Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Exchange Act Rule 15d-15(e). Our disclosure controls and procedures are designed to provide reasonable assurance of achieving the desired control objectives. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at a reasonable assurance level in enabling us to record, process, summarize and report information required to be included in our periodic filings with the Securities and Exchange Commission within the required time period and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
We have confidence in our internal controls and procedures. Nevertheless, our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the internal controls or disclosure procedures and controls will prevent all errors or intentional fraud. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of such internal controls are met. Further, the design of an internal control system must reflect that resource constraints exist, and the benefits of controls must be evaluated relative to their costs. Because of the inherent limitations in all internal control systems, no evaluation of controls can provide absolute assurance that all control issues, misstatements and instances of fraud, if any, have been prevented or detected.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over our financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance to our management and Board of Directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes (i) maintaining records that in reasonable detail accurately and fairly reflect our transactions; (ii) providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; (iii) providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and (iv) providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because (i) changes in conditions may occur or (ii) the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. This assessment is based on the criteria for effective internal control described in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2024.
Management has engaged KPMG LLP (“KPMG”), the independent registered public accounting firm that audited the consolidated financial statements included in this Form 10-K, to attest to and report on the effectiveness of our internal control over financial reporting. KPMG’s report is included herein.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Werner Enterprises, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Werner Enterprises, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity and temporary equity - redeemable noncontrolling interest, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement schedule II valuation and qualifying accounts (collectively, the consolidated financial statements), and our report dated February 26, 2025 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting . Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
Omaha, Nebraska
February 26, 2025
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Changes in Internal Control over Financial Reporting
Management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, concluded that no changes in our internal control over financial reporting occurred during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
During fourth quarter 2024, no information was required to be disclosed in a report on Form 8-K, but not reported.
Director and Officer Trading Arrangements
During fourth quarter 2024, no Company director or officer adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as such terms are defined in Item 408(a) of Regulation S-K.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable
PART III
Certain information required by Part III is omitted from this Form 10-K because we will file a definitive proxy statement pursuant to Regulation 14A (the “Proxy Statement”) not later than 120 days after the end of the fiscal year covered by this Form 10-K, and certain information included therein is incorporated herein by reference. Only those sections of the Proxy Statement which specifically address the items set forth herein are incorporated by reference.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this Item, with the exception of the Code of Corporate Conduct discussed below, is incorporated herein by reference to our Proxy Statement.
Code of Corporate Conduct
We adopted our Code of Corporate Conduct, which is our code of ethics, that applies to our principal executive officer, principal financial officer, principal accounting officer and all other officers, employee associates, and directors. The Code of Corporate Conduct is available on our website, www.werner.com in the “Investors” section. We will post on our website any amendment to, or waiver from, any provision of our Code of Corporate Conduct that applies to our Chief Executive Officer, Chief Financial Officer or Chief Accounting Officer (if any) within four business days of any such event.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference to our Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this Item, with the exception of the equity compensation plan information presented below, is incorporated herein by reference to our Proxy Statement.
Equity Compensation Plan Information
The following table summarizes, as of December 31, 2024, information about compensation plans under which our equity securities are authorized for issuance:
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
Plan Category (a) (b) (c)
Equity compensation plans approved by stockholders 709,497 (1)
$0.00 (2)
3,632,157
(1) Includes 709,082 shares to be issued upon vesting of outstanding restricted stock awards.
(2) As of December 31, 2024, we do not have any outstanding stock options.
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We do not have any equity compensation plans that were not approved by stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Item is incorporated herein by reference to our Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered public accounting firm is KPMG LLP , Omaha, NE , Auditor Firm ID: 185 .
The information required by this Item is incorporated herein by reference to our Proxy Statement.
PART IV
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements and Schedules.
(1) Financial Statements: See Part II, Item 8 hereof.
Page
Report of Independent Registered Public Accounting Firm 27
Consolidated Statements of Income 29
Consolidated Statements of Comprehensive Income 30
Consolidated Balance Sheets 31
Consolidated Statements of Cash Flows 32
Consolidated Statements of Stockholders’ Equity and Temporary Equity - Redeemable Noncontrolling Interest 33
Notes to Consolidated Financial Statements 34
(2) Financial Statement Schedules: The consolidated financial statement schedule set forth under the following caption is included herein. The page reference is to the consecutively numbered pages of this report on Form 10-K.
Page
Schedule II—Valuation and Qualifying Accounts 64
Schedules not listed above have been omitted because they are not applicable or are not required or the information required to be set forth therein is included in the Consolidated Financial Statements or Notes thereto.
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(3) Exhibits: The Company has attached or incorporated by reference herein certain exhibits as specified below pursuant to Rule 12b-32 under the Exchange Act.
Exhibit
Number Description Incorporated by Reference to:
3(i)
Restated Articles of Incorporation of Werner Enterprises, Inc.
Exhibit 3(i) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007
3(ii)
Revised and Restated By-Laws of Werner Enterprises, Inc.
Exhibit 3(ii) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024
4.1
Description of Common Stock
Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019
10.1
Werner Enterprises, Inc. 2023 Long-Term Incentive Plan
Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 9, 2023
10.2
Werner Enterprises, Inc. Amended and Restated Equity Plan
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021
10.3
Non-Employee Director Compensation
Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023
10.4
Werner Enterprises, Inc. Non-qualified Deferred Compensation Plan, effective January 1, 2025
Filed herewith
10. 5
The Executive Nonqualified Excess Plan of Werner Enterprises, Inc., restated
Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017
10.6
Named Executive Officer Compensation
Item 5.02 of the Company’s Current Report on Form 8-K dated February 7, 2022 ; Item 5.02 of the Company’s Current Report on Form 8-K dated February 10, 2023 ; Item 5.02 of the Company ’ s Current Report on Form 8-K dated February 23, 2023 ; Item 5.02 of the Company’s Current Report on Form 8-K dated February 23, 2023 ; Item 5.02 of the Company’s Current Report on Form 8-K dated February 9, 2024 ; Item 5.02 on the Company’s Current Report on Form 8-K dated February 13, 2025
1 0 .7
Form of Restricted Stock Award Agreement
Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 1, 2009
10. 8
Form of Restricted Stock Award Agreement, effective May 9, 2023
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023
10. 9
Form of Performance-Based Restricted Stock Award Agreement, effective February 7, 2022
Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 7, 2022
10. 10
Form of Performance-Based Restricted Stock Award Agreement, effective February 9, 2024
Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 9, 2024
10.1 1
Werner Enterprises, Inc. Change in Control Severance Plan
Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021
10.1 2
Credit Agreement, dated December 20, 2022 by and among Werner Enterprises, Inc., the lenders thereto, Wells Fargo Bank, National Association as Administrative Agent, Swingline Lender, and Issuing Lender, and BMO Harris Bank N.A. as Syndication Agent
Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022
19
Werner Enterprises, Inc. Insider Trading Policy, effective as of February 14, 2025
Filed herewith
21
Subsidiaries of the Registrant
Filed herewith
23.1
Consent of KPMG LLP
Filed herewith
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Exhibit
Number Description Incorporated by Reference to:
31.1
Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 (Section 302 of the Sarbanes-Oxley Act of 2002)
Filed herewith
31.2
Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 (Section 302 of the Sarbanes-Oxley Act of 2002)
Filed herewith
32.1
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
Furnished herewith
32.2
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)
Furnished herewith
97
Werner Enterprises, Inc. Clawback Policy, effective as of December 1, 2023
Exhibit 97 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023
101 The following audited financial information from Werner Enterprises’ Annual Report on Form 10-K for the year ended December 31, 2024, formatted in iXBRL (Inline Extensible Business Reporting Language) includes: (i) Consolidated Statements of Income for the years ended December 31, 2024, 2023 and 2022, (ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022, (iii) Consolidated Balance Sheets as of December 31, 2024 and 2023, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022, (v) Consolidated Statements of Stockholders’ Equity and Temporary Equity - Redeemable Noncontrolling Interest for the years ended December 31, 2024, 2023 and 2022, and (vi) the Notes to Consolidated Financial Statements as of December 31, 2024.
104 The cover page from this Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline XBRL (included as Exhibit 101).
ITEM 16. FORM 10-K SUMMARY
Not applicable
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 26th day of February, 2025.
WERNER ENTERPRISES, INC.
By: /s/ Derek J. Leathers
Derek J. Leathers
Chairman, Chief Executive Officer and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on this 26th day of February, 2025.
/s/ Scott C. Arves /s/ Carmen A. Tapio
Scott C. Arves Carmen A. Tapio
Director Director
/s/ Diane K. Duren /s/ Alexi A. Wellman
Diane K. Duren Alexi A. Wellman
Director Director
/s/ Michelle D. Greene /s/ Christopher D. Wikoff
Michelle D. Greene Christopher D. Wikoff
Director Executive Vice President, Treasurer
and Chief Financial Officer (Principal Financial Officer)
/s/ Jack A. Holmes /s/ James L. Johnson
Jack A. Holmes James L. Johnson
Director Executive Vice President and Chief Accounting Officer
(Principal Accounting Officer)
/s/ Michelle D. Livingstone
Michelle D. Livingstone
Director
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SCHEDULE II
WERNER ENTERPRISES, INC.
VALUATION AND QUALIFYING ACCOUNTS
(In thousands) Balance at
Beginning of
Period Charged
(Credited) to
Costs and
Expenses Write-offs
(Recoveries)
of Doubtful
Accounts Balance at
End of
Period
Year ended December 31, 2024:
Allowance for doubtful accounts $ 9,337 $ ( 1,725 ) $ 443 $ 7,169
Year ended December 31, 2023:
Allowance for doubtful accounts $ 10,271 $ 516 $ 1,450 $ 9,337
Year ended December 31, 2022:
Allowance for doubtful accounts $ 9,169 $ 1,956 $ 854 $ 10,271
(In thousands) Balance at
Beginning of
Period Charged to
Costs and
Expenses Write-offs
(Recoveries)
of Doubtful
Accounts Balance at
End of
Period
Year ended December 31, 2024:
Allowance for doubtful student notes $ 22,702 $ 22,490 $ 23,530 $ 21,662
Year ended December 31, 2023:
Allowance for doubtful student notes $ 23,491 $ 22,318 $ 23,107 $ 22,702
Year ended December 31, 2022:
Allowance for doubtful student notes $ 22,911 $ 20,301 $ 19,721 $ 23,491
See report of independent registered public accounting firm.
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