31 unchanged sentences
The operating ratio consists of operating expenses expressed as a percentage of operating revenues.
−Removed: The most significant variable expenses that impact the TTS segment are driver salaries and benefits, fuel, fuel taxes (included in taxes and licenses expense), payments to independent contractors (included in rent and purchased transportation expense), supplies and maintenance and insurance and claims.
−Removed: As discussed further in the comparison of operating results for second quarter 2025 to second quarter 2024, several industry-wide issues have caused, and could continue to cause, costs to increase in future periods.
+Added: The most significant
+Added: variable expenses that impact the TTS segment are driver salaries and benefits, fuel, fuel taxes (included in taxes and licenses expense), payments to independent contractors (included in rent and purchased transportation expense), supplies and maintenance and insurance and claims.
+Added: As discussed further in the comparison of operating results for third quarter 2025 to third quarter 2024, several industry-wide issues have caused, and could continue to cause, costs to increase in future periods.
These issues include shortages of drivers or independent contractors, changing fuel prices, changing used truck and trailer pricing, compliance with new or proposed regulations and tightening of the commercial truck liability insurance market.
13 unchanged sentences
Three Months Ended (3ME)
−Removed: June 30, Six Months Ended (6ME)
−Removed: June 30, Percentage Change in Dollar Amounts
+Added: September 30, Nine Months Ended (9ME)
+Added: September 30, Percentage Change in Dollar Amounts
2025 2024 2025 2024 3ME 9ME
12 unchanged sentences
Total operating expenses 784,520 101.7 728,106 97.6 2,189,293 97.9 2,222,785 97.7 7.7 (1.5)
−Removed: Operating income 66,321 8.8 19,611 2.6 60,489 4.1 35,199 2.3 238.2 71.8
+Added: Operating income (loss) (13,021) (1.7) 17,595 2.4 47,468 2.1 52,794 2.3 (174.0) (10.1)
Total other expense, net 8,884 1.1 9,051 1.2 23,671 1.0 22,804 1.0 (1.8) 3.8
−Removed: Income before income taxes 59,090 7.8 12,131 1.6 45,702 3.1 21,446 1.4 387.1 113.1
−Removed: Income tax expense 15,468 2.0 2,931 0.4 12,301 0.8 5,998 0.4 427.7 105.1
−Removed: Net income 43,622 5.8 9,200 1.2 33,401 2.3 15,448 1.0 374.2 116.2
+Added: Income (loss) before income taxes (21,905) (2.8) 8,544 1.2 23,797 1.1 29,990 1.3 (356.4) (20.7)
+Added: Income tax expense (benefit) (822) (0.1) 2,004 0.3 11,479 0.5 8,002 0.3 (141.0) 43.5
+Added: Net income (loss) (21,083) (2.7) 6,540 0.9 12,318 0.6 21,988 1.0 (422.4) (44.0)
Net loss attributable to noncontrolling interest 508 — 25 — 1,071 — 354 — 1,932.0 202.5
−Removed: Net income attributable to Werner $ 44,062 5.9 $ 9,465 1.2 $ 33,964 2.3 $ 15,777 1.0 365.5 115.3
−Removed: The following tables set forth the operating revenues, operating expenses and operating income for the TTS segment and certain statistical data regarding our TTS segment operations, as well as statistical data for One-Way Truckload and Dedicated operations within TTS.
+Added: Net income (loss) attributable to Werner $ (20,575) (2.7) $ 6,565 0.9 $ 13,389 0.6 $ 22,342 1.0 (413.4) (40.1)
+Added: The following tables set forth the operating revenues, operating expenses and operating income (loss) for the TTS segment and certain statistical data regarding our TTS segment operations, as well as statistical data for One-Way Truckload and Dedicated operations within TTS.
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2025 2024 2025 2024
5 unchanged sentences
Operating expenses 533,618 102.7 501,196 95.9 1,489,967 96.8 1,547,553 96.1
−Removed: Operating income $ 64,089 12.4 $ 20,998 3.9 $ 63,173 6.2 $ 41,838 3.8
+Added: Operating income (loss) $ (13,832) (2.7) $ 21,607 4.1 $ 49,341 3.2 $ 63,445 3.9
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
TTS segment 2025 2024 % Change 2025 2024 % Change
26 unchanged sentences
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
2025 2024 2025 2024
7 unchanged sentences
Three Months Ended
−Removed: June 30, Six Months Ended
+Added: September 30, Nine Months Ended
+Added: September 30,
Werner Logistics segment 2025 2024 % Change 2025 2024 % Change
2 unchanged sentences
Total trailers (at quarter end) 4,010 3,475 15.4 % 4,010 3,475 15.4 %
−Removed: Total containers (at quarter end) 200 — N/A 200 — N/A
−Removed: Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
+Added: Total containers (at quarter end) 375 200 87.5 % 375 200 87.5 %
+Added: Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024
Operating Revenues and Operating Profitability
−Removed: Operating reve nues decreased 1.0% for the three months ended June 30, 2025, comp ared to the same period of the prior year.
−Removed: When comparing second quarter 2025 to second quarter 2024, TTS segment reven ues decreased $19.4 million, or 3.6%, and Werner Logistics revenues increased $12.3 million, or 5.9%.
−Removed: We had operating income of $66.3 million in second quarter 2025 compared to $19.6 million in second quarter 2024, and our operating margin percentage increased to 8.8% in second quarter 2025 from 2.6% in second quarter 2024.
−Removed: Our second quarter 2025 consolidated and TTS segment operating results were positively impacted by a $45.7 million liability reversal through insurance and claims expense as a result of a favorable decision related to a lawsuit arising from a December 2014 accident, and a net favorable change of $7.9 million to the contingent earnout liability related to the Baylor Trucking, Inc.
−Removed: The Baylor Trucking, Inc.
−Removed: contingent consideration arrangement was finalized through negotiations in April 2025.
−Removed: For additional information related to this lawsuit and contingent consideration arrangement, see Notes 8 and 5, respectively, in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report.
−Removed: Dedicated retention and pipeline remains strong.
−Removed: The implementation of new Dedicated fleets awarded in first quarter 2025 started in the later half of second quarter 2025, and are continuing to progress into the third quarter as we hire drivers and build the new fleets to targeted levels.
−Removed: Additional Dedicated fleet contracts were awarded in second quarter 2025.
−Removed: One-Way Truckload freight conditions were steady through second quarter 2025, benefiting from pop-up opportunities, with stable volumes continuing into the early stages of the third quarter.
−Removed: The OBBBA, enacted on July 4, 2025, could stimulate consumer demand and industrial investment over time, both of which we believe would benefit freight volumes.
−Removed: Tariff and interest rate impacts remain uncertain for both shippers and consumers.
−Removed: Trucking revenues, net of fuel surcharge, decreased 1.6% in second quart er 2025 compared to second quarter 2024 due to a 1.8% decrease in the average number of tractors in service.
−Removed: TTS average revenues per tractor per week, net of fuel surcharge, increased 0.3%, due primarily to a 2.7% increase in One-Way Truckload revenues per total mile, net of fuel surcharge, partially offset by a 2.3% decrease in One-Way Truckload average total miles per tractor per week.
−Removed: One-Way Truckload revenues per total mile, net of fuel surcharge, increased as recent contractual rate changes became effective.
−Removed: One-Way Truckload average tractors in service decreased 3.5%.
−Removed: We continue to expect One-Way Truckload fleet average revenues per total mile, net of fuel surcharge, to remain flat or increase up to 3% in third quarter 2025 compared to third quarter 2024.
−Removed: Despite inefficiencies from new Dedicated fleet startups during second quarter 2025, Dedicated average revenues per tractor per week, net of fuel surcharge, increased 0.2%.
−Removed: It often takes 90 days or more before new fleets meet targeted levels.
−Removed: We continue to expect Dedicated average revenues per tractor per week, net of fuel surcharge, will remain flat or increase up to 3% in 2025 compared to 2024.
−Removed: TTS had a operating income of $64.1 million in second quarter 2025 compared to $21.0 million in second quarter 2024, and its operating margin percentage increased to 12.4% in second quarter 2025 from 3.9% in second quarter 2024.
−Removed: As discussed above, second quarter 2025 TTS operating results were positively impacted by a favorable decision related to a
−Removed: lawsuit and the finalization of the contingent consideration arrangement in April 2025 related to the Baylor Trucking, Inc.
−Removed: The average number of tractors in service in the TTS segment decreased 1.8% to 7,489 in second qu arter 2025 from 7,630 in second quarter 2024.
−Removed: W e ended second quarter 2025 wi th 7,545 tractors in the TTS segment, a year-over-year increase of 85 tractors compared to the e nd of second quarter 2024 , and a sequential increase of 105 tractors compared to the end of the first quarter 2025.
−Removed: Within TTS, Dedicated ended second quarter 2025 with 4,890 tractors (or 65% of our total TTS segment fleet) compared to 4,825 tractors (or 65%) a year ago.
−Removed: We are slightly lowering our expectation for our TTS segment fleet size at the end of 2025 to increase in a range from 1% to 5% to 1% to 4% when compared to the fleet size at the end of 2024.
−Removed: The One-Way Truckload fleet size increased sequentially in second quarter 2025, driven in part from the fleet meeting temporary capacity needs for select customers.
−Removed: Implementations of new Dedicated fleets remain ongoing, and over the remainder of 2025, growth is expected to be driven more by Dedicated than One-Way Truckload.
+Added: Operating reve nues increased 3.5% for the three months ended September 30, 2025, comp ared to the same period of the prior year.
+Added: When comparing third quarter 2025 to third quarter 2024, TTS segment reven ues decreased $3.0 million, or 0.6%, and Werner Logistics revenues increased $25.8 million, or 12.5%.
+Added: We had an operating loss of $13.0 million in third quarter 2025 compared to $17.6 million operating income in third quarter 2024, and our operating margin percentage decreased to (1.7)% in third quarter 2025 from 2.4% in third quarter 2024.
+Added: TTS segment had an operating loss of $13.8 million in third quarter 2025 compared to $21.6 million operating income in third quarter 2024, and its operating margin percentage decreased to (2.7)% in third quarter 2025 from 4.1% in third quarter 2024.
+Added: Our third quarter 2025 consolidated and TTS segment operating results were negatively impacted by an $18.0 million litigation settlement agreement and $3.4 million of related legal fees.
+Added: In October 2025, we reached an agreement with the plaintiffs in the consolidated class action lawsuits entitled Abarca et al.
+Added: Werner that are pending in the United States District Court for the District of Nebraska, to settle these cases for a combined $18.0 million.
+Added: An accrual for this settlement was recorded as of September 30, 2025.
+Added: The settlement is subject to court approval (see Note 9 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding legal proceedings).
+Added: Werner Logistics had operating income $3.0 million in third quarter 2025 compared to an operating loss of $0.3 million in third quarter 2024, and its operating margin percentage increased to 1.3% in third quarter 2025 from (0.2)% in third quarter 2024.
+Added: The increase in Werner Logistics operating margin was pressured during third quarter 2025, as the conclusion of higher margin project work was replaced with contractual business.
+Added: Dedicated retention and pipeline remains strong, as we are continuing to see steady momentum in adding new business.
+Added: Overall demand was below normal seasonality for most of the third quarter 2025, however we did see improvement in One-Way Truckload demand through September and October 2025.
+Added: The 2025 peak season shipments are projected to be lower while 2025 peak revenue per shipment is expected to be flat compared to 2024.
+Added: Spot freight rates, which have trended positively recently in late September and into October 2025, continue an upward trend which is consistent with normal seasonality.
+Added: Industry capacity has continued to contract following recent regulatory and enforcement actions related to non-domiciled commercial driver's licenses (“CDLs”), B1 Visas, and English Language Proficiency standards.
+Added: As challenging operating conditions continue, we are also seeing an increase in bankruptcies in the trucking industry further limiting capacity.
+Added: Trucking revenues, net of fuel surcharge, increased 0.5% in third quart er 2025 compared to third quarter 2024 due to a 1.2% increase in the average number of tractors in service.
+Added: TTS average revenues per tractor per week, net of fuel surcharge, decreased 0.7%, due primarily to a 4.7% decrease in One-Way Truckload average total miles per tractor per week, partially offset by a 0.4% increase in One-Way Truckload revenues per total mile, net of fuel surcharge.
+Added: One-Way Truckload average tractors in service increased 1.3%.
+Added: We expect One-Way Truckload fleet average revenues per total mile, net of fuel surcharge, to decrease 1% or increase up to 1% in fourth quarter 2025 compared to fourth quarter 2024.
+Added: Although One-Way Truckload average total miles per tractor per week decreased in third quarter 2025, we believe this decrease is temporary as One-Way
+Added: Truckload production has been recovering throughout October 2025.
+Added: Despite inefficiencies from new Dedicated fleet startups during third quarter 2025, Dedicated average revenues per tractor per week, net of fuel surcharge, increased 1.3%.
+Added: We have observed that it often takes 90 days or more before new fleets meet targeted levels.
+Added: We expect Dedicated average revenues per tractor per week, net of fuel surcharge, will remain flat or increase up to 1.5% in 2025 compared to 2024.
+Added: The average number of tractors in service in the TTS segment increased 1.2% to 7,503 in third qu arter 2025 from 7,414 in third quarter 2024.
+Added: W e ended third quarter 2025 and 2024 w ith 7,445 tractors in the TTS segment, flat year-over-year, and a sequential decrease of 100 tractors compared to the end of the second quarter 2025.
+Added: Within TTS, Dedicated ended third quarter 2025 with 4,965 tractors (or 67% of our total TTS segment fleet) compared to 4,905 tractors (or 66%) a year ago.
+Added: We are lowering our expectation for our TTS segment fleet size at the end of 2025 to decrease 2% or remain flat when compared to the fleet size at the end of 2024.
+Added: Implementations of new fleets in Dedicated remain ongoing, and over the remainder of 2025, One-Way Truckload fleet is expected to further decline.
We cannot predict whether future driver shortages, if any, would have a further adverse effect on our fleet size.
If such a driver market shortage were to occur, it could result in further fleet size reductions, and our results of operations could be adversely affected.
−Removed: Trucking fuel surcharge revenues decreased 21.1% to $55.2 million in second quarter 2025 from $70.0 million in second quarter 2024 due primarily to lower average diesel fuel prices and the impact of 10.9 million fewer company tractor miles.
+Added: Trucking fuel surcharge revenues decreased 5.2% to $59.5 million in third quarter 2025 from $62.7 million in third quarter 2024 due primarily to the impact of 7.4 million fewer company tractor miles, partially offset by higher average diesel fuel prices in third quarter 2025.
These revenues represent collections from customers for the increase in fuel and fuel-related expenses, including the fuel component of our independent contractor cost (recorded as rent and purchased transportation expense) and fuel taxes (recorded in taxes and licenses expense), when diesel fuel prices rise.
8 unchanged sentences
Werner Logistics revenues are generated by its three divisions.
−Removed: Werner Logistics recorded revenue and brokered freight expense of $4.7 million in second quarter 2025 and $3.3 million in second quarter 2024 for certain shipments performed by the TTS segment (also recorded as trucking revenue by the TTS segment), and these transactions between reporting segments are eliminated in consolidation.
−Removed: In second quarter 2025, Werner Logistics revenues increased $12.3 million, or 5.9%, compared to second quarter 2024.
−Removed: Truckload Logistics revenues (77% of total Werner Logistics segment revenues) increased $13.9 million, or 9%, in second quarter 2025, driven by a 7% increase in shipments and higher revenue per shipment.
−Removed: The Power Only solution, which utilizes third-party carriers who provide only a driver and a tractor, represented a growing portion of Truckload Logistics operations in second quarter 2025.
−Removed: Power Only revenues increased 17% while traditional brokerage recorded mid-single digit revenue growth in second quarter 2025 compared to second quarter 2024.
−Removed: Intermodal revenues (13% of total Werner Logistics segment revenues) increased $0.7 million, or 3%, in second quarter 2025, due to a 7% increase in shipments, partially offset by a 4% decrease in revenue per shipment.
−Removed: Final Mile revenues (10% of total Werner Logistics segment revenues) decreased $2.4 million, or 10%, in second quarter 2025.
−Removed: Werner Logistics had operating income $4.3 million in second quarter 2025 compared to $0.5 million in second quarter 2024, and its operating margin percentage increased to 2.0% in second quarter 2025 from 0.3% in second quarter 2024, due primarily to volume growth and a reduction in operating expenses.
−Removed: We expect growth in Werner Logistics revenues to continue, as large shippers need additional capacity.
+Added: Werner Logistics recorded revenue and brokered freight expense of $0.2 million in third quarter 2025 and $3.2 million in third quarter 2024 for certain shipments performed by the TTS segment (also recorded as trucking revenue by the TTS segment), and these transactions between reporting segments are eliminated in consolidation.
+Added: In third quarter 2025, Werner Logistics revenues increased $25.8 million, or 12.5%, compared to third quarter 2024.
+Added: Truckload Logistics revenues (75% of total Werner Logistics segment revenues) increased $19.8 million, or 13%, in third quarter 2025, driven by a 12% increase in shipments.
+Added: The Power Only solution, which utilizes third-party carriers who provide only a driver and a tractor, represented a growing portion of Truckload Logistics operations in third quarter 2025.
+Added: Power Only revenues increased 26% while traditional brokerage recorded mid-single digit revenue growth in third quarter 2025 compared to third quarter 2024.
+Added: Truckload Logistics volume in October has weakened and margins have been pressured as purchased transportation costs have increased.
+Added: Intermodal revenues (15% of total Werner Logistics segment revenues) increased $6.4 million, or 23%, in third quarter 2025, due to a 22% increase in shipments and relatively stable revenue per shipment.
+Added: Final Mile revenues (10% of total Werner Logistics segment revenues) decreased $0.3 million, or 1%, in third quarter 2025, but increased 4% sequentially.
Operating Expenses
−Removed: Our operating ratio (operati ng expenses expressed as a percentage of ope rating revenues) was 91.2% in second quarter 2025 compared to 97.4% in second quarter 2024.
+Added: Our operating ratio (operati ng expenses expressed as a percentage of ope rating revenues) was 101.7% in third quarter 2025 compared to 97.6% in third quarter 2024.
Expense items that impacted the overall operating ratio are described on the following pages.
The tables on pages 25 through 27 show the consolidated statements of income in dollars and as a percentage of total operating revenues and the percentage increase or decrease in the dollar amounts of those items compared to the same period of the prior year, as well as the operating ratios, operating margins, and certain statistical information for our two reportable segments, TTS and Werner Logistics.
−Removed: Salaries, wages and benefits decreased $9.3 million or 3.6% in second quarter 2025 compared to second quarter 2024 and decreased 0.9% as a percentage of operating revenues.
−Removed: The lower dollar amount of salaries, wages and benefits expense in the second quarter of 2025 was due primarily to the impact of 10.9 million fewer company tractor miles, lower benefit costs, and decreased non-driver pay.
−Removed: The decrease in non-driver pay was due primarily to a smaller average number of non-driver employees, partially offset by severance expense of $1.3 million from recent cost saving initiatives.
−Removed: Non-driver salaries, wages
−Removed: and benefits in our non-trucking Werner Logistics segment decreased 11% in second quarter 2025 compared to second quarter 2024.
+Added: Salaries, wages and benefits increased $10.4 million or 4.0% in third quarter 2025 compared to third quarter 2024 and increased 0.2% as a percentage of operating revenues.
+Added: The higher dollar amount of salaries, wages and benefits expense in the third quarter of 2025 was due primarily to the impact of an $18.0 million litigation settlement agreement discussed above, partially offset by the impact of 7.4 million fewer company tractor miles and decreased non-driver pay.
+Added: The $18.0 million litigation settlement is included in our TTS segment.
+Added: The decrease in non-driver pay was due primarily to a smaller average number of non-driver employees.
+Added: Non-driver salaries, wages and benefits in our non-trucking Werner Logistics segment decreased 10% in third quarter 2025 compared to third quarter 2024.
We renewed our workers’ compensation insurance coverage on April 1, 2025.
7 unchanged sentences
If such a driver shortage were to occur and driver pay rate increases became necessary to attract and retain drivers, our results of operations would be negatively impacted to the extent that we could not obtain corresponding freight rate increases.
−Removed: Fuel decreased $11.6 million or 16.1% in second quarter 2025 compared to second quarter 2024 and decreased 1.5% as a percentage of operating revenues, due to lower average diesel fuel prices and 10.9 million fewer company tractor miles in second quarter 2025.
−Removed: Average diesel fuel prices were 29 cents per gallon lower in second quarter 2025 than in second quarter 2024 and were 14 cents per gallon lower than in first quarter 2025.
+Added: Fuel decreased $0.8 million or 1.3% in third quarter 2025 compared to third quarter 2024 and decreased 0.4% as a percentage of operating revenues, due to the impact of 7.4 million fewer company tractor miles, partially offset by higher average diesel fuel prices in third quarter 2025.
+Added: Average diesel fuel prices were 5 cents per gallon higher in third quarter 2025 than in third quarter 2024 and were 19 cents per gallon higher than in second quarter 2025.
We continue to employ measures to improve our fuel mpg such as (i) limiting tractor engine idle time by installing auxiliary power units, (ii) optimizing the speed, weight and specifications of our equipment and (iii) implementing mpg-enhancing equipment changes to our fleet including new tractors, more aerodynamic tractor features, idle reduction systems, trailer tire inflation systems, trailer skirts and automated manual transmissions to reduce our fuel gallons purchased.
3 unchanged sentences
The SmartWay Transport Partnership is a national voluntary program developed by the EPA and freight industry representatives to reduce greenhouse gases and air pollution and promote cleaner, more efficient ground freight transportation.
−Removed: For July 2025, the average diesel fuel price per gallon was 2 cents lower than the average diesel fuel price per gallon in July 2024 and 12 cents higher than in third quarter 2024.
+Added: For October 2025, the average diesel fuel price per gallon was 5 cents higher than the average diesel fuel price per gallon in October 2024 and 8 cents higher than in fourth quarter 2024.
Shortages of fuel, increases in fuel prices and petroleum product rationing can have a material adverse effect on our operations and profitability.
We are unable to predict whether fuel price levels will increase or decrease in the future or the extent to which fuel surcharges will be collected from customers.
−Removed: As of June 30, 2025, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.
−Removed: Supplies and maintenance increased $0.3 million or 0.4% in second quarter 2025 compared to second quarter 2024 and increased 0.2% as a percentage of operating revenues.
−Removed: Supplies and maintenance expense increased due primarily to higher driver and placement driver-related costs such as driver advertising and lodging.
−Removed: These increases were partially offset by lower costs for over-the-road tractor maintenance and the impact of 10.9 million fewer company tractor miles in second quarter 2025.
−Removed: Taxes and licenses decreased $2.4 million or 9.4% in second quarter 2025 compared to second quarter 2024 and decreased 0.2% as a percentage of operating revenues due primarily to lower costs for fuel taxes.
−Removed: The decrease in fuel tax expense in the second quarter of 2025 was impacted by lower average diesel fuel prices and 10.9 million fewer company tractor miles.
−Removed: Insurance and claims decreased $38.7 million or 121.4% in second quarter 2025 compared to second quarter 2024 and decreased 5.1% as a percentage of operating revenues due primarily to the impact of a $45.7 million liability reversal through insurance and claims expense as a result of a favorable decision in second quarter 2025 related to an adverse jury verdict rendered on May 17, 2018 for a December 2014 accident, effectively ending the lawsuit in favor of Werner.
−Removed: For additional information related to this lawsuit, see Note 8 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report.
−Removed: The favorable impact of the liability reversal was partially offset by higher expense for liability claims, due primarily to a higher amount of unfavorable reserve development, partially offset by lower expense for new claims.
−Removed: Lower expense for new claims was impacted by decreased cost per claim in second quarter 2025 compared to the same period in 2024.
−Removed: We also incurred insurance and claims expense of $1.0 million for second quarter 2024 for accrued interest related to the adverse jury verdict rendered on May 17, 2018.
−Removed: We continued to accrue pre-tax insurance and claims expense for interest at
−Removed: $0.5 million per month (excluding months where the plaintiffs requested an extension of time to respond to our petition for review) until our appeal was finalized in second quarter 2025.
+Added: As of September 30, 2025, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.
+Added: Supplies and maintenance increased $3.9 million or 6.4% in third quarter 2025 compared to third quarter 2024 and increased 0.3% as a percentage of operating revenues.
+Added: Supplies and maintenance expense increased due primarily to higher costs for tires, tolls, over-the-road trailer maintenance, and driver and placement driver-related costs such as driver advertising and lodging.
+Added: These increases were partially offset by lower costs for over-the-road tractor maintenance and the impact of 7.4 million fewer company tractor miles in third quarter 2025.
+Added: Taxes and licenses decreased $0.4 million or 1.6% in third quarter 2025 compared to third quarter 2024 and decreased 0.2% as a percentage of operating revenues due primarily to lower costs for fuel taxes.
+Added: The decrease in fuel tax expense in the third quarter of 2025 was impacted by 7.4 million fewer company tractor miles.
+Added: Insurance and claims increased $10.4 million or 37.5% in third quarter 2025 compared to third quarter 2024 and increased 1.2% as a percentage of operating revenues.
+Added: We had higher expense for small dollar liability claims, resulting primarily from higher expense for new claims and a lower amount of favorable reserve development.
+Added: Our expense for large dollar liability claims was also higher, primarily due to a higher amount of unfavorable reserve development, partially offset by lower expense for new claims.
+Added: The expense for new claims was impacted by increased cost per claim in third quarter 2025 compared to the same period in 2024.
+Added: We also incurred insurance and claims expense of $1.5 million for third quarter of the prior year for accrued interest related to the adverse jury verdict rendered on May 17, 2018.
+Added: We continued to accrue pre-tax insurance and claims expense for interest at $0.5 million per month (excluding months where the plaintiffs requested an extension of time to respond to our petition for review) until our appeal was finalized in second quarter 2025.
The majority of our insurance and claims expense results from our claim experience and claim development under our self-insurance program;
the remainder results from insurance premiums for claims in excess of our self-insured limits.
−Removed: Our elevated insurance and claims expense is a reflection of the ongoing unprecedented rise in verdicts and litigation settlements across the industry, particularly for larger carriers.
+Added: We believe our elevated insurance and claims expense is a
+Added: reflection of the ongoing unprecedented rise in verdicts and litigation settlements across the industry, particularly for larger carriers.
We ren ewed our liability insurance policies on August 1, 2025, and are responsible for the first $15.0 million per claim on all claims with an annual $7.5 million aggregate for claims between $15.0 million and $20.0 million.
2 unchanged sentences
Our liability insurance premiums for the policy year that began August 1, 2025 are slightly higher than premiums for the previous policy year.
−Removed: Depreciation and amortization expense decreased $1.9 million or 2.6% in second quarter 2025 compared to second quarter 2024 and decreased 0.2% as a percentage of operating revenues due primarily to a decrease in depreciation of tractors, as we had fewer average tractors in service, and technology equipment as we continue to transition to more cloud-based technology solutions.
−Removed: The average age of our tractor fleet remains low by industry standards and was 2.4 years as of June 30, 2025, and the average age of our trailers was 5.5 years.
+Added: Depreciation and amortization expense increased $0.6 million or 0.8% in third quarter 2025 compared to third quarter 2024 and decreased 0.2% as a percentage of operating revenues due primarily to an increase in depreciation of trailers, as we incurred higher costs for recent specialty trailer purchases.
+Added: The increase was partially offset by a decrease in technology equipment depreciation as we continue to transition to more cloud-based technology solutions.
+Added: The average age of our tractor fleet remains low by industry standards and was 2.5 years as of September 30, 2025, and the average age of our trailers was 5.5 years.
We are continuing to invest in new tractors and trailers, technology, and our terminal network in 2025 to improve our driver experience, increase operational efficiency and more effectively manage our maintenance, safety and fuel costs.
−Removed: Rent and purchased transportation expense increased $17.9 million or 8.5% in second quarter 2025 compared to second quarter 2024, and increased 2.6% as a percentage of operating revenues.
+Added: Rent and purchased transportation expense increased $31.4 million or 14.9% in third quarter 2025 compared to third quarter 2024, and increased 3.1% as a percentage of operating revenues.
Rent and purchased transportation expense consists mostly of payments to third-party capacity providers in the Werner Logistics segment and other non-trucking operations, payments to independent contractors in the TTS segment, and cloud-based technology fees.
The payments to third-party capacity providers generally vary depending on changes in the volume of services generated by the Werner Logistics segment.
−Removed: Werner Logistics recorded revenue and brokered freight expense of $4.7 million in second quarter 2025 and $3.3 million in second quarter 2024 for certain shipments performed by the TTS segment (also recorded as trucking revenue by the TTS segment), and these transactions between reporting segments are eliminated in consolidation.
−Removed: Werner Logistics purchased transportation expense increased $11.3 million in second quarter 2025 as a result of higher logistics revenues, and increased to 85.1% as a percentage of Werner Logistics revenues in second quarter 2025 from 84.8% in second quarter 2024.
−Removed: Rent and purchased transportation expense for the TTS segment increased $6.3 million in second quarter 2025 compared to second quarter 2024 due primarily to more independent contractor miles and higher technology-related costs.
−Removed: These increases were partially offset by lower reimbursements to independent contractors because of lower average diesel fuel prices in second quarter 2025.
−Removed: Independent contractor miles increased approximately 1.9 million miles in second quarter 2025 and as a percentage of total miles were 6.0% in second quarter 2025 compared to 4.8% in second quarter 2024.
+Added: Werner Logistics recorded revenue and brokered freight expense of $0.2 million in third quarter 2025 and $3.2 million in third quarter 2024 for certain shipments performed by the TTS segment (also recorded as trucking revenue by the TTS segment), and these transactions between reporting segments are eliminated in consolidation.
+Added: Werner Logistics purchased transportation expense increased $23.4 million in third quarter 2025 as a result of higher logistics revenues, and increased to 85.8% as a percentage of Werner Logistics revenues in third quarter 2025 from 85.2% in third quarter 2024.
+Added: Rent and purchased transportation expense for the TTS segment increased $3.1 million in third quarter 2025 compared to third quarter 2024 due primarily to more independent contractor miles.
+Added: Independent contractor miles increased 1.9 million miles in third quarter 2025 and as a percentage of total miles were 6.4% in third quarter 2025 compared to 5.1% in third quarter 2024.
Because independent contractors supply their own tractors and drivers and are responsible for their operating expenses, the increase in independent contractor miles as a percentage of total miles shifted costs from other expense categories, including (i) salaries, wages and benefits, (ii) fuel, (iii) depreciation, (iv) supplies and maintenance and (v) taxes and licenses to the rent and purchased transportation category.
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These increased expenses could negatively affect our results of operations to the extent that we would not be able to obtain corresponding freight rate increases.
−Removed: Other operating expenses decreased $8.2 million in second quarter 2025 compared to second quarter 2024 and decreased 1.1% as a percentage of operating revenues due primarily to the impact of a $7.9 million net favorable change to the contingent earnout liability in April 2025 related to the Baylor Trucking, Inc.
−Removed: acquisition and higher gains on sales of property and equipment (primarily used tractors and trailers), partially offset by increased bad debt expense and costs associated with professional services.
+Added: Other operating expenses increased $1.1 million in third quarter 2025 compared to third quarter 2024 and increased 0.2% as a percentage of operating revenues due primarily to $3.4 million of legal fees related to the Abarca et al.
+Added: Werner litigation discussed above and increased bad debt expense.
+Added: These increases were partially offset by higher gains on sales of property and equipment (primarily used tractors and trailers) and decreased costs associated with professional services.
Gains on sales of property and equipment are reflected as a reduction of other operating expenses and are reported net of sales-related expenses (which include costs to prepare the equipment for sale).
−Removed: Gains on sales of property and equipment were $5.9 million in second quarter 2025 compared to $2.7 million, which includes $1.8 million from sales of real estate, in second quarter 2024.
−Removed: We sold fewer tractors and trailers in second quarter 2025 compared to second quarter 2024 and
−Removed: realized much higher average gains per tractor and trailer.
+Added: Gains on sales of property and equipment were $4.5 million in third quarter 2025 compared to $2.6 million.
+Added: We sold fewer tractors and trailers in third quarter 2025 compared to third quarter 2024 and realized much higher average gains per tractor and trailer.
Recently, used tractor values have been elevated due largely to tariff uncertainties.
−Removed: As a result, we are adjusting our full-year guidance range for gains on our used equipment from a range of $8 million and $18 million to a range of $12 million to $18 million in 2025.
+Added: We expect used equipment values to remain stable in the near term given manufacturing production constraints and the evolving regulatory environment that will be an incentive towards higher quality used assets, including assets with lower miles and remaining warranties.
+Added: As a result, we are narrowing our full-year guidance range for gains on our used equipment from a range of $12 million and $18 million to a range of $14 million to $16 million in 2025.
Other Expense (Income)
−Removed: Other expense, net of other income, decreased $0.2 million in second quarter 2025 compared to second quarter 2024, due primarily to a $0.9 million increase in the amount of net earnings recognized from our investments (see Note 6 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our investments), partially offset by a $0.6 million increase in net interest expense.
−Removed: Net interest expense increased primarily due to an increase in average debt outstanding.
+Added: Other expense, net of other income, decreased $0.2 million in third quarter 2025 compared to third quarter 2024, due primarily to a $0.7 million decrease in net interest expense, partially offset by a $0.5 million decrease in the amount of net earnings recognized from our investments (see Note 6 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our investments).
+Added: Net interest expense decreased primarily due to a decrease in average interest rates, partially offset by an increase in average debt outstanding.
During the first quarter 2025, we entered into a LSA, which bears interest at a lower rate than the 2022 Credit Agreement (see Note 7 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our credit facilities and interest rate swaps).
−Removed: We continue to expect net interest expense for full-year 2025 to be flat-to-down compared to 2024, higher in the first half and lower in the second half of the year, as we start to benefit from lower interest rates under the LSA.
−Removed: Income Tax Expense
−Removed: Income tax expense increased $12.5 million in second quarter 2025 compared to second quarter 2024 due primarily to higher pre-tax income and an increase in the effective income tax rate.
−Removed: Our effective income tax rate (income taxes expressed as a percentage of income before income taxes) increased to 26.2% in second quarter 2025 compared to 24.2% in second quarter 2024 due primarily to differences in discrete income tax items.
−Removed: We continue to estimate our full year 2025 effective income tax rate to be approximately 25.0% to 26.0%, as we expect a lower effective income tax rate in future quarters.
−Removed: Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
+Added: We continue to expect net interest expense for full-year 2025 to be flat-to-down compared to 2024, as we start to benefit from lower interest rates under the LSA.
+Added: Income Tax Expense (Benefit)
+Added: We had an income tax benefit of $0.8 million in third quarter 2025 compared to income tax expense of $2.0 million in third quarter 2024.
+Added: Our effective income tax rate (income taxes expressed as a percentage of income (loss) before income taxes) decreased to 3.8% in third quarter 2025 compared to 23.5% in third quarter 2024 due primarily to the impact of $4.7 million of unfavorable return to provision adjustments related to changes in deferred tax assets and liabilities for certain acquired entities and a subsidiary located in Mexico.
+Added: We estimate our fourth quarter 2025 effective income tax rate to be approximately 26.0% to 27.0%.
+Added: Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Operating Revenues and Operating Profitability
−Removed: Operating revenues decreased 4.2% for the six months ended June 30, 2025, compared to the same period of the prior year.
−Removed: When comparing the first six months of 2025 to the first six months of 2024, TTS segment revenues decreased $68.7 million, or 6.3%, and Werner Logistics revenues increased $5.3 million, or 1.3%.
+Added: Operating revenues decreased 1.7% for the first nine months of 2025, compared to the same period of the prior year.
+Added: When comparing the first nine months of 2025 to the first nine months of 2024, TTS segment revenues decreased $71.7 million, or 4.5%, and Werner Logistics revenues increased $31.2 million, or 5.0%.
In the TTS segment, trucking revenues, net of fuel surcharge, decreased $41.9 million, due primarily to a 2.5% decrease in average tractors in service and a 0.6% decrease in average revenues per tractor per week, net of fuel surcharge.
−Removed: TTS segment fuel surcharge revenues for the six months ended June 30, 2025 decreased $30.1 million, or 21.1%, when compared to the same period of the prior year due to the impact of 29.6 million fewer company tractor miles and lower average diesel fuel prices.
+Added: TTS segment fuel surcharge revenues for the first nine months 2025 decreased $33.4 million, or 16.2%, when compared to the same period of the prior year due to the impact of 36.9 million fewer company tractor miles and lower average diesel fuel prices.
The increase in Werner Logistics revenues was primarily due to higher volumes in Truckload Logistics.
−Removed: We had operating income of $60.5 million for the six months ended June 30, 2025 compared to $35.2 million for the first six months of 2024, and our operating margin percentage increased to 4.1% for the six months ended June 30, 2025 from 2.3% for the first six months of 2024.
−Removed: As discussed above, consolidated and TTS operating results for the six months ended June 30, 2025 were positively impacted by a favorable decision related to a lawsuit and the finalization of the contingent consideration arrangement in April 2025 related to the Baylor Trucking, Inc.
+Added: We had operating income of $47.5 million for the first nine months of 2025 compared to $52.8 million for the first nine months of 2024, and our operating margin percentage decreased to 2.1% for the first nine months of 2025 from 2.3% for the first nine months of 2024.
+Added: TTS segment had operating income of $49.3 million for the first nine months of 2025 compared to $63.4 million for the first nine months of 2024, and its operating margin percentage decreased to 3.2% for the first nine months of 2025 from 3.9% for the first nine months of 2024.
+Added: Our consolidated and TTS segment operating results for the nine months ended September 30, 2025 were positively impacted by a $45.7 million liability reversal through insurance and claims expense as a result of a favorable decision related to a lawsuit arising from a December 2014 accident, and a net favorable change of $7.9 million to the contingent earnout liability related to the Baylor Trucking, Inc.
+Added: The Baylor Trucking, Inc.
+Added: contingent consideration arrangement was finalized through negotiations in April 2025.
+Added: These positive impacts were partially offset by an $18.0 million settlement agreement and $3.4 million of related legal fees related to the Abarca et al.
+Added: Werner litigation as discussed above .
+Added: For additional information related to legal proceedings and the contingent consideration arrangement, see Notes 9 and 5, respectively, in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report.
+Added: Werner Logistics had operating income of $6.9 million for the first nine months of 2025 compared to an operating loss of $2.1 million for the first nine months of 2024, and its operating margin percentage increased to 1.1% for the first nine months of 2025 from (0.3)% for the first nine months of 2024.
Operating Expenses
−Removed: Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 95.9% for the six months ended June 30, 2025 and 97.7% for the six months ended June 30, 2024.
+Added: Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 97.9% for the nine months ended September 30, 2025 and 97.7% for the nine months ended September 30, 2024.
Expense items that impacted the overall operating ratio are described on the following pages.
The tables on pages 25 through 27 show the consolidated statements of income in dollars and as a percentage of total operating revenues and the percentage increase or decrease in the dollar amounts of those items compared to the same period of the prior year, as well as the operating ratios, operating margins, and certain statistical information for our two reportable segments, TTS and Werner Logistics.
−Removed: Salaries, wages and benefits decreased $31.5 million, or 6.0%, in the first six months of 2025 compared to the same period in 2024 and decreased 0.6% as a percentage of operating revenues to 33.7%.
−Removed: The lower dollar amount of salaries, wages and benefits expense in the first six months of 2025 was due primarily to the impact of 29.6 million fewer company tractor miles, decreased non-driver pay, and lower benefit costs.
−Removed: The decrease in non-driver pay was due primarily to a smaller average number of non-driver employees, partially offset by severance expense of $1.3 million from recent cost saving initiatives.
−Removed: Non-driver salaries, wages and benefits in our non-trucking Werner Logistics segment decreased 13% in the first six months of 2025 compared to the same period in 2024.
−Removed: Fuel decreased $26.1 million, or 17.5%, in the first six months of 2025 compared to the same period in 2024 and decreased 1.4% as a percentage of operating revenues due to lower average diesel fuel prices and 29.6 million fewer company tractor miles in the first six months of 2025.
−Removed: Average diesel fuel prices were 30 cents per gallon lower in the first six months of 2025 than in same period in 2024.
−Removed: Supplies and maintenance decreased $1.5 million, or 1.2%, in the first six months of 2025 compared to the same period in 2024 and increased 0.2% as a percentage of operating revenues.
−Removed: Supplies and maintenance expense decreased due primarily to the impact of 29.6 million fewer company tractor miles and lower costs for tractor maintenance and tolls.
−Removed: These decreases were partially offset by higher costs for tire maintenance and driver-related costs such as driver advertising.
−Removed: Insurance and claims decreased $31.3 million, or 45.8%, in the first six months of 2025 compared to the same period in 2024 and decreased 1.9 as a percentage of operating revenues due primarily to the impact of a $45.7 million liability reversal through insurance and claims expense as a result of a favorable decision in second quarter 2025 related to an adverse jury verdict rendered on May 17, 2018 for a December 2014 accident, effectively ending the lawsuit in favor of Werner.
+Added: Salaries, wages and benefits decreased $21.1 million, or 2.7%, in the first nine months of 2025 compared to the same period in 2024 and decreased 0.3% as a percentage of operating revenues.
+Added: The lower dollar amount of salaries, wages and benefits expense in the first nine months of 2025 was due primarily to the impact of 36.9 million fewer company tractor miles and decreased non-driver pay, partially offset by the impact of an $18.0 million litigation settlement agreement discussed above.
+Added: The $18.0 million litigation settlement is included in our TTS segment.
+Added: The decrease in non-driver pay was due primarily to a smaller average number of non-driver employees, partially offset by severance expense of $1.3 million from cost saving
+Added: Non-driver salaries, wages and benefits in our non-trucking Werner Logistics segment decreased 12% in the first nine months of 2025 compared to the same period in 2024.
+Added: Fuel decreased $27.0 million, or 12.6%, in the first nine months of 2025 compared to the same period in 2024 and decreased 1.0% as a percentage of operating revenues due to lower average diesel fuel prices and 36.9 million fewer company tractor miles in the first nine months of 2025.
+Added: Average diesel fuel prices were 18 cents per gallon lower in the first nine months of 2025 than in same period in 2024.
+Added: Supplies and maintenance increased $2.5 million, or 1.3%, in the first nine months of 2025 compared to the same period in 2024 and increased 0.2% as a percentage of operating revenues.
+Added: Supplies and maintenance expense increased due primarily to higher costs for tires and advertising, partially offset by lower costs for over-the-road tractor maintenance and the impact of 36.9 million fewer company tractor miles.
+Added: Taxes and licenses decreased $5.6 million or 7.5% in first nine months of 2025 compared to the same period in 2024 and decreased 0.2% as a percentage of operating revenues due primarily to lower costs for fuel taxes.
+Added: The decrease in fuel tax expense in first nine months of 2025 was impacted by 36.9 million fewer company tractor miles.
+Added: Insurance and claims decreased $20.9 million, or 21.8%, in the first nine months of 2025 compared to the same period in 2024 and decreased 0.8% as a percentage of operating revenues due primarily to the impact of a $45.7 million liability reversal through insurance and claims expense as a result of a favorable decision in second quarter 2025 related to an adverse jury verdict rendered on May 17, 2018 for a December 2014 accident, effectively ending the lawsuit in favor of Werner.
For additional information related to this lawsuit, see Note 9 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report.
−Removed: The favorable impact of the liability reversal was partially offset by higher expense for liability claims, due primarily to a higher amount of unfavorable reserve development, partially offset by lower expense for new claims.
−Removed: Lower expense for new claims was impacted by decreased cost per claim in first six months of 2025 compared to the same period in 2024.
−Removed: Depreciation and amortization expense decreased $6.1 million, or 4.2%, in the first six months of 2025 compared to the same period in 2024 and was flat as a percentage of operating revenues due primarily to decreases in depreciation of tractors as we had fewer average tractors in service, and technology equipment as we continue to transition to more cloud-based technology solutions.
−Removed: Werner Logistics purchased transportation expense increased $5.9 million in the first six months of 2025 as a result of higher logistics revenues, and increased 0.3% as a percentage of Werner Logistics revenues to 85.3% in the first six months of 2025 from 85.0% in the same period in 2024.
−Removed: Rent and purchased transportation expense for the TTS segment increased $12.3 million in the first six months of 2025 compared to the same period in 2024 due primarily to due primarily to more independent contractor miles, higher technology-related costs, and additional operational facility costs.
−Removed: These increases were partially offset by lower reimbursements to independent contractors because of lower average diesel fuel prices in first six months of 2025.
−Removed: Independent contractor miles increased 3.4 million miles in the first six months of 2025 and as a percentage of total miles were 5.8% in the first six months of 2025 compared to 4.5% in the first six months of 2024.
−Removed: Other operating expenses decreased $7.5 million in the first six months of 2025 compared to the same period in 2024 and decreased 0.5% as a percentage of operating revenues due primarily to the impact of a $7.8 million net favorable change to the contingent earnout liability related to the Baylor Trucking, Inc.
−Removed: acquisition and higher gains on sales of property and equipment (primarily used tractors and trailers), partially offset by increased bad debt expense and costs associated with professional services.
−Removed: Gains on sales of property and equipment were $8.8 million in the first six months of 2025 compared to $6.2 million, including $1.8 million from the sale of real estate, in the same period in 2024.
−Removed: We sold fewer tractors and trailers in the first six months of 2025 compared to the same period in 2024 and realized much higher average gains per tractor and trailer, as used equipment values have been elevated due largely to global trade policy.
+Added: The favorable impact of the liability reversal was partially offset by higher expense for liability claims.
+Added: We had higher expense for large dollar liability claims, resulting primarily from higher amount of unfavorable reserve development, partially offset by lower expense for new claims.
+Added: Our expense for small dollar liability claims was also higher, primarily due to a lower amount of favorable reserve development and higher expense for new claims.
+Added: The expense for new claims was impacted by decreased cost per claim in first nine months of 2025 compared to the same period in 2024.
+Added: Depreciation and amortization expense decreased $5.5 million, or 2.5%, in the first nine months of 2025 compared to the same period in 2024 and decreased 0.1% as a percentage of operating revenues due primarily to decreases in depreciation of tractors as we had fewer average tractors in service, and technology equipment as we continue to transition to more cloud-based technology solutions.
+Added: These decreases were partially offset by an increase in depreciation for trailers due to higher costs for recent specialty trailers purchases.
+Added: Werner Logistics purchased transportation expense increased $29.3 million in the first nine months of 2025 as a result of higher logistics revenues, and increased 0.4% as a percentage of Werner Logistics revenues to 85.5% in the first nine months of 2025 from 85.1% in the same period in 2024.
+Added: Rent and purchased transportation expense for the TTS segment increased $15.4 million in the first nine months of 2025 compared to the same period in 2024 due primarily to more independent contractor miles, higher technology-related costs, and additional operational facility costs.
+Added: Independent contractor miles increased 5.4 million miles in the first nine months of 2025 and as a percentage of total miles were 9.0% in the first nine months of 2025 compared to 4.7% in the first nine months of 2024.
+Added: These increases were partially offset by lower reimbursements to independent contractors because of lower average diesel fuel prices in first nine months of 2025.
+Added: Other operating expenses decreased $6.5 million in the first nine months of 2025 compared to the same period in 2024 and decreased 0.3% as a percentage of operating revenues due primarily to the impact of a $7.8 million net favorable change to the contingent earnout liability related to the Baylor Trucking, Inc.
+Added: acquisition and higher gains on sales of property and equipment (primarily used tractors and trailers), partially offset by legal fees related to the Abarca et al.
+Added: Werner litigation discussed above and increased bad debt expense.
+Added: Gains on sales of property and equipment were $13.3 million in the first nine months of 2025 compared to $8.8 million, including $1.8 million from the sale of real estate, in the same period in 2024.
+Added: We sold fewer tractors and trailers in the first nine months of 2025 compared to the same period in 2024 and realized much higher average gains per tractor and trailer, as used equipment values have been elevated due largely to global trade policy.
Other Expense (Income)
−Removed: Other expense, net of inco me, increased $1.0 million in the first six months of 2025 compared to the same period in 2024 due primari ly to a $2.4 million increase in net interest expense, partially offset by a $1.3 million increase in the amount of net earnings recognized from our investments (see Note 6 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our investments).
+Added: Other expense, net of inco me, increased $0.9 million in the first nine months of 2025 compared to the same period in 2024 due primari ly to a $1.7 million increase in net interest expense, partially offset by a $0.8 million increase in the amount of net earnings recognized from our investments (see Note 6 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our investments).
Net interest expense increased primarily due to the impact of replacing lower-cost debt and interest rate swaps with higher-cost debt and interest rate swaps upon certain maturities in the second quarter of 2024 (see Note 7 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for further information on our debt and interest rate swaps) and an increase in average debt outstanding.
Income Tax Expense
−Removed: Income tax expense increased $6.3 million in the first six months of 2025 compared to the same period in 2024 , due primarily to higher pre-tax income, partially offset by a decrease in the effective income tax rate.
−Removed: Our effective income tax rate decreased to 26.9% in the first six months of 2025 compared to 28.0% in the first six months of 2024 due primarily to differences in discrete income tax items.
+Added: Income tax expense increased $3.5 million in the first nine months of 2025 c ompared to the same period in 2024, due primarily to an increase in the effective income tax rate.
+Added: Our effective income tax rate increased to 48.2% in the first nine months of 2025 compared to 26.7% in the first nine months of 2024 due primarily to the impact of $4.7 million of unfavorable return to provision adjustments related to changes in deferred tax assets and liabilities for certain acquired entities and a subsidiary located in Mexico.
Liquidity and Capital Resources:
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Capital expenditures, business acquisitions, stock repurchases, and dividend payments are components of our cash flow and capital management strategy, which to a large extent, can be adjusted in response to economic and other changes in the business environment.
−Removed: Management’s approach to capital allocation focuses on
−Removed: investing in key priorities that support our business and growth strategies and providing stockholder returns, while funding ongoing operations.
−Removed: Management believes our financial position at June 30, 2025 is strong.
−Removed: As of June 30, 2025, we had $51.4 million of cash and cash equivalents and $1.4 billion of stockholders’ equity.
+Added: Management’s approach to capital allocation focuses on investing in key priorities that support our business and growth strategies and providing stockholder returns, while funding ongoing operations.
+Added: Management believes our financial position at September 30, 2025 is strong.
+Added: As of September 30, 2025, we had $51.0 million of cash and cash equivalents and $1.4 billion of stockholders’ equity.
Cash is invested primarily in short-term money market funds.
−Removed: In addition, we have a maximum borrowing capacity of $1.375 billion under our credit facilities, for which our total available borrowing capacity was $644.1 million as of June 30, 2025 (see Note 7 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our credit facilities).
+Added: In addition, we have a maximum borrowing capacity of $1.375 billion under our credit facilities, for which our total available borrowing capacity was $644.1 million as of September 30, 2025 (see Note 7 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our credit facilities).
We believe the six commercial banks in our $1.075 billion syndicated credit facility all have strong tier-one capital ratios and good loan-to-deposit ratios.
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Item 7 of Part II of our 2024 Form 10-K includes our disclosure of material cash requirements as of December 31, 2024.
−Removed: There were no material changes in the nature of these items during the six months ended June 30, 2025.
−Removed: During the six months ended June 30, 2025, we generated cash flow from operations of $75.4 million, a 61.9% or $122.3 million decrease in cash flows compared to the same six-month period a year ago.
−Removed: The decrease in net cash provided by operating activities was due primarily to working capital changes for the six-month period ended June 30, 2025.
+Added: There were no material changes in the nature of these items during the nine months ended September 30, 2025.
+Added: During the nine months ended September 30, 2025, we generated cash flow from operations of $119.5 million, a 53.8% or $139.2 million decrease in cash flows compared to the same nine-month period a year ago.
+Added: The decrease in net cash provided by operating activities was due primarily to working capital changes and a decrease in net income for the nine-month period ended September 30, 2025.
We were able to make net capital expenditures, make strategic investments, pay dividends, and repurchase company stock with the net cash provided by operating activities, supplemented by borrowings under our existing credit facilities.
−Removed: Net investing activities used $63.9 million for the six-month period ended June 30, 2025, and $119.4 million during the same period in 2024.
−Removed: Net property and equipment additions (primarily revenue equipment) were $58.1 million for the six-month period ended June 30, 2025, compared to $118.2 million during the same period of 2024.
−Removed: We are adjusting our full-year 2025 net capital expenditures (primarily revenue equipment) guidance from a range of $185 million to $235 million to a range of $145 million to $185 million.
+Added: Net investing activities used $99.8 million for the nine-month period ended September 30, 2025, and $206.5 million during the same period in 2024.
+Added: Net property and equipment additions (primarily revenue equipment) were $93.3 million for the nine-month period ended September 30, 2025, compared to $206.1 million during the same period of 2024.
+Added: We currently estimate net capital expenditures (primarily revenue equipment) in 2025 to be in the range of $155 million to $175 million, compared to net capital expenditures in 2024 of $234.9 million.
Given our strong balance sheet and proactive fleet management, we entered 2025 with a higher-than-normal inventory of new tractors ready to support growth.
These factors, combined with a deliberate shift to a more asset light operational mix are expected to result in net capital expenditures below our historical range in 2025.
−Removed: Net capital expenditures in 2024 was $234.9 million.
We intend to fund these net capital expenditures through cash flows from operations and financing available under our existing credit facilities, if necessary.
−Removed: As of June 30, 2025, we were committed to property and equipment purchases of approximately $116.4 million.
−Removed: Net financing activities used $1.8 million during the six months ended June 30, 2025 compared to $67.8 million during the same period in 2024.
−Removed: We had net borrowings on our debt of $75.0 million during the six months ended June 30, 2025, increasing our outstanding debt to $725.0 million at June 30, 2025.
−Removed: We had net borrowings on our debt of $21.3 million during the six months ended June 30, 2024.
−Removed: We paid dividends of $17.3 million during the six months ended June 30, 2025 and $17.8 million during the same period in 2024.
+Added: As of September 30, 2025, we were committed to property and equipment purchases of approximately $82.1 million.
+Added: Net financing activities used $10.9 million during the nine months ended September 30, 2025 compared to $56.4 million during the same period in 2024.
+Added: We had net borrowings on our debt of $75.0 million during the nine months ended September 30, 2025, increasing our outstanding debt to $725.0 million at September 30, 2025.
+Added: We had net borrowings on our debt of $41.3 million during the nine months ended September 30, 2024.
+Added: We paid dividends of $25.7 million during the nine months ended September 30, 2025 and $26.4 million during the same period in 2024.
We currently plan to continue paying a quarterly dividend.
−Removed: Financing activities for the six months ended June 30, 2025, also included stock repurchases of 2,113,007 shares at a cost of $55.6 million, including broker commissions and excise taxes.
+Added: Financing activities for the nine months ended September 30, 2025, also included stock repurchases of 2,113,007 shares at a cost of $55.6 million, including broker commissions and excise taxes.
Financing activities for the same period in 2024 included common stock repurchases of 1,787,810 shares at a cost of $67.1 million, including broker commissions and excise taxes.
−Removed: As of June 30, 2025, the Company had purchased 3,216,658 shares pursuant to our current Board of Directors repurchase authorization and had 1,783,342 shares remaining available for repurchase.
+Added: On August 7, 2025, the Board of Directors approved a new stock repurchase program under which the Company is authorized to
+Added: repurchase up to 5,000,000 shares of its common stock.
+Added: Upon approval of the new program, the Board of Directors withdrew the previous stock repurchase authorization, which had 1,783,342 shares remaining available for repurchase.
+Added: As of September 30, 2025, the Company had not purchased any shares pursuant to the new authorization and had 5,000,000 shares remaining available for repurchase.
The Company has repurchased, and may continue to repurchase, shares of the Company’s common stock.
The timing and amount of such purchases depend upon economic and stock market conditions and other factors.
−Removed: Item 1 of Part I of our 2024 Form 10-K includes a discussion of pending proposed regulations that may have an effect on our operations if they become adopted and effective as proposed.
+Added: Item 1 of Part I of our 2024 Form 10-K includes a discussion of pending proposed and recently enacted federal, state, and local regulations that could have an impact on our operations.
The following is an update to the regulations set forth in our 2024 Form 10-K.
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Also, in June 2025, Congress rescinded the previously granted waivers for Advanced Clean Trucks (“ACT”).
−Removed: While these regulations remain in the California Administrative Code, the future of the ACF and ACT regulations is uncertain.
+Added: In September 2025, the California Air Resources Board, voted to repeal the ACF regulations from the California Administrative Code.
Werner continues to monitor any California Air Resources Board-related regulatory developments.
−Removed: The rescission of the waiver request and approved waivers will potentially impact tractor prices, availability, performance, and efficiency.
+Added: The rescission of the waiver request, approved waivers, and state regulations will potentially impact tractor prices, availability, performance, and efficiency.
+Added: In September 2025, the U.S.
+Added: Department of Transportation enacted an emergency rule to strengthen federal oversight of how states issue non-domiciled commercial learner’s permits (“CLPs”) and CDLs.
+Added: The rule comes in response to a nationwide review conducted by the Federal Motor Carrier Safety Administration revealing widespread non-compliance among state driver licensing agencies.
+Added: The rule tightens eligibility for non-domiciled CLPs and CDLs, strengthens safeguards, and makes clear when these licenses must be canceled or revoked.
There have been no other material changes in the status of the proposed regulations previously disclosed in the 2024 Form 10-K.
8 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.