NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) BASIS OF PRESENTATION AND RECENT ACCOUNTING PRONOUNCEMENTS
Basis of Presentation
The accompanying unaudited interim consolidated financial statements include the accounts of Werner Enterprises, Inc. and its subsidiaries (collectively, the “Company” or “Werner”). Redeemable noncontrolling interest on the consolidated condensed balance sheets represents the portion of a consolidated entity in which we do not have a direct equity ownership. In these notes, the terms “we,” “us,” or “our” refer to Werner Enterprises, Inc. and its subsidiaries. All significant intercompany accounts and transactions relating to these entities have been eliminated.
These consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission (“SEC”) instructions to Form 10-Q and, in the opinion of management, reflect all adjustments, which are all of normal recurring nature, necessary to present fairly the financial condition, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles (“GAAP”). These consolidated financial statements do not include all information and footnotes required by GAAP for complete financial statements; although in management’s opinion, the disclosures are adequate so that the information presented is not misleading.
Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. In the opinion of management, the information set forth on the accompanying consolidated condensed balance sheets is fairly stated in all material respects in relation to the consolidated balance sheets from which it has been derived.
These consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and accompanying notes contained in our 2025 Form 10-K.
Reclassifications
Other non-current assets of $39.7 million, other current liabilities of $15.5 million, and other long-term liabilities of $26.5 million were reclassified to operating lease right-of-use assets, net, current maturities of operating lease liabilities, and operating lease liabilities, less current maturities, respectively, as of December 31, 2025, on the consolidated condensed balance sheets. In addition, certain prior period amounts in the consolidated statements of cash flows have been reclassified for separate presentation of amortization of operating lease right-of-use assets and operating lease liabilities, with no effect on the previously reported net cash provided by operating activities. These reclassifications were made to conform to the current financial statement presentation.
New Accounting Pronouncements
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05 Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient permitting entities to assume that conditions at the balance sheet date remain unchanged for the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets under Topic 606 – Revenue from Contracts with Customers. On January 1, 2026, we adopted ASU 2025-05 using a prospective approach. We elected the practical expedient upon the adoption of ASU 2025-05, and adoption of the standard did not have a material impact to our results of operations, cash flows, and financial condition.
Recently Issued Accounting Pronouncements, Not Yet Effective
In November 2024, the FASB issued ASU 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public business entities to disclose additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The provisions of this update are effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, using either a prospective or retrospective approach. We are evaluating the impact of adopting ASU 2024-03, and we expect this ASU to impact our disclosures but not our results of operations, cash flows, and financial condition.
In September 2025, the FASB issued ASU 2025-06 Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), which simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with
early adoption permitted. The amendments in this update permit an entity to apply the new guidance using a prospective, retrospective or modified transition approach. We plan to adopt this ASU for our fiscal year beginning January 1, 2028 using a prospective approach. Although we are evaluating the impact of adopting ASU 2025-06 on our results of operations, cash flows, and financial position, we do not expect a material effect upon adoption.
In November 2025, the FASB issued ASU 2025-09 Derivatives and Hedging (Topic 815), which clarifies certain aspects of the guidance on hedge accounting and addresses several incremental hedge accounting issues airing from the global reference rate reform initiative. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The amendments in this update require an entity to apply the new guidance using a prospective approach. We plan to adopt this ASU for our fiscal year beginning January 1, 2027 using a prospective approach. Although we are evaluating the impact of adopting ASU 2025-09 on our results of operations, cash flows, and financial position, we do not expect a material effect upon adoption.
(2) BUSINESS ACQUISITION
On January 27, 2026, we acquired 100% of the equity interests in FirstEnterprises, Inc. (“FirstFleet”). Separately, under a real estate purchase agreement, we acquired 11 properties from FirstFleet. The purchase price in accordance with GAAP for this acquisition was $214.8 million, which is reflective of cash paid of $184.8 million as well as a contingent earnout valued at $30.0 million on the acquisition date. The contingent earnout is dependent on gross revenue net of fuel surcharge metrics for the period April 1, 2026 through March 31, 2027. The potential undiscounted future contingent earnout payment that we could be required to make is between $0 and $35.0 million. We funded these transactions using cash on hand and our existing revolving credit facility. The cash paid was reduced by the finance lease liabilities assumed in connection with the transaction.
Headquartered in Murfreesboro, Tennessee, FirstFleet brings added scale to Werner with approximately 2,400 tractors, 11,000 trailers and 37 strategically located properties near 130 customer sites around the country. The results of operations for FirstFleet are included in our consolidated financial statements beginning January 27, 2026. Revenues generated by FirstFleet are reported in our Dedicated operating segment within the Truckload Transportation Services (“TTS”) reportable segment. For the three and six months ended June 30, 2026, our consolidated operating results included FirstFleet revenues of $169.1 million and $277.0 million, respectively, and net income of $1.1 million and $3.0 million, respectively. We incurred transaction costs related to the acquisition, such as legal and professional fees, of $4.3 million and $10.3 million for the three and six months ended June 30, 2026, respectively, which is included in other operating expenses on the consolidated statements of income.
Provisional Purchase Price Allocation
We accounted for the FirstFleet purchase using the acquisition method of accounting under GAAP. The purchase price has been allocated to the assets acquired and liabilities assumed using market data and valuation techniques. The estimated fair values of the assets acquired and liabilities assumed are considered provisional for FirstFleet, pending the completion of acquired tangible assets valuations, the assessment of operating and finance leases right-of-use assets and related liabilities, independent valuation of acquired intangible assets, calculations of deferred taxes based upon the underlying tax basis of assets acquired and liabilities assumed and the income taxes receivable, and the determination of insurance reserve liabilities. The determination of estimated fair values requires management to make significant estimates and assumptions. We believe that the information available provides a reasonable basis for estimating the values of assets acquired and liabilities assumed in the FirstFleet acquisition; however, these provisional estimates may be adjusted upon the availability of new information regarding facts and circumstances which existed at the acquisition date, and such adjustments may impact future earnings. We expect to finalize the valuation of assets and liabilities for FirstFleet as soon as practicable, but not later than one year from the acquisition date. Any adjustments to the initial estimates of the fair value of the acquired assets and liabilities assumed in the FirstFleet acquisition will be recorded as adjustments to the respective assets and liabilities, with the residual amounts allocated to goodwill. As of June 30, 2026, no adjustments have been made to the provisional purchase price allocation.
The following table summarizes the provisional purchase price allocation for FirstFleet as of June 30, 2026 (in thousands):
| | | | | | | | | | | | |
| | | | | | |
Provisional Purchase Price | | | | | | |
Cash consideration paid | | | | | $ | 177,387 | | (1) |
| | | | | | |
Contingent consideration arrangement | | | | | 30,000 | | (2) |
Deferred cash payments | | | | | 7,368 | | (3) |
| | | | | | |
Total provisional purchase price (fair value of consideration) | | | | | 214,755 | | |
Provisional Purchase Price Allocation | | | | | | |
Accounts receivable, trade | | | | | 77,250 | | |
| Inventories and supplies | | | | | 1,927 | | |
| Prepaid expenses | | | | | 8,007 | | |
| Other current assets | | | | | 3,130 | | |
Property and equipment | | | | | 175,573 | | |
| | | | | | |
Finance lease right-of-use assets | | | | | 57,195 | | |
| Goodwill | | | | | 9,472 | | |
| Intangible assets | | | | | 22,600 | | |
Operating lease right-of-use assets | | | | | 74,230 | | |
| Other non-current assets | | | | | 873 | | |
| Total assets acquired | | | | | 430,257 | | |
| Accounts payable | | | | | 10,464 | | |
| Insurance and claims accruals | | | | | 16,028 | | |
| Accrued payroll | | | | | 16,035 | | |
| Accrued expenses | | | | | 2,721 | | |
| Current maturities of operating lease liabilities | | | | | 35,627 | | |
| Current maturities of finance lease liabilities | | | | | 26,900 | | |
| Other current liabilities | | | | | 50 | | |
| | | | | | |
| Finance lease liabilities, less current maturities | | | | | 30,296 | | |
| Operating lease liabilities, less current maturities | | | | | 38,602 | | |
| | | | | | |
| Insurance and claims accruals, net of current portion | | | | | 25,870 | | |
| Deferred income taxes | | | | | 12,909 | | |
| Total liabilities assumed | | | | | 215,502 | | |
| Total provisional purchase price allocated | | | | | $ | 214,755 | | |
(1) At closing, $11.9 million of the cash consideration was placed in escrow to secure certain indemnification obligations of the sellers and to cover post-closing adjustments. During the six months ended June 30, 2026, $5.9 million was returned to the sellers. As of June 30, 2026, $6.0 million remains in escrow subject to the satisfaction of certain indemnification and post-closing obligations.
(2) The FirstFleet contingent consideration is recorded in other current liabilities on the consolidated condensed balance sheet as of June 30, 2026. For additional information regarding the valuation of the contingent liability, see Note 7 – Fair Value.
(3) Deferred cash payments of $7.4 million were made during the six months ended June 30, 2026.
The following unaudited pro forma information combines the historical operations of the Company and FirstFleet giving effect to the FirstFleet acquisition, and related transactions as if consummated on January 1, 2025, the beginning of the comparable prior annual reporting period. The unaudited pro forma financial information is based on currently available information, is presented for informational purposes only, and is not indicative of future operations or results had the FirstFleet acquisition been completed as of January 1, 2025 or any other date.
The following table summarizes the unaudited pro forma financial information (in thousands):
| | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| | | 2025 | | 2026 | | 2025 |
| Operating revenues | | | $ | 909,606 | | | $ | 1,792,309 | | | $ | 1,775,709 | |
| Net income | | | 45,528 | | | 19,338 | | | 31,943 | |
| Earnings per share - basic | | | 0.75 | | | 0.32 | | | 0.52 | |
| Earnings per share - diluted | | | 0.75 | | | 0.32 | | | 0.52 | |
The unaudited pro forma financial information includes certain adjustments such as recognition of assets acquired at estimated fair values and related depreciation and amortization, interest expense on acquisition financing, elimination of transaction costs incurred by the Company and FirstFleet that were directly related to the acquisition, and related income tax effects of these items. The adjustments do not reflect potential revenue enhancements, cost savings or operating synergies that we expect to realize after the acquisition.
Goodwill and Intangible Assets
Goodwill represents the excess of cost over the fair value of net identifiable tangible and intangible assets acquired in a business combination. Goodwill and intangible assets with indefinite lives are not amortized. Goodwill is reviewed for potential impairment on an annual basis or more frequently if indicators of a potential impairment exist. Goodwill associated with the acquisition was primarily attributable to acquiring and retaining the existing FirstFleet network and the anticipated synergies from combining the operations of the Company and FirstFleet. None of the goodwill associated with the acquisition is expected to be deductible for income tax purposes. All goodwill is assigned to our TTS segment.
We preliminarily allocated $22.6 million of the purchase price to finite-lived intangible assets, consisting of customer relationships. The estimated fair values of the intangible assets were determined, with the assistance of an independent third-party valuation firm, using the multi-period excess earnings method. This method is a form of the income approach, which requires a forecast of all the expected future cash flows.
The following table summarizes the acquired intangible assets and the respective weighted-average estimated amortization period:
| | | | | | | | | | | |
| Estimated Fair Value
(in thousands) | | Weighted-Average Estimated
Amortization Period
(Years) |
| Customer relationships | $ | 22,600 | | | 10 |
| | | |
| | | |
(3) REVENUE
Revenue Recognition
Revenues are recognized over time as control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.
The following table presents our revenues disaggregated by revenue source (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Truckload Transportation Services | $ | 702,572 | | | $ | 517,647 | | | $ | 1,296,884 | | | $ | 1,019,522 | |
| Werner Logistics | 211,732 | | | 221,177 | | | 407,568 | | | 416,735 | |
| Inter-segment eliminations | 2 | | | (4,749) | | | (105) | | | (8,812) | |
| Transportation services | 914,306 | | | 734,075 | | | 1,704,347 | | | 1,427,445 | |
| Other revenues | 19,621 | | | 19,073 | | | 38,190 | | | 37,817 | |
| Total revenues | $ | 933,927 | | | $ | 753,148 | | | $ | 1,742,537 | | | $ | 1,465,262 | |
The following table presents our revenues disaggregated by geographic areas in which we conduct business (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| United States | $ | 891,223 | | | $ | 715,677 | | | $ | 1,668,557 | | | $ | 1,390,919 | |
| Mexico | 39,639 | | | 33,557 | | | 68,474 | | | 67,168 | |
| Canada | 3,065 | | | 3,914 | | | 5,506 | | | 7,175 | |
| Total revenues | $ | 933,927 | | | $ | 753,148 | | | $ | 1,742,537 | | | $ | 1,465,262 | |
Operating revenues for foreign countries include revenues for (i) shipments with an origin or destination in that country and (ii) other services provided in that country. If both the origin and destination are in a foreign country, the revenues are attributed to the country of origin.
Contract Balances and Accounts Receivable
A receivable is an unconditional right to consideration and is recognized when shipments have been completed and the related performance obligation has been fully satisfied. At June 30, 2026 and December 31, 2025, the accounts receivable, trade, net, balance was $490.9 million and $394.9 million, respectively. Contract assets represent a conditional right to consideration in exchange for goods or services and are transferred to receivables when the rights become unconditional. At June 30, 2026 and December 31, 2025, the balance of contract assets was $6.4 million and $5.3 million, respectively. We have recognized contract assets within the other current assets financial statement caption on the consolidated condensed balance sheets. These contract assets are considered current assets as they will be settled in less than 12 months.
Contract liabilities represent advance consideration received from customers and are recognized as revenues over time as the related performance obligation is satisfied. At June 30, 2026 and December 31, 2025, the balance of contract liabilities was $1.7 million and $1.1 million, respectively. The amount of revenues recognized in the six months ended June 30, 2026 that was included in the December 31, 2025 contract liability balance was $1.1 million. We have recognized contract liabilities within the accounts payable financial statement caption on the consolidated condensed balance sheets. These contract liabilities are considered current liabilities as they will be settled in less than 12 months.
Performance Obligations
We have elected to apply the practical expedient in Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts With Customers, to not disclose the value of remaining performance obligations for contracts with an original expected length of one year or less. Remaining performance obligations represent the transaction price allocated to future reporting periods for freight shipments started but not completed at the reporting date that we expect to recognize as revenue in the period subsequent to the reporting date; transit times generally average approximately 3 days.
During the six months ended June 30, 2026 and 2025, revenues recognized from performance obligations related to prior periods (for example, due to changes in transaction price) were not material.
(4) ASSETS HELD FOR SALE
Assets held for sale consist of tractors and trailers removed from service and held for sale. These assets held for sale are recorded at the lower of carrying amount or fair value less cost to sell, and are expected to be sold within the next 12 months. The entire $12.0 million and $32.6 million recorded in assets held for sale at June 30, 2026 and December 31, 2025, respectively, are comprised of revenue equipment. Net gains or losses on disposals of property and equipment classified as assets held for sale are recorded in restructuring and impairment on the consolidated statements of income. During the three and six months ended June 30, 2026, the Company incurred impairment losses of $4.1 million related to certain tractors and trailers as a result of the restructuring of our One-Way Truckload operating segment. During the three and six months ended June 30, 2025, the Company did not recognize impairment losses related to assets held for sale.
(5) GOODWILL AND INTANGIBLE ASSETS
The following table summarizes changes in the carrying amount of goodwill by segment for the six months ended June 30, 2026 (in thousands):
| | | | | | | | | | | | | | | | | |
| TTS | | Werner Logistics | | Total |
Balance as of December 31, 2025 | $ | 46,056 | | | $ | 83,048 | | | $ | 129,104 | |
| Goodwill recorded in acquisition of FirstFleet | 9,472 | | | — | | | 9,472 | |
| | | | | |
Balance as of June 30, 2026 | $ | 55,528 | | | $ | 83,048 | | | $ | 138,576 | |
The following table presents acquired intangible assets (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2026 | | December 31, 2025 |
| Gross
Carrying
Amount | | Accumulated
Amortization | | Net
Carrying
Amount | | Gross
Carrying
Amount | | Accumulated
Amortization | | Net
Carrying
Amount |
| Customer relationships | $ | 82,600 | | | $ | (24,880) | | | $ | 57,720 | | | $ | 60,000 | | | $ | (20,939) | | | $ | 39,061 | |
| Trade names | 7,600 | | | (2,375) | | | 5,225 | | | 7,600 | | | (2,058) | | | 5,542 | |
| Total intangible assets | $ | 90,200 | | | $ | (27,255) | | | $ | 62,945 | | | $ | 67,600 | | | $ | (22,997) | | | $ | 44,603 | |
Amortization expense on intangible assets was $2.2 million and $4.3 million for the three and six months ended June 30, 2026, respectively, and $2.5 million and $5.0 million for the three and six months ended June 30, 2025, respectively, and is reported in depreciation and amortization on the consolidated statements of income. As of June 30, 2026, we estimate future amortization expense for intangible assets will be $4.4 million for the remainder of 2026, and $8.9 million for each of the next four fiscal years and $8.7 million for the fifth succeeding fiscal year.
(6) LEASES
Lessee Disclosures
We lease real estate under operating leases and revenue equipment (tractors and trailers) under both operating and finance leases. The leases have terms which range from 2 years to 18 years, and some include options to renew. Renewal terms are included in the lease term when it is reasonably certain that we will exercise the option to renew.
Operating leases are included in operating lease right-of-use assets, net, current maturities of operating lease liabilities and operating lease liabilities, less current maturities on the consolidated condensed balance sheets. Finance leases are included in finance lease right-of-use assets, net, current maturities of finance lease liabilities and finance lease liabilities, less current maturities on the consolidated condensed balance sheets.
We assess whether an arrangement is a lease or contains a lease at inception. These assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date (or acquisition date, for leases assumed in a business combination), using our incremental borrowing rate because the rate implicit in each lease is not readily determinable. We have certain contracts for real estate that may contain lease and non-lease components which we have elected to treat as a single lease component. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. Lease expense for operating leases, and any variable lease expense, is reported in rent and purchased transportation on the consolidated statements of income. We recognize the amortization of the right-of-use asset for our finance leases on a straight-line basis over the shorter of the lease term or the useful life of the right-of-use asset in depreciation and amortization expense on the consolidated statements of income. The interest expense related to finance leases is recognized using the effective interest method based on the discount rate determined at lease commencement and is included within interest expense on the consolidated statements of income.
The following table presents the weighted average remaining lease term and discount rate:
| | | | | | | | | | | |
| June 30, 2026 | | December 31, 2025 |
| Weighted-average remaining lease term (years) | | | |
| Operating leases | 2.9 | | 4.5 |
| Finance leases | 2.0 | | N/A |
| Weighted-average discount rate | | | |
| Operating leases | 4.7 | % | | 5.0 | % |
| Finance leases | 2.8 | % | | N/A |
The following table presents the maturities of operating and finance lease liabilities as of June 30, 2026 (in thousands):
| | | | | | | | | | | |
| Operating Leases | | Finance Leases |
| 2026 (remaining) | $ | 36,171 | | | $ | 21,354 | |
| 2027 | 33,709 | | | 12,542 | |
| 2028 | 20,325 | | | 7,471 | |
| 2029 | 12,030 | | | 4,513 | |
| 2030 | 3,680 | | | 5,083 | |
| Thereafter | 5,602 | | | — | |
Total undiscounted lease payments | $ | 111,517 | | | $ | 50,963 | |
| Less: Imputed interest | (7,879) | | | (2,676) | |
Present value of lease liabilities | $ | 103,638 | | | $ | 48,287 | |
The following table presents supplemental disclosures for the consolidated statements of cash flows (in thousands):
| | | | | | | | | | | |
| Six Months Ended
June 30, |
| 2026 | | 2025 |
| Cash paid for amounts included in the measurement of lease liabilities | | | |
| Operating cash flows for operating leases | $ | 22,402 | | | $ | 8,758 | |
| Operating cash flows for finance leases | 619 | | | N/A |
| Financing cash flows for finance leases | 6,838 | | | N/A |
| | | |
| Right-of-use assets obtained in exchange for new lease liabilities | | | |
| Operating leases | $ | 9,890 | | | $ | 2,542 | |
| Finance leases | — | | | N/A |
The following table presents the classification of lease cost components (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30, | Six Months Ended
June 30, |
| Financial Statement Classification | | 2026 | | 2025 | 2026 | | 2025 |
| Operating lease cost | Rent and purchased transportation | | $ | 13,524 | | | $ | 4,478 | | $ | 24,630 | | | $ | 8,980 | |
| Short-term lease cost | Rent and purchased transportation | | 4,353 | | | 2,168 | | 7,758 | | | 4,280 | |
| Variable lease cost | Rent and purchased transportation | | — | | | — | | — | | | — | |
| Finance lease cost | | | | | | | | |
| Amortization of right-of-use assets | Depreciation and amortization | | 2,585 | | | N/A | 4,203 | | | N/A |
| Interest on lease liabilities | Interest Expense | | 356 | | | N/A | 619 | | | N/A |
| Total lease cost | | | $ | 20,818 | | | $ | 6,646 | | $ | 37,210 | | | $ | 13,260 | |
Lessor Disclosures
We are the lessor of tractors and trailers (revenue equipment) under operating leases with initial terms of 1 year to 10 years. At times, we also lease or sublease real estate to third parties. We recognize revenue for such leases on a straight-line basis over the term of the lease. Revenues were $3.1 million and $6.4 million for the three and six months ended June 30, 2026, respectively, and $2.9 million and $5.5 million for the three and six months ended June 30, 2025, respectively.
The following table presents information about the maturities of these operating leases as of June 30, 2026 (in thousands):
| | | | | |
| 2026 (remaining) | $ | 6,160 | |
| 2027 | 4,352 | |
| 2028 | — | |
| 2029 | — | |
| 2030 | — | |
| Thereafter | — | |
| Total | $ | 10,512 | |
The owned assets underlying our leases as lessor primarily consist of revenue equipment. As of June 30, 2026 and December 31, 2025, the gross carrying value of such revenue equipment underlying these leases was $72.9 million and $72.5 million, respectively, and accumulated depreciation was $31.0 million and $32.0 million, respectively. Depreciation expense for these assets was $2.3 million and $4.6 million for the three and six months ended June 30, 2026, respectively, and $2.1 million and $4.1 million for the three and six months ended June 30, 2025, respectively.
(7) FAIR VALUE
Fair Value Measurement — Definition and Hierarchy
ASC 820-10, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.
ASC 820-10 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability, developed based on market data obtained from sources independent of the Company. Unobservable inputs reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability, developed based on the best information available in the circumstances.
The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows:
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access.
Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Such inputs include quoted prices in markets that are not active, quoted prices for similar assets and liabilities in active and inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 — Unobservable inputs for the asset or liability, where there is little, if any, observable market activity or data for the asset or liability.
In general, and where applicable, we use quoted prices in active markets for identical assets or liabilities to determine fair value. This pricing methodology applies to our Level 1 assets and liabilities. If quoted prices in active markets for identical assets and liabilities are not available to determine fair value, then we use quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. This pricing methodology would apply to Level 2 assets and liabilities.
The following table presents the fair value hierarchy for our assets and liabilities measured at fair value on a recurring basis (in thousands):
| | | | | | | | | | | | | | | | | | | | |
| | Level in
Fair Value
Hierarchy | | Fair Value |
| | | June 30, 2026 | | December 31, 2025 |
| Assets | | | | | | |
| | | | | | |
| | | | | | |
| Other non-current assets | | | | | | |
Pay-fixed interest rate swaps (1) | | 2 | | $ | 1,140 | | | $ | — | |
Equity securities (2) | | 2 | | 88 | | | 73 | |
| | | | | | |
| Total assets at fair value | | | | $ | 1,228 | | | $ | 73 | |
| Liabilities | | | | | | |
| Other current liabilities | | | | | | |
Pay-fixed interest rate swaps (1) | | 2 | | $ | 868 | | | $ | 465 | |
| Contingent consideration associated with acquisition | | 3 | | 30,387 | | | — | |
| Total other current liabilities | | | | 31,255 | | | 465 | |
| Other long-term liabilities: | | | | | | |
Pay-fixed interest rate swaps (1) | | 2 | | — | | | 3,361 | |
| | | | | | |
| | | | | | |
| Total liabilities at fair value | | | | $ | 31,255 | | | $ | 3,826 | |
(1) Pay-fixed interest rate swaps are measured on a recurring basis by netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves. See Note 9 – Debt and Credit Facilities for further information on our interest rate swaps.
(2) Represents our investment in an autonomous technology company. For additional information regarding the valuation of this equity security, see Note 8 – Investments.
The following table presents changes in the fair value of our contingent earnout liability (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
Balance at beginning of period | $ | 30,000 | | | $ | 9,421 | | | $ | — | | | $ | 9,315 | |
Contingent consideration associated with the acquisition of FirstFleet (1) | — | | | — | | | 30,000 | | | — | |
| | | | | | | |
Payment for contingent consideration (2) | — | | | (1,500) | | | — | | | (1,500) | |
Change in fair value (3) | 387 | | | (7,921) | | | 387 | | | (7,815) | |
Balance at end of period | $ | 30,387 | | | $ | — | | | $ | 30,387 | | | $ | — | |
(1) For additional information regarding our FirstFleet contingent consideration arrangement, see Note 2 – Business Acquisition.
(2) The final outcome of the contingent consideration arrangement related to the Baylor Trucking, Inc. acquisition was negotiated and paid in April 2025, as certain financial performance goals were achieved. The contingent earnout period was scheduled to end on October 31, 2025.
(3) For the three and six months ended June 30, 2025, the change in fair value primarily represents a net favorable change to the contingent earnout liability resulting from the finalization of the Baylor Trucking Inc. contingent consideration arrangement in April 2025.
The estimated fair value of our contingent consideration arrangement is based upon a Black-Scholes-Merton valuation model for the acquired entity. The fair value of the contingent consideration is a Level 3 measurement within the fair value hierarchy. Additionally, as the liability is stated at present value, the passage of time alone will increase the estimated fair value of the liability each reporting period. Any change in the fair value of the contingent consideration subsequent to the acquisition date and prior to settlement will be recognized in other operating expenses on the consolidated statements of income.
We have ownership interests in investments, primarily Mastery Logistics Systems, Inc. (“MLSI”), which do not have readily determinable fair values and are accounted for using the measurement alternative in ASC 321, Investments - Equity Securities. Our ownership interest in Autotech Fund III, L.P. (“Autotech Fund III”) and Autotech Fund IV, L.P. (“Autotech Fund IV”) (collectively, the “Autotech Funds”) are accounted for under ASC 323, Investments - Equity Method and Joint Ventures. For additional information regarding the valuation of these investments, see Note 8 – Investments.
Fair Value of Financial Instruments Not Recorded at Fair Value
Cash and cash equivalents, accounts receivable trade, and accounts payable are short-term in nature and accordingly are carried at amounts that approximate fair value. The carrying amount of our variable-rate long-term debt approximates fair value due to the duration of our credit arrangements and the variable interest rates.
(8) INVESTMENTS
Equity Investments without Readily Determinable Fair Values
Our strategic equity investments without readily determinable fair values primarily consist of our investment in MLSI, a transportation management systems company. MLSI has developed a cloud-based transportation management system using its SaaS technology, and we have obtained a license. Our investments are being accounted for under ASC 321 using the measurement alternative and are recorded in other non-current assets on the consolidated condensed balance sheets. We record changes in the values of our investments based on events that occur that would indicate the values have changed, in loss (gain) on investments in equity securities on the consolidated statements of income. As of June 30, 2026 and December 31, 2025, the value of our investment in MLSI was $109.9 million, and the value of our other equity investments without readily determinable fair values was $0.4 million. No gains or losses were recorded for the three and six months ended June 30, 2026 and 2025.
The following table summarizes the activity related to our equity investments without readily determinable fair values during the periods presented (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
Investment in equity securities | $ | — | | | $ | 11 | | | $ | — | | | $ | 6,021 | |
| | | | | | | |
| | | | | | | |
As of June 30, 2026, cumulative upward adjustments on our equity securities without readily determinable fair values totaled $64.9 million.
Equity Investments with Readily Determinable Fair Values
We own a strategic minority equity investment in an autonomous technology company, which is being accounted for under ASC 321 and is recorded in other non-current assets on the consolidated condensed balance sheets. As of June 30, 2026 and December 31, 2025, the value of this investment was $0.1 million. For additional information regarding the fair value of this equity investment, see Note 7 – Fair Value.
The following table summarizes the activity related to our equity investments with readily determinable fair values during the periods presented (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Loss (gain) on investments in equity securities | $ | 11 | | | $ | 33 | | | $ | (15) | | | $ | 35 | |
| | | | | | | |
Equity Method Investment
We have committed to make a $20.0 million and a $10.0 million investment in Autotech Fund III and Autotech Fund IV, respectively, pursuant to limited partnership agreements. The Autotech Funds are managed by Autotech Ventures, a venture capital firm focused on ground transportation technology. Our interest in each fund individually and in the aggregate, which represents an ownership percentage of less than 20%, is being accounted for under ASC 323. As a limited partner in each fund, we make periodic capital contributions toward these total commitment amounts. As of June 30, 2026 and December 31, 2025, the value of our investment in the Autotech Funds was $14.5 million and $11.7 million, respectively, and is recorded in other non-current assets on the consolidated condensed balance sheets. As of June 30, 2026, the carrying amount of Autotech Fund III was updated using operating results through March 31, 2026, as this is the most recent information available to us at this time. As of June 30, 2026, the carrying amount of Autotech Fund IV approximates its fair value.
The following table summarizes the activity related to our equity method investments during the periods presented (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2026 | | 2025 | | 2026 | | 2025 |
| Capital contributions | | $ | 2,000 | | | $ | 1,760 | | | $ | 2,000 | | | $ | 1,760 | |
| Earnings from equity method investments | | (650) | | | (719) | | | (736) | | | (842) | |
As of June 30, 2026, our cumulative capital contributions in the Autotech Funds were $13.6 million.
(9) DEBT AND CREDIT FACILITIES
On December 20, 2022, we entered into a $1.075 billion unsecured credit facility with a group of lenders (the “2022 Credit Agreement”), replacing our previous credit facilities. The 2022 Credit Agreement is scheduled to mature on December 20, 2027, and has a $100.0 million maximum limit for the aggregate amount of letters of credit issued.
Revolving credit loans drawn under the 2022 Credit Agreement bear interest, at our option, at (i) the Base Rate (the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50%, or (c) the one-month Term Secured Overnight Financing Rate (“SOFR”) plus 1.10%), plus a margin ranging between 0.125% and 0.750%, or (ii) Term SOFR plus 0.10% and a margin ranging between 1.125% and 1.750%. Swingline loans drawn under the 2022 Credit Agreement bear interest at the Base Rate, as defined above, plus a margin ranging between 0.125% and 0.750%. The 2022 Credit Agreement also requires us to pay quarterly (i) a letter of credit commission on the daily amount available to be drawn under such standby letters of credit at rates ranging between 1.125% and 1.750% per annum and (ii) a nonrefundable commitment fee on the average daily unused amount of the commitment at rates ranging between 0.125% and 0.250% per annum. The margin, letter of credit commission, and commitment fee rates are based on our ratio of net funded debt to earnings before interest, income taxes, depreciation and amortization (“EBITDA”). There are no scheduled principal payments due on the 2022 Credit Agreement until the maturity date, and interest is payable in arrears at periodic intervals not to exceed three months.
Availability of such funds under the 2022 Credit Agreement is conditional upon various customary terms and covenants. Such covenants include, among other things, two financial covenants requiring us (i) not to exceed a maximum ratio of net funded debt to EBITDA and (ii) to exceed a minimum ratio of EBITDA to interest expense. As of June 30, 2026, we were in compliance with these covenants.
We have entered into variable-for-fixed interest rate swap agreements in order to limit our exposure to increases in interest rates on a portion of our variable-rate indebtedness. Under the terms of our interest rate swap agreements, we receive monthly variable-rate interest payments based on one-month Term SOFR and make monthly fixed-rate interest payments as specified in the interest rate swap agreements. We have designated our interest rate swap agreements as cash flow hedges. Changes in fair value of outstanding derivatives in cash flow hedges are recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income until earnings are impacted by the hedged transactions. In June 2026, we entered into two variable-for-fixed interest rate swap agreements with an aggregate notional amount of $90.0 million, maturing in June 2029. Subsequent to the end of the quarter, in July 2026, two variable-for-fixed interest rate swap agreements with an aggregate notional amount of $90.0 million matured. For additional information regarding our interest rate swaps, see Note 7 - Fair Value.
On March 27, 2025, the Company and Werner Receivables Company, LLC (“WRC”), a newly-formed wholly-owned subsidiary of the Company, entered into a Loan Security Agreement (“LSA”) with various lenders. The LSA is scheduled to terminate on September 21, 2027, 90 days prior to the 2022 Credit Agreement maturity date, unless extended by the parties and is subject to earlier termination as provided in the LSA. The LSA is a secured borrowing that is collateralized by eligible receivables, for which the Company is the servicing agent. WRC is a bankruptcy remote, special purpose entity and the borrower under the LSA. The Company has contributed and from time to time sells a designated pool of eligible accounts receivables to WRC which, in turn, may borrow funds under the LSA on a revolving basis. The collateral is available to satisfy the claims related to the lenders’ interests in the receivables and unavailable to satisfy claims of the Company and its subsidiaries. The LSA does not qualify for sale treatment. Accordingly, the Company’s eligible receivables remain on our condensed consolidated balance sheets in accounts receivable, trade, less allowance.
On June 5, 2026, we entered into a third amendment to the LSA with various lenders, increasing the maximum funding available for eligible receivables from $325.0 million to $350.0 million, which may increase to $400.0 million upon WRC’s request and acceptance by the lenders. The third amendment to the LSA also incorporates language from the Performance Guaranty Agreement entered into by the Company on June 5, 2026, which provides an unconditional, irrevocable guaranty to the secured parties under the LSA, supporting the obligations (monetary and non-monetary) of WRC, the Company as the servicer, and any other originators under the LSA. The guaranty remains in effect until all obligations are paid and performed in full. As of June 30, 2026, the performance risk under the guaranty is considered remote due to no adverse credit indicators. Subsequent to the end of the quarter, on July 7, 2026, we entered into a fourth amendment to the LSA, increasing the maximum funding available from $350.0 million to $375.0 million. Borrowings under the LSA bear interest at (i) a commercial paper rate or (ii) one-month Term SOFR, plus 0.10%. The LSA also requires us to pay nonrefundable drawn and undrawn fees on the average daily used and unused amounts of the commitment, respectively.
The LSA is subject various affirmative and negative covenants, representations and warranties, and default and termination provisions customary for facilities of this type, including a minimum borrower’s net worth covenant. As of June 30, 2026, we were in compliance with these covenants.
The following table presents total debt under the 2022 Credit Agreement and the LSA (together, “the Credit Facilities”) (in thousands):
| | | | | | | | | | | |
| June 30, 2026 | | December 31, 2025 |
| | | |
| | | |
| Long-term debt, net of current portion | | | |
| 2022 Credit Agreement | $ | 443,000 | | | $ | 427,000 | |
LSA (weighted average interest rate of 4.50% at June 30, 2026) | 350,000 | | | 325,000 | |
| Total long-term debt, net of current portion | 793,000 | | | 752,000 | |
Total debt (1) | $ | 793,000 | | | $ | 752,000 | |
(1) As of June 30, 2026, we effectively fixed the interest rate on a portion of our outstanding variable-rate debt using the following interest rate swaps:
•$90.0 million which is effectively fixed at 6.24% with interest rate swap agreements through July 2026;
•$75.0 million which is effectively fixed at 6.36% with an interest rate swap agreement through April 2027;
•$75.0 million which is effectively fixed at 6.21% with an interest rate swap agreement through May 2027;
•$60.0 million which is effectively fixed at 5.27% with interest rate swap agreements through July 2028;
•$75.0 million which is effectively fixed at 5.26% with an interest rate swap agreement through August 2028; and
•$90.0 million which is effectively fixed at 5.58% with interest rate swap agreements through June 2029.
Our total available borrowing capacity was $599.9 million as of June 30, 2026, consisting of $599.9 million under the 2022 Credit Agreement after considering $32.1 million in stand-by letters of credit under which we are obligated. As of June 30, 2026, no borrowing capacity was available under the LSA.
Availability under the LSA is calculated as follows (in thousands):
| | | | | |
| June 30, 2026 |
| Borrowing base, based on eligible receivables | $ | 350,000 | |
| Less: outstanding borrowings | (350,000) | |
| Availability under LSA | $ | — | |
For information regarding the fair value of our debt and interest rate swaps, see Note 7 – Fair Value.
At June 30, 2026, the aggregate maturities of future debt principal payments under the Credit Facilities are as follows (in thousands):
| | | | | |
| 2026 (remaining) | $ | — | |
| 2027 | 793,000 | |
| 2028 | — | |
| 2029 | — | |
| |
| Total | $ | 793,000 | |
(10) COMMITMENTS AND CONTINGENCIES
We have committed to property and equipment purchases of approximately $139.8 million at June 30, 2026.
We are involved in certain claims and pending litigation, including the litigation described herein, arising in the ordinary course of business. The majority of these claims relate to bodily injury, property damage, cargo and workers’ compensation incurred in the transportation of freight, as well as certain class action litigation related to personnel and employment matters. We accrue for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the knowledge of the facts, management believes the resolution of claims and pending litigation, taking into account existing reserves, will not have a material adverse effect on our consolidated financial statements. Moreover, the results of complex legal proceedings are difficult to predict, and our view of these matters may change in the future as the litigation and related events unfold.
In October 2025, we reached an agreement with the plaintiffs in the consolidated class action lawsuits entitled Abarca et al. v. 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 after more than a decade of litigation. The proceeding was instituted on June 4, 2014 in the Superior Court for Alameda County, California and was transferred to the United States District Court for the District of Nebraska on October 20, 2014. The cases, which were brought by a small group of drivers and later certified as a class action with tens of thousands of class members and covered the years from mid-2010 to late 2023, involved claims for failure to provide meal and rest breaks (and such meal and rest break claims were dismissed via summary judgment on June 1, 2021), alleged unpaid wages, unauthorized deductions, and other items. The Court entered preliminary approval February 5, 2026. The settlement is still subject to court final approval. A liability balance of $17.7 million and $18.0 million for this agreement is included in other current liabilities on the consolidated condensed balance sheets as of June 30, 2026 and December 31, 2025, respectively.
(11) RESTRUCTURING AND IMPAIRMENT COSTS
During the fourth quarter 2025, we began to incur costs in connection with the strategic restructuring of our One-Way Truckload business to enhance long-term profitability and fleet utilization by maximizing production and mitigating unprofitable freight. Key steps in this initiative include exiting selective unprofitable regional and short-haul truckload freight, further integrating our one-way acquisition operations, and a further shift in the One-Way Truckload fleet composition toward more specialized, expedited (“Expedited”), and team capacity. This repositioning focuses on eliminating underperforming business. We believe this restructuring reflects the necessary steps to rationalize our assets and business model for future margin expansion.
The following table summarizes activity in our restructuring liability during the three and six months ended June 30, 2026, which is included in other current liabilities on the consolidated condensed balance sheets (in thousands):
| | | | | | | | | | | | | |
| | | | | Other Revenue Equipment Costs | | | | |
| Restructuring liability balance, March 31, 2026 | | | | | $ | 5,016 | | | | | |
| | | | | | | | | |
| Costs paid or otherwise settled | | | | | (1,404) | | | | | |
| | | | | | | | | |
| Restructuring liability balance, June 30, 2026 | | | | | $ | 3,612 | | | | | |
| | | | | | | | | | | | | |
| | | | | Other Revenue Equipment Costs | | | | |
| Restructuring liability balance, December 31, 2025 | | | | | $ | 6,643 | | | | | |
| | | | | | | | | |
| Costs paid or otherwise settled | | | | | (3,031) | | | | | |
| | | | | | | | | |
| Restructuring liability balance, June 30, 2026 | | | | | $ | 3,612 | | | | | |
During the three and six months ended June 30, 2026, we recognized $4.1 million in restructuring and impairment costs on the consolidated statements of income. These costs relate to the impairment of revenue equipment in our One-Way Truckload business.
The following table summarizes the cumulative amount of restructuring and impairment costs incurred as of June 30, 2026 related to the restructuring of our One-Way Truckload business (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Financial Statement Classification | | Intangible Asset Impairment | | Revenue Equipment Impairment | | Other Revenue Equipment Costs | | Current Assets (1) | | Total |
| Restructuring and impairment | | $ | 21,735 | | | $ | 18,454 | | | $ | 6,643 | | | $ | 1,487 | | | $ | 48,319 | |
| | | | | | | | | | |
(1) Costs relating to the removal of prepaid expenses, inventory, and other current assets.
These costs are recorded in our One-Way Truckload operating segment. There may be changes in previously recorded estimates as assets are sold, payments are made, and further restructuring actions are completed. All restructuring and impairment activities are expected to be completed by the end of 2026.
(12) EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income attributable to Werner by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to Werner by the weighted average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding restricted stock awards. Performance awards are excluded from the calculation of dilutive potential common shares until the threshold performance conditions have been satisfied. There are no differences in the numerators of our computations of basic and diluted loss per share for any periods presented.
The computation of basic and diluted earnings per share is shown below (in thousands, except per share amounts).
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Net income attributable to Werner | $ | 6,350 | | | $ | 44,062 | | | $ | 2,088 | | | $ | 33,964 | |
| Weighted average common shares outstanding | 59,965 | | | 60,888 | | | 59,938 | | | 61,386 | |
| Dilutive effect of stock-based awards | 275 | | | 113 | | | 258 | | | 146 | |
| Shares used in computing diluted earnings per share | 60,240 | | | 61,001 | | | 60,196 | | | 61,532 | |
| Basic earnings per share | $ | 0.11 | | | $ | 0.72 | | | $ | 0.03 | | | $ | 0.55 | |
| Diluted earnings per share | $ | 0.11 | | | $ | 0.72 | | | $ | 0.03 | | | $ | 0.55 | |
(13) SEGMENT INFORMATION
We have two reportable segments – TTS and Werner Logistics.
The TTS reportable segment consists of two operating segments, Dedicated and One-Way Truckload. These operating segments are aggregated because they have similar economic characteristics and meet the other aggregation criteria described in the accounting guidance for segment reporting. Dedicated provides truckload services dedicated to a specific customer, generally for a retail distribution center or manufacturing facility, utilizing either dry van or specialized trailers. One-Way Truckload is comprised of the following operating fleets: (i) the medium-to-long-haul van (“Van”) fleet transports a variety of consumer nondurable products and other commodities in truckload quantities over irregular routes using dry van trailers, including Mexico cross-border routes; (ii) the expedited (“Expedited”) fleet provides time-sensitive truckload services utilizing driver teams; (iii) the regional short-haul (“Regional”) fleet provides comparable truckload van service within geographic regions across the United States; and (iv) the Temperature Controlled fleet provides truckload services for temperature sensitive products over irregular routes utilizing temperature-controlled trailers. Revenues for the TTS segment include a small amount of non-trucking revenues which consist primarily of the intra-Mexico portion of cross-border shipments delivered to or from Mexico where we utilize a third-party capacity provider. Results of operations for FirstFleet are included in our Dedicated operating segment within the TTS reportable segment beginning January 27, 2026. For additional information regarding the FirstFleet acquisition, see Note 2 – Business Acquisition.
The Werner Logistics segment provides non-asset-based transportation and logistics services. Werner Logistics provides services throughout North America and generates the majority of our non-trucking revenues through three divisions. These three Werner Logistics divisions are as follows: (i) Truckload Logistics, which uses contracted carriers to complete shipments for brokerage customers and freight management customers for which we offer a full range of single-source logistics management services and solutions; (ii) the Intermodal (“Intermodal”) division offers rail transportation through alliances with rail and drayage providers as an alternative to truck transportation; and (iii) Werner Final Mile (“Final Mile”) offers residential and commercial deliveries of large or heavy items using third-party agents, independent contractors, and Company employees with two-person delivery teams operating a liftgate straight truck.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies contained in our 2025 Form 10-K. Inter-segment transactions between reporting segments have been recorded at amounts approximating market and are eliminated in consolidation.
The chief operating officer of the Company is our chief operating decision maker (“CODM”). Our CODM evaluates the operating results of each individual segment, using monthly divisional financial statements, to asses performance and to allocate resources to each segment. Our divisional financial statements detail the revenues and operating expenses of each individual segment netting to operating income (loss) that allows the CODM to make operational decisions regarding each individual segment.
We do not prepare separate balance sheets by segment and, as a result, assets are not separately identifiable by segment. Based on our operations, certain revenue-generating assets (primarily tractors and trailers) are interchangeable between segments. Depreciation for these interchangeable assets is allocated to segments based on the actual number of units utilized by the segment during the period. Other depreciation and amortization is allocated to segments based on specific identification or as a percentage of a metric such as average number of tractors.
The following tables summarize our segment information (in thousands):
| | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2026 |
| Truckload Transportation Services | | Werner Logistics | | Total |
| Revenues from external customers | $ | 702,574 | | | $ | 211,732 | | | $ | 914,306 | |
| Inter-segment revenues | (2) | | | — | | | (2) | |
| Reportable segment revenues | 702,572 | | | 211,732 | | | 914,304 | |
Reconciliation of revenues: | | | | | |
Other revenues (1) | | | | | 19,621 | |
| Elimination of inter-segment revenues | | | | | 2 | |
| Consolidated revenues | | | | | $ | 933,927 | |
Less operating expenses: (2) | | | | | |
Salaries, wages and benefits | 282,579 | | | 18,068 | | | 300,647 | |
| Fuel | 118,606 | | | 903 | | | 119,509 | |
| Supplies and maintenance | 70,798 | | | 2,973 | | | 73,771 | |
| Taxes and licenses | 22,995 | | | 216 | | | 23,211 | |
| Insurance and claims | 40,193 | | | 1,109 | | | 41,302 | |
| Depreciation and amortization | 73,287 | | | 3,692 | | | 76,979 | |
| Rent and purchased transportation | 58,616 | | | 187,663 | | | 246,279 | |
| Communications and utilities | 4,333 | | | 329 | | | 4,662 | |
| Gains on sales of property and equipment | (2,040) | | | (99) | | | (2,139) | |
Other segment items (3) | 6,087 | | | 748 | | | 6,835 | |
| Reportable segment operating expenses | 675,454 | | | 215,602 | | | 891,056 | |
| Reportable segment operating income (loss) | $ | 27,118 | | | $ | (3,870) | | | $ | 23,248 | |
Reconciliation of operating income: | | | | | |
Other operating loss (1) | | | | | (6,327) | |
| Consolidated operating income | | | | | $ | 16,921 | |
| | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, 2025 |
| Truckload Transportation Services | | Werner Logistics | | Total |
| Revenues from external customers | $ | 512,898 | | | $ | 221,177 | | | $ | 734,075 | |
| Inter-segment revenues | 4,749 | | | — | | | 4,749 | |
| Reportable segment revenues | 517,647 | | | 221,177 | | | 738,824 | |
Reconciliation of revenues: | | | | | |
Other revenues (1) | | | | | 19,073 | |
| Elimination of inter-segment revenues | | | | | (4,749) | |
| Consolidated revenues | | | | | $ | 753,148 | |
Less operating expenses: (2) | | | | | |
Salaries, wages and benefits (4) | 225,123 | | | 18,044 | | | 243,167 | |
| Fuel | 59,731 | | | 338 | | | 60,069 | |
| Supplies and maintenance | 53,710 | | | 2,916 | | | 56,626 | |
| Taxes and licenses | 22,662 | | | 244 | | | 22,906 | |
Insurance and claims (5) | (7,555) | | | 506 | | | (7,049) | |
| Depreciation and amortization | 65,207 | | | 3,868 | | | 69,075 | |
| Rent and purchased transportation | 40,110 | | | 190,293 | | | 230,403 | |
| Communications and utilities | 3,107 | | | 228 | | | 3,335 | |
| Gains on sales of property and equipment | (5,799) | | | (420) | | | (6,219) | |
Other segment items (3) | (2,738) | | | 832 | | | (1,906) | |
| Reportable segment operating expenses | 453,558 | | | 216,849 | | | 670,407 | |
| Reportable segment operating income | $ | 64,089 | | | $ | 4,328 | | | $ | 68,417 | |
Reconciliation of operating income: | | | | | |
Other operating loss (1) | | | | | (2,096) | |
| Consolidated operating income | | | | | $ | 66,321 | |
| | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, 2026 |
| Truckload Transportation Services | | Werner Logistics | | Total |
| Revenues from external customers | $ | 1,296,779 | | | $ | 407,568 | | | $ | 1,704,347 | |
| Inter-segment revenues | 105 | | | — | | | 105 | |
| Reportable segment revenues | 1,296,884 | | | 407,568 | | | 1,704,452 | |
Reconciliation of revenues: | | | | | |
Other revenues (1) | | | | | 38,190 | |
| Elimination of inter-segment revenues | | | | | (105) | |
| Consolidated revenues | | | | | $ | 1,742,537 | |
Less operating expenses: (2) | | | | | |
| Salaries, wages and benefits | 538,163 | | | 35,515 | | | $ | 573,678 | |
| Fuel | 200,105 | | | 1,521 | | | 201,626 | |
| Supplies and maintenance | 132,262 | | | 5,921 | | | 138,183 | |
| Taxes and licenses | 45,418 | | | 444 | | | 45,862 | |
| Insurance and claims | 81,463 | | | 1,636 | | | 83,099 | |
| Depreciation and amortization | 143,774 | | | 7,460 | | | 151,234 | |
| Rent and purchased transportation | 106,775 | | | 358,265 | | | 465,040 | |
| Communications and utilities | 8,332 | | | 711 | | | 9,043 | |
| Gains on sales of property and equipment | (6,656) | | | (200) | | | (6,856) | |
Other segment items (3) | 6,192 | | | 2,170 | | | 8,362 | |
| Reportable segment operating expenses | 1,255,828 | | | 413,443 | | | 1,669,271 | |
| Reportable segment operating income (loss) | $ | 41,056 | | | $ | (5,875) | | | $ | 35,181 | |
Reconciliation of operating income: | | | | | |
Other operating loss (1) | | | | | (14,265) | |
| Consolidated operating income | | | | | $ | 20,916 | |
| | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, 2025 |
| Truckload Transportation Services | | Werner Logistics | | Total |
| Revenues from external customers | $ | 1,010,710 | | | $ | 416,735 | | | $ | 1,427,445 | |
| Inter-segment revenues | 8,812 | | | — | | | 8,812 | |
| Reportable segment revenues | 1,019,522 | | | 416,735 | | | 1,436,257 | |
Reconciliation of revenues: | | | | | |
Other revenues (1) | | | | | 37,817 | |
| Elimination of inter-segment revenues | | | | | (8,812) | |
| Consolidated revenues | | | | | $ | 1,465,262 | |
Less operating expenses: (2) | | | | | |
Salaries, wages and benefits (4) | 442,826 | | | 36,300 | | | 479,126 | |
| Fuel | 122,164 | | | 698 | | | 122,862 | |
| Supplies and maintenance | 105,048 | | | 5,589 | | | 110,637 | |
| Taxes and licenses | 44,619 | | | 467 | | | 45,086 | |
Insurance and claims (5) | 35,519 | | | 1,128 | | | 36,647 | |
| Depreciation and amortization | 128,253 | | | 7,560 | | | 135,813 | |
| Rent and purchased transportation | 78,563 | | | 359,512 | | | 438,075 | |
| Communications and utilities | 6,715 | | | 585 | | | 7,300 | |
| Gains on sales of property and equipment | (9,087) | | | (719) | | | (9,806) | |
Other segment items (3) | 1,729 | | | 1,762 | | | 3,491 | |
| Reportable segment operating expenses | 956,349 | | | 412,882 | | | 1,369,231 | |
| Reportable segment operating income | $ | 63,173 | | | $ | 3,853 | | | $ | 67,026 | |
Reconciliation of operating income: | | | | | |
Other operating loss (1) | | | | | (6,537) | |
| Consolidated operating income | | | | | $ | 60,489 | |
(1) Revenues and operating income or loss from segments below the quantitative thresholds for determining reportable segments. Those segments include driver training schools, transportation-related activities such as third-party equipment maintenance and equipment leasing, other business activities, and corporate related items which are incidental to our activities and are not attributable to any of our operating segments.
(2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Inter-segment expenses are included within the amounts shown.
(3) Other segment items for each reportable segment primarily includes costs for professional services. During the three and six months ended June 30, 2026, other segment items for the TTS segment incurred $4.1 million of restructuring and impairment costs, see Note 11 – Restructuring and Impairment Costs. During the three and six months ended June 30, 2025, other segment items for the TTS segment were partially offset by a net favorable change of $7.9 million and $7.8 million, respectively, to the contingent earnout liability related to the Baylor Trucking, Inc. acquisition. For additional information regarding this contingent consideration arrangement, see Note 7 – Fair Value.
(4) During the three and six months ended June 30, 2025, salaries, wages and benefits for the TTS and Werner Logistics segments included severance costs of $0.9 million and $0.4 million, respectively, related to cost saving initiatives.
(5) During the three and six months ended June 30, 2025, insurance and claims expense for the TTS segment was offset by a $45.7 million liability reversal as a result of a favorable decision related to a previously disclosed lawsuit arising from a December 2014 accident.
(14) SUBSEQUENT EVENT
On July 7, 2026, we entered into a fourth amendment to the LSA, increasing the maximum funding available from $350.0 million to $375.0 million. For additional information regarding our credit facilities, see Note 9 – Debt and Credit Facilities.
