What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2025-03-12 compared with 2024-03-13 · 101 added, 58 removed, 164 unchanged (49% of the section changed)

Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is traded on the NASDAQ Global Market under the symbol PTSI.

Our common stock is traded on the NASDAQ Global Market under the symbol PAMT.

As of February 19, 2025, there were approximately 57 holders of record of our common stock.

6 unchanged sentences

No shares were repurchased under the Company’s stock repurchase program during the fourth quarter of 2024.

As of December 31, 2024, 474,016 shares remained available for repurchase under the stock repurchase program.

Securities Authorized for Issuance Under Equity Compensation Plans

14 unchanged sentences

Truckload services are performed by Company divisions that generally utilize Company- owned trucks, long-term contractors, or single-trip contractors to transport loads of freight for customers, while brokerage and logistics services coordinate or facilitate the transport of loads of freight for customers and generally involve the utilization of single-trip contractors.

Both our truckload operations and our brokerage/logistics operations have similar economic characteristics and are impacted by virtually the same economic factors as discussed elsewhere in this Report.

All of the Company's operations are in the motor carrier segment.

Both our truckload operations and our brokerage and logistics operations have similar economic characteristics and are impacted by virtually the same economic factors as discussed elsewhere in this Report.

Based on the Company’s segment identification, interpretation of the aggregation criteria outlined in ASC 280-10-50-11, and the similar qualitative and quantitative economic characteristics of the Company’s operating segments, the operations of the Company are aggregated into a single motor carrier segment.

For both operations, substantially all of our revenue is generated by transporting freight for customers and is predominantly affected by the rates per mile received from our customers, equipment utilization, and our percentage of non-compensated miles.

3 unchanged sentences

Currently, our most challenging costs include fuel, driver recruitment, training, wage and benefit costs, independent broker costs (which we record as purchased transportation), insurance and claims, maintenance, and capital equipment costs.

The Company’s chief operating decision maker, the Chief Executive Officer, utilizes the metrics of net income and operating ratio to evaluate company performance and in competitive analysis when comparing to competing companies.

The accounting policies of the motor carrier segment are the same as those described in the summary of accounting policies found in this report.

For purposes of this report, net income reflects the profitability of our operations by calculating the total earnings after deducting operating expenses, interest expense, income taxes and any other applicable costs from total revenue.

The measure of net income is reported on the consolidated statement of operations as consolidated net (loss) income.

Operating ratio is the measure of our efficiency in managing operating expenses relative to revenue generation and is calculated as total operating expenses as a percentage of total operating revenue.

In discussing our results of operations we use revenue, before fuel surcharge (and operating supplies and expense, net of fuel surcharge), because management believes that eliminating the impact of this sometimes volatile source of revenue allows a more consistent basis for comparing our results of operations from period to period.

11 unchanged sentences

Rent and purchased transportation

Impairment Loss

Insurance and claims

(Gain) on sale or disposal of property

Loss(gain) on sale or disposal of property

Total operating expenses

Operating income

Operating (loss)income

Non-operating income

3 unchanged sentences

For the year ended December 31, 2024, truckload services revenue, before fuel surcharges, decreased 8.4% to $422.0 million as compared to $460.9 million for the year ended December 31, 2023.

The decrease relates primarily to a 5.7% decrease in total miles travelled from 189.5 million during the year ended December 31, 2023 to 178.6 million for the year ended December 31, 2024 and to a 3.2% decrease in our rate per mile, from $2.17 for the year ended December 31, 2023 to $2.10 for the year ended December 31, 2024.

The reduction in total miles was primarily driven by a 3.1% reduction in the average number of trucks operated combined with a 3.5% reduction in average miles driven by each truck during the year ended December 31, 2024 compared to the year ended December 31, 2023.

The reduction in truck count and miles resulted from a less favorable freight market year over year, characterized by an oversupply of available trucks in the market compared to available freight.

Salaries, wages and benefits increased from 37.8% of revenues, before fuel surcharges, during 2023 to 38.9% of revenues, before fuel surcharges, during 2024.

The percentage-based increase relates primarily to the interaction of a decrease in operating revenues with the fixed-cost nature of employing human capital.

Rent and purchased transportation increased from 23.5% of revenues, before fuel surcharges, during 2023 to 26.1% of revenues, before fuel surcharges, during 2024.

The increase was primarily due to a year-over-year increase in the percentage of miles driven by third-party owner-operators as opposed to company-employed drivers and to a lesser extent increased rates paid to third-party carriers for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Depreciation increased from 13.8% of revenues, before fuel surcharges, during 2023 to 23.3% of revenues, before fuel surcharges, during 2024.

The increase is primarily attributed to management’s change in accounting estimates related to the salvage values and useful lives of revenue equipment during the year ended December 31, 2024.

During 2024, the Company conducted a review of its revenue equipment and determined that changes in market conditions and expected asset usage warranted a revision to the estimated useful lives and salvage values of certain equipment.

As a result, during the year ended December 31, 2024, the Company reduced the estimated useful lives of its trailer equipment and lowered the estimated salvage values of revenue equipment to better reflect their expected residual values at the end of their service periods.

This change in accounting estimates increased depreciation expense by approximately $24.7 million and increased basic and diluted loss per share by $0.86, net of tax, for the year ended December 31, 2024.

In addition to the Company’s change in accounting estimate, the year-over-year increase can also be attributed to an increase in the cost for replacement revenue equipment compared to the cost of retired equipment and to the interaction of a decrease in operating revenues with the fixed-cost nature of depreciation expense.

Impairment loss accounted for 1.5% of revenues, before fuel surcharges, during 2024.

The Company has not previously recognized an impairment loss on long-lived assets.

Management determined that market conditions for used revenue equipment had deteriorated since its peak in 2022.

This decline in market conditions prompted the requirement for a recoverability test and subsequent impairment charge against certain asset groups of used trucks and trailers.

Management tested all applicable asset groups and determined specific asset groups of trucks and trailers to be impaired beyond their carrying value.

The impairment of these asset groups resulted in an impairment loss of approximately $6.4 million, or $0.22 loss per share, net of tax, during the year ended December 31, 2024.

No impairment loss was incurred during the year ended December 31, 2023.

Insurance and claims decreased from 6.7% of revenues, before fuel surcharges, during 2023 to 4.6% of revenues, before fuel surcharges, during 2024.

The decrease is primarily attributable to a decrease in auto liability claims incurred during the year ended December 31, 2024 compared to the year ended December 31, 2023.

This decrease was slightly offset by an increase in the rate per mile paid for auto liability insurance during 2024 compared to 2023.

Non-operating income increased from 1.2% of revenues, before fuel surcharges, during 2023 to 1.9% of revenues, before fuel surcharges, during 2024.

This increase resulted primarily from an increase in the market value of our marketable equity securities portfolio and an increase in the Company’s net realized gains from the sale of certain marketable equity securities during the year-ended December 31, 2024 as compared to the year ended December 31, 2023.

Interest expense increased from 1.6% of revenues, before fuel surcharges, during 2023 to 2.9% of revenues, before fuel surcharges, during 2024.

The increase is attributed to the Company’s increased long-term debt from $261.7 million at December 31, 2023 to $325.6 million at December 31, 2024, coupled with an increase in interest rates as the Company’s weighted average interest rate increased from 4.20% in 2023 to 5.00% in 2024.

The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 111.2% for 2024 from 97.7% for 2023.

2023 Compared to 2022

For the year ended December 31, 2023, truckload services revenue, before fuel surcharges, decreased 14.8% to $460.9 million as compared to $540.9 million for the year ended December 31, 2022.

The decrease relates primarily to a 14.2% decrease in our rate per loaded mile, from $2.92 for the year ended December 31, 2022 to $2.51 for the year ended December 31, 2023 and to a 0.8% decrease in loaded miles from 185.0 million for the year ended December 31, 2022 to 183.8 million for the year ended December 31, 2023.

The decrease in rate per loaded mile reflects the challenging freight rate environment across our industry during 2023, while the slight reduction in loaded miles was largely due to the impacts of the automotive plant shutdowns during the UAW strikes in September and October 2023, partially offset by an increase in our average truck count during the current year attributable to the acquisition of Metropolitan Trucking assets in June 2022.

We expect freight rates to generally remain under pressure from customers during 2024 with freight demand continuing to be somewhat impacted by the recent automotive shutdowns and general economic uncertainties.

The decrease in rate per loaded mile reflects the challenging freight rate environment across our industry during 2023, while the slight reduction in loaded miles was largely due to the impacts of the automotive plant shutdowns during the UAW strikes in September and October 2023, partially offset by an increase in our average truck count during 2023 attributable to the acquisition of Metropolitan Trucking assets in June 2022.

Salaries, wages and benefits increased from 31.3% of revenues, before fuel surcharges, during 2022 to 37.8% of revenues, before fuel surcharges, during 2023.

14 unchanged sentences

2022 Compared to 2021

For the year ended December 31, 2022, truckload services revenue, before fuel surcharges, increased 25.9% to $540.9 million as compared to $429.6 million for the year ended December 31, 2021.

The increase relates primarily to a 13.5% increase in our rate per loaded mile, from $2.58 for the year ended December 31, 2021 to $2.92 for the year ended December 31, 2022 and to a 10.9% increase in loaded miles from 166.8 million for the year ended December 31, 2021 to 185.0 million for the year ended December 31, 2022.

Salaries, wages and benefits increased from 30.6% of revenues, before fuel surcharges, during 2021 to 31.3% of revenues, before fuel surcharges, during 2022.

The percentage-based increase relates primarily to the increase in employees combined with a decrease in independent contractors.

Operating supplies and expenses decreased from 8.3% of revenues, before fuel surcharges, during 2021 to 6.8% of revenues, before fuel surcharges, during 2022.

The decrease relates primarily to a decrease in the average surcharge-adjusted fuel price paid per gallon of diesel fuel, due to increased fuel surcharge collections from customers for the year ended December 31, 2022 compared to December 31, 2021.

The decrease also relates to the interaction of expenses with fixed-cost characteristics, such as rents, driver training schools and operating taxes and licenses.

Rent and purchased transportation increased from 24.3% of revenues, before fuel surcharges, during 2021 to 26.0% of revenues, before fuel surcharges, during 2022.

The increase was primarily due to an increase in the rates paid to third-party owner-operators for the year ended December 31, 2022 compared to the year ended December 31, 2021.

Depreciation decreased from 12.5% of revenues, before fuel surcharges, during 2021 to 11.3% of revenues, before fuel surcharges, during 2022.

The decrease relates primarily to the interaction of an increase in operating revenues with the fixed-cost nature of depreciation expense.

Insurance and claims increased from 4.4% of revenues, before fuel surcharges, during 2021 to 6.0% of revenues, before fuel surcharges, during 2022.

This increase relates primarily to an increase in accident and legal reserves, recognized in 2022 as compared to 2021 and to an increase in the premiums paid for auto liability and cargo insurance.

Non-operating income decreased from 1.9% of revenues, before fuel surcharges, during 2021 to 0.5% of revenues, before fuel surcharges, during 2022.

This decrease resulted primarily from a smaller increase in the market value of our marketable equity securities portfolio at December 31, 2022 as compared to December 31, 2021.

Results of Operations - Logistics and Brokerage Services

The following table sets forth, for logistics and brokerage services, the percentage relationship of expense items to operating revenues, before fuel surcharges, for the periods indicated.

Brokerage operations occur specifically in certain divisions;

Brokerage service operations occur specifically in certain divisions;

however, brokerage operations occur throughout the Company in similar operations having substantially similar economic characteristics.

12 unchanged sentences

For the year ended December 31, 2024, logistics and brokerage services revenues, before fuel surcharges, decreased 15.6% to $207.0 million as compared to $245.2 million for the year ended December 31, 2023.

The decrease relates to a reduction in the average rates charged to customers year to year, while total brokered loads remained flat.

The truckload market continues to be negatively impacted by downward rate pressure driven by the challenging truckload rate environment.

Rent and purchased transportation increased from 84.6% of revenues, before fuel surcharges, in 2023 to 86.6% of revenues, before fuel surcharges, in 2024.

The increase results from paying third-party carriers a larger percentage of customer revenue, coupled with the interaction of a decrease in operating revenues with the need for purchased transportation.

The logistics and brokerage services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 94.9% for 2024 from 91.9% for 2023.

2023 Compared to 2022

For the year ended December 31, 2023, logistics and brokerage services revenues, before fuel surcharges, decreased 11.7% to $245.2 million as compared to $277.8 million for the year ended December 31, 2022.

The decrease was primarily related to a 21.4% decrease in revenue per load, partially offset by a 12.3% increase in the number of loads during 2023 as compared to 2022.

The decrease in revenue per load was due to a reduction in rates paid for brokered loads during 2023, as spot market rates were negatively impacted by downward rate pressure driven by the challenging truckload freight rate environment across our industry during 2023.

Rent and purchased transportation increased from 80.8% of revenues, before fuel surcharges, in 2022 to 84.6% of revenues, before fuel surcharges, in 2023.

1 unchanged sentence

2022 Compared to 2021

For the year ended December 31, 2022, logistics and brokerage services revenues, before fuel surcharges, increased 31.3% to $277.8 million as compared to $211.7 million for the year ended December 31, 2021.

The increase was primarily related to a 20.9% increase in the number of loads carried for customers during 2022 as compared to 2021, partially offset by a 3.5% decrease in revenue per load.

Rent and purchased transportation decreased from 82.5% of revenues, before fuel surcharges, in 2021 to 80.8% of revenues, before fuel surcharges, in 2022.

The decrease results from paying third-party carriers a smaller percentage of customer revenue.

Results of Operations - Combined Services

2024 Compared to 2023

Income tax expense was approximately $10.2 million in 2023, resulting in an effective rate of 35.6%, as compared to approximately $28.3 million, or an effective tax rate of 23.8% in 2022.

Income tax benefit was approximately $9.8 million in 2024, resulting in an effective rate of 23.5%, as compared to income tax expense of approximately $10.2 million, or an effective tax rate of 35.6% in 2023.

The effective tax rate is impacted by the effect of state taxes and other factors.

9 unchanged sentences

The major tax jurisdictions in which we operate generally provide for a deficiency assessment statute of limitation period of three years and as a result, the Company’s tax years 2021 and forward remain open to examination in those jurisdictions.

The combined net income for all divisions was $18.4 million, or 2.6% of revenues, before fuel surcharge, for 2023 as compared to the combined net income for all divisions of $90.7 million or 11.1% of revenues, before fuel surcharge, for 2022.

Diluted earnings per share decreased to $0.83 for the year ended December 31, 2023 from $4.04 for the year ended December 31, 2022.

The combined net loss for all divisions was $31.8 million, or 5.1% of revenues, before fuel surcharge, for 2024 as compared to the combined net income for all divisions of $18.4 million or 2.6% of revenues, before fuel surcharge, for 2023.

Diluted (loss) earnings per share decreased to ($1.45) for the year ended December 31, 2024 from $0.83 for the year ended December 31, 2023.

2023 Compared to 2022

1 unchanged sentence

The effective tax rate is impacted by the effect of state taxes and other factors.

In determining whether a tax asset valuation allowance is necessary, management, in accordance with the provisions of ASC 740-10-30, weighs all available evidence, both positive and negative to determine whether, based on the weight of that evidence, a valuation allowance is necessary.

If negative conditions exist which indicate a valuation allowance might be necessary, consideration is then given to what effect the future reversals of existing taxable temporary differences and the availability of tax strategies might have on future taxable income to determine the amount, if any, of the required valuation allowance.

As of December 31, 2023, management determined that the future reversals of existing taxable temporary differences and available tax strategies would generate sufficient future taxable income to realize its tax assets and therefore a valuation allowance was not necessary.

Management also determined that no adjustment to the Company’s consolidated financial statements for uncertain tax positions was required as of December 31, 2022 as management believes that the Company’s tax positions taken in income tax returns filed or to be filed are supported by clear and unambiguous income tax laws.

Additionally, during 2022 and 2021, the Company did not recognize or accrue any interest or penalties related to uncertain income tax positions.

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the position will be sustained on examination by taxing authorities, based on the technical merits of the position.

As of December 31, 2023, an adjustment to the Company’s consolidated financial statements for uncertain tax positions has not been required as management believes that the Company’s tax positions taken in income tax returns filed or to be filed are supported by clear and unambiguous income tax laws.

The Company recognizes interest and penalties related to uncertain income tax positions, if any, in income tax expense.

During 2023 and 2022, the Company has not recognized or accrued any interest or penalties related to uncertain income tax positions.

Diluted earnings per share increased to $4.04 for the year ended December 31, 2022 from $3.35 for the year ended December 31, 2021.

Diluted earnings per share decreased to $0.83 for the year ended December 31, 2023 from $4.04 for the year ended December 31, 2022.

Liquidity and Capital Resources

Our business has required, and will continue to require, a significant investment in new revenue equipment.

Our primary sources of liquidity have been funds provided by operations, proceeds from the sales of revenue equipment, borrowings under our lines of credit, installment notes and investment margin account, and issuances of equity securities.

Our primary sources of liquidity have been funds provided by operations, proceeds from the sales of revenue equipment, borrowings under our lines of credit, installment notes, investment margin account, and issuances of equity securities.

During 2024, we generated $59.0 million in cash from operating activities compared to $114.6 million and $168.8 million in 2023 and 2022, respectively.

Investing activities used $11.3 million in cash during 2023 compared to using $113.5 million and generating $9.3 million in 2022 and 2021, respectively.

Financing activities used $76.8 million in cash during 2023 compared to generating $0.3 million during 2022 and using $92.8 million during 2021.

Investing activities used $100.2 million in cash during 2024 compared to using $11.3 million and $113.5 million in 2023 and 2022, respectively.

Financing activities generated $8.6 million in cash during 2024 compared to using $76.8 million during 2023 and generating $0.3 million during 2022.

See the Consolidated Statements of Cash Flows in Item 8 of this Report.

2 unchanged sentences

During 2024 and 2023, we utilized cash on hand, installment notes, and our lines of credit to finance revenue equipment purchases of approximately $143.5 million and $113.5 million, respectively.

We often finance the acquisition of revenue equipment through installment notes with fixed interest rates and terms ranging from 36 to 84 months.

We often finance the acquisition of revenue equipment through installment notes with fixed interest rates.

At December 31, 2024, the Company’s subsidiaries had combined outstanding indebtedness under such installment notes of $325.6 million.

2 unchanged sentences

These installment notes were payable in monthly installments, ranging from 36 to 84 months at a weighted average interest rate of 4.20%.

In order to maintain our truck and trailer fleet count, it is often necessary to purchase replacement units and place them in service before trade units are removed from service.

The timing of this process often requires the Company to pay for new units without any reduction in price for trade units.

In this situation, the Company later receives payment for the trade units as they are delivered to the equipment vendor and have passed vendor inspection.

During the twelve months ended December 31, 2023 and 2022, the Company received approximately $15.7 million and $0.0 million, respectively, for units delivered for trade.

In order to maintain an adequate pool of available equipment, it is often necessary to purchase replacement equipment and place them in service before trucks and trailers scheduled for replacement are removed from service.

The timing of this process often requires the Company to pay for new equipment before receiving any proceeds from retired equipment, or without any reduction in price for trade units.

In this situation, the Company later receives payment for the equipment scheduled for replacement once they are delivered to the buyer and have passed inspection.

During the twelve months ended December 31, 2024 and 2023, the Company received approximately $36.9 million and $22.6 million, respectively, for disposed revenue equipment.

During 2024, we maintained a revolving line of credit with a borrowing limit of $60.0 million.

1 unchanged sentence

The credit facility also establishes an “unused fee” of 0.25% if average borrowings are less than $18.0 million.

At December 31, 2023, outstanding advances on the line of credit were approximately $0.1 million, including approximately $0.1 million in letters of credit, with availability to borrow $59.9 million.

Trade accounts receivable decreased from $134.7 million at December 31, 2022 to $80.6 million at December 31, 2023.

The decrease relates to a general decrease in freight revenue and fuel surcharge revenue, which flows through the accounts receivable account, during the fourth quarter of 2023 as compared to the freight revenue and fuel surcharge revenue generated during the fourth quarter of 2022.

Marketable equity securities at December 31, 2023 increased approximately $1.5 million as compared to December 31, 2022.

The increase resulted from an increase in the market value of the portfolio by approximately $1.6 million offset by sales of marketable equity securities approximating $0.1 million.

At December 31, 2024, we had no outstanding borrowings against the line of credit and approximately $0.2 million of outstanding letters of credit, with availability to borrow $59.8 million.

Trade accounts receivable remained relatively flat year-over-year, with a balance of $80.0 million at December 31, 2024 compared to $80.6 million at December 31, 2023.

Marketable equity securities at December 31, 2024 decreased approximately $0.6 million as compared to December 31, 2023.

The decrease resulted from the sales of marketable equity securities approximating $3.7 million offset by an increase in the market value of the portfolio by approximately $3.1 million.

At December 31, 2024, the remaining marketable equity securities have a combined cost basis of approximately $27.1 million and a combined fair market value of approximately $42.6 million.

2 unchanged sentences

The holding term of these securities depends largely on the general economic environment, the equity markets, borrowing rates, and the Company's cash requirements.

Revenue equipment at December 31, 2023, which generally consists of trucks, trailers, and revenue equipment accessories such as satellite tracking units and auxiliary power units, increased approximately $51.7 million as compared to December 31, 2022.

The increase relates primarily to the purchase of replacement trucks and trailers.

Accounts payable increased from $48.9 million at December 31, 2022 to $62.7 million at December 31, 2023.

This increase was primarily attributable to new revenue equipment that was invoiced, or delivered, but not yet paid as of December 31, 2023.

This increase was offset by other factors including a decrease in the percentage of miles driven by third-party owner-operators, as opposed to company-employed drivers, a reduction in the bonus accrual and a decrease in amounts accrued for parts at the end of 2023.

Property and equipment increased by approximately $65.4 million from $771.1 as of December 31, 2023 to $836.5 million as of December 31,2024.

This increase is primarily attributable to the purchase of $144.2 million of revenue equipment partially offset by the disposal of approximately $93.8 million of revenue equipment during 2024.

Also contributing to the increase was the purchase of property in El Paso, Texas that will serve as an additional terminal for our truckload operations and the construction of a driver training facility at our corporate headquarters in Tontitown, Arkansas.

Partially offsetting the increase to property and equipment was an impairment loss of $6.4 million which resulted from management’s assessment that the market conditions for used revenue equipment had deteriorated to an extent that required a test for recoverability and subsequent impairment charge against certain asset groups of used trucks and trailers.

Accounts payable decreased from $62.7 million at December 31, 2023 to $31.2 million at December 31, 2024.

This decrease was primarily attributable to payments made during 2024 for new revenue equipment that was invoiced or delivered, but not yet paid as of December 31, 2023.

This decrease was also attributable to a decrease in the amounts payable to third party carriers as of December 31, 2024.

Accounts payable accruals can vary significantly at the end of each reporting period depending on the timing of the actual date of payment in relation to the last day of the reporting period.

Accrued expenses and other liabilities decreased from $16.8 million at December 31, 2023 to $14.6 million at December 31, 2024.

The decrease was primarily related to payments during 2023 of amounts accrued for liability and legal claims at December 31, 2022.

For 2024, we expect to purchase 688 new trucks and 1,548 trailers while continuing to sell or trade equipment that has reached the end of its life cycle, which we expect to result in net capital expenditures of approximately $113.1 million.

The decrease is primarily attributable to a decrease in auto liability claims accrued during the year ended December 31, 2024 compared to auto liability claims accrued for the year ended December 31, 2023.

For 2025, we expect to purchase 293 new trucks and 300 trailers while continuing to sell or trade equipment that has reached the end of its life cycle.

Management believes we will be able to finance our existing needs for working capital over the next twelve months, as well as acquisitions of revenue equipment and any other asset acquisitions or capital transactions during such period, with cash balances, cash flows from operations, and borrowings believed to be available from financing sources.

26 unchanged sentences

Future changes in our estimated useful life or salvage value estimates, or fluctuations in market value that are not reflected in current estimates, could have a material effect on the Company’s consolidated financial statements.

During the year ended December 31, 2024, the Company conducted a review of its revenue equipment and determined that changes in market conditions and expected asset usage warranted a revision to the estimated useful lives and salvage values of certain equipment.

In accordance with ASC 250-10-45-17, this change is considered a change in accounting estimate and has been applied prospectively during the year ended December 31, 2024.

The effect of this change increased depreciation expense by $24.7 million and increased basic and diluted loss per share by $0.86 net of tax, for the year ended December 31, 2024.

Impairment of Long-Lived Assets.

We review our property, plant, and equipment and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.

Indicators of impairment may include, but are not limited to, declining operating performance, adverse changes in market conditions, regulatory developments, or planned asset dispositions.

When an indicator of impairment is identified, we perform a recoverability test by comparing the undiscounted future cash flows expected to be generated by the asset group to its carrying amount.

If the carrying amount exceeds the undiscounted cash flows, we recognize an impairment loss equal to the excess of the carrying amount over the asset’s fair value.

Fair value is typically estimated using a combination of market prices (if available), appraisals, or discounted cash flow analyses.

The determination of fair value involves significant management judgment, including assumptions about future revenue growth, operating costs, asset utilization, and discount rates.

During the year ended December 31, 2024, management determined that the market conditions for used revenue equipment had deteriorated since its peak in 2022.

This decline in market conditions prompted the requirement for a recoverability test and subsequent impairment charge against certain asset groups of used trucks and trailers.

Management tested all applicable asset groups and determined certain asset groups of used trucks and trailers to be impaired beyond their carrying value.

The impairment of these asset groups resulted in an impairment loss of approximately $6.4 million, or $0.22 loss per share, net of tax, during the year ended December 31, 2024.

If our business is negatively impacted by prolonged economic downturns, the market for used equipment may decline and our ability to generate cash from the utilization of our equipment could decrease, necessitating future impairment charges.

Conversely, an improvement in market conditions or operational performance may reduce the likelihood of future impairments.

Management will continue to monitor our property, plant, and equipment and other long-lived assets for impairment as necessary.

Additional impairment charges, if any, could have a material impact on our financial position and results of operations.

Claims accruals .

9 unchanged sentences

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 5. Market for Registrant’s Common Equity