WERNER ENTERPRISES INC

Previous wording

The operating ratio is a common industry measure used to evaluate our profitability and that of our TTS segment operating fleets. The operating ratio consists of operating expenses expressed as a percentage of operating revenues. 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. As discussed further in the comparison of operating results for second quarter 2024 to second quarter 2023, 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. Our main fixed costs include depreciation expense for tractors and trailers and equipment licensing fees (included in taxes and licenses expense). The TTS segment requires substantial cash expenditures for tractor and trailer purchases. We fund these purchases with net cash from operations and financing available under our existing credit facility, as management deems necessary.

Current wording

The operating ratio is a common industry measure used to evaluate our profitability and that of our TTS segment operating fleets. The operating ratio consists of operating expenses expressed as a percentage of operating revenues. 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. As discussed further in the comparison of operating results for third quarter 2024 to third quarter 2023, 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. Our main fixed costs include depreciation expense for tractors and trailers and equipment licensing fees (included in taxes and licenses expense). The TTS segment requires substantial cash expenditures for tractor and trailer purchases. We fund these purchases with net cash from operations and financing available under our existing credit facility, as management deems necessary.

Previous wording

Operating reve nues decreased 6.2% for the three months ended June 30, 2024, comp ared to the same period of the prior year. When comparing second quarter 2024 to second quarter 2023, TTS segment revenues decreased $33.1 million, or 5.8%, and Werner Logistics revenues decreased $15.6 million, or 7.0%.

Current wording

Operating reve nues decreased 8.8% for the three months ended September 30, 2024, comp ared to the same period of the prior year. When comparing third quarter 2024 to third quarter 2023, TTS segment revenues decreased $49.4 million, or 8.6%, and Werner Logistics revenues decreased $23.5 million, or 10.2%.

Previous wording

Dedicated freight demand remains steady and durable despite a continued challenging freight market, and the Dedicated pipeline of opportunities remains strong, but competitive. One-Way Truckload freight conditions improved midway through second quarter 2024 and continued into July. Werner Logistics revenues and profitability continue to be impacted by ongoing pricing pressure.

Current wording

Dedicated freight demand remains steady and durable despite a continued challenging freight market, and the Dedicated customer retention rate and pipeline of opportunities remain strong. In One-Way Truckload, our pricing discipline, combined with better freight options and strong miles per tractor, led to a 6.9% increase in average revenues per tractor per week, net of fuel surcharge during third quarter 2024. Werner Logistics revenues and profitability continue to be impacted by ongoing pricing pressure.

Previous wording

Trucking revenues, net of fuel surcharge, decreased 5.9% in second quarter 2024 compared to second quarter 2023 due to an 8.6% decrease in the average number of tractors in service, partially offset by a 3.0% increase in average revenues per tractor per week, net of fuel surcharge. During second quarter 2024, One-Way Truckload average revenues per total mile, net of fuel surcharge, decreased 2.7%, as One-Way Truckload remained challenged by ongoing pricing pressure. One-Way Truckload average tractors in service decreased 11.2%, offset with 10.8% higher average total miles per tractor per week in second quarter 2024. As a result, One-Way Truckload total miles were down only 1.6% compared to second quarter 2023. We expect average revenues per total mile, net of fuel surcharge, for the One-Way Truckload fleet to remain flat or decrease by no more than 3% in third quarter 2024 compared to third quarter 2023. Dedicated average revenues per tractor per week, net of fuel surcharge, increased 0.4%. We continue to expect Dedicated average revenues per tractor per week, net of fuel surcharge, to remain flat or increase up to 3% in 2024 compared to 2023, as we continue to maintain high customer retention and the pipeline of opportunities in Dedicated remains strong.

Current wording

Trucking revenues, net of fuel surcharge, decreased 6.7% in third quarter 2024 compared to third quarter 2023 due to a 9.9% decrease in the average number of tractors in service, partially offset by a 3.5% increase in average revenues per tractor per week, net of fuel surcharge. During third quarter 2024, One-Way Truckload average revenues per total mile, net of fuel surcharge, increased 0.3%. One-Way Truckload average tractors in service decreased 12.3%, partially offset with 6.6% higher average total miles per tractor per week inthird quarter 2024. As a result, One-Way Truckload total miles were down only 6.6% compared to third quarter 2023. We expect average revenues per total mile, net of fuel surcharge, for the One-Way Truckload fleet to remain flat or increase up to 3% in fourth quarter 2024 compared to fourth quarter 2023, as we see increasing opportunity for favorable rate changes going forward. Dedicated average revenues per tractor per week, net of fuel surcharge, increased 1.7%. We continue to expect Dedicated average revenues per tractor per week, net of fuel surcharge, to remain flat or increase up to 3% in 2024 compared to 2023.

Previous wording

The average number of tractors in service in the TTS segment decreased 8.6% to 7,630 in second quarter 2024 from 8,351 in second quarter 2023. The prolonged weak freight market combined with the impact from certain fleet losses as a result of maintaining our pricing and operating margin discipline resulted in fewer tractors at the end of second quarter 2024. We ended second quarter 2024 with 7,460 tractors in the TTS segment, a year-over-year decrease of 825 tractors compared to the end of second quarter 2023, and a sequential decrease of 350 tractors compared to the end of first quarter 2024. Within TTS, our Dedicated unit ended second quarter 2024 with 4,825 tractors (or 65% of our total TTS segment fleet) compared to 5,260 tractors (or 63%) a year ago. We currently expect our TTS segment fleet size at the end of 2024 to decrease in a range of 6% to 3% when compared to the fleet size at the end of 2023. 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.

Current wording

The average number of tractors in service in the TTS segment decreased 9.9% to 7,414 in third quarter 2024 from 8,226 in third quarter 2023. The prolonged weak freight market combined with the impact from certain fleet losses as a result of maintaining our pricing and operating margin discipline resulted in fewer tractors at the end of third quarter 2024. We ended third quarter 2024 with 7,445 tractors in the TTS segment, a year-over-year decrease of 725 tractors compared to the end of third quarter 2023, and a sequential decrease of 15 tractors compared to the end of second quarter 2024. Within TTS, our Dedicated unit ended third quarter 2024 with 4,905 tractors (or 66% of our total TTS segment fleet) compared to 5,260 tractors (or 64%) a year ago. We currently expect our TTS segment fleet size at the end of 2024 to decrease in a range of 8% to 6% when compared to the fleet size at the end of 2023, as we see potential for a decrease in our Dedicated fleet, partially offset by growth in our One-Way fleet in fourth quarter 2024. 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.

Previous wording

Trucking fuel surcharge revenues decreased 8.8% to $70.0 million in second quarter 2024 from $76.7 million in second quarter 2023. 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. Conversely, when fuel prices decrease, fuel surcharge revenues decrease. To lessen the effect of fluctuating fuel prices on our margins, we collect fuel surcharge revenues from our customers for the cost of diesel fuel and taxes in excess of specified base fuel price levels according to terms in our customer contracts. Fuel surcharge rates generally adjust weekly based on an independent U.S. Department of Energy fuel price survey which is released every Monday. Our fuel surcharge programs are designed to (i) recoup higher fuel costs from customers when fuel prices rise and (ii) provide customers with the benefit of lower fuel costs when fuel prices decline. These programs generally enable us to recover a majority, but not all, of the fuel price increases. The remaining portion is generally not recoverable because it results from empty and out-of-route miles (which are not billable to customers) and tractor idle time. Fuel prices that change rapidly in short time periods also impact our recovery because the surcharge rate in most programs only changes once per week.

Current wording

Trucking fuel surcharge revenues decreased 24.2% to $62.7 million in third quarter 2024 from $82.7 million in third quarter 2023. 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. Conversely, when fuel prices decrease, fuel surcharge revenues decrease. To lessen the effect of fluctuating fuel prices on our margins, we collect fuel surcharge revenues from our customers for the cost of diesel fuel and taxes in excess of specified base fuel price levels according to terms in our customer contracts. Fuel surcharge rates generally adjust weekly based on an independent U.S. Department of Energy fuel price survey which is released every Monday. Our fuel surcharge programs are designed to (i) recoup higher fuel costs from customers when fuel prices rise and (ii) provide customers with the benefit of lower fuel costs when fuel prices decline. These programs generally enable us to recover a majority, but not all, of the fuel price increases. The remaining portion is generally not recoverable because it results from empty and out-of-route miles (which are not billable to customers) and tractor idle time. Fuel prices that change rapidly in short time periods also impact our recovery because the surcharge rate in most programs only changes once per week.

Previous wording

Werner Logistics revenues are generated by its three operating units. Werner Logistics recorded revenue and brokered freight expense of $3.3 million in second quarter 2024 and $3.5 million in second quarter 2023 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. In second quarter 2024, Werner Logistics revenues decreased $15.6 million, or 7.0%, compared to second quarter 2023. Truckload Logistics revenues (75% of total Werner Logistics segment revenues) decreased $17.3 million, or 10%, in second quarter 2024, driven by a decrease in shipments and a decline in revenue per shipment. The Power Only solution, which utilizes third-party carriers who provide only a driver and a tractor, represented a growing portion of the Truckload Logistics volume in second quarter 2024, as Power Only volumes increased over 30% in second quarter 2024 compared to second quarter 2023. Intermodal revenues (13% of total Werner Logistics segment revenues) increased $4.1 million, or 17%, in second quarter 2024, due to an increase in shipments, partially offset by lower revenue per shipment. Final Mile revenues (12% of total Werner Logistics segment revenues) decreased $2.5 million, or 9%, in second quarter 2024. Werner Logistics operating income decreased to $0.5 million in second quarter 2024 from $4.4 million in second quarter 2023, and its operating margin percentage decreased to 0.3% in second quarter 2024 from 1.9% in second quarter 2023. The operating environment continues to be competitive, which is pressuring Werner Logistics operating margins in the short term.

Current wording

Werner Logistics revenues are generated by its three operating units. Werner Logistics recorded revenue and brokered freight expense of $3.2 million in third quarter 2024 and $4.4 million in third quarter 2023 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. In third quarter 2024, Werner Logistics revenues decreased $23.5 million, or 10.2%, compared to third quarter 2023. Truckload Logistics revenues (75% of total Werner Logistics segment revenues) decreased $20.9 million, or 12%, in third quarter 2024, driven by a decrease in shipments, partially offset by an increase in revenue per shipment. The Power Only solution, which utilizes third-party carriers who provide only a driver and a tractor, represented a growing portion of the Truckload Logistics volume in third quarter 2024, as Power Only volumes increased over 18% in third quarter 2024 compared to third quarter 2023. Intermodal revenues (14% of total Werner Logistics segment revenues) increased $2.0 million, or 7%, in third quarter 2024, due to an increase in shipments, partially offset by lower revenue per shipment. Final Mile revenues (11% of total Werner Logistics segment revenues) decreased $4.6 million, or 17%, in third quarter 2024 due to lower volume for furniture and appliances, and timing of isolated churn ahead of new customer facilities being implemented. Werner Logistics had an operating loss of $0.3 million in third quarter 2024 compared to operating income of $2.0 million in third quarter 2023, and its operating margin percentage decreased to (0.2)% in third quarter 2024 from 0.9% in third quarter 2023. The operating environment continues to be competitive, which is pressuring Werner Logistics operating margins in the short term.

Previous wording

Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 97.4% in second quarter 2024 compared to 94.2% in second quarter 2023. Expense items that impacted the overall operating ratio are described on the following pages. The tables on pages 20 through 22 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.

Current wording

Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 97.6% in third quarter 2024 compared to 95.4% in third quarter 2023. Expense items that impacted the overall operating ratio are described on the following pages. The tables on pages 20 through 22 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.

Previous wording

Salaries, wages and benefits decreased $6.6 million or 2.5% in second quarter 2024 compared to second quarter 2023 and increased 1.2% as a percentage of operating revenues to 34.1%. The lower dollar amount of salaries, wages and benefits expense in the second quarter of 2024 was due primarily to the impact of 6.5 million fewer company tractor miles and decreased non-driver pay in the second quarter 2024, partially offset by higher benefit costs. The decrease in non-driver pay was due primarily to a smaller average number of non-driver employees. Non-driver salaries, wages and benefits in our non-trucking Werner Logistics segment decreased 11% in second quarter 2024 compared to second quarter 2023.

Current wording

Salaries, wages and benefits decreased $9.7 million or 3.6% in third quarter 2024 compared to third quarter 2023 and increased 1.8% as a percentage of operating revenues to 34.6%. The lower dollar amount of salaries, wages and benefits expense in the third quarter of 2024 was due primarily to the impact of 12.2 million fewer company tractor miles and decreased non-driver pay in the third quarter 2024, partially offset by higher benefit costs resulting primarily from elevated health care claims. The decrease in non-driver pay was due primarily to a smaller average number of non-driver employees. Non-driver salaries, wages and benefits in our non-trucking Werner Logistics segment decreased 11% in third quarter 2024 compared to third quarter 2023.

Previous wording

Fuel decreased $5.7 million or 7.4% in second quarter 2024 compared to second quarter 2023 and decreased 0.1% as a percentage of operating revenues to 9.5%, due primarily to lower average diesel fuel prices, and 6.5 million fewer company tractor miles in second quarter 2024. Average diesel fuel prices were 6 cents per gallon lower in second quarter 2024 than in second quarter 2023 and were 15 cents per gallon lower than in first quarter 2024.

Current wording

Fuel decreased $25.5 million or 28.2% in third quarter 2024 compared to third quarter 2023 and decreased 2.3% as a percentage of operating revenues, due primarily to lower average diesel fuel prices and 12.2 million fewer company tractor miles in third quarter 2024. Average diesel fuel prices were 69 cents per gallon lower in third quarter 2024 than in third quarter 2023 and were 16 cents per gallon lower than in second quarter 2024.

Previous wording

For July 2024, the average diesel fuel price per gallon was approximately 12 cents lower than the average diesel fuel price per gallon in July 2023 and approximately 54 cents lower than in third quarter 2023.

Current wording

For October 2024, the average diesel fuel price per gallon was approximately 86 cents lower than the average diesel fuel price per gallon in October 2023 and approximately 58 cents lower than in fourth quarter 2023.

Previous wording

Supplies and maintenance decreased $3.0 million or 4.6% in second quarter 2024 compared to second quarter 2023 and increased 0.1% as a percentage of operating revenues. Supplies and maintenance expense decreased due primarily to the lower costs for over-the-road tractor and trailer maintenance, the impact of 6.5 million fewer company tractor miles, and lower driver and placement driver-related costs such as driver advertising and lodging. We have taken steps to reduce repair and maintenance expense by growing our in-house maintenance capabilities throughout our terminal network.

Current wording

Supplies and maintenance increased $1.4 million or 2.3% in third quarter 2024 compared to third quarter 2023 and increased 0.8% as a percentage of operating revenues. Supplies and maintenance expense increased due primarily to the higher costs for over-the-road tractor maintenance despite 12.2 million fewer company tractor miles. We have taken steps to reduce repair and maintenance expense by growing our in-house maintenance capabilities throughout our terminal network.

Previous wording

Insurance and claims decreased $4.9 million or 13.3% in second quarter 2024 compared to second quarter 2023 and decreased 0.3% as a percentage of operating revenues. We had lower expense for small dollar liability claims, resulting primarily from a higher amount of favorable reserve development. Our expense for large dollar liability claims was also lower due to a lower amount of unfavorable reserve development partially offset by higher new claims. We also incurred insurance and claims expense of $1.0 million in second quarter 2024 and $1.4 million for second quarter 2023, for accrued interest related to a previously-disclosed adverse jury verdict rendered on May 17, 2018, which we are continuing to defend. Interest is accrued at $0.5 million per month until such time as the outcome of the litigation is finalized, excluding months where the plaintiffs requested an extension of time to respond to our petition for review. 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. 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.

Current wording

Insurance and claims decreased $3.6 million or 11.5% in third quarter 2024 compared to third quarter 2023 and decreased 0.1% as a percentage of operating revenues. We had lower expense for small dollar liability claims, resulting primarily from lower expense for new claims and a higher amount of favorable reserve development. Our expense for large dollar liability claims was also lower, primarily due to a lower amount of unfavorable reserve development, partially offset by higher expense for new claims. Expense for new claims was impacted by decreased cost per claim in third quarter 2024 compared to third quarter 2023. We also incurred insurance and claims expense of $1.5 million in third quarter 2024 and $1.4 million for third quarter 2023, for accrued interest related to a previously-disclosed adverse jury verdict rendered on May 17, 2018, which we are continuing to defend. Interest is accrued at $0.5 million per month until such time as the outcome of the litigation is finalized, excluding months where the plaintiffs requested an extension of time to respond to our petition for review. 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. 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.

Previous wording

Depreciation and amortization expense decreased $2.2 million or 3.0% in second quarter 2024 compared to second quarter 2023 and increased 0.4% 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. Depreciation of other service equipment also decreased due to certain assets becoming fully depreciated. These decreases were partially offset by the higher cost of new tractors and trailers.

Current wording

Depreciation and amortization expense decreased $3.0 million or 4.0% in third quarter 2024 compared to third quarter 2023 and increased 0.5% 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. These decreases were partially offset by the higher cost of new tractors and trailers.

Previous wording

The average age of our tractor fleet remains low by industry standards and was 2.1 years as of June 30, 2024, and the average age of our trailers was 4.9 years. We are continuing to invest in new tractors and trailers, technology, and our terminal network in 2024 to improve our driver experience, increase operational efficiency and more effectively manage our maintenance, safety and fuel costs. During the remainder of 2024, we expect the average age of our tractor and trailer fleets to remain at or near current levels.

Current wording

The average age of our tractor fleet remains low by industry standards and was 2.0 years as of September 30, 2024, and the average age of our trailers was 5.2 years. We are continuing to invest in new tractors and trailers, technology, and our terminal network in 2024 to improve our driver experience, increase operational efficiency and more effectively manage our maintenance, safety and fuel costs. During the remainder of 2024, we expect the average age of our tractor and trailer fleets to increase slightly.

Previous wording

Rent and purchased transportation expense decreased $6.7 million or 3.1% in second quarter 2024 compared to second quarter 2023, and increased 0.9% 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. Werner Logistics recorded revenue and brokered freight expense of $3.3 million in second quarter 2024 and $3.5 million in second quarter 2023 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. Werner Logistics purchased transportation expense decreased $8.3 million in second quarter 2024 as a result of lower logistics revenues, but increased to 84.8% as a percentage of Werner Logistics revenues in second quarter 2024 from 82.6% in second quarter 2023 due to the competitive operating environment in 2024.

Current wording

Rent and purchased transportation expense decreased $12.9 million or 5.7% in third quarter 2024 compared to third quarter 2023, and increased 0.9% 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. Werner Logistics recorded revenue and brokered freight expense of $3.2 million in third quarter 2024 and $4.4 million in third quarter 2023 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. Werner Logistics purchased transportation expense decreased $18.7 million in third quarter 2024 as a result of lower logistics revenues, but increased to 85.2% as a percentage of Werner Logistics revenues in third quarter 2024 from 84.7% in third quarter 2023 due to the competitive operating environment in 2024.

Previous wording

Rent and purchased transportation expense for the TTS segment increased $1.1 million in second quarter 2024 compared to second quarter 2023 due primarily to higher independent contractor miles and cloud-based technology fees, partially offset by lower reimbursements to independent contractors because of lower average diesel fuel prices. Independent contractor miles increased approximately 0.2 million miles in second quarter 2024 and as a percentage of total miles were 4.8% in second quarter 2024 compared to 4.5% in second quarter 2023. 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.

Current wording

Rent and purchased transportation expense for the TTS segment increased $4.6 million in third quarter 2024 compared to third quarter 2023 due primarily to higher cloud-based technology fees and independent contractor miles, partially offset by lower reimbursements to independent contractors because of lower average diesel fuel prices. Independent contractor miles increased approximately 0.4 million miles in third quarter 2024 and as a percentage of total miles were 5.1% in third quarter 2024 compared to 4.6% in third quarter 2023. 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.

Previous wording

Other operating expenses increased $6.9 million in second quarter 2024 compared to second quarter 2023 and increased 0.9% as a percentage of operating revenues due to lower gains on sales of property and equipment (primarily used tractors and trailers), partially offset by decreased costs associated with professional technology services and decreased bad debt expense. 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). Gains on sales of property and equipment were $2.7 million in second quarter 2024, including $1.8 million from sales of real estate, compared to $11.9 million in second quarter 2023. We sold fewer tractors and substantially more trailers in second quarter 2024 compared to second quarter 2023 and realized lower average gains per tractor and trailer due to lower pricing in the market for our used equipment. Compared to 2023, we expect our gains on sales of property and equipment to be considerably lower in 2024, in a range between $7 million and $13 million for the year as we expect lower pricing for our used equipment to continue.

Current wording

Other operating expenses increased $4.2 million in third quarter 2024 compared to third quarter 2023 and increased 0.6% as a percentage of operating revenues due to lower gains on sales of property and equipment (primarily used tractors and trailers), partially offset by decreased bad debt expense and decreased costs associated with professional technology 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). Gains on sales of property and equipment were $2.6 million in third quarter 2024 compared to $9.1 million in third quarter 2023. We sold fewer tractors and substantially more trailers in third quarter 2024 compared to third quarter 2023 and realized lower average gains per tractor and trailer due to lower pricing in the market for our used equipment. We expect our gains on sales of property and equipment to be considerably lower in 2024 compared to 2023, in a range between $7 million and $11 million for the year, not including gains of $1.8 million from the sale of real estate in second quarter 2024, as we expect lower pricing for our used equipment to continue.

Previous wording

Other expense, net of other income, increased $0.4 million in second quarter 2024 compared to second quarter 2023, due primarily to a $1.0 million increase in net interest expense, partially offset by a $0.7 million decrease in the amount of loss recognized from our equity method investment (see Note 6 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our equity method investment). Net interest expense increased due to higher interest rates for variable-rate debt and the impact of replacing lower-cost debt and interest rate swaps with higher-cost debt and interest rate swaps upon maturity, partially offset by a decrease in average debt outstanding. In May 2024, we repaid the remaining outstanding principal balance under the BMO Term Loan using proceeds from the 2022 Credit Agreement, and two variable-for-fixed interest rate swap agreements with an aggregate notional amount of $150.0 million matured. In second quarter 2024, we also entered into two variable-for-fixed interest rate swap agreements with an aggregate notional amount of $150.0 million to limit our exposure to increases in interest rates on a portion of our variable-rate indebtedness (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). We continue to expect net interest expense for full-year 2024 to be higher than 2023, primarily due to repricing of the BMO Term Loan that matured in May 2024 and the impact of two lower-priced interest rate swaps that matured in May 2024 as described above.

Current wording

Other expense, net of other income, increased $1.7 million in third quarter 2024 compared to third quarter 2023, due primarily to a $2.3 million increase in net interest expense, partially offset by a $0.4 million increase in the amount of earnings recognized from our equity method investment (see Note 6 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our equity method investment). Net interest expense increased due to the impact of replacing lower-cost debt and interest rate swaps with higher-cost debt and interest rate swaps upon maturity, an increase in average debt outstanding, and higher interest rates for variable-rate debt. In May 2024, we repaid the remaining outstanding principal balance under the BMO Term Loan using proceeds from the 2022 Credit Agreement, and two variable-for-fixed interest rate swap agreements with an aggregate notional amount of $150.0 million matured. In August 2024, we entered into a variable-for-fixed interest rate swap with a notional amount of $75 million, and during the second quarter 2024, we entered into two variable-for-fixed interest rate swap agreements with an aggregate notional amount of $150.0 million to limit our exposure to increases in interest rates on a portion of our variable-rate indebtedness (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). We continue to expect net interest expense for full-year 2024 to be higher than 2023, primarily due to repricing of the BMO Term Loan that matured in May 2024 and the impact of two lower-priced interest rate swaps that matured in May 2024 as described above.

Previous wording

Income tax expense decreased $7.2 million in second quarter 2024 compared to second quarter 2023, due primarily to lower pre-tax income. Our effective income tax rate (income taxes expressed as a percentage of income before income taxes) was 24.2% in second quarter 2024 compared to 25.2% in second quarter 2023. The lower effective income tax rate was attributed to differences in discrete income tax items.

Current wording

Income tax expense decreased $5.0 million in third quarter 2024 compared to third quarter 2023, due primarily to lower pre-tax income. Our effective income tax rate (income taxes expressed as a percentage of income before income taxes) was 23.5% in third quarter 2024 compared to 23.0% in third quarter 2023. The lower effective income tax rate in both third quarter 2024 and 2023 are attributed primarily to favorable discrete income tax items. We currently estimate our full year 2024 effective income tax rate will increase to a range of 25.5% to 26.5%.

Previous wording

Operating revenues decreased 6.9% for the six months ended June 30, 2024, compared to the same period of the prior year. When comparing the first six months of 2024 to the first six months of 2023, TTS segment revenues decreased $70.3 million, or 6.1%, and Werner Logistics revenues decreased $41.8 million, or 9.2%. In the TTS segment, trucking revenues, net of fuel surcharge, decreased $51.8 million, due primarily to an 8.0% decrease in average tractors in service, partially offset by a 2.9% increase in average revenues per tractor per week, net of fuel surcharge. TTS segment fuel surcharge revenues for the six months ended June 30, 2024 decreased $22.0 million, or 13.4%, when compared to the same period of the prior year due to lower average diesel fuel prices in the 2024 period. The lower Logistics revenues resulted from continued pricing pressure.

Current wording

Operating revenues decreased 7.6% for the nine months ended September 30, 2024, compared to the same period of the prior year. When comparing the first nine months of 2024 to the first nine months of 2023, TTS segment revenues decreased $119.7 million, or 6.9%, and Werner Logistics revenues decreased $65.3 million, or 9.6%. In the TTS segment, trucking revenues, net of fuel surcharge, decreased $84.2 million, due primarily to an 8.6% decrease in average tractors in service, partially offset by a 3.1% increase in average revenues per tractor per week, net of fuel surcharge. TTS segment fuel surcharge revenues for the nine months ended September 30, 2024 decreased $42.0 million, or 17.0%, when compared to the same period of the prior year due to lower average diesel fuel prices in the 2024 period. The lower Logistics revenues resulted from continued pricing pressure.

Previous wording

Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 97.7% for the six months ended June 30, 2024 and 93.9% for the six months ended June 30, 2023. Expense items that impacted the overall operating ratio are described on the following pages. The tables on pages 20 through 22 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.

Current wording

Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 97.7% for the nine months ended September 30, 2024 and 94.4% for the nine months ended September 30, 2023. Expense items that impacted the overall operating ratio are described on the following pages. The tables on pages 20 through 22 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.

Previous wording

Salaries, wages and benefits decreased $9.5 million, or 1.8%, in the first six months of 2024 compared to the same period in 2023 and increased 1.8% as a percentage of operating revenues to 34.3%. The lower dollar amount of salaries, wages and benefits expense in the first six months of 2024 was due primarily to lower driver pay from 9.9 million fewer company tractor miles and decreased non-driver pay in the first six months of 2024, partially offset by higher benefit costs. The decrease in non-driver pay was due primarily to a smaller average number of non-driver employees. Non-driver salaries, wages and benefits in our non-trucking Werner Logistics segment decreased 9% in the first six months of 2024 compared to the same period in 2023.

Current wording

Salaries, wages and benefits decreased $19.3 million, or 2.4%, in the first nine months of 2024 compared to the same period in 2023 and increased 1.8% as a percentage of operating revenues to 34.4%. The lower dollar amount of salaries, wages and benefits expense in the first nine months of 2024 was due primarily to the impact of 22.1 million fewer company tractor miles and decreased non-driver pay in the first nine months of 2024, partially offset by higher benefit costs. The decrease in non-driver pay was due primarily to a smaller average number of non-driver employees. Non-driver salaries, wages and benefits in our non-trucking Werner Logistics segment decreased 10% in the first nine months of 2024 compared to the same period in 2023.

Previous wording

Fuel decreased $19.5 million, or 11.5%, in the first six months of 2024 compared to the same period in 2023 and decreased 0.5% as a percentage of operating revenues due to lower average diesel fuel prices and 9.9 million fewer company tractor miles in the first six months of 2024. Average diesel fuel prices were 19 cents per gallon lower in the first six months of 2024 than in same period in 2023.

Current wording

Fuel decreased $45.0 million, or 17.3%, in the first nine months of 2024 compared to the same period in 2023 and decreased 1.1% as a percentage of operating revenues due to lower average diesel fuel prices and 22.1 million fewer company tractor miles in the first nine months of 2024. Average diesel fuel prices were 35 cents per gallon lower in the first nine months of 2024 than in same period in 2023.

Previous wording

Supplies and maintenance decreased $9.4 million, or 7.1%, in the first six months of 2024 compared to the same period in 2023 and remained flat as a percentage of operating revenues. Supplies and maintenance expense decreased due primarily to lower costs for over-the-road repairs and tires, and the impact of 9.9 million fewer company tractor miles. We also had lower driver and placement driver-related costs such as driver advertising and lodging. These decreases were partially offset by higher costs for tolls.

Current wording

Supplies and maintenance decreased $8.1 million, or 4.2%, in the first nine months of 2024 compared to the same period in 2023 and increased 0.3% as a percentage of operating revenues. Supplies and maintenance expense decreased due primarily to lower driver and placement driver-related costs such as lodging and driver advertising, lower costs for over-the-road repairs and tires, and the impact of 22.1 million fewer company tractor miles. These decreases were partially offset by higher costs for tolls.

Previous wording

Insurance and claims decreased $5.0 million, or 6.9%, in the first six months of 2024 compared to the same period in 2023 and remained flat as a percentage of operating revenues. We had lower expense for small dollar liability claims, resulting from favorable reserve development in the first six months of 2024 compared to unfavorable reserve development for the same period in 2023, partially offset by higher expense for new claims. We had slightly higher expense for large dollar liability claims, resulting from a higher expense for new claims, mostly offset by unfavorable reserve development. Higher expense for new claims was impacted by increased cost per claim in the first six months of 2024 compared to the same period in 2023.

Current wording

Insurance and claims decreased $8.6 million, or 8.2%, in the first nine months of 2024 compared to the same period in 2023 and remained flat as a percentage of operating revenues. We had lower expense for small dollar liability claims, resulting primarily from a higher amount of favorable reserve development, partially offset by higher expense for new claims. Our expense for large dollar liability claims was also lower, primarily due to a lower amount of unfavorable reserve development, partially offset by higher expense for new claims. Higher expense for new claims was impacted by increased cost per claim in the first nine months of 2024 compared to the same period in 2023.

Previous wording

Depreciation and amortization expense decreased $2.3 million, or 1.5%, in the first six months of 2024 compared to the same period in 2023 and increased 0.5% 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. Depreciation of other service equipment also decreased due to certain assets becoming fully depreciated. These decreases were partially offset by the higher cost of new tractors and trailers.

Current wording

Depreciation and amortization expense decreased $5.3 million, or 2.4%, in the first nine months of 2024 compared to the same period in 2023 and increased 0.5% 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. Depreciation of other service equipment also decreased due to certain assets becoming fully depreciated. These decreases were partially offset by the higher cost of new tractors and trailers.

Previous wording

Werner Logistics purchased transportation expense decreased $24.3 million in the first six months of 2024 as a result of lower logistics revenues, and increased 2.5% as a percentage of Werner Logistics revenues to 85.0% in the first six months of 2024 from 82.5% in the same period in 2023. Rent and purchased transportation expense for the TTS segment decreased $0.2 million in the first six months of 2024 compared to the same period in 2023 due primarily to fewer independent contractor miles and lower reimbursements to independent contractors because of lower average diesel fuel prices, partially offset by higher cloud-based technology fees in the first six months of 2024. Independent contractor miles decreased approximately 1.2 million miles in the first six months of 2024 and as a percentage of total miles were 4.5% in the first six months of 2024 compared to 4.7% in the first six months of 2023.

Current wording

Werner Logistics purchased transportation expense decreased $43.1 million in the first nine months of 2024 as a result of lower logistics revenues, and increased 1.9% as a percentage of Werner Logistics revenues to 85.1% in the first nine months of 2024 from 83.2% in the same period in 2023. Rent and purchased transportation expense for the TTS segment increased $4.4 million in the first nine months of 2024 compared to the same period in 2023 due primarily to higher cloud-based technology fees, partially offset by fewer independent contractor miles and lower reimbursements to independent contractors because of lower average diesel fuel prices in the first nine months of 2024. Independent contractor miles decreased approximately 0.9 million miles in the first nine months of 2024 and as a percentage of total miles were 4.7% in the first nine months of 2024 and 2023.

Previous wording

Other operating expenses increased $21.0 million in the first six months of 2024 compared to the same period in 2023 and increased 1.3% as a percentage of operating revenues due primarily to lower gains on sales of property and equipment, partially offset by decreased costs associated with professional technology services. Gains on sales of property and equipment were $6.2 million in the first six months of 2024, compared to $30.2 million in the same period in 2023. We sold fewer tractors and substantially more trailers in the first six months of 2024 compared to the same period in 2023 and realized lower average gains per tractor and trailer due to lower pricing in the market for our used equipment.

Current wording

Other operating expenses increased $25.2 million in the first nine months of 2024 compared to the same period in 2023 and increased 1.0% as a percentage of operating revenues due primarily to lower gains on sales of property and equipment, partially offset by decreased costs associated with professional technology services and decreased bad debt expense. Gains on sales of property and equipment were $8.8 million in the first nine months of 2024, including $1.8 million from the sale of real estate, compared to $39.3 million in the same period in 2023. We sold fewer tractors and substantially more trailers in the first nine months of 2024 compared to the same period in 2023 and realized lower average gains per tractor and trailer due to lower pricing in the market for our used equipment.

Previous wording

Other expense, net of income, increased $0.2 million in thefirst six months of 2024 compared to the same period in 2023 due primarily to a $0.9 million increase in net interest expense, partially offset by a $0.6 million decrease in the amount of loss from our equity method investment (see Note 6 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our equity method investment). Net interest expense increased due to higher interest rates for variable-rate debt and the impact of replacing lower-cost debt and interest rate swaps with higher-cost debt and interest rate swaps upon maturity, partially offset by a decrease in average debt outstanding (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).

Current wording

Other expense, net of income, increased $1.9 million in thefirst nine months of 2024 compared to the same period in 2023 due primarily to a $3.2 million increase in net interest expense, partially offset by a $1.0 million increase in the amount of earnings from our equity method investment (see Note 6 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our equity method investment). Net interest expense increased 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, and higher interest rates for variable-rate debt, partially offset by a decrease in average debt outstanding (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).

Previous wording

Income tax expense decreased $15.5 million in thefirst six months of 2024 compared to the same period in 2023, due primarily to lower pre-tax income, partially offset by an increase in the effective income tax rate. Our effective income tax rate (income taxes expressed as a percentage of income before income taxes) was 28.0% in thefirst six months of 2024 compared to 24.7% in thefirst six months of 2023. The higher income tax rate was attributed primarily to differences in discrete income tax items in the firstsix months of 2024 primarily related to the tax impact of equity compensation.

Current wording

Income tax expense decreased $20.5 million in thefirst nine months of 2024 compared to the same period in 2023, due primarily to lower pre-tax income, partially offset by an increase in the effective income tax rate. Our effective income tax rate (income taxes expressed as a percentage of income before income taxes) was 26.7% in thefirst nine months of 2024 compared to 24.3% in thefirst nine months of 2023. The higher income tax rate was attributed primarily to differences in discrete income tax items in the first nine months of 2024.

Previous wording

We closely manage our liquidity and capital resources. Our liquidity requirements depend on key variables, including the level of investment needed to support business strategies, the performance of the business, capital expenditures, borrowing arrangements, and working capital management. 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. Management’s approach to capital allocation focuses on investing in key priorities that support our business and growth strategies and providing shareholder returns, while funding ongoing operations.

Current wording

We closely manage our liquidity and capital resources. Our liquidity requirements depend on key variables, including the level of investment needed to support business strategies, the performance of the business, capital expenditures, borrowing arrangements, and working capital management. 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. 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.

Previous wording

Management believes our financial position at June 30, 2024 is strong. As of June 30, 2024, we had $70.4 million of cash and cash equivalents and nearly $1.5 billion of stockholders’ equity. Cash is invested primarily in short-term money market funds. In addition, we have a $1.075 billion credit facility, for which our total available borrowing capacity was $399.1 million as of June 30, 2024 (see Note 7 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our credit agreements). After considering developments in the banking sector, 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. We believe our liquid assets, cash generated from operating activities, and borrowing capacity under our existing credit facility will provide sufficient funds to meet our cash requirements and our planned shareholder returns for the foreseeable future.

Current wording

Management believes our financial position at September 30, 2024 is strong. As of September 30, 2024, we had $54.7 million of cash and cash equivalents and $1.4 billion of stockholders’ equity. Cash is invested primarily in short-term money market funds. In addition, we have a $1.075 billion credit facility, for which our total available borrowing capacity was $379.1 million as of September 30, 2024 (see Note 7 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report for information regarding our credit agreements). After considering developments in the banking sector, 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. We believe our liquid assets, cash generated from operating activities, and borrowing capacity under our existing credit facility will provide sufficient funds to meet our cash requirements and our planned stockholder returns for the foreseeable future.

Previous wording

Item 7 of Part II of our 2023 Form 10-K includes our disclosure of material cash requirements as of December 31, 2023. There were no material changes in the nature of these items during the six months ended June 30, 2024.

Current wording

Item 7 of Part II of our 2023 Form 10-K includes our disclosure of material cash requirements as of December 31, 2023. There were no material changes in the nature of these items during the nine months ended September 30, 2024.

Previous wording

During the six months ended June 30, 2024, we generated cash flow from operations of $197.7 million, a 29.9% or $84.1 million decrease in cash flows compared to the same six-month period a year ago. The decrease in net cash provided by operating activities was due primarily to a decrease in net income for the six-month period ended June 30, 2024 and working capital changes. We were able to make net capital expenditures, repay debt, make strategic investments, pay dividends, and repurchase company stock with the net cash provided by operating activities and existing cash balances, supplemented by borrowings under our existing credit facility.

Current wording

During the nine months ended September 30, 2024, we generated cash flow from operations of $258.7 million, a 27.3% or $97.3 million decrease in cash flows compared to the same nine-month period a year ago. The decrease in net cash provided by operating activities was due primarily to a decrease in net income for the nine-month period ended September 30, 2024 and working capital changes. We were able to make net capital expenditures, repay debt, make strategic investments, pay dividends, and repurchase company stock with the net cash provided by operating activities and existing cash balances, supplemented by borrowings under our existing credit facility.

Previous wording

Net cash used in investing activities was $119.4 million for the six-month period ended June 30, 2024 compared to $280.3 million during the same period in 2023. Net property and equipment additions (primarily revenue equipment) were $118.2 million for the six-month period ended June 30, 2024, compared to $254.2 million during the same period of 2023. We currently estimate net capital expenditures (primarily revenue equipment) in 2024 to be in the range of $225 million to $275 million, compared to net capital expenditures in 2023 of $408.7 million. We intend to fund these net capital expenditures through cash flows from operations and financing available under our existing credit facility, if necessary. As of June 30, 2024, we were committed to property and equipment purchases of approximately $202.6 million. During the six-month period ended June 30, 2023, we purchased a $25.0 million subordinated promissory note from Mastery Logistics Systems, Inc. with a maturity date of January 24, 2030.

Current wording

Net cash used in investing activities was $206.5 million for the nine-month period ended September 30, 2024 compared to $402.1 million during the same period in 2023. Net property and equipment additions (primarily revenue equipment) were $206.1 million for the nine-month period ended September 30, 2024, compared to $374.2 million during the same period of 2023. We currently estimate net capital expenditures (primarily revenue equipment) in 2024 to be in the range of $240 million to $260 million, compared to net capital expenditures in 2023 of $408.7 million. We intend to fund these net capital expenditures through cash flows from operations and financing available under our existing credit facility, if necessary. As of September 30, 2024, we were committed to property and equipment purchases of approximately $81.1 million. During the nine-month period ended September 30, 2023, we purchased a $25.0 million subordinated promissory note from MLSI with a maturity date of January 24, 2030.

Previous wording

Net financing activities used $67.8 million during the six months ended June 30, 2024 compared to $64.2 million during the same period in 2023. We had net borrowings on our debt of $21.3 million during the six months ended June 30, 2024, increasing our outstanding debt to $670.0 million at June 30, 2024. We repaid $53.8 million on our debt during the six months ended June 30, 2023. We paid dividends of $17.8 million during the six months ended June 30, 2024 and $16.5 million during the same period in 2023. We currently plan to continue paying a quarterly dividend.

Current wording

Net financing activities used $56.4 million during the nine months ended September 30, 2024 compared to $20.0 million during the same period in 2023. We had net borrowings on our debt of $41.3 million during the nine months ended September 30, 2024, increasing our outstanding debt to $690.0 million at September 30, 2024. We had net repayments on our debt of $3.8 million during the nine months ended September 30, 2023. We paid dividends of $26.4 million during the nine months ended September 30, 2024 and $25.3 million during the same period in 2023. We currently plan to continue paying a quarterly dividend.

Previous wording

Financing activities for the six months ended June 30, 2024, also included common stock repurchases of 1,787,810 shares at a cost of $67.1 million. We did not repurchase any shares of common stock during the same period in 2023. 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. On May 14, 2024, the Board of Directors approved a new stock repurchase program under which the Company is authorized to repurchase up to 5,000,000 shares ofits common stock. Upon approval of the new program, the Board of Directors withdrew the previous stock repurchase authorization, which had 1,627,651 shares remaining available for repurchase. As of June 30, 2024, the Company had purchased 1,103,651 shares pursuant to the new authorization and had 3,896,349 shares remaining available for repurchase.

Current wording

Financing activities for the nine months ended September 30, 2024, also included common stock repurchases of 1,787,810 shares at a cost of $67.1 million. We did not repurchase any shares of common stock during the same period in 2023. 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. On May 14, 2024, the Board of Directors approved a new stock repurchase program under which the Company is authorized to repurchase up to 5,000,000 shares ofits common stock. Upon approval of the new program, the Board of Directors withdrew the previous stock repurchase authorization, which had 1,627,651 shares remaining available for repurchase. As of September 30, 2024, the Company had purchased 1,103,651 shares pursuant to the new authorization and had 3,896,349 shares remaining available for repurchase.