of CDLs for non-domiciled persons and restricting the issuance or renewal of a CDL for non-domiciled persons without a lawful immigration status or legitimate employment-based reason to hold a CDL.

While the interim rule has been challenged and enforcement has been temporarily stayed by a federal appeals court while it reviews the legality of the interim rule, it remains uncertain whether there will be further changes to the interim rule in response to such challenges or whether it will go into effect as originally issued.

While we have not been notified by the FMCSA that our training schools are at the risk of losing accreditation, the effects of these rules could result in a decrease in driver availability, greater competition for drivers, and/or an increase in recruitment costs, training costs, and training school costs, any of which could adversely affect our business, operations or profitability.

In 2023, the FMCSA issued a supplemental notice of proposed rulemaking requesting additional information on automated driving systems (“ADS”) and seeking comment on regulatory approaches that would enable it to obtain relevant safety information and the current and anticipated size of the population of carriers operating ADS-equipped CMVs.

In 2023, the FMCSA and the National Highway Traffic Safety Administration ("NHTSA") issued a joint proposed rule that would require automated emergency braking on all new heavy-duty trucks.

Additionally, in 2023, NHTSA issued an advance notice of proposed rulemaking that would require side underride guards to be installed on all new trailers and semi-trailers.

It remains to be seen what, if any, final rules will stem from such proposals.

Our industry has faced proposed rules aiming to mandate the use of speed-limiting devices in certain CMVs, including a rule proposed in 2023 that would have required certain commercial vehicles to be equipped with speed limiters;

however, the proposal was ultimately withdrawn in 2025.

A rule mandating speed-limiting devices could result in a decrease in driver availability or otherwise adversely affect our business, operations, or profitability.

In 2022, the FMCSA issued an advance notice of proposed rulemaking that would require fleets and independent contractors to equip their trucks with unique electronic identification systems designed to streamline roadside inspections and provide transparency and accountability in day-to-day trucking operations.

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It remains to be seen what rules, if any, may stem from this notice.

However, in February 2023, the FMCSA announced a new operational test for monitoring and enforcing driver and motor carrier safety compliance standards.

In March 2024, the FMCSA began proof-of-concept testing to determine whether the technology required for electronic identification systems is sufficient and information and data being provided is secure, reliable, and useful for the FMCSA.

In 2022, Senate lawmakers introduced legislation that would set aside grant funds over four years to expand truck parking across the United States.

However, in 2023, the FMCSA announced a new operational test for monitoring and enforcing driver and motor carrier safety compliance standards.

In 2024, the FMCSA began proof-of-concept testing to determine whether the technology required for electronic identification systems is sufficient and information and data being provided is secure, reliable, and useful for the FMCSA.

In 2022, Senate lawmakers introduced legislation that would set aside grant funds over four years to expand truck parking across the U.S.

Such legislation would allow for the creation of new parking areas, the expansion of existing facilities, and the approval of commercial parking at existing weigh stations, rest areas, and park-and-ride facilities.

It would also allow for truck parking expansion at commercial truck stops and travel plazas.

More recently, the DOT has provided funding to increase parking in certain heavily congested areas of Nevada, Ohio, and Wisconsin, and Congressional leaders have included a provision in the House funding bill introduced in June 2024 to allocate $200 million for truck parking projects.

Further, the DOT has provided funding to increase parking in certain heavily congested areas of Nevada, Ohio, Wisconsin, and Florida, while certain Congressional leaders have introduced legislation to allocate an additional $200 million for truck parking projects.

Industry groups are generally in favor of additional funding to improve parking infrastructure, as a lack of available parking has negatively impacted the industry as a whole, including the Company and its subsidiaries.

In 2018, the FMCSA granted a petition filed by the American Trucking Associations and in doing so determined that federal law does preempt California’s wage and hour laws, and interstate truck drivers are not subject to such laws.

In 2018, the FMCSA granted a petition filed by the American Trucking Associations and in doing so determined that federal law preempts California’s wage and hour laws, and interstate truck drivers are not subject to such laws.

The FMCSA’s decision has been appealed by labor groups and multiple lawsuits have been filed in federal courts seeking to overturn the decision.

In 2021, the Ninth Circuit Court of Appeals upheld the FMCSA's determination that federal law does preempt California's meal and rest break laws, as applied to drivers of property-carrying CMVs.

In 2021, the Ninth Circuit Court of Appeals upheld the FMCSA's determination that federal law preempts California's meal and rest break laws, as applied to drivers of property-carrying CMVs.

Other current and future state and local laws, including laws related to employee meal breaks and rest periods, may also vary significantly from federal law.

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Both of these issues are adversely impacting the Company and the industry as a whole, with respect to the practical application of the laws, thereby resulting in additional cost.

As a result, we, along with other companies in the industry, could become subject to an uneven patchwork of laws throughout the United States.

As a result, we, along with other companies in the industry, could become subject to an uneven patchwork of laws throughout the U.S.

In the past, certain legislators have proposed federal legislation to preempt certain state and local laws;

however, passage of such legislation is uncertain.

If federal legislation is not passed, we will either need to comply with the most restrictive state and local laws across our entire network or overhaul our management systems to comply with varying state and local laws.

In the absence of such federal legislation preempting state and local wage and hour laws, we will either need to comply with the most restrictive state and local laws across our entire network

or overhaul our management systems to comply with varying state and local laws.

Either solution could result in increased compliance and labor costs, driver turnover, decreased efficiency, and amplified legal exposure.

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It is unclear if other jurisdictions will adopt this view, or if any legislation will result from this holding.

If so, this could have an adverse effect on the results of operations for our teams.

In November 2023, a bill was introduced to Congress that would eliminate an exclusion of truck drivers from receiving overtime pay.

If so, this could have a material adverse effect on our business, financial condition, and results of operations.

In 2023, a bill was introduced to Congress that would eliminate an exclusion of truck drivers from receiving overtime pay.

If enacted, this could have a material adverse effect on our business, financial condition, and results of operations.

Environmental Regulations

We are subject to various environmental laws and regulations dealing with the hauling and handling of hazardous materials, fuel storage tanks, air emissions from our vehicles and facilities, engine idling, and discharge and retention of storm water.

We are subject to various environmental laws and regulations including those dealing with the hauling and handling of hazardous materials, fuel storage tanks, air emissions from our vehicles and facilities, engine idling, and discharge and retention of storm water.

Our truck terminals often are located in industrial areas where groundwater or other forms of environmental contamination could occur.

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We do not know of any environmental regulations that would have a material effect on our capital expenditures, earnings or competitive position.

Additionally, increasing efforts to control emissions of greenhouse gases may have an adverse effect on us.

We aim to maintain a young fleet age of tractors to ensure we are utilizing technological advancements deployed by

manufacturers to reduce emissions.

Additionally, efforts to control emissions of greenhouse gases may have an adverse effect on us.

We aim to maintain a young fleet age of tractors to ensure we are utilizing technological advancements deployed by manufacturers to reduce emissions.

Although we have instituted programs to monitor and control environmental risks and promote compliance with applicable environmental laws and regulations, if we are involved in a spill or other accident involving hazardous substances, if there are releases of hazardous substances we transport, if soil or groundwater contamination is found at our facilities or results from our operations, or if we are found to be in violation of applicable laws or regulations, we could be subject to cleanup costs and liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a materially adverse effect on our business and operating results.

The NHTSA and the EPA have fuel economy and greenhouse gas standards for medium-and heavy-duty vehicles, including the tractors we use.

The NHTSA and the EPA currently have fuel economy and greenhouse gas standards for medium-and heavy-duty vehicles, including the tractors we use.

In 2016, the NHTSA and the EPA published the final rule mandating that fuel economy and greenhouse gas standards apply to trailers beginning with model year 2018 and tractors beginning with model year 2021;

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The Company’s (or its subsidiaries', as applicable) new tractor purchases in 2025 complied with the emission and fuel consumption reductions required by the standards.

Even though the trailer provisions of the standards have been removed, we will still need to ensure the majority of our fleet is compliant with the California standards (described in further detail below).

In 2022, the EPA adopted a final rule regarding emissions standards of nitrogen oxides for heavy-duty motor vehicles beginning with model year 2027 being more than 80% stronger than current emission standards, with the intent to reduce heavy-duty emissions by almost 50% from 2022 levels by 2045.

The EPA has indicated that the 2022 rule is the first part of a three-part plan focusing on greenhouse gas emissions, which is commonly referred to as the “Cleaner Trucks Initiative,” or the “Clean Trucks Plan.” In 2023, the EPA released the second and third parts to the Clean Trucks Plan, including a proposed rule relating to greenhouse gas (“GHG”) standards for heavy-duty vehicles known as “Phase 3” to the EPA’s GHG program.

A final rule with respect to these regulations was issued in March 2024 and establishes new GHG emission standards for heavy-duty motor vehicles which are phased-in starting with model year 2027 and increasing in stringency annually through model year 2032.

Compliance with these regulations could increase the cost of new tractors and trailers, impair equipment productivity, and increase operating expenses.

These effects, combined with the uncertainty as to the operating results that will be produced by the newly designed diesel engines and the residual values of these vehicles, could increase our costs or otherwise adversely affect our business or operations.

The California Air Resources Board ("CARB") also adopted emission control regulations that will be applicable to all heavy-duty tractors that pull 53-foot or longer box-type trailers within the State of California.

Even though the trailer provisions of the current standards have been removed, we will still need to ensure the majority of our fleet is compliant with the California standards (described in further detail below).

In 2022, the EPA adopted a final rule regarding emissions standards of nitrogen oxides for heavy-duty motor vehicles beginning with model year 2027 being more than 80% stronger than current emission standards, with the intent to reduce heavy duty emissions by almost 50% from 2022 levels by 2045 (the “2022 NOx Rule”).

The EPA had indicated that the 2022 NOx Rule is the first part of a three-part plan focusing on greenhouse gas emissions, which is commonly referred to as the “Cleaner Trucks Initiative,” or the “Clean Trucks Plan.” In 2023, the EPA released the second and third parts to the Clean Trucks Plan, including a proposed rule relating to GHG standards for heavy-duty vehicles known as “Phase 3” to the EPA’s GHG program.

A final rule with respect to these regulations was issued in 2024 and established new GHG emission standards for heavy-duty motor vehicles which are phased-in starting with model year 2027 and increasing in stringency annually through model year 2032 (the “Phase 3 Rule”).

However, in February 2026, the EPA rescinded the 2009 Endangerment Finding (which determined that GHG emissions from motor vehicles threatens public health and welfare under Clean Air Act Section 202(a)) and concurrently repealed all subsequent federal GHG emission standards for light-duty, medium-duty, and heavy-duty vehicles and engines from model years 2012 onward.

The 2022 NOx Rule is expected to remain in effect to the extent based on separate criteria pollutant authority.

The rescission removes federal GHG emission requirements previously applicable to heavy-duty vehicles, including the Phase 3 Rule.

This development may reduce capital expenditures for fleet replacement or upgrades that would have been necessary to meet prior GHG-related standards.

The absence of uniform GHG regulations potentially creates a patchwork of regulations, which when combined with the uncertainty as to the operating results that will be produced if manufacturers are required to re-design diesel engines or make other changes affecting the residual values of vehicles, may increase our costs or otherwise adversely affect our business or operations.

Additionally, the EPA's action may be subject to legal challenges from states, environmental groups, or other stakeholders, which could lead to judicial stays, partial reinstatements, or modifications of the rescission, creating further uncertainty regarding the long-term regulatory landscape.

This uncertainty may affect vehicle manufacturer production timelines, the availability and pricing of compliant equipment,

expectations for fuel efficiency improvements and equipment productivity, compliance costs, operating expenses, and residual values of vehicles which may increase our costs or otherwise adversely affect our business or operations.

The California Air Resources Board ("CARB") also adopted emission control regulations that is applicable to all heavy-duty tractors that pull 53-foot or longer box-type trailers within the State of California.

The tractors and trailers subject to these CARB regulations must be either EPA SmartWay certified or equipped with low-rolling, resistance tires and retrofitted with SmartWay-approved aerodynamic technologies.

In 2019, the California standards that generally align with the federal standards (with some minor additional requirements) became final.

Thus, even though the trailer provisions of the federal standards were removed, we must still ensure the majority of our fleet is compliant with the California standards, which may adversely affect our operating results and profitability.

While the greenhouse gas standards affecting trailers were removed from the federal regulations, we must still ensure the majority of our fleet is compliant with the California standards, which may adversely affect our operating results and profitability.

CARB has also announced its intentions to adopt regulations ensuring that 100% of tractors operating in California are operating with battery or fuel cell-electric engines in the future.

Whether these regulations will ultimately be adopted remains unclear.

Federal and state lawmakers also have proposed a variety of other climate-change proposals, including those that contemplate regulatory limits on carbon emissions and fuel consumption.

Federal and state lawmakers also have proposed a variety of other regulatory limits on carbon emissions and fuel consumption.

Compliance with such regulations could increase the cost of new tractors and trailers, impair equipment productivity, and increase operating expenses.

In 2020 CARB also passed the Advanced Clean Trucks (“ACT”) regulation, which became effective in 2021 and generally requires original equipment manufacturers to begin shifting towards greater production and sales of zero-emission heavy duty tractors starting with model year 2024.

In 2020 CARB passed the Advanced Clean Trucks (“ACT”) regulation, which became effective in 2021 and generally requires original equipment manufacturers to begin shifting towards greater production and sales of zero-emission heavy duty tractors starting with model year 2024.

Under ACT, by 2045, every new tractor sold in California will need to be zero-emission.

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However, in January 2025, given legal challenges to the ACF and a lack of public support for environmental regulation, CARB withdrew its request for the EPA to provide a waiver of certain federal regulations necessary for CARB to impose the environmental restrictions and mandates in the ACF that are more stringent than federal law, which effectively tabled the ACF.

Further, CARB has proposed amendments to repeal portions of the ACF to exempt certain industries previously impacted in addition to pushing back some target dates.

If CARB seeks to adopt and implement the ACF in the future, it could materially and negatively impact our business by increasing our compliance obligations, operating costs, and related expenses.

The periodic testing portion of California’s Clean Truck Check (as a part of CARB’s Clean Truck program), known as Phase 3 of the Clean Truck Check, began in 2024.

Under Phase 3, heavy duty vehicles are subject to periodic emissions testing and annual compliance fees, increasing our operating costs and related expenses.

Additionally, in October 2023, California enacted two bills into law, Senate Bill 253 (“SB 253”) and Senate Bill 261 (“SB 261”), which require certain companies doing business in California to disclose greenhouse gas emissions and climate-related financial risks, with reporting beginning in 2026.

SB 253 requires companies that exceed $1 billion in annual revenue and that do business in California to publicly disclose their GHG emissions, while SB 261 requires companies doing business in California and earning annual revenue exceeding $500 million to report on their climate-related financial risks and measures taken to mitigate such risks on or before January 2026.

Senate Bill 219 (“SB 219”), which was enacted in September 2024, delays the final regulations for SB 253 until July 2025 and permits subsidiaries to file SB 253 reports on a consolidated basis with their parent companies, which previously was only permitted under SB 261.

These laws are currently facing litigation, which could result in delays or modifications to the laws.

Implementation of these additional reporting requirements would result in increased compliance costs and resource utilization.

In order to reduce exhaust emissions, lawmakers, including federal and some states and municipalities have begun to restrict the locations and amount of time where diesel-powered tractors may idle.

Under Phase 3, heavy duty vehicles are subject to periodic emissions testing and annual compliance fees, which, if applicable, could increase our operating costs and related expenses.

In August 2025, the EPA proposed a rule that would partially approve California’s Clean Truck Check, allowing California to require periodic emissions testing for heavy duty vehicles registered in California, but prohibit California from testing heavy duty vehicles that are registered outside of the state.

Currently, we and our subsidiaries have no equipment that is registered with the State of California, meaning we would be exempt from the Clean Truck Check testing requirements if the rule currently proposed by the EPA were finalized.

SB 253 requires companies that exceed $1 billion in annual revenue and that do business in California to publicly disclose their GHG emissions with initial reporting due on or before August 10, 2026, while SB 261 requires companies doing business in California and earning annual revenue exceeding $500 million to report on their climate-related financial risks and measures taken to mitigate such risks.

The reporting deadline under SB 261 was originally targeted for January 2026, but legal challenges and ongoing court proceedings have prevented California from enforcing SB 261 as originally intended, and it remains unclear whether SB 261 will ultimately go into effect, and if so, when reporting will commence.

Implementation of SB 253 and SB 261 or additional reporting requirements would result in increased compliance costs and resource utilization.

In order to reduce exhaust emissions, lawmakers, including federal and some states and municipalities continue to restrict the locations and amount of time where diesel-powered tractors may idle.

These restrictions could force us to purchase on-board power units that do not require the engine to idle or to alter our drivers' behavior, which could result in a decrease in productivity or increase in driver turnover.

Complying with these environmental regulations and any future GHG regulations enacted by CARB, the EPA, the NHTSA and/or any other state or federal governing body has increased and will likely continue to increase the cost of our new tractors, may increase the cost of new trailers, may require us to retrofit certain of our trailers, may increase our maintenance costs, and could impair equipment productivity and increase our operating costs, particularly if such costs are not offset by potential fuel savings.

These adverse effects, combined with the uncertainty as to the reliability of the newly designed diesel engines and the residual values of our equipment, could materially increase our costs or otherwise adversely affect our business or operations.

These effects, combined with the uncertainty of any future GHG regulations enacted by CARB, the EPA, the NHTSA and/or any other state or federal governing body has increased and will likely continue to increase the cost of our new tractors, may increase the cost of new trailers, may require us to retrofit certain of our trailers, may increase our maintenance costs, and could impair equipment productivity and increase our operating costs, particularly if such costs are not offset by potential fuel savings.

These adverse effects, combined with the uncertainty as to whether manufacturers will be required to re-design diesel engines or make other changes affecting the residual values of our equipment, could materially increase our costs or otherwise adversely affect our business or operations.

We cannot predict, however, the extent to which our operations and productivity will be impacted.

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In 2020, the FDA released its “New Era of Smarter Food Safety” blueprint, which creates a ten year roadmap to create a more digital, traceable and safer food system.

The Food Traceability Rule is one aspect of the blueprint and has a compliance date for all parties subject to its recordkeeping requirements of January 20, 2026.

The Food Traceability Rule is one aspect of the blueprint and, for all parties subject to its recordkeeping requirements, had an original compliance date of January 20, 2026 that has since been extended to July 20, 2028.

In the event the Company becomes subject to any such recordkeeping requirements, compliance costs may increase.

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Executive and Legislative Climate

Recently, the Trump administration issued a memorandum which directed federal departments and agencies to freeze regulatory actions.

In particular, the memorandum prohibited new rules from being proposed or issued until such are reviewed and approved by heads of departments or agencies appointed under the Trump administration.

Rules previously sent to the Federal Register but not already published are also to be withdrawn to permit additional review and permission to proceed.

Additionally, existing rules could be delayed for up to 60 days to allow for additional review, including the assessment their impacts and allow for public comments.

The Inflation Reduction Act of 2022 contains provisions relating to energy, climate change, and tax reform.

In particular, the Inflation Reduction Act shifts timing for certain tax payments, imposes an excise tax on certain corporate stock buybacks, and creates a 15% corporate alternative minimum tax, which is generally applicable to corporations that reported over $1 billion in profits in each of the three proceeding tax years.

Tax changes in the Inflation Reduction Act, together with changes to any other U.S.

tax laws may have an adverse impact on our business and profitability.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law.

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation for certain property and the business interest expense limitation.

Although we do not expect the OBBBA to have a negative effect on our financial position, results of operations, and cash flows, until certain regulations are promulgated, we may not know the full extent of the OBBBA’s effects on our financial results and financial position.

It is unclear what other legislative initiatives will be signed into law and what changes they may undergo.

However, adoption and implementation could negatively impact our business by increasing our compliance obligations and related expenses.

In January 2023, the Safer Highways and Increased Performance for Interstate Trucking Act (the “SHIP IT Act”) was introduced into the U.S.

In 2023, the Safer Highways and Increased Performance for Interstate Trucking Act (the “SHIP IT Act”) was introduced into the U.S.

House of Representatives.

As proposed, the SHIP IT Act would allow states to issue special permits for overweight vehicles and loads during emergencies, allow drivers to apply for Workforce Innovation and Opportunity Act grants, attempt to recruit truck drivers to the industry through targeted and temporary tax credits, streamline the CDL process in certain respects, and expand access to truck parking and rest areas for commercial drivers.

A similar bill, the Truck Parking Safety Improvement Act, was introduced into the Senate in March 2023 and if enacted as proposed, would dedicate $755 million in funding over the next three years to expand access to truck parking and rest areas for commercial drivers.

A similar bill, the Truck Parking Safety Improvement Act, was introduced into the Senate in 2023 and reintroduced in February 2025.

If enacted, the bill would dedicate $755 million in funding over the following three years to expand access to truck parking and rest areas for commercial drivers.

It remains unclear whether such acts will ultimately become law, however, and what changes they may undergo prior to finalization.

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Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as amended, are available to the public, free of charge, through our Internet website, at http://www.heartlandexpress.com , as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission ("SEC").

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

Information on our

website is not incorporated by reference into this Annual Report.

You may also access and read our filings with the SEC without charge through the SEC's website at www.sec.gov.

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 1. Business