What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-26 compared with 2024-02-26 · 228 added, 217 removed, 786 unchanged (36% of the section changed)

67 unchanged sentences

Loss (gain) on investments in equity securities, net ( 7,930 ) 278 ( 12,195 )

Loss from equity method investment 1,046 — —

Loss (earnings) from equity method investment ( 556 ) 1,046 —

Other ( 162 ) 477 388

20 unchanged sentences

Change in fair value of interest rate swaps, net of tax ( 1,386 ) ( 4,512 ) 6,886

Other comprehensive income, net 1,608 9,312 2,229

Other comprehensive income (loss) ( 8,753 ) 1,608 9,312

Comprehensive income 24,817 113,898 254,892

11 unchanged sentences

Inventories and supplies 14,183 18,077

Prepaid taxes, licenses and permits 16,505 17,699

Prepaid expenses 53,690 54,333

Other current assets 15,327 30,072

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Common stock, $ 0.01 par value, 200,000,000 shares authorized;

80,533,536 shares

80,533,536 shares issued;

61,850,434 and 63,444,681 shares outstanding, respectively

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Loss (gain) on investments in equity securities, net ( 7,930 ) 278 ( 12,195 )

Loss from equity method investment 1,046 — —

Loss (earnings) from equity method investment ( 556 ) 1,046 —

Other ( 9,298 ) ( 7,612 ) ( 13,295 )

38 unchanged sentences

Dividends accrued but not yet paid at end of period 8,659 8,882 8,220

Noncontrolling interest associated with acquisition — — 33,556

Contingent consideration associated with acquisition — ( 800 ) 13,400

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Other comprehensive income — — — 9,312 — 9,312 —

Purchase of 2,297,911 shares of common stock

Repurchases of common stock, 2,710,304 shares

— — — — ( 110,400 ) ( 110,400 ) —

4 unchanged sentences

Non-cash equity compensation expense — 12,486 — — — 12,486 —

Investment in noncontrolling interest — — — — — — 35,322

Purchase accounting adjustments — — — — — ( 1,766 )

Distribution to noncontrolling interest — — — — — — ( 1,572 )

1 unchanged sentence

Net income attributable to Werner — — 112,382 — — 112,382 —

Net income attributable to noncontrolling interest — — — — — — 4,324

Net loss attributable to noncontrolling interest — — — — — — ( 92 )

Other comprehensive income — — — 1,608 — 1,608 —

Purchase of 2,710,304 shares of common stock

— — — — ( 110,400 ) ( 110,400 ) —

Dividends on common stock ($ 0.55 per share)

3 unchanged sentences

Non-cash equity compensation expense — 11,943 — — — 11,943 —

Distribution to noncontrolling interest — — — — — — ( 1,572 )

BALANCE, December 31, 2023 805 134,894 1,953,385 ( 9,684 ) ( 551,061 ) 1,528,339 38,607

1 unchanged sentence

Net loss attributable to noncontrolling interest — — — — — — ( 663 )

Other comprehensive income — — — 1,608 — 1,608 —

Other comprehensive loss — — — ( 8,753 ) — ( 8,753 ) —

Repurchases of common stock, 1,787,810 shares

— — — — ( 67,069 ) ( 67,069 ) —

Dividends on common stock ($ 0.56 per share)

19 unchanged sentences

state regulatory authorities.

Our ten largest customers comprised 48 %, 46 %, and 49 % of our revenues for the years ended December 31, 2023, 2022, and 2021, respectively.

Our largest customer, Dollar General, accounted for 10 % of our total revenues in 2023, and 14 % of our total revenues in 2022 and 2021.

Our ten largest customers comprised 48 % of our revenues for the years ended December 31, 2024 and 2023, and 46 % of our revenues for the year ended December 31, 2022.

Our largest customer, Dollar General, accounted for 11 %, 10 %, and 14 % of our total revenues in 2024, 2023, and 2022, respectively.

Revenues generated by Dollar General are reported in both of our reportable operating segments.

Dollar General accounted for 10 % and 13 % of our accounts receivable, trade balance as of December 31, 2023 and 2022, respectively.

Dollar General accounted for 10 % of our accounts receivable, trade balance as of December 31, 2024 and 2023.

Use of Management Estimates :

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the (i) reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and (ii) reported amounts of revenues and expenses during the reporting period.

The most significant estimates that affect our financial statements include the accrued liabilities for insurance and claims and useful lives and salvage values of property and equipment.

The most significant estimates that affect our financial statements include the accrued liabilities for insurance and claims.

Actual results could differ from those estimates.

Reclassification:

The balance sheet caption formerly known as “prepaid taxes, licenses and permits” has been renamed “prepaid expenses.” In addition, $ 37.8 million of other prepaid expenses have been reclassified from other current assets to prepaid expenses on the consolidated balance sheet as of December 31, 2023.

This reclassification was made to conform to the current financial statement presentation.

Cash and Cash Equivalents :

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Accelerated depreciation methods are used for income tax purposes.

The lives and salvage values assigned to certain assets for financial reporting purposes are different than for income tax purposes.

The lives and salvage values assigned to certain

assets for financial reporting purposes are different than for income tax purposes.

For financial reporting purposes, assets are generally depreciated using the following estimated useful lives and salvage values:

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For the policy year that began August 1, 2022, we were responsible for the first $ 10.0 million per claim on all claims with an annual $ 10.0 million aggregate for claims between $ 10.0 million and $ 20.0 million.

For the policy year that began on August 1, 2020, we were responsible for the first $ 10.0 million per claim with no aggregates.

For the policy year that began August 1, 2021, we were responsible for the first $ 10.0 million per claim on all claims with an annual $ 10.0 million aggregate for claims between $ 10.0 million and $ 15.0 million.

We maintain liability insurance coverage with insurance carriers in excess of the $ 15.0 million per claim.

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Our self-insured retention (“SIR”) for workers’ compensation claims is $ 2.0 million per claim, with premium-based coverage (issued by insurance companies) for claims exceeding this amount.

Our SIR for workers’ compensation claims increased from $ 1.0 million to $ 2.0 million per claim on April 1, 2020.

We also maintain a $ 25.1 million bond for the State of Nebraska and a $ 15.1 million bond for our workers’ compensation insurance carrier.

Under these insurance arrangements, we maintained $ 49.4 million in letters of credit as of December 31, 2023.

Under these insurance arrangements, we maintained $ 4.3 million in letters of credit and $ 46.9 million in additional bonds as of December 31, 2024.

Revenue Recognition:

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Performance awards are excluded from the calculation of dilutive potential common shares until the threshold performance conditions have been satisfied.

There are no differences in the numerators of our computations of basic and diluted earnings per share for any periods presented.

There are no differences in the numerators of

our computations of basic and diluted earnings per share for any periods presented.

The computation of basic and diluted earnings per share is shown below (in thousands, except per share amounts).

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For the years ended December 31, 2024, 2023, and 2022, comprehensive income consists of net income, foreign currency translation adjustments and change in fair value of interest rate swaps.

The components of accumulated other comprehensive loss reported in the consolidated balance sheets as of December 31, 2023 and 2022, consisted of foreign currency translation adjustment losses of $ 10.0 million and $ 16.2 million, respectively, and gains of $ 0.3 million and $ 4.9 million related to changes in fair value of interest rate swaps, net of tax, respectively.

Recently Issued Accounting Pronouncements, Not Yet Effective:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07 Segment Reporting (Topic 280):

The components of accumulated other comprehensive loss reported in the consolidated balance sheets as of December 31, 2024 and 2023, consisted of foreign currency translation adjustment losses of $ 17.4 million and $ 10.0 million, respectively, and losses of $ 1.0 million and gains of $ 0.3 million related to changes in fair value of interest rate swaps, net of tax, respectively.

New Accounting Pronouncements Adopted:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , with the objective of improving financial reporting, primarily through enhanced disclosures about significant segment expenses.

The provisions of this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, using a retrospective approach.

Early adoption is permitted.

We are evaluating the impact of adopting ASU 2023-07, and we expect this ASU to only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition.

On December 31, 2024, we adopted ASU 2023-07 using a retrospective approach.

Adoption of the standard enhanced our reportable segment disclosures, see Note 13 – Segment Information, but did not impact our results of operations, cash flows, and financial condition.

Recently Issued Accounting Pronouncements, Not Yet Effective:

In December 2023, FASB issued ASU 2023-09 Income Taxes (Topic 740):

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The provisions of this update are effective for annual periods beginning after December 15, 2024, using a prospective approach.

Early adoption and retrospective application are permitted.

We are evaluating the impact of adopting ASU 2023-09, and we expect this ASU to only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition.

Retrospective application is permitted.

We are evaluating the impact of adopting ASU 2023-09, and we expect this ASU to impact our disclosures but not our results of operations, cash flows, and financial condition.

In November 2024, the FASB issued ASU 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , requiring public business entities to disclose additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization.

The provisions of this update are effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, using either a prospective or retrospective approach.

We are evaluating the impact of adopting ASU 2024-03, and we expect this ASU to impact our disclosures but not our results of operations, cash flows, and financial condition.

(2) BUSINESS ACQUISITIONS

2022 Business Acquisitions

Developments during the year ended December 31, 2023 related to our 2022 business acquisitions are discussed below.

On November 5, 2022, we acquired 100 % of the equity interests in Reed Transport Services, Inc.

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We incurred transaction costs related to the acquisition, such as legal and professional fees, of $ 0.4 million for the year ended December 31, 2022, which is included in other operating expenses on the consolidated statements of income.

No measurement period adjustments were recorded during the year ended December 31, 2023.

Purchase Price Allocations

We accounted for the ReedTMS and Baylor purchases using the acquisition method of accounting under U.S.

generally accepted accounting principles (GAAP).

The purchase price of each acquisition has been allocated to the assets acquired and liabilities assumed using market data and valuation techniques.

The purchase price allocations for ReedTMS and Baylor were considered final as of June 30, 2023.

The following table summarizes the purchase price allocation for ReedTMS, including any adjustments (in thousands):

November 5, 2022 Opening Balance Sheet

as Reported at

December 31, 2022 Adjustments (1)

November 5, 2022 Opening Balance Sheet

as Reported at

December 31, 2023

Purchase Price

Cash consideration paid $ 116,989 $ — $ 116,989 (2)

Cash and cash equivalents acquired ( 12,120 ) — ( 12,120 )

Contingent consideration arrangement 5,000 ( 800 ) 4,200 (3)

Working capital surplus (deficiency) ( 689 ) 188 ( 501 )

Total purchase price (fair value of consideration) 109,180 ( 612 ) 108,568

Purchase Price Allocation

Current assets 52,531 49 52,580

Property and equipment 35,000 ( 12,485 ) 22,515

Intangible assets 12,000 15,300 27,300

Other non-current assets 7,927 ( 1 ) 7,926

Total assets acquired 107,458 2,863 110,321

Current liabilities ( 45,497 ) ( 389 ) ( 45,886 )

Other long-term liabilities ( 5,622 ) 527 ( 5,095 )

Total liabilities assumed ( 51,119 ) 138 ( 50,981 )

Goodwill $ 52,841 $ ( 3,613 ) $ 49,228

(1) The measurement period adjustments were recorded during the three months ended March 31, 2023.

No material statement of income effects were identified with these adjustments.

(2) Includes $ 0.9 million related to the net present value of future insurance payments.

At closing, $ 11.5 million of the cash consideration was placed in escrow to secure certain indemnification obligations of the sellers and to cover post-closing adjustments.

During the three months ended March 31, 2023, we received $ 2.1 million from escrow for post-closing adjustments.

The remaining balance of the escrow, except for $ 0.5 million, was returned to the sellers.

In exchange, the sellers obtained a $ 10.0 million Standby Letter of Credit with the Company named as beneficiary.

(3) The contingent earnout liability was recorded in other long-term liabilities as of December 31, 2022.

For additional information regarding the valuation of the contingent liability, see Note 6 – Fair Value.

2021 Business Acquisitions

On November 22, 2021, we acquired 100 % of the equity interests in NEHDS Logistics, LLC (“NEHDS”) for a final purchase price of $ 62.3 million after including the impacts of contingent consideration and net working capital changes.

We financed the transaction through a combination of cash on hand and existing credit facilities.

The contingent earnout period related to the NEHDS acquisition ended on December 31, 2022 and did not result in any additional cash payments, as the financial performance goals were not achieved.

This resulted in a $ 2.5 million favorable change to the contingent earnout liability, which was recorded in other operating expenses on the consolidated statements of income for the year ended December 31, 2022.

NEHDS is a final mile residential delivery provider serving customers primarily in the Northeast and Midwest United States markets.

NEHDS delivers primarily big and bulky products (primarily furniture and appliances) using 2-person delivery teams performing residential and commercial deliveries.

The results of operations for NEHDS are included in our consolidated financial statements beginning November 22, 2021.

Revenues generated by NEHDS are reported in Final Mile within our Werner Logistics segment.

We incurred transaction costs related to the acquisition, such as legal and professional fees, of $ 0.6 million for the year ended December 31, 2021, which is included in other operating expenses on the consolidated statements of income.

On July 1, 2021, we acquired an 80 % ownership interest in ECM Associated, LLC ("ECM”) for a final purchase price of $ 141.3 million after net working capital changes and net of cash acquired.

We have an exclusive option to purchase the remaining 20 % ownership interest in ECM upon the occurrence of certain events or after a period of five years following transaction close, based on a fixed multiple of ECM’s average annual adjusted earnings before interest, taxes, depreciation and amortization.

The noncontrolling interest holder also has an option to put the remaining 20 % ownership interest to us on the same terms.

We record the 20 % remaining interest in temporary equity – redeemable noncontrolling interest in the consolidated balance sheets.

We financed the cash transaction through a combination of cash on hand, existing credit facilities, and the addition of a $ 100.0 million unsecured fixed-rate term loan commitment with BMO Harris Bank N.A.

on June 30, 2021.

For more information regarding our debt, see Note 8 – Debt and Credit Facilities.

ECM provides regional truckload carrier services in the Mid-Atlantic, Ohio, and Northeast regions of the United States.

The results of operations for ECM are included in our consolidated financial statements beginning July 1, 2021.

Revenues generated by ECM are reported in our TTS segment.

We incurred transaction costs related to the ECM acquisition, such as legal and professional fees, of $ 1.0 million for the year ended December 31, 2021, which is included in other operating expenses on the consolidated statements of income.

Revenue Recognition

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A customer may submit several shipment orders for transportation services at various times throughout a service agreement term, but each shipment represents a distinct service that is a separately identified performance obligation.

We often provide additional or

ancillary services as part of the shipment (such as loading/unloading and stops in transit) which are not distinct or are not material in the context of the contract;

We often provide additional or ancillary services as part of the shipment (such as loading/unloading and stops in transit) which are not distinct or are not material in the context of the contract;

therefore, the revenues for these services are recognized with the freight transaction price.

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Contract liabilities represent advance consideration received from customers and are recognized as revenues over time as the related performance obligation is satisfied.

At December 31, 2023 and 2022, the balance of contract liabilities was $ 0.9 million.

At December 31, 2024 and 2023, the balance of contract liabilities was $ 1.4 million and $ 0.9 million, respectively.

The amount of revenues recognized in 2024 that was included in the December 31, 2023 contract liability balance was $ 0.9 million.

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(4) GOODWILL AND INTANGIBLE ASSETS

The following table summarizes changes in the carrying amount of goodwill by segment for the years ended December 31, 2023 and 2022 (in thousands):

The following table presents goodwill by segment (in thousands):

TTS Werner Logistics Total

Balance as of December 31, 2022 $ 53,897 $ 78,820 $ 132,717

Goodwill recorded in acquisition of ReedTMS 10,341 42,500 52,841

Goodwill recorded in acquisition of Baylor 5,472 — 5,472

Purchase accounting adjustments (1)

1 unchanged sentence

Balance as of December 31, 2023 $ 46,056 $ 83,048 $ 129,104

Purchase accounting adjustments (1)

( 7,841 ) $ 4,228 ( 3,613 )

Balance as of December 31, 2024 $ 46,056 $ 83,048 $ 129,104

(1) The purchase accounting adjustments consist of post-closing adjustments related to net assets assumed in the acquisitions of NEHDS and ReedTMS for the years ended December 31, 2022 and 2023, respectively.

For additional information regarding the ReedTMS purchase accounting adjustments, see Note 2 – Business Acquisitions.

(1) The purchase accounting adjustments consist of post-closing adjustments related to net assets assumed in the acquisition of ReedTMS.

The following table presents acquired intangible assets (in thousands):

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We have entered into operating leases primarily for real estate.

The leases have terms which range from 1 year to 18 years, and some include options to renew.

The leases have terms which range from 2 years to 18 years, and some include options to renew.

Renewal terms are included in the lease term when it is reasonably certain that we will exercise the option to renew.

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Present value of operating lease liabilities $ 51,758

During the years ended December 31, 2023, 2022, and 2021, right-of-use assets of $ 4.7 million, $ 14.7 million, and $ 8.2 million, respectively, were recognized as non-cash asset additions that resulted from new operating lease liabilities, and we acquired right-of-use assets of $ 8.3 million and $ 15.6 million as a result of our business acquisitions during the years ended December 31, 2022 and 2021, respectively.

During the years ended December 31, 2024, 2023, and 2022, right-of-use assets of $ 26.1 million, $ 4.7 million, and $ 14.7 million, respectively, were recognized as non-cash asset additions that resulted from new operating lease liabilities, and we acquired right-of-use assets of $ 8.3 million as a result of our business acquisitions during the year ended December 31, 2022.

Cash paid for amounts included in the present value of operating lease liabilities was $ 12.1 million, $ 11.1 million, and $ 8.5 million during the years ended December 31, 2024, 2023, and 2022, respectively, and are included in operating cash flows.

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Lessor Operating Leases

We are the lessor of tractors and trailers under operating leases with initial terms of 3 to 8 years.

We are the lessor of tractors and trailers (revenue equipment) under operating leases with initial terms of 1 year to 10 years.

At times, we also lease or sublease real estate to third parties.

We recognize revenue for such leases on a straight-line basis over the term of the lease.

Revenues for the years ended December 31, 2023, 2022, and 2021 were $ 10.9 million, $ 10.7 million, and $ 11.7 million, respectively.

Revenues for the years ended December 31, 2024, 2023, and 2022 were $ 9.6 million, $ 10.9 million, and

$ 10.7 million, respectively.

The following table presents information about the maturities of these operating leases as of December 31, 2024 (in thousands):

Total $ 7,878

The owned assets underlying our leases as lessor primarily consist of revenue equipment.

As of December 31, 2024 and 2023, the gross carrying value of such revenue equipment underlying these leases was $ 61.8 million and $ 62.2 million, respectively, and accumulated depreciation was $ 26.7 million and $ 29.7 million, respectively.

Depreciation expense for these assets was $ 7.4 million, $ 8.2 million, and $ 7.8 million during the years ended December 31, 2024, 2023, and 2022, respectively.

(6) FAIR VALUE

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Value Hierarchy 2024 2023

Other current assets:

Pay-fixed interest rate swaps (1)

2 $ — $ 2,261

Other non-current assets:

Pay-fixed interest rate swaps (1)

Equity securities (2)

1 $ 310 $ 723

Total other non-current assets 1,303 310

Total assets at fair value $ 1,303 $ 2,571

Other current liabilities:

Pay-fixed interest rate swaps (1)

Other long-term liabilities:

Pay-fixed interest rate swaps (1)

2 2,420 1,792

Contingent consideration associated with acquisitions 3 9,315 8,896

(1) Represents our investments in autonomous technology companies.

For additional information regarding the valuation of these equity securities, see Note 7 – Investments.

Total other long-term liabilities 11,735 10,688

Total liabilities at fair value $ 11,869 $ 10,688

(1) Pay-fixed interest rate swaps are measured on a recurring basis by netting the discounted future fixed cash payments and the discounted expected variable cash receipts.

The variable cash receipts are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves.

See Note 8 – Debt and Credit Facilities for further information on our interest rate swaps.

(2) Represents our investment in an autonomous technology company.

For additional information regarding the valuation of this equity security, see Note 7 – Investments.

The following table presents changes in the fair value of our contingent earnout liabilities for the years ended December 31, 2024 and 2023 (in thousands):

Balance as of December 31, 2022 $ 13,400

Contingent consideration associated with the acquisition of Baylor 8,400

Contingent consideration associated with the acquisition of ReedTMS 5,000

Change in fair value (1)

Balance as of December 31, 2022 13,400

Measurement period adjustment associated with the acquisition of ReedTMS (1)

2 unchanged sentences

Balance as of December 31, 2023 8,896

(1) The contingent earnout period related to the NEHDS acquisition ended on December 31, 2022 and did not result in any additional cash payments, as the financial performance goals were not achieved.

Change in fair value 419

Balance as of December 31, 2024 $ 9,315

(1) The measurement period adjustment was recorded in goodwill on the consolidated balance sheet.

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Our ownership interest in Autotech Fund III, L.P.

(“Autotech Fund III”) is accounted for under ASC 323, “ Investments - Equity Method and Joint Ventures .” For additional information regarding the valuation of these investments, see Note 7 – Investments.

(the “Autotech Fund”) is accounted for under ASC 323, “ Investments - Equity Method and Joint Ventures .” For additional information regarding the valuation of these investments, see Note 7 – Investments.

Fair Value of Financial Instruments Not Recorded at Fair Value

Cash and cash equivalents, accounts receivable trade, and accounts payable are short-term in nature and accordingly are carried at amounts that approximate fair value.

The carrying amount of our fixed-rate debt not measured at fair value on a recurring basis was $ 88.8 million and $ 93.8 million as of December 31, 2023 and 2022, respectively.

The estimated fair value of our fixed-rate debt using the income approach, based on its net present value, discounted at our current borrowing rate, was $ 86.7 million and $ 87.2 million as of December 31, 2023 and 2022, respectively (categorized as Level 2 of the fair value hierarchy).

The carrying amount of our variable-rate long-term debt approximates fair value due to the duration of our credit arrangement and the variable interest rate (categorized as Level 2 of the fair value hierarchy).

The carrying amount of our fixed-rate debt not measured at fair value on a recurring basis was $ 88.8 million as of December 31, 2023.

We had no fixed-rate debt outstanding as of December 31, 2024.

The estimated fair value of our fixed-rate debt using the income approach, based on its net present value, discounted at our current borrowing rate, was $ 86.7 million as of December 31, 2023 (categorized as Level 2 of the fair value hierarchy).

The carrying amount of our variable-rate long-term debt approximates fair value due to the duration of our credit arrangement and the variable interest rate.

(7) INVESTMENTS

Equity Investments without Readily Determinable Fair Values

Our strategic equity investments without readily determinable fair values primarily consists of our investment in MLSI, a transportation management systems company.

MLSI is developing a cloud-based transportation management system using MLSI's SaaS technology which we have agreed to license.

These investments are being accounted for under ASC 321 using the measurement alternative, and are recorded in other noncurrent assets on the consolidated balance sheets.

We record changes in the values of these investments based on events that occur that would indicate the values have changed, in loss (gain) on investments in equity securities on the consolidated statements of income.

Our strategic equity investments without readily determinable fair values primarily consist of our investment in MLSI, a transportation management systems company.

MLSI has developed a cloud-based transportation management system using its SaaS technology, and we have obtained a license.

Our investments are being accounted for under ASC 321 using the measurement alternative, and are recorded in other noncurrent assets on the consolidated balance sheets.

We record changes in the values of our investments based on events that occur that would indicate the values have changed, in loss (gain) on investments in equity securities on the consolidated statements of income.

As of December 31, 2024 and 2023, the value of our investment in MLSI was $ 103.9 million and $ 89.8 million, respectively, and the value of our other equity investments without readily determinable fair values was $ 358 thousand and $ 316 thousand, respectively.

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Equity Investments with Readily Determinable Fair Values

We own strategic minority equity investments in autonomous technology companies, which are being accounted for under ASC 321 and are recorded in other noncurrent assets on the consolidated balance sheets.

We record changes in the value of these investments, based on the share prices reported by Nasdaq, in loss (gain) on investments in equity securities on the consolidated statements of income.

As of December 31, 2023 and 2022, the value of these investments was $ 0.3 million and $ 0.7 million, respectively.

For additional information regarding the fair value of these equity investments, see Note 6 – Fair Value.

We own a strategic minority equity investment in an autonomous technology company, which is being accounted for under ASC 321 and is recorded in other noncurrent assets on the consolidated balance sheets.

As of December 31, 2024 and 2023, the value of this investment was $ 0.1 million and $ 0.3 million, respectively.

For additional information regarding the fair value of this equity investment, see Note 6 – Fair Value.

The following table summarizes the activity related to our equity investments with readily determinable fair values during the periods presented (in thousands):

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2024 2023 2022

Loss (gain) on investments in equity securities, net $ 278 $ 16,443 $ ( 12,166 )

Portion of unrealized loss (gain) for the period related to equity securities still held at the reporting date $ 270 $ 16,443 $ ( 12,166 )

Loss on investments in equity securities, net $ 169 $ 278 $ 16,443

Portion of net unrealized loss for the period related to equity securities still held at the reporting date $ 169 $ 270 $ 16,443

Equity Method Investment

In January 2023, we committed to make a $ 20.0 million investment in Autotech Fund III (the “Fund”) pursuant to a limited partnership agreement.

The Fund is managed by Autotech Ventures, a venture capital firm focused on ground transportation technology.

In January 2023, we committed to make a $ 20.0 million investment in the Autotech Fund pursuant to a limited partnership agreement.

The Autotech Fund is managed by Autotech Ventures, a venture capital firm focused on ground transportation technology.

Our interest, which represents an ownership percentage of less than 20 %, is being accounted for under ASC 323, “ Investments - Equity Method and Joint Ventures .” As a limited partner, we will make periodic capital contributions toward this total commitment amount.

We contributed $ 3.4 million to the Fund during the year ended December 31, 2023.

As of December 31, 2023, the value of our investment in the Fund was $ 2.3 million and is recorded in other noncurrent assets on the consolidated balance sheets.

The carrying amount of the Fund as of December 31, 2023 approximates its fair value as of September 30, 2023, as this is the most recent information available to us at this time.

We recognized a loss of $ 1.0 million from the Fund for the year ended December 31, 2023, which is reported in loss from equity method investment on the consolidated statements of income.

As of December 31, 2024 and 2023, the value of our investment in the Autotech Fund was $ 6.7 million and $ 2.3 million, respectively, and is recorded in other noncurrent assets on the consolidated balance sheets.

The carrying amount of the Autotech Fund as of December 31, 2024 approximates its fair value as of September 30, 2024, as this is

the most recent information available to us at this time.

The following table summarizes the activity related to our equity method investment during the periods presented (in thousands):

Years Ended December 31,

2024 2023 2022

Capital contributions $ 3,820 $ 3,385 N/A

Loss (earnings) from equity method investment $ ( 556 ) $ 1,046 N/A

As of December 31, 2024, our cumulative capital contributions in the Autotech Fund were $ 7.2 million.

(8) DEBT AND CREDIT FACILITIES

On December 20, 2022, we entered into a $ 1.075 billion unsecured credit facility with a group of lenders (the “2022 Credit Agreement”), replacing our previous unsecured credit facility with BMO Harris Bank N.A.

(“BMO Harris”), dated May 14, 2019, as amended, and the credit agreement with Wells Fargo Bank, National Association, dated March 25, 2022.

On December 20, 2022, we entered into a $ 1.075 billion unsecured credit facility with a group of lenders (the “2022 Credit Agreement”), replacing our previous credit facilities.

The 2022 Credit Agreement is scheduled to mature on December 20, 2027, and has a $ 100.0 million maximum limit for the aggregate amount of letters of credit issued.

Revolving credit loans drawn under the 2022 Credit Agreement bear interest, at our option, at (i) the Base Rate (the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50 %, or (c) the one-month Term SOFR plus 1.10 %), plus a margin ranging between 0.125 % and 0.750 %, or (ii) Term SOFR plus 0.10 % and a margin ranging between 1.125 % and 1.750 %.

Revolving credit loans drawn under the 2022 Credit Agreement bear interest, at our option, at (i) the Base Rate (the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50 %, or (c) the one-month Term Secured Overnight Financing Rate (“SOFR”) plus 1.10 %), plus a margin ranging between 0.125 % and 0.750 %, or (ii) Term SOFR plus 0.10 % and a margin ranging between 1.125 % and 1.750 %.

Swingline loans drawn under the 2022 Credit Agreement bear interest at the Base Rate, as defined above, plus a margin ranging between 0.125 % and 0.750 %.

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There are no scheduled principal payments due on the 2022 Credit Agreement until the maturity date, and interest is payable in arrears at periodic intervals not to exceed three months.

In July 2023, we entered into four additional variable-for-fixed interest rate swap

agreements for a notional amount of $ 130.0 million to further limit our exposure to increases in interest rates on a portion of our variable-rate indebtedness.

On June 30, 2021, we entered into a $ 100.0 million unsecured fixed-rate term loan commitment with BMO Harris, with quarterly principal payments of $ 1.25 million, which began on September 30, 2021, and a final payment of principal and interest due and payable on May 14, 2024 ("BMO Term Loan").

We are currently planning to repay the remaining outstanding principal balance under the BMO Term Loan in May 2024 using proceeds from the 2022 Credit Agreement.

The outstanding principal balance of the BMO Term Loan bears interest at a fixed rate of 1.28 %, payable quarterly in arrears.

We have entered into variable-for-fixed interest rate swap agreements in order to limit our exposure to increases in interest rates on a portion of our variable-rate indebtedness.

Under the terms of our interest rate swap agreements, we receive monthly variable-rate interest payments based on one-month Term SOFR and make monthly fixed-rate interest payments as specified in the interest rate swap agreements.

We have designated our interest rate swap agreements as cash flow hedges.

Changes in fair value of outstanding derivatives in cash flow hedges are recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income until earnings are impacted by the hedged transactions.

For additional information regarding the valuation of our interest rate swaps, see Note 6 – Fair Value.

Two variable-for-fixed interest rate swap agreements with an aggregate notional amount of $ 150.0 million matured in May 2024.

In August 2024, we entered into a variable-for-fixed interest rate swap agreement with a notional amount of $ 75.0 million, maturing in 2028, and during the three months ended June 30, 2024, we entered into two variable-for-fixed interest rate swap agreements with an aggregate notional amount of $ 150.0 million, maturing in 2027.

On June 30, 2021, we entered into a $ 100.0 million unsecured 1.28 % fixed-rate term loan commitment with BMO Harris, with quarterly principal payments of $ 1.25 million and a final payment of principal and interest due and payable on May 14, 2024 ("BMO Term Loan").

We repaid the remaining $ 86.3 million outstanding principal balance under the BMO Term Loan in May 2024 using proceeds from the 2022 Credit Agreement.

As of December 31, 2024 and 2023, our outstanding debt totaled $ 650.0 million and $ 648.8 million, respectively.

As of December 31, 2023, we had an outstanding revolving credit loan balance of $ 560.0 million under the 2022 Credit Agreement, including (i) $ 280.0 million at a variable interest rate of 6.73 %, (ii) $ 150.0 million which is effectively fixed at 2.88 % with interest rate swap agreements through May 2024, (iii) $ 40.0 million which is effectively fixed at 6.20 % with interest rate swap agreements through July 2025, and (iv) $ 90.0 million which is effectively fixed at 5.87 % with interest rate swap agreements through July 2026.

As of December 31, 2024, our outstanding revolving credit loan balance under the 2022 Credit Agreement, consisted of:

• $ 295.0 million at a variable interest rate of 6.12 %;

• $ 40.0 million which is effectively fixed at 6.45 % with interest rate swap agreements through July 2025;

• $ 90.0 million which is effectively fixed at 6.12 % with interest rate swap agreements through July 2026;

• $ 75.0 million which is effectively fixed at 6.23 % with an interest rate swap agreement through April 2027;

• $ 75.0 million which is effectively fixed at 6.09 % with an interest rate swap agreement through May 2027;

• $ 75.0 million which is effectively fixed at 5.14 % with an interest rate swap agreement through August 2028.

Our total available borrowing capacity under the 2022 Credit Agreement was $ 419.1 million as of December 31, 2024, after considering $ 5.9 million in stand-by letters of credit under which we are obligated.

In addition, as of December 31, 2023, we had $ 88.8 million outstanding under the BMO Term Loan at a fixed interest rate of 1.28 %.

Availability of such funds under the current debt agreements is conditional upon various customary terms and covenants.

Such covenants include, among other things, two financial covenants requiring us (i) not to exceed a maximum ratio of net funded debt to EBITDA and (ii) to exceed a minimum ratio of EBITDA to interest expense.

Availability of such funds under the current debt agreement is conditional upon various customary terms and covenants.

Such covenants include, among other things, two financial covenants requiring us (i) not to exceed a maximum ratio of net funded

debt to EBITDA and (ii) to exceed a minimum ratio of EBITDA to interest expense.

As of December 31, 2024, we were in compliance with these covenants.

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There are no scheduled principal payments due on the promissory note until the maturity date, and interest accrues at 7.5 % compounded annually, with the first accrued interest payment due on January 24, 2028, and at the end of each calendar year thereafter.

The independent contractor notes receivable, MLSI subordinated promissory note, and other notes receivable are included in other current assets and other non-current assets in the consolidated balance sheets.

The independent contractor notes receivable and other notes receivable are included in other current assets and other non-current assets in the consolidated balance sheets.

The MLSI subordinated promissory note is included in other non-current assets in the consolidated balance sheets.

The following table presents our notes receivable (in thousands):

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Deferred income tax assets are more likely than not to be realized as a result of the reversal of deferred income tax liabilities.

We recognized a $ 201 thousand decrease, a $ 54 thousand increase, and a $ 49 thousand increase in the net liability for unrecognized tax benefits for the years ended December 31, 2023, 2022, and 2021, respectively.

We recognized a $ 14 thousand decrease, a $ 201 thousand decrease, and a $ 54 thousand increase in the net liability for unrecognized tax benefits for the years ended December 31, 2024, 2023, and 2022, respectively.

We recognized net interest expense of $ 129 thousand, $ 70 thousand, and $ 42 thousand during 2024, 2023, and 2022, respectively.

If recognized, $ 1.5 million, $ 1.7 million, and $ 2.0 million of unrecognized tax benefits as of December 31, 2024, 2023 and 2022, respectively, would impact our effective tax rate.

Interest of $ 0.5 million as of December 31, 2023 and 2022 has been reflected as a component of the total liability.

Interest of $ 0.7 million as of December 31, 2024 and $ 0.5 million as of December 31, 2023 has been reflected as a component of the total liability.

We expect no other significant increases or decreases for uncertain tax positions during the next 12 months.

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Gross increases – current period tax positions 80 120 320

Settlements ( 531 ) ( 349 ) ( 323 )

Reductions due to lapsed statute of limitations ( 269 ) ( 531 ) ( 349 )

Unrecognized tax benefits, ending balance $ 2,235 $ 2,245 $ 2,495

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The Werner Enterprises, Inc.

2023 Long-term Incentive Plan (the “Equity Plan”), approved by the Company’s shareholders in 2023, provides for grants to employees, non-employee directors, and consultants of the Company in the form of stock options, restricted stock and units (“restricted awards”), unrestricted stock awards, performance awards, and stock appreciation rights.

2023 Long-term Incentive Plan (the “Equity Plan”), approved by the Company’s shareholders in 2023, provides for grants to employees, non-employee directors, and consultants of the Company in the form of stock options, restricted awards, unrestricted stock awards, performance awards, and stock appreciation rights.

The Board of Directors or the Compensation Committee of our Board of Directors determines the terms of each award, including the type, recipients, number of shares subject to and vesting conditions of each award.

No awards of stock options, unrestricted stock, and stock appreciation rights have been issued under the Equity Plan to date.

The maximum number of

shares of common stock that may be awarded under the Equity Plan is 4,000,000 shares.

The maximum number of shares of common stock that may be awarded under the Equity Plan is 4,000,000 shares.

As of December 31, 2024, there were 3,632,157 shares available for granting additional awards.

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Performance awards:

Pre-tax compensation expense $ 1,723 $ 4,690 $ 4,452

Tax benefit 444 1,174 1,113

Performance award expense, net of tax $ 1,279 $ 3,516 $ 3,339

Pre-tax compensation expense (benefit) $ ( 348 ) $ 1,723 $ 4,690

Tax benefit (expense) ( 89 ) 444 1,174

Performance award expense (benefit), net of tax $ ( 259 ) $ 1,279 $ 3,516

We do not have a formal policy for issuing shares upon vesting of restricted and performance awards.

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The 2023 performance awards are earned based upon the level of attainment by the Company of specified performance objectives related to cumulative diluted earnings per share for the two-year period from January 1, 2023 to December 31, 2024.

Shares earned based on cumulative diluted earnings per share may be capped based on the Company’s total shareholder return during the three-year period ended December 31, 2024, relative to the total shareholder return of a peer group of companies for the same period.

Shares earned based on cumulative diluted earnings per share may increase or decrease by 25 % based on the Company’s total shareholder return during the three-year period ended December 31, 2025, relative to the total shareholder return of a peer group of companies for the same period.

The 2024 and 2023 performance awards will vest in one installment on the third anniversary from the respective grant dates.

In January 2024, the Compensation Committee determined the 2021 fiscal year performance objectives were achieved at a level above the target level;

although, shares earned based on cumulative diluted earnings per share were capped based on the Company’s total shareholder return during the three-year period ended December 31, 2023, relative to the total shareholder return of a peer group of companies for the same period.

The additional shares earned above the target are included in the granted shares in the activity table above.

In January 2025, the Compensation Committee

determined the 2022 fiscal year performance objectives were below threshold, thus resulting in no payout.

The unearned shares are included in the forfeited shares in the activity table above.

We estimate the fair value of performance awards based upon the market price of the underlying common stock on the date of grant, reduced by the present value of estimated future dividends because the awards are not entitled to receive dividends prior to vesting.

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Nonqualified Deferred Compensation Plan

The Executive Nonqualified Excess Plan (the “Excess Plan”) is our nonqualified deferred compensation plan for the benefit of eligible key managerial associates whose 401(k) Plan contributions are limited because of IRS regulations affecting highly compensated associates.

Under the terms of the Excess Plan, participants may elect to defer compensation on a pre-tax basis within annual dollar limits we establish.

At December 31, 2023, there were 49 participants in the Excess Plan.

Although our current intention is not to do so, we may also make matching credits and/or profit-sharing credits to participants’ accounts as we so determine each year.

Each participant is fully vested in all deferred compensation and earnings;

The Executive Nonqualified Excess Plan, which was frozen for new elections as of December 31, 2024 (the “Former Excess Plan”), and the Non-Qualified Deferred Compensation Plan, effective January 1, 2025 (the “New Excess Plan”) are our nonqualified deferred compensation plans for the benefit of eligible key managerial associates whose 401(k) Plan contributions are limited because of IRS regulations affecting highly compensated associates.

Under the terms of the New Excess Plan, participants may elect to defer compensation on a pre-tax basis and participants under the Former Excess Plan also had that ability prior to the date such Former Excess Plan was frozen.

At December 31, 2024, there were 47 participants in the Former Excess Plan.

Although our current intention is not to do so, we may also make matching credits and/or profit-sharing credits to participants’ New Excess Plan accounts as we so determine each year.

Under both plans, each participant is fully vested in all deferred compensation and earnings;

however, these amounts are subject to general creditor claims until distributed to the participant.

Under current federal tax law, we are not allowed a current income tax deduction for the compensation deferred by participants, but we are allowed a tax deduction when a distribution payment is made to a participant from the Excess Plan.

The accumulated benefit obligation is included in other long-term liabilities in the consolidated balance sheets.

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The Company pursued an appeal of this verdict, and on May 18, 2023, the Texas Court of Appeals overruled Werner’s appeal and affirmed the trial court’s judgment.

The Company has since filed a Petition for Review with the Texas Supreme Court,

seeking further review of the Texas Court of Appeals decision.

No assurances can be given regarding whether the Texas Supreme Court will accept the Company’s petition to review or the outcome of any such review.

We have been involved in class action litigation in the U.S.

District Court for the District of Nebraska, in which the plaintiffs allege that we owe drivers for unpaid wages under the Fair Labor Standards Act (“FLSA”) and the Nebraska Wage Payment and Collection Act and that we failed to pay minimum wage per hour for drivers in our Career Track Program, related to short break time and sleeper berth time.

The period covered by this class action suit is August 2008 through March 2014.

The case was tried to a jury in May 2017, resulting in a verdict of $ 0.8 million in plaintiffs’ favor on the short break matter and a verdict in our favor on the sleeper berth matter.

As a result of various post-trial motions, the court awarded $ 0.5 million to the plaintiffs for attorney fees and costs.

Plaintiffs appealed the post-verdict amounts awarded by the trial court for fees, costs and liquidated damages, and the Company filed a cross appeal on the verdict that was in plaintiffs’ favor.

The United States Court of Appeals for the Eighth Circuit denied Plaintiffs’ appeal and granted Werner’s appeal, vacating the judgment in favor of the plaintiffs.

The appellate court sent the case back to the trial court for proceedings consistent with the appellate court’s opinion.

On June 22, 2020, the trial court denied Plaintiffs’ request for a new trial and entered judgment in favor of the Company, dismissing the case with prejudice.

On July 21, 2020, Plaintiffs’ counsel filed a notice of appeal of that dismissal.

On August 3, 2022, the Eighth Circuit Court of Appeals vacated the district court’s judgment and remanded the case, for the trial court to determine whether the plaintiffs should be granted a new trial on the short break claim.

On January 10, 2023, the trial court denied Plaintiff’s motion for a new trial and entered judgment in Werner’s favor on all claims.

Plaintiffs again have appealed the case to the Eighth Circuit Court of Appeals.

As of December 31, 2023, we have an accrual for the jury’s award, attorney fees and costs in the short break matter and had not accrued for the sleeper berth matter.

The Company filed a Petition for Review with the Texas Supreme Court and, on August 30, 2024, the Texas Supreme Court granted the Company’s Petition for Review.

Oral argument of the appeal was held on December 3, 2024.

No assurances can be given regarding the outcome of the review.

We are also involved in certain class action litigation in which the plaintiffs allege claims for failure to provide meal and rest breaks, unpaid wages, unauthorized deductions and other items.

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We have two reportable segments – Truckload Transportation Services and Werner Logistics.

The TTS segment consists of two operating units, Dedicated and One-Way Truckload.

These units are aggregated because they have similar economic characteristics and meet the other aggregation criteria described in the accounting guidance for segment reporting.

The TTS reportable segment consists of two operating segments, Dedicated and One-Way Truckload.

These operating segments are aggregated because they have similar economic characteristics and meet the other aggregation criteria described in the accounting guidance for segment reporting.

Dedicated provides truckload services dedicated to a specific customer, generally for a retail distribution center or manufacturing facility, utilizing either dry van or specialized trailers.

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and (iv) the Temperature Controlled fleet provides truckload services for temperature sensitive products over irregular routes utilizing temperature-controlled trailers.

Revenues for the TTS segment include a small amount of non-trucking revenues which consist primarily of the intra-Mexico portion of cross-border shipments delivered to or from Mexico where we utilize a third-party capacity provider.

The Werner Logistics segment is a non-asset-based transportation and logistics provider.

Revenues for the TTS segment include a small amount

of non-trucking revenues which consist primarily of the intra-Mexico portion of cross-border shipments delivered to or from Mexico where we utilize a third-party capacity provider.

The Werner Logistics segment provides non-asset-based transportation and logistics services.

Werner Logistics provides services throughout North America and generates the majority of our non-trucking revenues through three operating units.

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and (iii) Werner Final Mile (“Final Mile”) offers residential and commercial deliveries of large or heavy items using third-party agents, independent contractors, and Company employees with two-person delivery teams operating a liftgate straight truck.

In first quarter 2021, we completed the sale of the Werner Global Logistics (“WGL”) freight forwarding services for international ocean and air shipments to Scan Global Logistics Group, and we realized a $ 1.0 million gain when the transaction closed on February 26, 2021.

We generate other revenues from our driver training schools, transportation-related activities such as third-party equipment maintenance and equipment leasing, and other business activities.

None of these operations meets the quantitative reporting thresholds.

As a result, these operations are grouped in “Other” in the tables below.

“Corporate” includes revenues and expenses that are incidental to our activities and are not attributable to any of our operating segments, including gains and losses on sales of property and equipment not attributable to our operating segments.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

Inter-segment transactions between reporting segments have been recorded at amounts approximating market and are eliminated in consolidation.

The chief operating officer of the Company is our chief operating decision maker (“CODM”).

Our CODM evaluates the operating results of each individual segment, using monthly divisional financial statements, to asses performance and to allocate resources to each segment.

Our divisional financial statements detail the revenues and operating expenses of each individual segment netting to operating income (loss) that allows the CODM to make operational decisions regarding each individual segment.

We do not prepare separate balance sheets by segment and, as a result, assets are not separately identifiable by segment.

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Other depreciation and amortization is allocated to segments based on specific identification or as a percentage of a metric such as average number of tractors.

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

The following tables summarize our segment information (in thousands):

Years Ended December 31,

Year Ended December 31, 2024

Truckload Transportation Services Werner Logistics Total

Revenues from external customers $ 2,123,864 $ 831,337 $ 2,955,201

Inter-segment revenues 14,429 — 14,429

Reportable segment revenues 2,138,293 831,337 2,969,630

Reconciliation of revenues:

Other revenues (1)

Elimination of inter-segment revenues ( 14,429 )

Consolidated revenues $ 3,030,258

Less operating expenses:

Salaries, wages and benefits 922,921 81,565 1,004,486

Fuel 272,570 1,575 274,145

Supplies and maintenance 211,847 9,602 221,449

Taxes and licenses 95,541 983 96,524

Insurance and claims 141,654 3,438 145,092

Depreciation and amortization 261,170 15,176 276,346

Rent and purchased transportation 139,848 714,385 854,233

Communications and utilities 13,884 1,983 15,867

Gains on sales of property and equipment ( 10,993 ) ( 1,090 ) ( 12,083 )

Other segment items (3)

14,685 4,601 19,286

Revenues by Segment

Truckload Transportation Services $ 2,310,810 $ 2,428,686 $ 2,045,073

Werner Logistics 910,433 793,492 622,461

Other 78,063 71,185 66,108

Corporate 1,883 1,833 1,629

Subtotal 3,301,189 3,295,196 2,735,271

Inter-segment eliminations ( 17,690 ) ( 5,218 ) ( 899 )

Total $ 3,283,499 $ 3,289,978 $ 2,734,372

Years Ended December 31,

Reportable segment operating expenses 2,063,127 832,218 2,895,345

Reportable segment operating income (loss) $ 75,166 $ ( 881 ) $ 74,285

Reconciliation of operating income:

Other operating loss (1)

Consolidated operating income $ 66,148

Year Ended December 31, 2023

Truckload Transportation Services Werner Logistics Total

Revenues from external customers $ 2,293,120 $ 910,433 $ 3,203,553

Inter-segment revenues 17,690 — 17,690

Reportable segment revenues 2,310,810 910,433 3,221,243

Reconciliation of revenues:

Other revenues (1)

Elimination of inter-segment revenues ( 17,690 )

Consolidated revenues $ 3,283,499

Less operating expenses:

Salaries, wages and benefits 951,712 89,401 1,041,113

Fuel 341,126 2,336 343,462

Supplies and maintenance 224,988 7,933 232,921

Taxes and licenses 101,149 1,099 102,248

Insurance and claims 134,319 3,895 138,214

Depreciation and amortization 271,245 15,395 286,640

Rent and purchased transportation 130,076 768,793 898,869

Communications and utilities 13,908 3,636 17,544

Gains on sales of property and equipment ( 45,453 ) ( 1,497 ) ( 46,950 )

Other segment items (3)

18,410 3,563 21,973

Operating Income (Loss) by Segment

Truckload Transportation Services $ 169,330 $ 294,555 $ 281,823

Werner Logistics 15,879 36,184 27,873

Other 69 ( 2,604 ) 4,947

Corporate ( 8,862 ) ( 5,059 ) ( 5,497 )

Total $ 176,416 $ 323,076 $ 309,146

Years Ended December 31,

Reportable segment operating expenses 2,141,480 894,554 3,036,034

Reportable segment operating income $ 169,330 $ 15,879 $ 185,209

Reconciliation of operating income:

Other operating loss (1)

Consolidated operating income $ 176,416

Year Ended December 31, 2022

Truckload Transportation Services Werner Logistics Total

Revenues from external customers $ 2,423,468 $ 793,492 $ 3,216,960

Inter-segment revenues 5,218 — 5,218

Reportable segment revenues 2,428,686 793,492 3,222,178

Reconciliation of revenues:

Other revenues (1)

Elimination of inter-segment revenues ( 5,218 )

Consolidated revenues $ 3,289,978

Less operating expenses:

Salaries, wages and benefits 920,166 69,894 990,060

Fuel 430,962 4,292 435,254

Supplies and maintenance 221,821 7,186 229,007

Taxes and licenses 96,461 994 97,455

Insurance and claims 143,914 3,118 147,032

Depreciation and amortization 256,768 9,989 266,757

Rent and purchased transportation 119,506 659,839 779,345

Communications and utilities 13,287 1,683 14,970

Gains on sales of property and equipment ( 85,268 ) ( 2,014 ) ( 87,282 )

Other segment items (3)

16,514 2,327 18,841

Depreciation and Amortization by Segment

Truckload Transportation Services $ 271,245 $ 256,768 $ 245,169

Werner Logistics 15,395 9,989 8,833

Other 11,541 11,258 10,786

Corporate 1,328 1,908 2,912

Total $ 299,509 $ 279,923 $ 267,700

Reportable segment operating expenses 2,134,131 757,308 2,891,439

Reportable segment operating income $ 294,555 $ 36,184 $ 330,739

Reconciliation of operating income:

Other operating loss (1)

Consolidated operating income $ 323,076

(1) Revenues and operating income or loss from segments below the quantitative thresholds for determining reportable segments.

Those segments include driver training schools, transportation-related activities such as third-party equipment maintenance and equipment leasing, other business activities, and corporate related items which are incidental to our activities and are not attributable to any of our operating segments.

(2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.

Inter-segment expenses are included within the amounts shown.

(3) Other segment items for each reportable segment primarily includes costs for professional services.

During 2023 and 2022, other segment items for the Logistics segment were partially offset by net favorable changes of $ 2.7 million and $ 2.5 million , respectively, to the contingent earnout liabilities related to the ReedTMS and NEHDS Logistics, LLC acquisitions, respectively.

Information about the geographic areas in which we conduct business is summarized below (in thousands).

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We generate substantially all of our revenues within the United States or from North American shipments with origins or destinations in the United States.

Our largest customer, Dollar General, accounted for 10 % of our total revenues in 2023 and 14 % in 2022 and 2021.

Our largest customer, Dollar General, accounted for 11 % of our total revenues in 2024, 10 % in 2023, and 14 % in 2022.

Revenues generated by Dollar General are reported in both of our reportable operating segments.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data