10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

 

[Mark	one]
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-14690

WERNER ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Nebraska			47-0648386
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
14507 Frontier Road
Post Office Box 45308
Omaha	,	Nebraska	68145-0308
(Address of principal executive offices)			(Zip Code)

(402) 895-6640

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value	WERN	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large Accelerated Filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of October 28, 2019, 69,204,715 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

WERNER ENTERPRISES, INC.

INDEX

		PAGE
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements:	3
	Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2019 and 2018	4
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2019 and 2018	5
	Consolidated Condensed Balance Sheets as of September 30, 2019 and December 31, 2018	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018	7
	Consolidated Statements of Stockholders’ Equity for the Three Months Ended September 30, 2019, June 30, 2019, March 31, 2019, September 30, 2018, June 30, 2018, and March 31, 2018	8
	Notes to Consolidated Financial Statements (Unaudited) as of September 30, 2019	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 6.	Exhibits	32

2

PART I

FINANCIAL INFORMATION

Cautionary Note Regarding Forward-Looking Statements:

This Quarterly Report on Form 10-Q contains historical information and forward-looking statements based on information currently available to our management. The forward-looking statements in this report, including those made in Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of Part I, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These safe harbor provisions encourage reporting companies to provide prospective information to investors. Forward-looking statements can be identified by the use of certain words, such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project” and other similar terms and language. We believe the forward-looking statements are reasonable based on currently available information. However, forward-looking statements involve risks, uncertainties and assumptions, whether known or unknown, that could cause our actual results, business, financial condition and cash flows to differ materially from those anticipated in the forward-looking statements. A discussion of important factors relating to forward-looking statements is included in Item 1A (Risk Factors) of Part I of our Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”). Readers should not unduly rely on the forward-looking statements included in this Form 10-Q because such statements speak only to the date they were made. Unless otherwise required by applicable securities laws, we undertake no obligation or duty to update or revise any forward-looking statements contained herein to reflect subsequent events or circumstances or the occurrence of unanticipated events.

Item 1. Financial Statements.

The interim consolidated financial statements contained herein reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the financial condition, results of operations and cash flows for the periods presented. The interim consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission (“SEC”) instructions to Form 10-Q and were also prepared without audit. The interim consolidated financial statements do not include all information and footnotes required by accounting principles generally accepted in the United States of America 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-month and nine-month periods ended September 30, 2019, are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. In the opinion of management, the information set forth in 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 interim consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and accompanying notes contained in our 2018 Form 10-K.

3

WERNER ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share amounts)	2019			2018			2019			2018
	(Unaudited)
Operating revenues	$	618,264		$	629,735		$	1,841,914		$	1,811,549
Operating expenses:
Salaries, wages and benefits	209,586			201,606			618,386			580,515
Fuel	59,518			67,072			176,720			191,769
Supplies and maintenance	46,907			47,136			136,963			138,556
Taxes and licenses	24,244			18,463			70,788			63,607
Insurance and claims	21,930			22,011			65,631			73,858
Depreciation	62,620			58,382			184,816			170,439
Rent and purchased transportation	134,797			147,870			413,809			435,225
Communications and utilities	3,892			3,993			11,806			12,028
Other	1,413			(184		)	3,177			(3,732		)
Total operating expenses	564,907			566,349			1,682,096			1,662,265
Operating income	53,357			63,386			159,818			149,284
Other expense (income):
Interest expense	2,408			870			4,695			1,842
Interest income	(756		)	(646		)	(2,648		)	(2,079		)
Other	47			41			(11		)	172
Total other expense (income)	1,699			265			2,036			(65		)
Income before income taxes	51,658			63,121			157,782			149,349
Income taxes	12,614			15,607			39,334			35,764
Net income	$	39,044		$	47,514		$	118,448		$	113,585
Earnings per share:
Basic	$	0.56		$	0.67		$	1.70		$	1.58
Diluted	$	0.56		$	0.66		$	1.69		$	1.57
Weighted-average common shares outstanding:
Basic	69,198			71,436			69,684			72,001
Diluted	69,600			71,752			70,053			72,300

See Notes to Consolidated Financial Statements (Unaudited).

4

WERNER ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands)	2019			2018		2019			2018
	(Unaudited)
Net income	$	39,044		$	47,514	$	118,448		$	113,585
Other comprehensive income (loss):
Foreign currency translation adjustments	(1,065		)	2,011		79			1,799
Change in fair value of interest rate swap, net of tax	(1,440		)	5		(1,651		)	377
Other comprehensive income (loss)	(2,505		)	2,016		(1,572		)	2,176
Comprehensive income	$	36,539		$	49,530	$	116,876		$	115,761

See Notes to Consolidated Financial Statements (Unaudited).

5

WERNER ENTERPRISES, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands, except share amounts)	September 30, 2019			December 31, 2018
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	14,354		$	33,930
Accounts receivable, trade, less allowance of $8,246 and $8,613, respectively	323,375			337,927
Other receivables	44,247			26,545
Inventories and supplies	9,750			10,060
Prepaid taxes, licenses and permits	7,462			16,619
Other current assets	37,137			31,577
Total current assets	436,325			456,658
Property and equipment	2,384,254			2,247,577
Less – accumulated depreciation	808,906			760,015
Property and equipment, net	1,575,348			1,487,562
Other non-current assets	151,866			139,284
Total assets	$	2,163,539		$	2,083,504
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Checks issued in excess of cash balances	$	8,902		$	—
Accounts payable	89,348			97,781
Current portion of long-term debt	75,000			75,000
Insurance and claims accruals	91,305			67,304
Accrued payroll	38,501			40,271
Other current liabilities	28,865			30,004
Total current liabilities	331,921			310,360
Long-term debt, net of current portion	275,000			50,000
Other long-term liabilities	20,511			10,911
Insurance and claims accruals, net of current portion	229,870			214,030
Deferred income taxes	241,433			233,450
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 200,000,000 shares authorized; 80,533,536 shares
issued; 69,204,715 and 70,441,973 shares outstanding, respectively	805			805
Paid-in capital	112,064			107,455
Retained earnings	1,252,344			1,413,746
Accumulated other comprehensive loss	(17,645		)	(16,073		)
Treasury stock, at cost; 11,328,821 and 10,091,563 shares, respectively	(282,764		)	(241,180		)
Total stockholders’ equity	1,064,804			1,264,753
Total liabilities and stockholders’ equity	$	2,163,539		$	2,083,504

See Notes to Consolidated Financial Statements (Unaudited).

6

WERNER ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended September 30,
(In thousands)	2019			2018
	(Unaudited)
Cash flows from operating activities:
Net income	$	118,448		$	113,585
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	184,816			170,439
Deferred income taxes	8,413			25,114
Gain on disposal of property and equipment	(14,530		)	(15,922		)
Non-cash equity compensation	6,346			5,507
Insurance and claims accruals, net of current portion	15,840			21,100
Other	(4,527		)	(5,081		)
Changes in certain working capital items:
Accounts receivable, net	14,552			(20,737		)
Other current assets	5,667			(9,535		)
Accounts payable	(532		)	11,742
Other current liabilities	(2,308		)	6,301
Net cash provided by operating activities	332,185			302,513
Cash flows from investing activities:
Additions to property and equipment	(375,202		)	(412,557		)
Proceeds from sales of property and equipment	103,543			123,267
Issuance of notes receivable	—			(3,300		)
Decrease in notes receivable	9,247			15,846
Net cash used in investing activities	(262,412		)	(276,744		)
Cash flows from financing activities:
Repayments of short-term debt	—			(40,000		)
Proceeds from issuance of short-term debt	—			40,000
Repayments of long-term debt	(50,000		)	(20,000		)
Proceeds from issuance of long-term debt	275,000			70,000
Change in net checks issued in excess of cash balances	8,902			(18,240		)
Dividends on common stock	(279,962		)	(16,605		)
Repurchases of common stock	(42,301		)	(46,413		)
Tax withholding related to net share settlements of restricted stock awards	(1,191		)	(679		)
Stock options exercised	171			476
Net cash used in financing activities	(89,381		)	(31,461		)
Effect of exchange rate fluctuations on cash	32			211
Net decrease in cash, cash equivalents and restricted cash	(19,576		)	(5,481		)
Cash, cash equivalents and restricted cash, beginning of period	33,930			15,131
Cash, cash equivalents and restricted cash, end of period	$	14,354		$	9,650
Supplemental disclosures of cash flow information:
Interest paid	$	4,361		$	1,699
Income taxes paid	41,038			6,332
Supplemental schedule of non-cash investing and financing activities:
Notes receivable issued upon sale of property and equipment	$	5,542		$	8,054
Change in fair value of interest rate swap	(1,651		)	377
Property and equipment acquired included in accounts payable	8,847			4,797
Property and equipment disposed included in other receivables	1,486			1,007
Dividends accrued but not yet paid at end of period	6,229			6,407

See Notes to Consolidated Financial Statements (Unaudited).

7

WERNER ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share and per share amounts)	Common Stock		Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Stockholders’ Equity
	(Unaudited)
BALANCE, December 31, 2018	$	805	$	107,455		$	1,413,746		$	(16,073	)	$	(241,180	)	$	1,264,753
Comprehensive income	—		—			36,086			513			—			36,599
Purchases of 600,000 shares of common stock	—		—			—			—			(20,545		)	(20,545		)
Dividends on common stock ($0.09 per share)	—		—			(6,290		)	—			—			(6,290		)
Equity compensation activity, 46,129 shares	—		(1,578		)	—			—			399			(1,179		)
Non-cash equity compensation expense	—		2,051			—			—			—			2,051
BALANCE, March 31, 2019	805		107,928			1,443,542			(15,560		)	(261,326		)	1,275,389
Comprehensive income	—		—			43,318			420			—			43,738
Purchases of 700,000 shares of common stock	—		—			—			—			(21,756		)	(21,756		)
Dividends on common stock ($3.84 per share)	—		—			(267,331		)	—			—			(267,331		)
Equity compensation activity, 6,901 shares	—		(140		)	—			—			130			(10		)
Non-cash equity compensation expense	—		2,314			—			—			—			2,314
BALANCE, June 30, 2019	805		110,102			1,219,529			(15,140		)	(282,952		)	1,032,344
Comprehensive income	—		—			39,044			(2,505		)	—			36,539
Dividends on common stock ($0.09 per share)	—		—			(6,229		)	—			—			(6,229		)
Equity compensation activity, 9,712 shares	—		(19		)	—			—			188			169
Non-cash equity compensation expense	—		1,981			—			—			—			1,981
BALANCE, September 30, 2019	$	805	$	112,064		$	1,252,344		$	(17,645	)	$	(282,764	)	$	1,064,804

See Notes to Consolidated Financial Statements (Unaudited).

8

WERNER ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share and per share amounts)	Common Stock		Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Stockholders’ Equity
	(Unaudited)
BALANCE, December 31, 2017	$	805	$	102,563		$	1,267,871		$	(15,835	)	$	(170,622	)	$	1,184,782
Comprehensive income	—		—			27,807			2,603			—			30,410
Dividends on common stock ($0.07 per share)	—		—			(5,071		)	—			—			(5,071		)
Equity compensation activity, 44,980 shares	—		(1,069		)	—			—			631			(438		)
Non-cash equity compensation expense	—		1,410			—			—			—			1,410
Cumulative effect of accounting change	—		—			2,011			—			—			2,011
BALANCE, March 31, 2018	805		102,904			1,292,618			(13,232		)	(169,991		)	1,213,104
Comprehensive income	—		—			38,264			(2,443		)	—			35,821
Purchases of 627,652 shares of common stock	—		—			—			—			(22,884		)	(22,884		)
Dividends on common stock ($0.09 per share)	—		—			(6,466		)	—			—			(6,466		)
Equity compensation activity, 4,935 shares	—		(84		)	—			—			91			7
Non-cash equity compensation expense	—		1,979			—			—			—			1,979
BALANCE, June 30, 2018	805		104,799			1,324,416			(15,675		)	(192,784		)	1,221,561
Comprehensive income	—		—			47,514			2,016			—			49,530
Purchases of 649,449 shares of common stock	—		—			—			—			(23,529		)	(23,529		)
Dividends on common stock ($0.09 per share)	—		—			(6,407		)	—			—			(6,407		)
Equity compensation activity, 12,267 shares	—		(13		)	—			—			241			228
Non-cash equity compensation expense	—		2,118			—			—			—			2,118
BALANCE, September 30, 2018	$	805	$	106,904		$	1,365,523		$	(13,659	)	$	(216,072	)	$	1,243,501

See Notes to Consolidated Financial Statements (Unaudited).

9

WERNER ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) Accounting Policies

New Accounting Pronouncements Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases,” to increase transparency and comparability by recognizing a right-of-use asset and a lease liability on the balance sheet and disclosing key information about leasing arrangements. The Company adopted ASU No. 2016-02 and related amendments as of January 1, 2019, using the optional transition method. See Note 3 - Leases for additional adoption information and disclosures required by Accounting Standards Codification (“ASC”) Topic 842.

In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The Company adopted ASU 2017-12 as of January 1, 2019. Upon adoption, this update had no effect on our financial position, results of operations and cash flows.

In February 2018, the FASB issued ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The Company adopted ASU No. 2018-02 as of January 1, 2019. Upon adoption, this update had no effect on our financial position, results of operations and cash flows.

Accounting Standards Updates Not Yet Effective

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements,” which requires measurement and recognition of expected versus incurred credit losses for financial assets. The provisions of this update are effective for fiscal years beginning after December 15, 2019. We are evaluating the impact of adopting ASU No. 2016-13 on our financial position, results of operations and cash flows.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which modifies the disclosure requirements on fair value measurements. As part of its disclosure framework project, the FASB has eliminated, amended and added disclosure requirements for fair value measurements in Topic 820, Fair Value Measurement. The provisions of this update are effective for fiscal years beginning after December 15, 2019. Although we are evaluating the impact of adopting ASU No. 2018-13 on our financial position, results of operations and cash flows, we do not expect a material effect upon adoption because we do not currently disclose any fair value measurements subject to the amendments.

In August 2018, the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force),” which updates the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract to align with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The provisions of this update are effective for fiscal years beginning after December 15, 2019. We are evaluating the impact of adopting ASU No. 2018-15 on our financial position, results of operations and cash flows.

10

(2) 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 September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Truckload Transportation Services	$	480,351		$	484,782		$	1,423,201		$	1,386,615
Werner Logistics	121,331			129,422			369,584			380,854
Inter-segment eliminations	(1		)	(208		)	(240		)	(878		)
Transportation services	601,681			613,996			1,792,545			1,766,591
Other revenues	16,583			15,739			49,369			44,958
Total revenues	$	618,264		$	629,735		$	1,841,914		$	1,811,549

The following table presents our revenues disaggregated by geographic areas in which we conduct business (in thousands). 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.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
United States	$	551,008	$	548,885	$	1,631,861	$	1,577,189
Mexico	49,031		61,028		153,803		177,180
Other	18,225		19,822		56,250		57,180
Total revenues	$	618,264	$	629,735	$	1,841,914	$	1,811,549

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 September 30, 2019 and December 31, 2018, the accounts receivable, net, balance was $323.4 million and $337.9 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 September 30, 2019 and December 31, 2018, the balance of contract assets was $7.9 million and $7.4 million, respectively. The Company has recognized contract assets within the other current assets financial statement caption on the balance sheet. 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 September 30, 2019 and December 31, 2018, the balance of contract liabilities was $1.6 million and $1.7 million, respectively. The amount of revenues recognized in the nine months ended September 30, 2019 that was included in the December 31, 2018 contract liability balance was $1.7 million. The Company has recognized contract liabilities within the accounts payable and other current liabilities financial statement captions on the balance sheet. 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 ASC Topic 606 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 nine months ended September 30, 2019 and September 30, 2018, revenues recognized from performance obligations related to prior periods (for example, due to changes in transaction price) were not material.

11

(3) Leases

Adoption of ASC Topic 842, “Leases”

On January 1, 2019, the Company adopted ASC Topic 842, “Leases”, which requires lessees to recognize most leases in the consolidated balance sheet as a right-of-use asset and a lease obligation. Expenses are recognized in the consolidated statement of income in a manner similar to previous accounting guidance. The Company adopted the accounting standard using the optional transition approach, which applies the provisions of the new guidance at the effective date without adjusting the comparative periods presented.

The Company elected the following practical expedients upon adoption: not to reassess whether any existing contracts are or contain leases, not to reassess the lease classification for any existing leases, not to reassess initial direct costs for any existing leases and not to separately identify lease and non-lease components for all underlying classes of assets. Additionally, the Company made a short-term lease accounting policy election to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less.

Adoption of the new standard resulted in recognition of right-of-use assets and corresponding lease liabilities of $8.7 million as of January 1, 2019. The new standard did not have a significant impact on the consolidated statement of income.

The Company has entered into operating leases primarily for real estate. The leases have terms which range from 1 year to 11 years, and some include options to renew. Renewal terms are included in the lease term when it is reasonably certain that the Company will exercise the option to renew.

Operating leases are included in the other non-current assets, other current liabilities and other long-term liabilities on the consolidated condensed balance sheets. These assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date, using the Company’s incremental borrowing rate because the rate implicit in each lease in not readily determinable. The Company has certain contracts for real estate that may contain lease and non-lease components which it has 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 is reported in rent and purchase transportation on the consolidated statements of income.

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The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of September 30, 2019.

(In thousands)	September 30, 2019
Maturity of Lease Liabilities
2019 (remaining)	$	932
2020	3,424
2021	2,554
2022	1,625
2023	688
Thereafter	1,746
Total undiscounted operating lease payments	$	10,969
Less: Imputed interest	(763		)
Present value of operating lease liabilities	$	10,206
Balance Sheet Classification
Right-of-use assets (recorded in other non-current assets)	$	9,883
Current lease liabilities (recorded in other current liabilities)	$	3,251
Long-term lease liabilities (recorded in other long-term liabilities)	6,955
Total operating lease liabilities	$	10,206
Other Information
Weighted-average remaining lease term for operating leases	4.34 years
Weighted-average discount rate for operating leases	3.5		%

Cash Flows

An initial right-of-use asset of $8.7 million was recognized as a non-cash asset addition with the adoption of the new lease accounting standard. Additional right-of-use assets of $3.6 million were recognized as non-cash asset additions that resulted from new operating lease liabilities during the nine months ended September 30, 2019. Cash paid for amounts included in the present value of operating lease liabilities was $2.7 million during the nine months ended September 30, 2019, and is included in operating cash flows.

Operating Lease Expense

Operating lease expense was $2.0 million and $6.2 million during the three and nine months ended September 30, 2019, respectively. This expense included $0.9 million and $2.7 million for the three and nine months ended September 30, 2019, respectively, for long-term operating leases, with the remainder for variable and short-term lease expense.

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Lessor Operating Leases

We are the lessor of tractors and trailers under operating leases with initial terms of 2 to 10 years. We recognize revenue for such leases on a straight-line basis over the term of the lease, and revenues for the three and nine months ended September 30, 2019 were $3.6 million and $10.4 million, respectively. The following table presents information about the maturities of these operating leases as of September 30, 2019.

(In thousands)	September 30, 2019
2019 (remaining)	$	3,169
2020	7,674
2021	248
2022	62
2023	—
Thereafter	—
Total	$	11,153

(4) Credit Facilities

As of September 30, 2019, we had unsecured committed credit facilities with three banks. We had with Wells Fargo Bank, N.A. a $300.0 million credit facility which will expire on May 14, 2024. We had a $200.0 million credit facility with BMO Harris Bank N.A. which will expire on May 14, 2024. We also had an unsecured line of credit of $75.0 million with U.S. Bank, N.A., which will expire on July 13, 2020. Borrowings under these credit facilities bear variable interest based on the London Interbank Offered Rate (“LIBOR”). On July 2, 2019, we (i) terminated our previous $75.0 million interest rate swap agreement with Wells Fargo Bank, N.A., (ii) entered into a new $75.0 million interest rate swap agreement with Wells Fargo Bank, N.A., and (iii) entered into a $75.0 million interest rate swap agreement with BMO Harris Bank N.A.

As of September 30, 2019 and December 31, 2018, our outstanding debt totaled $350.0 million and $125.0 million, respectively. We had $200.0 million outstanding under the credit facilities at a weighted average variable interest rate of 2.67% as of September 30, 2019. We had (i) an additional $75.0 million outstanding under the Wells Fargo Bank, N.A. credit facility at a variable rate of 2.72% as of September 30, 2019, which is effectively fixed at 2.32% with an interest rate swap agreement through May 14, 2024 and (ii) an additional $75.0 million outstanding under the BMO Harris Bank N.A. credit facility at a variable rate of 2.79% as of September 30, 2019, which is effectively fixed at 2.36% with an interest rate swap agreement through May 14, 2024. The $575.0 million of borrowing capacity under our credit facilities at September 30, 2019, is further reduced by $32.7 million in stand-by letters of credit under which we are obligated. Each of the debt agreements includes, among other things, financial covenants requiring us (i) to exceed a minimum ratio of earnings before interest, income taxes, depreciation and amortization to interest expense and/or (ii) not to exceed a maximum ratio of total funded debt to earnings before interest, income taxes, depreciation and amortization (as such terms are defined in each credit facility). At September 30, 2019, we were in compliance with these covenants.

At September 30, 2019, the aggregate future maturities of long-term debt by year are as follows (in thousands):

2019	$	—
2020	75,000
2021	—
2022	—
2023	—
2024	275,000
Total	$	350,000

The carrying amounts of our long-term debt approximate fair value due to the duration of the notes and the variable interest rates.

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(5) Commitments and Contingencies

As of September 30, 2019, we have committed to property and equipment purchases of approximately $63.5 million.

We are involved in certain claims and pending litigation, including those 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.

On May 17, 2018, in Harris County District Court in Houston, Texas, a jury rendered an adverse verdict against Werner Enterprises, Inc. (the “Company”) in a lawsuit arising from a December 30, 2014 accident between a Werner tractor-trailer and a passenger vehicle. On July 30, 2018, the court entered a final judgment against Werner for $92 million, including pre-judgment interest.

The Company has premium-based liability insurance to cover the potential outcome from this jury verdict. Under the Company’s insurance policies in effect on the date of this accident, the Company’s maximum liability for this accident is $10.0 million (plus pre-judgment and post-judgment interest) with premium-based coverage that exceeds the jury verdict amount. As a result of this jury verdict, the Company had recorded a liability of $17.7 million as of September 30, 2019, and $15.2 million as of December 31, 2018. Under the terms of the Company’s insurance policies, the Company is the primary obligor of the verdict, and as such, the Company has also recorded a $79.2 million receivable from its third-party insurance providers in other non-current assets and a corresponding liability of the same amount in the long-term portion of insurance and claims accruals in the consolidated balance sheets as of September 30, 2019 and December 31, 2018.

The Company is pursuing an appeal of this verdict. No assurances can be given regarding the outcome of any such appeal.

We are involved in class action litigation in the U.S. District Court for the District of Nebraska, in which the plaintiffs allege that we owe drivers for unpaid wages under the Fair Labor Standards Act (“FLSA”) and the Nebraska Wage Payment and Collection Act and that we failed to pay minimum wage per hour for drivers in our student driver training program, related to short break time and sleeper berth time. The period covered by this class action suit is August 2008 through March 2014. The case was tried to a jury in May 2017, resulting in a verdict of $0.8 million in plaintiffs’ favor on the short break matter and a verdict in our favor on the sleeper berth matter. As a result of various post-trial motions, the court has awarded $0.5 million to the plaintiffs for attorney fees and costs. As of September 30, 2019, we had accrued for the jury’s award, attorney fees and costs in the short break matter and had not accrued for the sleeper berth matter. Plaintiffs have appealed the post-verdict amounts awarded by the trial court for fees, costs and liquidated damages.

We are also involved in certain class action litigation in which the plaintiffs allege claims for failure to provide meal and rest breaks, unpaid wages, unauthorized deductions and other items. Based on the knowledge of the facts, management does not currently believe the outcome of these class actions is likely to have a material adverse effect on our financial position or results of operations. However, the final disposition of these matters and the impact of such final dispositions cannot be determined at this time. 

(6) Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income 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 stock options and restricted stock awards. There are no differences in the numerators of our computations of basic and diluted earnings per share for any periods presented.

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

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	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net income	$	39,044	$	47,514	$	118,448	$	113,585
Weighted average common shares outstanding	69,198		71,436		69,684		72,001
Dilutive effect of stock-based awards	402		316		369		299
Shares used in computing diluted earnings per share	69,600		71,752		70,053		72,300
Basic earnings per share	$	0.56	$	0.67	$	1.70	$	1.58
Diluted earnings per share	$	0.56	$	0.66	$	1.69	$	1.57

There were no options to purchase shares of common stock that were outstanding during the periods indicated above that were excluded from the computation of diluted earnings per share because the option purchase price was greater than the average market price of the common shares during the period. Performance awards are excluded from the calculation of dilutive potential common shares until the threshold performance conditions have been satisfied.

(7) Equity Compensation

The Werner Enterprises, Inc. Amended and Restated Equity Plan (the “Equity Plan”), approved by the Company’s shareholders, provides for grants to employees and non-employee directors of the Company in the form of nonqualified stock options, restricted stock and units (“restricted awards”), performance awards, and stock appreciation rights. The Board of Directors or the Compensation Committee of our Board of Directors determines the terms of each award, including the type, recipients, number of shares subject to and vesting conditions of each award. No awards of stock appreciation rights have been issued under the Equity Plan to date. The maximum number of shares of common stock that may be awarded under the Equity Plan is 20,000,000 shares. The maximum aggregate number of shares that may be awarded to any one person in any one calendar year under the Equity Plan is 500,000. As of September 30, 2019, there were 6,779,440 shares available for granting additional awards.

Equity compensation expense is included in salaries, wages and benefits within the Consolidated Statements of Income. As of September 30, 2019, the total unrecognized compensation cost related to non-vested equity compensation awards was approximately $10.6 million and is expected to be recognized over a weighted average period of 1.8 years. The following table summarizes the equity compensation expense and related income tax benefit recognized in the Consolidated Statements of Income (in thousands): 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Restricted awards:
Pre-tax compensation expense	$	1,310	$	1,028	$	3,786	$	3,091
Tax benefit	335		262		966		788
Restricted stock expense, net of tax	$	975	$	766	$	2,820	$	2,303
Performance awards:
Pre-tax compensation expense	$	680	$	992	$	2,577	$	2,319
Tax benefit	173		253		657		591
Performance award expense, net of tax	$	507	$	739	$	1,920	$	1,728

We do not have a formal policy for issuing shares upon an exercise of stock options or vesting of restricted and performance awards. Such shares are generally issued from treasury stock. From time to time, we repurchase shares of our common stock, the timing and amount of which depends on market and other factors. Historically, the shares acquired from such repurchases have provided us with sufficient quantities of stock to issue for equity compensation. Based on current treasury stock levels, we do not expect to repurchase additional shares specifically for equity compensation during 2019.

Stock Options

Stock options are granted at prices equal to the market value of the common stock on the date the option award is granted. Option awards exercised in 2019 became exercisable in installments from 24 to 72 months after the date of grant. The options were exercisable over a period not to exceed ten years, one day from the date of grant. No stock options are outstanding as of September 30, 2019.

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The following table summarizes stock option activity for the nine months ended September 30, 2019:

	Number of Options (in thousands)		Weighted Average Exercise Price ($)		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding at beginning of period	9		$	19.02
Granted	—		—
Exercised	(9	)	19.02
Forfeited	—		—
Expired	—		—
Outstanding at end of period	—		—		0.00	$	—
Exercisable at end of period	—		—		0.00	$	—

We did not grant any stock options during the nine-month periods ended September 30, 2019 and September 30, 2018. The fair value of stock option grants is estimated using a Black-Scholes valuation model. In the nine-month periods ended September 30, 2019, and September 30, 2018, the total intrinsic value of stock options exercised was $136 thousand and $484 thousand, respectively.

Restricted Awards

Restricted stock entitles the holder to shares of common stock when the award vests. Restricted stock units entitle the holder to a combination of cash or stock equal to the value of common stock when the unit vests. The value of these shares may fluctuate according to market conditions and other factors. Restricted awards currently outstanding vest over periods ranging from 12 to 60 months from the grant date of the award. The restricted awards do not confer any voting or dividend rights to recipients until such shares vest and do not have any post-vesting sales restrictions.

The following table summarizes restricted award activity for the nine months ended September 30, 2019:

	Number of Restricted Awards (in thousands)		Weighted Average Grant Date Fair Value ($)
Nonvested at beginning of period	326		$	31.93
Granted	147		32.55
Vested	(53	)	33.04
Forfeited	(9	)	31.55
Nonvested at end of period	411		32.02

We estimate the fair value of restricted awards based upon the market price of the underlying common stock on the date of grant, reduced by the present value of estimated future dividends because the awards are not entitled to receive dividends prior to vesting. Our estimate of future dividends is based on the most recent quarterly dividend rate at the time of grant, adjusted for any known future changes in the dividend rate. Cash settled restricted stock units are recorded as a liability within the Consolidated Balance Sheets and are adjusted to fair value each reporting period.

The total fair value of previously granted restricted awards vested during the nine-month periods ended September 30, 2019 and September 30, 2018 was $1.8 million and $0.8 million, respectively. We withheld shares based on the closing stock price on the vesting date to settle the employees’ statutory obligation for the applicable income and other employment taxes. The shares withheld to satisfy the tax withholding obligations were recorded as treasury stock.

Performance Awards

Performance awards entitle the recipient to shares of common stock upon attainment of performance objectives as pre-established by the Compensation Committee. If the performance objectives are achieved, performance awards currently outstanding vest, subject to continued employment, over periods ranging from 12 to 60 months from the grant date of the award. The performance awards do not confer any voting or dividend rights to recipients until such shares vest and do not have any post-vesting sales restrictions.

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The following table summarizes performance award activity for the nine months ended September 30, 2019:

	Number of Performance Awards (in thousands)		Weighted Average Grant Date Fair Value ($)
Nonvested at beginning of period	207		$	27.92
Granted	97		32.88
Vested	(35	)	27.07
Forfeited	—		—
Nonvested at end of period	269		30.40

The 2019 performance awards are earned based upon the level of attainment by the Company of specified performance objectives related to cumulative diluted earnings per share for the two-year period from January 1, 2019 to December 31, 2020. Shares earned based on cumulative diluted earnings per share may be capped based on absolute total shareholder return during the three-year period ended December 31, 2021. The 2019 performance awards will vest in one installment on the third anniversary from the grant date.

We estimate the fair value of performance awards based upon the market price of the underlying common stock on the date of grant, reduced by the present value of estimated future dividends because the awards are not entitled to receive dividends prior to vesting. Our estimate of future dividends is based on the most recent quarterly dividend rate at the time of grant, adjusted for any known future changes in the dividend rate.

The vesting date fair value of performance awards that vested during the nine-month periods ended September 30, 2019 and September 30, 2018 was $1.2 million and $1.3 million, respectively. We withheld shares based on the closing stock price on the vesting date to settle the employees’ statutory obligation for the applicable income and other employment taxes. The shares withheld to satisfy the tax withholding obligations were recorded as treasury stock.

(8) Segment Information

We have two reportable segments – Truckload Transportation Services (“TTS”) and Werner Logistics.

The TTS segment consists of two operating units, Dedicated and One-Way Truckload. These units are aggregated because they have similar economic characteristics and meet the other aggregation criteria described in the accounting guidance for segment reporting. 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; and (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.

The Werner Logistics segment generates the majority of our non-trucking revenues through four operating units that provide non-trucking services to our customers. These four Werner Logistics operating units 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”) unit offers rail transportation through alliances with rail and drayage providers as an alternative to truck transportation; (iii) Werner Global Logistics international (“WGL”) provides complete management of global shipments from origin to destination using a combination of air, ocean, truck and rail transportation modes; and (iv) Werner Final Mile (“Final Mile”) offers home and business deliveries of large or heavy items using third-party agents with two associates operating a liftgate straight truck.

We generate other revenues from our driver training schools, transportation-related activities such as third-party equipment maintenance and equipment leasing, and other business activities. None of these operations meets the quantitative reporting thresholds. As a result, these operations are grouped in “Other” in the table below. “Corporate” includes revenues and expenses that are incidental to our activities and are not attributable to any of our operating segments, including gains and losses on sales of assets not attributable to our operating segments. We do not prepare separate balance sheets by segment and, as a result, assets

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are not separately identifiable by segment. Inter-segment eliminations in the table below represent transactions between reporting segments that are eliminated in consolidation.

The following table summarizes our segment information (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues
Truckload Transportation Services	$	480,351		$	484,782		$	1,423,201		$	1,386,615
Werner Logistics	121,331			129,422			369,584			380,854
Other	15,896			15,107			47,464			42,788
Corporate	687			632			1,905			2,170
Subtotal	618,265			629,943			1,842,154			1,812,427
Inter-segment eliminations	(1		)	(208		)	(240		)	(878		)
Total	$	618,264		$	629,735		$	1,841,914		$	1,811,549
Operating Income
Truckload Transportation Services	$	48,870		$	58,894		$	143,488		$	135,748
Werner Logistics	3,028			4,776			12,921			13,135
Other	1,709			576			5,181			433
Corporate	(250		)	(860		)	(1,772		)	(32		)
Total	$	53,357		$	63,386		$	159,818		$	149,284

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) summarizes the financial statements from management’s perspective with respect to our financial condition, results of operations, liquidity and other factors that may affect actual results. The MD&A is organized in the following sections:

• Overview

• Results of Operations

• Liquidity and Capital Resources

• Contractual Obligations and Commercial Commitments

• Regulations

• Critical Accounting Estimates

The MD&A should be read in conjunction with our 2018 Form 10-K.

Overview:

We have two reportable segments, Truckload Transportation Services (“TTS”) and Werner Logistics, and we operate in the truckload and logistics sectors of the transportation industry. In the truckload sector, we focus on transporting consumer nondurable products that generally ship more consistently throughout the year. In the logistics sector, besides managing transportation requirements for individual customers, we provide additional sources of truck capacity, alternative modes of transportation, a global delivery network and systems analysis to optimize transportation needs. Our success depends on our ability to efficiently and effectively manage our resources in the delivery of truckload transportation and logistics services to our customers. Resource requirements vary with customer demand, which may be subject to seasonal or general economic conditions. Our ability to adapt to changes in customer transportation requirements is essential to efficiently deploy resources and make capital investments in tractors and trailers (with respect to our TTS segment) or obtain qualified third-party capacity at a reasonable price (with respect to our Werner Logistics segment). Although our business volume is not highly concentrated, we may also be affected by our customers’ financial failures or loss of customer business.

Revenues for our TTS segment operating units (Dedicated and One-Way Truckload) are typically generated on a per-mile basis and also include revenues such as stop charges, loading and unloading charges, equipment detention charges and equipment repositioning charges. To mitigate our risk to fuel price increases, we recover from our customers additional fuel surcharge revenues that generally recoup a majority of the increased fuel costs; however, we cannot assure that current recovery levels will continue in future periods. Because fuel surcharge revenues fluctuate in response to changes in fuel costs, we identify them separately and exclude them from the statistical calculations to provide a more meaningful comparison between periods. The key statistics used to evaluate trucking revenues, net of fuel surcharge, are (i) average revenues per tractor per week, (ii) average percentage of empty miles (miles without trailer cargo), (iii) average trip length (in loaded miles) and (iv) average number of tractors in service. General economic conditions, seasonal trucking industry freight patterns and industry capacity are important factors that impact these statistics. Our TTS segment also generates a small amount of revenues categorized as non-trucking revenues, which consist primarily of the intra-Mexico portion of cross-border shipments delivered to or from Mexico where the TTS segment utilizes a third-party capacity provider. We exclude such revenues from the statistical calculations.

Our most significant resource requirements are company drivers, independent contractors, tractors and trailers. Independent contractors supply their own tractors and drivers and are responsible for their operating expenses. Our financial results are affected by company driver and independent contractor availability and the markets for new and used revenue equipment. We are self-insured for a significant portion of bodily injury, property damage and cargo claims; workers’ compensation claims; and associate health claims (supplemented by premium-based insurance coverage above certain dollar levels). For that reason, our financial results may also be affected by driver safety, medical costs, weather, legal and regulatory environments and insurance coverage costs to protect against catastrophic losses.

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 2019 to third quarter 2018, 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, higher new truck and trailer purchase prices and compliance with new or proposed regulations. 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 facilities, as management deems necessary.

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We provide non-trucking services primarily through the four operating units within our Werner Logistics segment (Truckload Logistics, Intermodal, WGL and Final Mile). Unlike our TTS segment, the Werner Logistics segment is less asset-intensive and is instead dependent upon qualified associates, information systems and qualified third-party capacity providers. The largest expense item related to the Werner Logistics segment is the cost of purchased transportation we pay to third-party capacity providers. This expense item is recorded as rent and purchased transportation expense. Other operating expenses consist primarily of salaries, wages and benefits. We evaluate the Werner Logistics segment’s financial performance by reviewing the gross margin percentage (revenues less rent and purchased transportation expenses expressed as a percentage of revenues) and the operating income percentage. The gross margin percentage can be impacted by the rates charged to customers and the costs of securing third-party capacity. We have a mix of contracted long-term rates and variable rates for the cost of third-party capacity, and we cannot assure that our operating results will not be adversely impacted in the future if our ability to obtain qualified third-party capacity providers changes or the rates of such providers increase.

Results of Operations:

The following table sets forth 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 prior year. 

	Three Months Ended (3ME) September 30,							Nine Months Ended (9ME) September 30,								Percentage Change in Dollar Amounts
	2019			2018				2019			2018					3ME		9ME
(Amounts in thousands)	$		%	$			%	$		%	$			%		%		%
Operating revenues	$	618,264	100.0	$	629,735		100.0	$	1,841,914	100.0	$	1,811,549		100.0		(1.8	)	1.7
Operating expenses:
Salaries, wages and benefits	209,586		33.9	201,606			32.0	618,386		33.6	580,515			32.0		4.0		6.5
Fuel	59,518		9.6	67,072			10.6	176,720		9.6	191,769			10.6		(11.3	)	(7.8	)
Supplies and maintenance	46,907		7.6	47,136			7.5	136,963		7.4	138,556			7.7		(0.5	)	(1.1	)
Taxes and licenses	24,244		3.9	18,463			2.9	70,788		3.8	63,607			3.5		31.3		11.3
Insurance and claims	21,930		3.6	22,011			3.5	65,631		3.6	73,858			4.1		(0.4	)	(11.1	)
Depreciation	62,620		10.1	58,382			9.3	184,816		10.0	170,439			9.4		7.3		8.4
Rent and purchased transportation	134,797		21.8	147,870			23.5	413,809		22.5	435,225			24.0		(8.8	)	(4.9	)
Communications and utilities	3,892		0.7	3,993			0.6	11,806		0.6	12,028			0.7		(2.5	)	(1.8	)
Other	1,413		0.2	(184		)	—	3,177		0.2	(3,732		)	(0.2	)	867.9		185.1
Total operating expenses	564,907		91.4	566,349			89.9	1,682,096		91.3	1,662,265			91.8		(0.3	)	1.2
Operating income	53,357		8.6	63,386			10.1	159,818		8.7	149,284			8.2		(15.8	)	7.1
Total other expense (income)	1,699		0.3	265			0.1	2,036		0.1	(65		)	—		541.1		3,232.3
Income before income taxes	51,658		8.3	63,121			10.0	157,782		8.6	149,349			8.2		(18.2	)	5.6
Income taxes	12,614		2.0	15,607			2.5	39,334		2.2	35,764			1.9		(19.2	)	10.0
Net income	$	39,044	6.3	$	47,514		7.5	$	118,448	6.4	$	113,585		6.3		(17.8	)	4.3

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The following tables set forth the operating revenues, operating expenses and operating income for the TTS segment, as well as certain statistical data regarding our TTS segment operations for the periods indicated.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Truckload Transportation Services segment (amounts in thousands)	$		%	$		%	$		%	$		%
Trucking revenues, net of fuel surcharge	$	417,954		$	409,306		$	1,227,105		$	1,168,588
Trucking fuel surcharge revenues	57,171			68,420			177,881			197,212
Non-trucking and other operating revenues	5,226			7,056			18,215			20,815
Operating revenues	480,351		100.0	484,782		100.0	1,423,201		100.0	1,386,615		100.0
Operating expenses	431,481		89.8	425,888		87.9	1,279,713		89.9	1,250,867		90.2
Operating income	$	48,870	10.2	$	58,894	12.1	$	143,488	10.1	$	135,748	9.8

	Three Months Ended September 30,								Nine Months Ended September 30,
Truckload Transportation Services segment	2019			2018			% Change		2019			2018			% Change
Average tractors in service	8,010			7,728			3.6	%	7,945			7,568			5.0	%
Average revenues per tractor per week (1)	$	4,014		$	4,074		(1.5	)%	$	3,960		$	3,959		—	%
Total tractors (at quarter end)
Company	7,480			7,135			4.8	%	7,480			7,135			4.8	%
Independent contractor	575			615			(6.5	)%	575			615			(6.5	)%
Total tractors	8,055			7,750			3.9	%	8,055			7,750			3.9	%
Total trailers (at quarter end)	22,895			23,345			(1.9	)%	22,895			23,345			(1.9	)%
One-Way Truckload
Trucking revenues, net of fuel surcharge (in 000’s)	$	185,791		$	195,660		(5.0	)%	$	550,204		$	566,706		(2.9	)%
Average tractors in service	3,418			3,327			2.7	%	3,385			3,355			0.9	%
Total tractors (at quarter end)	3,435			3,350			2.5	%	3,435			3,350			2.5	%
Average percentage of empty miles	12.24		%	10.89		%	12.4	%	12.02		%	11.01		%	9.2	%
Average revenues per tractor per week (1)	$	4,181		$	4,523		(7.6	)%	$	4,168		$	4,331		(3.8	)%
Average % change in revenues per total mile (1)	(5.6		)%	15.7		%			(0.8		)%	14.2		%
Average % change in total miles per tractor per week	(2.0		)%	0.1		%			(2.9		)%	0.2		%
Average completed trip length in miles (loaded)	843			833			1.2	%	844			827			2.1	%
Dedicated
Trucking revenues, net of fuel surcharge (in 000’s)	$	232,163		$	213,646		8.7	%	$	676,901		$	601,882		12.5	%
Average tractors in service	4,592			4,401			4.3	%	4,560			4,213			8.2	%
Total tractors (at quarter end)	4,620			4,400			5.0	%	4,620			4,400			5.0	%
Average revenues per tractor per week (1)	$	3,888		$	3,734		4.1	%	$	3,805		$	3,663		3.9	%

⁽¹⁾ Net of fuel surcharge revenues.

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The following tables set forth the Werner Logistics segment’s revenues, rent and purchased transportation expense, gross margin, other operating expenses (primarily salaries, wages and benefits expense) and operating income, as well as certain statistical data regarding the Werner Logistics segment.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Werner Logistics segment (amounts in thousands)	$		%	$		%	$		%	$		%
Operating revenues	$	121,331	100.0	$	129,422	100.0	$	369,584	100.0	$	380,854	100.0
Rent and purchased transportation expense	102,886		84.8	108,870		84.1	309,742		83.8	322,064		84.6
Gross margin	18,445		15.2	20,552		15.9	59,842		16.2	58,790		15.4
Other operating expenses	15,417		12.7	15,776		12.2	46,921		12.7	45,655		12.0
Operating income	$	3,028	2.5	$	4,776	3.7	$	12,921	3.5	$	13,135	3.4

	Three Months Ended September 30,				Nine Months Ended September 30,
Werner Logistics segment	2019	2018	% Change		2019	2018	% Change
Average tractors in service	33	43	(23.3	)%	36	42	(14.3	)%
Total tractors (at quarter end)	31	43	(27.9	)%	31	43	(27.9	)%
Total trailers (at quarter end)	1,580	1,415	11.7	%	1,580	1,415	11.7	%

Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018

Operating Revenues

Operating revenues decreased 1.8% for the three months ended September 30, 2019, compared to the same period of the prior year. When comparing third quarter 2019 to third quarter 2018, TTS segment revenues decreased $4.4 million or 0.9%, and Werner Logistics revenues decreased $8.1 million or 6.3%.

During third quarter 2019, freight demand in our One-Way Truckload fleet was seasonally below average and meaningfully below the unusually strong freight demand of third quarter 2018, which was aided by two December 2017 mandates. Tax reform incentives strengthened third quarter 2018 freight volumes while the electronic hours of service requirement limited truck and driver capacity in third quarter 2018. One-Way Truckload demand, while still lower than the same period a year ago, showed slight seasonal improvement sequentially in September 2019, October 2019 and into early November 2019.

Trucking revenues, net of fuel surcharge, increased 2.1% in third quarter 2019 compared to third quarter 2018 due to a 3.6% increase in average tractors in service, partially offset by a 1.5% decrease in average revenues per tractor per week, net of fuel surcharge, which was due primarily to a decrease in average miles per tractor, partially offset by a small increase in average revenues per total mile. The small increase in average revenues per total mile was due primarily to strength in Dedicated pricing, partially offset by lower One-Way Truckload pricing. We currently expect the percentage change in average revenues per total mile for the One-Way Truckload fleet for the full year 2019 compared to 2018 to be in the range of flat to 3% lower. The third quarter 2019 freight market provided few project and surge freight opportunities with premium rates, unlike the very robust freight market in third quarter 2018. We currently expect freight to seasonally strengthen sequentially in fourth quarter 2019, and we expect peak season to be solid but not as strong as the 2018 peak season.

The average number of tractors in service in the TTS segment increased 3.6% to 8,010 in third quarter 2019 from 7,728 in third quarter 2018. We ended third quarter 2019 with 8,055 trucks in the TTS segment, a year-over-year increase of 305 trucks compared to the end of third quarter 2018, and a sequential increase of 120 trucks compared to the end of second quarter 2019. We currently expect growth in our truck fleet from year-end 2018 to be in the low end of the range of 3% to 5% in 2019, and do not expect truck growth in fourth quarter 2019. We cannot predict whether future driver shortages, if any, will adversely affect our ability to maintain our fleet size. If such a driver shortage were to occur, it could result in a fleet size reduction, and our results of operations could be adversely affected.

Trucking fuel surcharge revenues decreased 16.4% to $57.2 million in third quarter 2019 from $68.4 million in third quarter 2018 due to lower average fuel prices in the 2019 quarter. 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

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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 truck 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.

Werner Logistics revenues are generated by its four operating units and exclude revenues for full truckload shipments transferred to the TTS segment, which are recorded as trucking revenues by the TTS segment. Werner Logistics also recorded revenue and brokered freight expense of $1 thousand in third quarter 2019 and $208 thousand in third quarter 2018 for Intermodal drayage movements 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 2019, Werner Logistics revenues decreased $8.1 million, or 6.3%, primarily due to significantly lower Intermodal volume impacted by a delayed peak season and excess trucking capacity in the market compared to third quarter 2018. Truckload Logistics (formerly our Brokerage and Freight Management units within Werner Logistics) experienced double-digit volume growth; however, this was offset by rate pressure, led primarily by a nearly 20% decline in transactional spot pricing for non-contractual shipments and few project freight opportunities in third quarter 2019. The Werner Logistics gross margin percentage in third quarter 2019 of 15.2% decreased from 15.9% in third quarter 2018 due primarily to a softer and more competitive Truckload Logistics freight market. The Werner Logistics operating income percentage in third quarter 2019 of 2.5% decreased from third quarter 2018 of 3.7%, and operating income dollars decreased $1.7 million, or 36.6%, compared to third quarter 2018, although we began to gain efficiencies from our investments in decision-making technologies that optimize and automate freight and carrier selection, enabling us to lower our other operating expenses.

Operating Expenses

Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 91.4% for the three months ended September 30, 2019, compared to 89.9% for the three months ended September 30, 2018. Expense items that impacted the overall operating ratio are described on the following pages. The tables on pages 21 through 23 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 quarter 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.

Salaries, wages and benefits increased $8.0 million or 4.0% in third quarter 2019 compared to third quarter 2018 and increased 1.9% as a percentage of operating revenues to 33.9%. The higher dollar amount of salaries, wages and benefits expense in the 2019 third quarter was due primarily to higher driver pay rates and 4.6 million more company truck miles, both of which also resulted in an increased amount of payroll taxes and other payroll-related fringe benefits. When evaluated on the basis of company truck miles, driver salaries, wages and benefits also increased, which we primarily attribute to nearly 4% higher driver pay per company truck mile in third quarter 2019 compared to third quarter 2018. The rate of year-over-year percentage increases in driver pay began to moderate when compared to the larger driver pay increases from the first half of 2018. Non-driver salaries, wages and benefits in the non-trucking Werner Logistics segment decreased 6.6%.

We renewed our workers’ compensation insurance coverage for the policy year beginning April 1, 2019. Our coverage levels are the same as the prior policy year. We continue to maintain a self-insurance retention of $1.0 million per claim. Our workers’ compensation insurance premium rate for the policy year beginning April 2019 is 5% higher than the rate for the previous policy year.

The driver recruiting market is extremely competitive. Several ongoing market factors persisted including a declining number of, and increased competition for, driver training school graduates, an historically low national unemployment rate, aging truck driver demographics and increased truck safety regulations including the regulation changes for electronic logging devices. We continue to take significant actions to strengthen our driver recruiting and retention to make Werner a preferred choice for the best drivers, including raising driver pay, maintaining a new truck and trailer fleet, purchasing best-in-class safety and training features for all new trucks, investing in our driver training school network and collaborating with customers to improve or eliminate unproductive freight. These efforts continue to have positive results on our driver retention. We are unable to predict whether we will experience future driver shortages or continue to maintain our current driver retention rates. If such a driver shortage were to occur and additional driver pay rate increases became necessary to attract and retain drivers, our results of operations would be negatively impacted to the extent that we could not obtain corresponding freight rate increases.

Fuel decreased $7.6 million or 11.3% in third quarter 2019 compared to third quarter 2018 and decreased 1.0% as a percentage of operating revenues due to lower average diesel fuel prices, despite 4.6 million more company truck miles in third quarter 2019.

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Average diesel fuel prices were 30 cents per gallon lower in third quarter 2019 than in third quarter 2018 and were 11 cents per gallon lower than in second quarter 2019.

We continue to employ measures to improve our fuel mpg such as (i) limiting truck engine idle time, (ii) optimizing the speed, weight and specifications of our equipment and (iii) implementing mpg-enhancing equipment changes to our fleet including new trucks, more aerodynamic truck features, idle reduction systems, trailer tire inflation systems, trailer skirts and automated manual transmissions to reduce our fuel gallons purchased. However, fuel savings from mpg improvement is partially offset by higher depreciation expense and the additional cost of diesel exhaust fluid. Although our fuel management programs require significant capital investment and research and development, we intend to continue these and other environmentally conscious initiatives, including our active participation as an EPA SmartWay Transport Partner. The SmartWay Transport Partnership is a national voluntary program developed by the EPA and freight industry representatives to reduce greenhouse gases and air pollution and promote cleaner, more efficient ground freight transportation.

For October 2019, the average diesel fuel price per gallon was approximately 39 cents lower than the average diesel fuel price per gallon in October 2018 and approximately 13 cents lower than in fourth quarter 2018.

Shortages of fuel, increases in fuel prices and petroleum product rationing can have a materially adverse effect on our operations and profitability. We are unable to predict whether fuel price levels will increase or decrease in the future or the extent to which fuel surcharges will be collected from customers. As of September 30, 2019, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.

Supplies and maintenance decreased $0.2 million or 0.5% in third quarter 2019 compared to third quarter 2018 and increased 0.1% as a percentage of operating revenues. The lower dollar amount of supplies and maintenance expense was due primarily to lower driver recruiting costs in third quarter 2019 compared to third quarter 2018, partially offset by increased toll expense and higher maintenance costs resulting from 4.6 million more company truck miles.

Taxes and licenses increased $5.8 million or 31.3% in third quarter 2019 compared to third quarter 2018 and increased 1.0% as a percentage of revenues. During third quarter 2018, we reached a favorable settlement related to a property tax dispute that reduced taxes and licenses expense by $4.9 million for property taxes that were expensed and paid over a multi-year period. In addition to this favorable item in 2018, the effect of having more company trucks and company truck miles in third quarter 2019 compared to third quarter 2018 also added to the increased taxes and licenses.

Insurance and claims decreased $0.1 million or 0.4% in third quarter 2019 compared to third quarter 2018 and increased 0.1% as a percentage of operating revenues. During third quarter 2018, the court entered the final judgment on the apportionment of fault related to an adverse jury verdict rendered May 17, 2018, which we are appealing (see Note 5 in the Notes to Consolidated Financial Statements (Unaudited) set forth in Part 1 of this report). We incurred insurance and claims expense of $2.8 million in third quarter 2018 for accrued interest and legal fees. We incurred insurance and claims expense of $0.8 million in third quarter 2019 for accrued interest related to this matter. Interest is accrued at $0.4 million per month, until such time as the outcome of our appeal is finalized, excluding the months of June and July 2019 when the plaintiffs requested an extension of time to respond to our appeal. 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.

We renewed our liability insurance policies on August 1, 2019 with the same deductibles and aggregates as the August 1, 2018 renewal. We continue to be responsible for the first $3.0 million per claim with an annual $6.0 million aggregate for claims between $3.0 million and $5.0 million. We also have an additional $5.0 million deductible per claim for each claim between $5.0 million and $10.0 million. As a result, we are responsible for the first $10.0 million per claim, until we meet the $6.0 million aggregate for claims between $3.0 million and $5.0 million. We maintain liability insurance coverage with insurance carriers substantially in excess of the $10.0 million per claim. Our liability insurance premiums for the policy year that began August 1, 2019 are 11% higher, or $0.7 million higher, than premiums for the previous policy year.

Depreciation expense increased $4.2 million or 7.3% in third quarter 2019 compared to third quarter 2018 and increased 0.8% as a percentage of operating revenues. A larger company truck fleet, the higher cost of new truck and trailer equipment, and information technology and communications infrastructure upgrades resulted in higher depreciation expense in third quarter 2019.

We are continuing to invest in new trucks and trailers and our terminals in 2019 to improve our driver experience, increase operational efficiency and more effectively manage our maintenance, safety and fuel costs. We currently intend to maintain the average age of our truck and trailer fleet at or near current levels. The average age of our truck fleet remains low by industry standards and was 1.8 years as of September 30, 2019, and the average age of our trailers was 4.0 years.

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Rent and purchased transportation expense decreased $13.1 million or 8.8% in third quarter 2019 compared to third quarter 2018 and decreased 1.7% 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 and payments to independent contractors in the TTS segment. 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 rent and purchased transportation expense decreased $6.0 million as a result of lower logistics revenues, and as a percentage of Werner Logistics revenues increased to 84.8% in third quarter 2019 from 84.1% in third quarter 2018 due primarily to a softer and more competitive Truckload Logistics freight market.

Rent and purchased transportation expense for the TTS segment decreased $7.3 million in third quarter 2019 compared to third quarter 2018. Independent contractor miles were slightly lower in third quarter 2019, and the per-mile settlement rate for certain independent contractors decreased in third quarter 2019 compared to third quarter 2018. Independent contractor miles as a percentage of total miles were 9.9% in third quarter 2019 compared to 10.4% in third quarter 2018. Because independent contractors supply their own tractors and drivers and are responsible for their operating expenses, the decrease in independent contractor miles as a percentage of total miles shifted costs from the rent and purchased transportation category to other expense categories, including (i) salaries, wages and benefits, (ii) fuel, (iii) depreciation, (iv) supplies and maintenance and (v) taxes and licenses.

Challenging operating conditions continue to make independent contractor recruitment and retention difficult. Such conditions include inflationary cost increases that are the responsibility of independent contractors and a shortage of financing available to independent contractors for equipment purchases. Historically we have been able to add company tractors and recruit additional company drivers to offset any decrease in the number of independent contractors. If a shortage of independent contractors and company drivers were to occur, further increases in per-mile settlement rates (for independent contractors) and driver pay rates (for company drivers) may become necessary to attract and retain these drivers. This could negatively affect our results of operations to the extent that we would not be able to obtain corresponding freight rate increases.

Other operating expenses increased $1.6 million in third quarter 2019 compared to third quarter 2018 and increased 0.2% as a percentage of operating revenues. Gains on sales of assets (primarily used trucks and trailers) 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 assets were $4.1 million in third quarter 2019 compared to $4.6 million in third quarter 2018. We realized higher average gains per truck and lower average gains per trailer in third quarter 2019 compared to third quarter 2018 and sold 53% fewer trucks and 35% more trailers. Pricing in the market for our used trucks and trailers began to moderate in the latter part of second quarter 2019 and continued in third quarter 2019. We currently expect gains on sales of equipment in 2019 to be in the low end of the range of $18 million to $20 million and to moderate in fourth quarter 2019. Increases to the provision for doubtful accounts for our driver training schools and professional consulting services also contributed to the increase in other operating expenses.

Other Expense (Income)

Other expense (income) increased $1.4 million in third quarter 2019 compared to third quarter 2018. Interest expense increased $1.5 million in third quarter 2019 compared to third quarter 2018 due to higher average outstanding debt in the 2019 quarter. We currently expect interest expense in fourth quarter 2019 to be slightly lower than the $2.4 million recorded in third quarter 2019, based on our current debt level and interest rates, including the $150 million of our debt for which we fixed the interest rate in early July 2019 at an average rate of 2.34% with two $75 million interest rate swap agreements.

Income Taxes

Our effective income tax rate (income taxes expressed as a percentage of income before income taxes) was 24.4% in third quarter 2019 and 24.7% in third quarter 2018. The lower income tax rate in third quarter 2019 was attributed primarily to favorable discrete federal and state income tax items. We currently expect our 2019 effective income tax rate to be in the low end of the range of 25% to 26%.

Nine Months Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018

Operating Revenues

Operating revenues increased 1.7% for the nine months ended September 30, 2019, compared to the same period of the prior year. In the TTS segment, trucking revenues, net of fuel surcharge, increased 5.0% in the 2019 year-to-date period compared to the 2018 year-to-date period due primarily to a 5.0% increase in the average number of tractors in service. Average revenues per total mile, net of fuel surcharge, increased 2.9% in the first nine months of 2019 compared to the same period in 2018, and average monthly miles per tractor decreased by 2.8%. TTS segment fuel surcharge revenues for the nine months ended September 30, 2019 decreased $19.3 million or 9.8% when compared to the nine months ended September 30, 2018 due to lower average fuel prices in the 2019 period. Werner Logistics revenues decreased 3.0% to $369.6 million in the first nine months of 2019 compared to $380.9 million in the same 2018 period.

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Operating Expenses

Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 91.3% for the nine months ended September 30, 2019, compared to 91.8% for the nine months ended September 30, 2018. Expense items that impacted the overall operating ratio are described on the following pages. The tables on pages 21 through 23 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.

Salaries, wages and benefits increased $37.9 million or 6.5% in the first nine months of 2019 compared to the first nine months of 2018 and increased as a percentage of operating revenues to 33.6%. The higher dollar amount of salaries, wages and benefits expense was due primarily to higher driver pay rates and approximately 14.1 million more company truck miles, both of which resulted in higher payroll taxes and payroll-related fringe benefits. Increased health insurance costs in the 2019 period also contributed to the increase in salaries, wages and benefits. When evaluated on the basis of company truck miles, driver pay increased by about 6%. Non-driver salaries, wages and benefits in the non-trucking Werner Logistics segment increased 0.1% compared to 3.0% lower revenues.

Fuel decreased $15.0 million or 7.8% in the first nine months of 2019 compared to the same period in 2018 and decreased 1.0% as a percentage of operating revenues due primarily to lower average diesel fuel prices in 2019, partially offset by increased company truck miles. Average diesel fuel prices were 18 cents per gallon lower in the first nine months of 2019 than in the same 2018 period.

Supplies and maintenance decreased $1.6 million or 1.1% despite higher truck miles driven in the first nine months of 2019 compared to the same period in 2018 and decreased 0.3% as a percentage of operating revenues. The lower dollar amount was due primarily to lower tractor maintenance costs in the first nine months of 2019 compared to the first nine months of 2018, partially the result of more effective management of winter weather conditions and lower weather-related maintenance costs in early 2019, and lower driver recruiting costs. These decreases were partially offset by increased toll expense in the first nine months of 2019 compared to the same period in 2018.

Taxes and licenses increased $7.2 million or 11.3% in the first nine months of 2019 compared to the same period in 2018 and increased 0.3% as a percentage of revenues. The increase was primarily due to the aforementioned favorable settlement related to a property tax dispute that reduced taxes and licenses expense by $4.9 million. In addition to this favorable item in 2018, the effect of having more company trucks and company truck miles in the first nine months of 2019 compared to same period in 2018 also added to the increased taxes and licenses.

Insurance and claims expense decreased $8.2 million or 11.1% in the first nine months of 2019 compared to the same period in 2018 and decreased 0.5% as a percentage of operating revenues. The lower expense in the 2019 year-to-date period was due primarily to the $14.0 million accrual in the 2018 period versus the $2.7 million accrual in the 2019 period related to the aforementioned adverse jury verdict.

Depreciation expense increased $14.4 million or 8.4% in the first nine months of 2019 compared to the same 2018 period and increased 0.6% as a percentage of operating revenues due primarily to the higher cost of new equipment, a larger company truck and trailer fleet, and information technology and communications infrastructure upgrades.

Rent and purchased transportation expense decreased $21.4 million or 4.9% in the first nine months of 2019 compared to the same 2018 period and decreased 1.5% as a percentage of operating revenues. Rent and purchased transportation for the TTS segment decreased $9.7 million in the first nine months of 2019 compared to the same 2018 period. This decrease is due primarily to 2.1% fewer independent contractor miles driven in the first nine months of 2019 compared to the same period in 2018. Independent contractor miles as a percentage of total miles were 10.0% and 10.4% in the first nine months of 2019 and 2018, respectively. Werner Logistics rent and purchased transportation expense decreased $12.3 million and as a percentage of Werner Logistics revenues decreased to 83.8% in the 2019 period from 84.6% in the 2018 period.

Other operating expenses increased $6.9 million in the first nine months of 2019 compared to the same period in 2018 and increased 0.4% as a percentage of operating revenues. Gains on sales of assets (primarily used trucks and trailers) decreased to $14.5 million in the nine months ended September 30, 2019, compared to $15.9 million in the nine months ended September 30, 2018, which included a $3.5 million gain on the sale of real estate. In the 2019 year-to-date period, we sold 24% fewer trucks and 6% more trailers and realized higher average gains per truck and lower average gains per trailer when compared to same period of 2018. Increased costs associated with professional and software consulting services and the provision for doubtful accounts for our driver training schools for the nine months ended September 30, 2019, compared to the same period in 2018 also contributed to the increase of other operating expenses.

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Other Expense (Income)

Other expense (income) increased $2.1 million in the first nine months of 2019 compared to the same 2018 period. Higher interest expense in first nine months of 2019 compared to the same period in 2018 due to higher average outstanding debt in the 2019 period was partially offset by higher interest income in the 2019 period.

Income Taxes

Our effective income tax rate (income taxes expressed as a percentage of income before income taxes) increased to 24.9% for the first nine months of 2019 from 23.9% for the first nine months of 2018. The lower income tax rate in the year-to-date 2018 period is attributed primarily to the benefit of discrete federal and state income tax items in the 2018 period.

Liquidity and Capital Resources:

During the nine months ended September 30, 2019, we generated cash flow from operations of $332.2 million, a 9.8% or $29.7 million increase in cash flows compared to the same nine-month period a year ago. The increase in net cash provided by operating activities resulted primarily from increased cash flows from working capital items, primarily accounts receivable, and higher non-cash depreciation and net income, partially offset by higher income tax payments. We were able to make net capital expenditures, pay dividends and repurchase company stock with the net cash provided by operating activities and existing cash balances, supplemented by net borrowings under our credit facilities.

Net cash used in investing activities decreased to $262.4 million for the nine-month period ended September 30, 2019 from $276.7 million for the nine-month period ended September 30, 2018. Net property additions (primarily revenue equipment) were $271.7 million for the nine-month period ended September 30, 2019, compared to $289.3 million during the same period of 2018. As of September 30, 2019, we were committed to property and equipment purchases of approximately $63.5 million. We currently estimate net capital expenditures (primarily revenue equipment) in 2019 to be in the low end of the range of $275 million to $300 million, compared to net capital expenditures in 2018 of $349.0 million. We intend to fund these net capital expenditures through cash flow from operations and financing available under our existing credit facilities, if necessary.

Net financing activities used $89.4 million during the nine months ended September 30, 2019, and used $31.5 million during the same period in 2018. We borrowed $275.0 million of long-term debt and repaid $50.0 million of long-term debt during the nine months ended September 30, 2019, bringing our outstanding debt at September 30, 2019 to $350.0 million. We borrowed $110.0 million of short-term debt and repaid $60.0 million of debt during the nine months ended September 30, 2018. The proceeds from the additional borrowings in 2019 were used to pay the $261.1 million special dividend. We paid dividends of $280.0 million in the nine-month period ended September 30, 2019 and $16.6 million in the nine-month period ended September 30, 2018. In May 2019, we declared a special dividend of $3.75 per share, or $261.1 million, which was paid on June 7, 2019. Beginning with the quarterly dividend paid in July 2018, we increased our quarterly dividend rate by $0.02 per share, or 29%, to the current rate of $0.09 per share. Financing activities for the nine months ended September 30, 2019, also included common stock repurchases of 1,300,000 shares at a cost of $42.3 million. 1,277,101 shares were repurchased in the nine months ended September 30, 2018 at a cost of $46.4 million. From time to time, 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 stock market conditions and other factors. As of September 30, 2019, the Company had purchased 700,000 shares pursuant to our current Board of Directors repurchase authorization and had 4,300,000 shares remaining available for repurchase. We also had financing net inflows of $8.9 million in the nine months ended September 30, 2019, and financing net outflows of $18.2 million in the nine months ended September 30, 2018, related to the change in net checks issued in excess of cash balances.

Management believes our financial position at September 30, 2019 is strong. As of September 30, 2019, we had $14.4 million of cash and cash equivalents and over $1 billion of stockholders’ equity. Cash is invested primarily in government portfolio money market funds. As of September 30, 2019, we had a total of $575.0 million of borrowing capacity under three credit facilities (see Note 4 in the Notes to Consolidated Financial Statements (Unaudited) under Item 1 of Part I of this Form 10-Q), of which we had borrowed $350.0 million. The remaining $225.0 million of credit available under these facilities at September 30, 2019 is reduced by the $32.7 million in stand-by letters of credit under which we are obligated. These stand-by letters of credit are primarily required as security for insurance policies. We believe our liquid assets, cash generated from operating activities, and borrowing capacity under our three credit facilities will provide sufficient funds for our operating and capital needs for the foreseeable future. Based on our strong financial position, management does not foresee any significant barriers to obtaining sufficient financing, if necessary.

28

Contractual Obligations and Commercial Commitments:

Item 7 of Part II of our 2018 Form 10-K includes our disclosure of contractual obligations and commercial commitments as of December 31, 2018. Except for entering into new debt agreements with additional borrowings under such agreements, and the associated future interest expense, as disclosed in Note 4 in the Notes to Consolidated Financial Statements (Unaudited) under Item I of Part I of this Form 10-Q, there were no material changes in the nature of these items during the nine months ended September 30, 2019.

Regulations:

Item 1 of Part I of our 2018 Form 10-K includes a discussion of pending proposed regulations that may have an effect on our operations if they become adopted and effective as proposed. There have been no material changes in the status of these proposed regulations previously disclosed in the 2018 Form 10-K.

Critical Accounting Estimates:

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the (i) reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and (ii) reported amounts of revenues and expenses during the reporting period. We evaluate these estimates on an ongoing basis as events and circumstances change, utilizing historical experience, consultation with experts and other methods considered reasonable in the particular circumstances. Actual results could differ from those estimates and may significantly impact our results of operations from period to period. It is also possible that materially different amounts would be reported if we used different estimates or assumptions.

Information regarding our Critical Accounting Estimates can be found in our 2018 Form 10-K. Estimates of accrued liabilities for insurance and claims for liability and physical damage losses and workers’ compensation is a critical accounting estimate that requires us to make significant judgments and estimates and affects our financial statements.

There have been no material changes to this critical accounting estimate from that discussed in our 2018 Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risk from changes in commodity prices, foreign currency exchange rates and interest rates.

Commodity Price Risk

The price and availability of diesel fuel are subject to fluctuations attributed to changes in the level of global oil production, refining capacity, seasonality, weather and other market factors. Historically, we have recovered a majority, but not all, of fuel price increases from customers in the form of fuel surcharges. We implemented customer fuel surcharge programs with most of our customers to offset much of the higher fuel cost per gallon. However, we do not recover all of the fuel cost increase through these surcharge programs.

On January 1, 2020, the International Maritime Organization regulations limiting sulfur content of bunker fuel (IMO 2020) will take effect. While the regulations do not apply to domestic transportation modes, IMO 2020 will significantly increase the demand and competition for low-sulfur fuel, which is expected to result in higher diesel fuel prices for truck and rail transportation and may also constrict supply. We cannot predict the extent to which fuel prices will increase or decrease in the future or the extent to which fuel surcharges could be collected. As of September 30, 2019, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.

Foreign Currency Exchange Rate Risk

We conduct business in several foreign countries, including Mexico, Canada, and China. To date, most foreign revenues are denominated in U.S. Dollars, and we receive payment for foreign freight services primarily in U.S. Dollars to reduce direct foreign currency risk. Assets and liabilities maintained by a foreign subsidiary company in the local currency are subject to foreign exchange gains or losses. Foreign currency translation gains and losses primarily relate to changes in the value of revenue equipment owned by a subsidiary in Mexico, whose functional currency is the Peso. Foreign currency translation losses were $1.1 million for third quarter 2019 and gains were $2.0 million for third quarter 2018. These were recorded in accumulated other comprehensive loss within stockholders’ equity in the Consolidated Balance Sheets.

Interest Rate Risk

We manage interest rate exposure through a mix of variable rate debt and interest rate swap agreements. We had $150 million of debt outstanding at September 30, 2019, for which the interest rate is effectively fixed at 2.34% through May 2024 with two

29

interest rate swap agreements to reduce our exposure to interest rate increases. We had $200 million of variable rate debt outstanding at September 30, 2019. Interest rates on the variable rate debt and our unused credit facilities are based on the LIBOR. Assuming this level of borrowing, a hypothetical one-percentage point increase in the LIBOR interest rate would increase our annual interest expense by approximately $2.0 million.

Item 4. Controls and Procedures.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”). Our disclosure controls and procedures are designed to provide reasonable assurance of achieving the desired control objectives. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at a reasonable assurance level in enabling us to record, process, summarize and report information required to be included in our periodic filings with the SEC within the required time period and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management, under the supervision of and with the participation of our Chief Executive Officer and Chief Financial Officer, concluded that no changes in our internal control over financial reporting occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We have confidence in our internal controls and procedures. Nevertheless, our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that the internal controls or disclosure procedures and controls will prevent all errors or intentional fraud. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of such internal controls are met. Further, the design of an internal control system must reflect that resource constraints exist, and the benefits of controls must be evaluated relative to their costs. Because of the inherent limitations in all internal control systems, no evaluation of controls can provide absolute assurance that all control issues, misstatements and instances of fraud, if any, have been prevented or detected.

30

PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

Information regarding the May 17, 2018 adverse jury verdict and subsequent final judgment on July 30, 2018 in Harris County District Court in Houston, Texas, is incorporated by reference from Note 5 in our Notes to Consolidated Financial Statements (Unaudited) set forth in Part I of this report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On May 14, 2019, our Board of Directors approved and announced a new stock repurchase program under which the Company is authorized to repurchase up to 5,000,000 shares of its common stock. As of September 30, 2019, the Company had purchased 700,000 shares pursuant to this authorization and had 4,300,000 shares remaining available for repurchase. The Company may purchase shares from time to time depending on market, economic and other factors. The authorization will continue unless withdrawn by the Board of Directors.

No shares of common stock were repurchased during third quarter 2019 by either the Company or any “affiliated purchaser,” as defined by Rule 10b-18 of the Exchange Act.

31

Item 6. Exhibits.

Exhibit No.	Exhibit	Incorporated by Reference to:
3(i)	Restated Articles of Incorporation of Werner Enterprises, Inc.	Exhibit 3(i) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007
3(ii)	Revised and Restated By-Laws of Werner Enterprises, Inc.	Exhibit 3.1 to the Company’s Current Report on Form 8-K dated August 14, 2018
11	Statement Re: Computation of Per Share Earnings	See Note 6 (Earnings Per Share) in the Notes to Consolidated Financial Statements (Unaudited) under Item 1 of Part I of this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019
31.1	Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 (Section 302 of the Sarbanes-Oxley Act of 2002)	Filed herewith
31.2	Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 (Section 302 of the Sarbanes-Oxley Act of 2002)	Filed herewith
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)	Furnished herewith
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)	Furnished herewith
101	The following unaudited financial information from Werner Enterprises’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in iXBRL (Inline Extensible Business Reporting Language) includes: (i) Consolidated Statements of Income for the three and nine months ended September 30, 2019 and September 30, 2018, (ii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and September 30, 2018, (iii) Consolidated Condensed Balance Sheets as of September 30, 2019 and December 31, 2018, (iv) Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and September 30, 2018, (v) Consolidated Statements of Stockholders’ Equity for the three months ended September 30, 2019, June 30, 2019, March 31, 2019, September 30, 2018, June 30, 2018 and March 31, 2018, and (vi) the Notes to Consolidated Financial Statements (Unaudited) as of September 30, 2019.
104	The cover page from this Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in Inline XBRL (included as Exhibit 101).

32

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	WERNER ENTERPRISES, INC.
Date: November 6, 2019	By:	/s/ John J. Steele
		John J. Steele
		Executive Vice President, Treasurer and Chief Financial Officer
Date: November 6, 2019	By:	/s/ James L. Johnson
		James L. Johnson
		Executive Vice President, Chief Accounting Officer and Corporate Secretary

33

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

(SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)

I, Derek J. Leathers, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Werner Enterprises, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2019

/s/ Derek J. Leathers

Derek J. Leathers

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

(SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)

I, John J. Steele, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Werner Enterprises, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2019

/s/ John J. Steele

John J. Steele

Executive Vice President, Treasurer and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Quarterly Report of Werner Enterprises, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2019 (the “Report”), filed with the Securities and Exchange Commission, I, Derek J. Leathers, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 6, 2019	/s/ Derek J. Leathers
	Derek J. Leathers
	President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Quarterly Report of Werner Enterprises, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2019 (the “Report”), filed with the Securities and Exchange Commission, I, John J. Steele, Executive Vice President, Treasurer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 6, 2019	/s/ John J. Steele
	John J. Steele
	Executive Vice President, Treasurer and Chief Financial Officer

XML

Consolidated Condensed Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 14,354	$ 33,930
Accounts receivable, trade, less allowance of $8,246 and $8,613, respectively	323,375	337,927
Other receivables	44,247	26,545
Inventories and supplies	9,750	10,060
Prepaid taxes, licenses and permits	7,462	16,619
Other current assets	37,137	31,577
Total current assets	436,325	456,658
Property and equipment	2,384,254	2,247,577
Less – accumulated depreciation	808,906	760,015
Property and equipment, net	1,575,348	1,487,562
Other non-current assets	151,866	139,284
Total assets	2,163,539	2,083,504
Current liabilities:
Checks issued in excess of cash balances	8,902	0
Accounts payable	89,348	97,781
Current portion of long-term debt	75,000	75,000
Insurance and claims accruals	91,305	67,304
Accrued payroll	38,501	40,271
Other current liabilities	28,865	30,004
Total current liabilities	331,921	310,360
Long-term debt, net of current portion	275,000	50,000
Other long-term liabilities	20,511	10,911
Insurance and claims accruals, net of current portion	229,870	214,030
Deferred income taxes	241,433	233,450
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 200,000,000 shares authorized; 80,533,536 shares issued; 69,204,715 and 70,441,973 shares outstanding, respectively	805	805
Paid-in capital	112,064	107,455
Retained earnings	1,252,344	1,413,746
Accumulated other comprehensive loss	(17,645)	(16,073)
Treasury stock, at cost; 11,328,821 and 10,091,563 shares, respectively	(282,764)	(241,180)
Total stockholders’ equity	1,064,804	1,264,753
Total liabilities and stockholders’ equity	$ 2,163,539	$ 2,083,504

XML

Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018
Statement of Stockholders' Equity [Abstract]
Purchase of common stock, shares	0	700,000	600,000	649,449	627,652	0
Dividends declared per share	$ 0.09	$ 3.84	$ 0.09	$ 0.09	$ 0.09	$ 0.07
Equity compensation activity, shares	9,712	6,901	46,129	12,267	4,935	44,980

XML

Equity Compensation (Schedule of Equity Compensation Stock Options Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Equity Compensation [Abstract]
Number of options outstanding at beginning of period	9
Number of options granted	0	0
Number of options exercised	9
Number of options forfeited	0
Number of options expired	0
Number of options outstanding at end of period	0
Number of options exercisable at end of period	0
Weighted average exercise price outstanding at beginning of period	$ 19.02
Weighted average exercise price options granted	0
Weighted average exercise price options exercised	19.02
Weighted average exercise price options forfeited	0
Weighted average exercise price options expired	0
Weighted average exercise price outstanding at end of period	0
Weighted average exercise price exercisable at end of period	$ 0
Weighted average remaining contractual term outstanding at end of period, years	0 years
Weighted average remaining contractual term exercisable at end of period, years	0 years
Aggregate intrinsic value outstanding at end of period	$ 0
Aggregate intrinsic value exercisable at end of period	$ 0

XML

Commitments And Contingencies (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2019	Dec. 30, 2014
Loss Contingencies [Line Items]
Commitment for property and equipment purchases			$ 63.5
Loss contingency, damages awarded, value		$ 0.8
Loss contingency, damages awarded, attorney fees and costs		$ 0.5
May 17, 2018 Verdict [Member]
Loss Contingencies [Line Items]
Loss contingency, damages awarded, value	$ 92.0
Self insurance retained liability				$ 10.0
Loss contingency, estimate of possible loss	15.2		17.7
Loss contingency, receivable, noncurrent	79.2		79.2
Loss contingency, accrual, noncurrent	$ 79.2		$ 79.2

XML

Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Schedule of Operating Lease Information

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of September 30, 2019.

(In thousands)	September 30, 2019
Maturity of Lease Liabilities
2019 (remaining)	$	932
2020	3,424
2021	2,554
2022	1,625
2023	688
Thereafter	1,746
Total undiscounted operating lease payments	$	10,969
Less: Imputed interest	(763		)
Present value of operating lease liabilities	$	10,206
Balance Sheet Classification
Right-of-use assets (recorded in other non-current assets)	$	9,883
Current lease liabilities (recorded in other current liabilities)	$	3,251
Long-term lease liabilities (recorded in other long-term liabilities)	6,955
Total operating lease liabilities	$	10,206
Other Information
Weighted-average remaining lease term for operating leases	4.34 years
Weighted-average discount rate for operating leases	3.5		%

Schedule of Lessor Operating Lease Maturities

The following table presents information about the maturities of these operating leases as of September 30, 2019.

(In thousands)	September 30, 2019
2019 (remaining)	$	3,169
2020	7,674
2021	248
2022	62
2023	—
Thereafter	—
Total	$	11,153

XML

Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

Leases

Adoption of ASC Topic 842, “Leases”

On January 1, 2019, the Company adopted ASC Topic 842, “Leases”, which requires lessees to recognize most leases in the consolidated balance sheet as a right-of-use asset and a lease obligation. Expenses are recognized in the consolidated statement of income in a manner similar to previous accounting guidance. The Company adopted the accounting standard using the optional transition approach, which applies the provisions of the new guidance at the effective date without adjusting the comparative periods presented.

The Company elected the following practical expedients upon adoption: not to reassess whether any existing contracts are or contain leases, not to reassess the lease classification for any existing leases, not to reassess initial direct costs for any existing leases and not to separately identify lease and non-lease components for all underlying classes of assets. Additionally, the Company made a short-term lease accounting policy election to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less.

Adoption of the new standard resulted in recognition of right-of-use assets and corresponding lease liabilities of $8.7 million as of January 1, 2019. The new standard did not have a significant impact on the consolidated statement of income.

The Company has entered into operating leases primarily for real estate. The leases have terms which range from 1 year to 11 years, and some include options to renew. Renewal terms are included in the lease term when it is reasonably certain that the Company will exercise the option to renew.

Operating leases are included in the other non-current assets, other current liabilities and other long-term liabilities on the consolidated condensed balance sheets. These assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date, using the Company’s incremental borrowing rate because the rate implicit in each lease in not readily determinable. The Company has certain contracts for real estate that may contain lease and non-lease components which it has 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 is reported in rent and purchase transportation on the consolidated statements of income.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of September 30, 2019.

(In thousands)	September 30, 2019
Maturity of Lease Liabilities
2019 (remaining)	$	932
2020	3,424
2021	2,554
2022	1,625
2023	688
Thereafter	1,746
Total undiscounted operating lease payments	$	10,969
Less: Imputed interest	(763		)
Present value of operating lease liabilities	$	10,206
Balance Sheet Classification
Right-of-use assets (recorded in other non-current assets)	$	9,883
Current lease liabilities (recorded in other current liabilities)	$	3,251
Long-term lease liabilities (recorded in other long-term liabilities)	6,955
Total operating lease liabilities	$	10,206
Other Information
Weighted-average remaining lease term for operating leases	4.34 years
Weighted-average discount rate for operating leases	3.5		%

Cash Flows

An initial right-of-use asset of $8.7 million was recognized as a non-cash asset addition with the adoption of the new lease accounting standard. Additional right-of-use assets of $3.6 million were recognized as non-cash asset additions that resulted from new operating lease liabilities during the nine months ended September 30, 2019. Cash paid for amounts included in the present value of operating lease liabilities was $2.7 million during the nine months ended September 30, 2019, and is included in operating cash flows.

Operating Lease Expense

Operating lease expense was $2.0 million and $6.2 million during the three and nine months ended September 30, 2019, respectively. This expense included $0.9 million and $2.7 million for the three and nine months ended September 30, 2019, respectively, for long-term operating leases, with the remainder for variable and short-term lease expense.

Lessor Operating Leases

We are the lessor of tractors and trailers under operating leases with initial terms of 2 to 10 years. We recognize revenue for such leases on a straight-line basis over the term of the lease, and revenues for the three and nine months ended September 30, 2019 were $3.6 million and $10.4 million, respectively. The following table presents information about the maturities of these operating leases as of September 30, 2019.

(In thousands)	September 30, 2019
2019 (remaining)	$	3,169
2020	7,674
2021	248
2022	62
2023	—
Thereafter	—
Total	$	11,153

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Equity Compensation

9 Months Ended

Sep. 30, 2019

Equity Compensation [Abstract]

Equity Compensation

Equity Compensation

The Werner Enterprises, Inc. Amended and Restated Equity Plan (the “Equity Plan”), approved by the Company’s shareholders, provides for grants to employees and non-employee directors of the Company in the form of nonqualified stock options, restricted stock and units (“restricted awards”), performance awards, and stock appreciation rights. The Board of Directors or the Compensation Committee of our Board of Directors determines the terms of each award, including the type, recipients, number of shares subject to and vesting conditions of each award. No awards of stock appreciation rights have been issued under the Equity Plan to date. The maximum number of shares of common stock that may be awarded under the Equity Plan is 20,000,000 shares. The maximum aggregate number of shares that may be awarded to any one person in any one calendar year under the Equity Plan is 500,000. As of September 30, 2019, there were 6,779,440 shares available for granting additional awards.

Equity compensation expense is included in salaries, wages and benefits within the Consolidated Statements of Income. As of September 30, 2019, the total unrecognized compensation cost related to non-vested equity compensation awards was approximately $10.6 million and is expected to be recognized over a weighted average period of 1.8 years. The following table summarizes the equity compensation expense and related income tax benefit recognized in the Consolidated Statements of Income (in thousands): 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Restricted awards:
Pre-tax compensation expense	$	1,310	$	1,028	$	3,786	$	3,091
Tax benefit	335		262		966		788
Restricted stock expense, net of tax	$	975	$	766	$	2,820	$	2,303
Performance awards:
Pre-tax compensation expense	$	680	$	992	$	2,577	$	2,319
Tax benefit	173		253		657		591
Performance award expense, net of tax	$	507	$	739	$	1,920	$	1,728

We do not have a formal policy for issuing shares upon an exercise of stock options or vesting of restricted and performance awards. Such shares are generally issued from treasury stock. From time to time, we repurchase shares of our common stock, the timing and amount of which depends on market and other factors. Historically, the shares acquired from such repurchases have provided us with sufficient quantities of stock to issue for equity compensation. Based on current treasury stock levels, we do not expect to repurchase additional shares specifically for equity compensation during 2019.

Stock Options

Stock options are granted at prices equal to the market value of the common stock on the date the option award is granted. Option awards exercised in 2019 became exercisable in installments from 24 to 72 months after the date of grant. The options were exercisable over a period not to exceed ten years, one day from the date of grant. No stock options are outstanding as of September 30, 2019.

The following table summarizes stock option activity for the nine months ended September 30, 2019:

	Number of Options (in thousands)		Weighted Average Exercise Price ($)		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding at beginning of period	9		$	19.02
Granted	—		—
Exercised	(9	)	19.02
Forfeited	—		—
Expired	—		—
Outstanding at end of period	—		—		0.00	$	—
Exercisable at end of period	—		—		0.00	$	—

We did not grant any stock options during the nine-month periods ended September 30, 2019 and September 30, 2018. The fair value of stock option grants is estimated using a Black-Scholes valuation model. In the nine-month periods ended September 30, 2019, and September 30, 2018, the total intrinsic value of stock options exercised was $136 thousand and $484 thousand, respectively.

Restricted Awards

Restricted stock entitles the holder to shares of common stock when the award vests. Restricted stock units entitle the holder to a combination of cash or stock equal to the value of common stock when the unit vests. The value of these shares may fluctuate according to market conditions and other factors. Restricted awards currently outstanding vest over periods ranging from 12 to 60 months from the grant date of the award. The restricted awards do not confer any voting or dividend rights to recipients until such shares vest and do not have any post-vesting sales restrictions.

The following table summarizes restricted award activity for the nine months ended September 30, 2019:

	Number of Restricted Awards (in thousands)		Weighted Average Grant Date Fair Value ($)
Nonvested at beginning of period	326		$	31.93
Granted	147		32.55
Vested	(53	)	33.04
Forfeited	(9	)	31.55
Nonvested at end of period	411		32.02

We estimate the fair value of restricted awards based upon the market price of the underlying common stock on the date of grant, reduced by the present value of estimated future dividends because the awards are not entitled to receive dividends prior to vesting. Our estimate of future dividends is based on the most recent quarterly dividend rate at the time of grant, adjusted for any known future changes in the dividend rate. Cash settled restricted stock units are recorded as a liability within the Consolidated Balance Sheets and are adjusted to fair value each reporting period.

The total fair value of previously granted restricted awards vested during the nine-month periods ended September 30, 2019 and September 30, 2018 was $1.8 million and $0.8 million, respectively. We withheld shares based on the closing stock price on the vesting date to settle the employees’ statutory obligation for the applicable income and other employment taxes. The shares withheld to satisfy the tax withholding obligations were recorded as treasury stock.

Performance Awards

Performance awards entitle the recipient to shares of common stock upon attainment of performance objectives as pre-established by the Compensation Committee. If the performance objectives are achieved, performance awards currently outstanding vest, subject to continued employment, over periods ranging from 12 to 60 months from the grant date of the award. The performance awards do not confer any voting or dividend rights to recipients until such shares vest and do not have any post-vesting sales restrictions.

The following table summarizes performance award activity for the nine months ended September 30, 2019:

	Number of Performance Awards (in thousands)		Weighted Average Grant Date Fair Value ($)
Nonvested at beginning of period	207		$	27.92
Granted	97		32.88
Vested	(35	)	27.07
Forfeited	—		—
Nonvested at end of period	269		30.40

The 2019 performance awards are earned based upon the level of attainment by the Company of specified performance objectives related to cumulative diluted earnings per share for the two-year period from January 1, 2019 to December 31, 2020. Shares earned based on cumulative diluted earnings per share may be capped based on absolute total shareholder return during the three-year period ended December 31, 2021. The 2019 performance awards will vest in one installment on the third anniversary from the grant date.

We estimate the fair value of performance awards based upon the market price of the underlying common stock on the date of grant, reduced by the present value of estimated future dividends because the awards are not entitled to receive dividends prior to vesting. Our estimate of future dividends is based on the most recent quarterly dividend rate at the time of grant, adjusted for any known future changes in the dividend rate.

The vesting date fair value of performance awards that vested during the nine-month periods ended September 30, 2019 and September 30, 2018 was $1.2 million and $1.3 million, respectively. We withheld shares based on the closing stock price on the vesting date to settle the employees’ statutory obligation for the applicable income and other employment taxes. The shares withheld to satisfy the tax withholding obligations were recorded as treasury stock.

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Schedule of Segment Information

The following table summarizes our segment information (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues
Truckload Transportation Services	$	480,351		$	484,782		$	1,423,201		$	1,386,615
Werner Logistics	121,331			129,422			369,584			380,854
Other	15,896			15,107			47,464			42,788
Corporate	687			632			1,905			2,170
Subtotal	618,265			629,943			1,842,154			1,812,427
Inter-segment eliminations	(1		)	(208		)	(240		)	(878		)
Total	$	618,264		$	629,735		$	1,841,914		$	1,811,549
Operating Income
Truckload Transportation Services	$	48,870		$	58,894		$	143,488		$	135,748
Werner Logistics	3,028			4,776			12,921			13,135
Other	1,709			576			5,181			433
Corporate	(250		)	(860		)	(1,772		)	(32		)
Total	$	53,357		$	63,386		$	159,818		$	149,284

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Leases (Narrative) (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	Jan. 01, 2019	Sep. 30, 2019	Sep. 30, 2019
Lessee, Lease, Description [Line Items]
Right-of-use asset	$ 8,700	$ 9,883	$ 9,883
Operating lease liabilities	8,700	10,206	10,206
Right-of-use asset recognized as non-cash asset addition	$ 8,700		3,600
Cash paid for amounts included in measurement of operating lease liability			2,700
Total operating lease expense		2,000	6,200
Operating lease expense		900	2,700
Operating lease revenues		$ 3,600	$ 10,400
Minimum
Lessee, Lease, Description [Line Items]
Operating leases remaining term, lessee		1 year	1 year
Operating leases remaining term, lessor		2 years	2 years
Maximum
Lessee, Lease, Description [Line Items]
Operating leases remaining term, lessee		11 years	11 years
Operating leases remaining term, lessor		10 years	10 years

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Equity Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Equity Compensation [Abstract]

Schedule of Equity Compensation Expense and Related Income Tax Benefit Recognized

The following table summarizes the equity compensation expense and related income tax benefit recognized in the Consolidated Statements of Income (in thousands): 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Restricted awards:
Pre-tax compensation expense	$	1,310	$	1,028	$	3,786	$	3,091
Tax benefit	335		262		966		788
Restricted stock expense, net of tax	$	975	$	766	$	2,820	$	2,303
Performance awards:
Pre-tax compensation expense	$	680	$	992	$	2,577	$	2,319
Tax benefit	173		253		657		591
Performance award expense, net of tax	$	507	$	739	$	1,920	$	1,728

Schedule of Equity Compensation Stock Options Activity

The following table summarizes stock option activity for the nine months ended September 30, 2019:

	Number of Options (in thousands)		Weighted Average Exercise Price ($)		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding at beginning of period	9		$	19.02
Granted	—		—
Exercised	(9	)	19.02
Forfeited	—		—
Expired	—		—
Outstanding at end of period	—		—		0.00	$	—
Exercisable at end of period	—		—		0.00	$	—

Schedule of Equity Compensation, Restricted Award Activity

The following table summarizes restricted award activity for the nine months ended September 30, 2019:

	Number of Restricted Awards (in thousands)		Weighted Average Grant Date Fair Value ($)
Nonvested at beginning of period	326		$	31.93
Granted	147		32.55
Vested	(53	)	33.04
Forfeited	(9	)	31.55
Nonvested at end of period	411		32.02

Schedule of Equity Compensation Performance Award Activity

The following table summarizes performance award activity for the nine months ended September 30, 2019:

	Number of Performance Awards (in thousands)		Weighted Average Grant Date Fair Value ($)
Nonvested at beginning of period	207		$	27.92
Granted	97		32.88
Vested	(35	)	27.07
Forfeited	—		—
Nonvested at end of period	269		30.40

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Revenue (Disaggregation of Revenue by Geographical Areas) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of revenue
Revenues	$ 618,264	$ 629,735	$ 1,841,914	$ 1,811,549
United States
Disaggregation of revenue
Revenues	551,008	548,885	1,631,861	1,577,189
Mexico
Disaggregation of revenue
Revenues	49,031	61,028	153,803	177,180
Others
Disaggregation of revenue
Revenues	$ 18,225	$ 19,822	$ 56,250	$ 57,180

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Equity Compensation (Schedule of Equity Compensation Restricted Stock Activity) (Details) - Restricted Stock shares in Thousands	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Equity Compensation [Abstract]
Number of shares nonvested at beginning of period | shares	326
Number of shares granted | shares	147
Number of shares vested | shares	(53)
Number of shares forfeited | shares	(9)
Number of shares nonvested at end of period | shares	411
Weighted average grant date fair value nonvested at beginning of period | $ / shares	$ 31.93
Weighted average grant date fair value shares granted | $ / shares	32.55
Weighted average grant date fair value shares vested | $ / shares	33.04
Weighted average grant date fair value shares forfeited | $ / shares	31.55
Weighted average grant date fair value nonvested at end of period | $ / shares	$ 32.02

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Accounting Policies

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Accounting Policies

Accounting Policies

New Accounting Pronouncements Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases,” to increase transparency and comparability by recognizing a right-of-use asset and a lease liability on the balance sheet and disclosing key information about leasing arrangements. The Company adopted ASU No. 2016-02 and related amendments as of January 1, 2019, using the optional transition method. See Note 3 - Leases for additional adoption information and disclosures required by Accounting Standards Codification (“ASC”) Topic 842.

In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The Company adopted ASU 2017-12 as of January 1, 2019. Upon adoption, this update had no effect on our financial position, results of operations and cash flows.

In February 2018, the FASB issued ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The Company adopted ASU No. 2018-02 as of January 1, 2019. Upon adoption, this update had no effect on our financial position, results of operations and cash flows.

Accounting Standards Updates Not Yet Effective

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements,” which requires measurement and recognition of expected versus incurred credit losses for financial assets. The provisions of this update are effective for fiscal years beginning after December 15, 2019. We are evaluating the impact of adopting ASU No. 2016-13 on our financial position, results of operations and cash flows.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which modifies the disclosure requirements on fair value measurements. As part of its disclosure framework project, the FASB has eliminated, amended and added disclosure requirements for fair value measurements in Topic 820, Fair Value Measurement. The provisions of this update are effective for fiscal years beginning after December 15, 2019. Although we are evaluating the impact of adopting ASU No. 2018-13 on our financial position, results of operations and cash flows, we do not expect a material effect upon adoption because we do not currently disclose any fair value measurements subject to the amendments.

In August 2018, the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force),” which updates the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract to align with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The provisions of this update are effective for fiscal years beginning after December 15, 2019. We are evaluating the impact of adopting ASU No. 2018-15 on our financial position, results of operations and cash flows.

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Earnings Per Share (Basic And Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Net income	$ 39,044	$ 47,514	$ 118,448	$ 113,585
Weighted average common shares outstanding	69,198	71,436	69,684	72,001
Dilutive effect of stock-based awards	402	316	369	299
Shares used in computing diluted earnings per share	69,600	71,752	70,053	72,300
Basic earnings per share	$ 0.56	$ 0.67	$ 1.70	$ 1.58
Diluted earnings per share	$ 0.56	$ 0.66	$ 1.69	$ 1.57
Number of antidilutive options that were excluded from computation of earnings per share	0	0	0	0

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Consolidated Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Allowance for doubtful trade accounts receivable	$ 8,246	$ 8,613
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	80,533,536	80,533,536
Common stock, shares outstanding	69,204,715	70,441,973
Treasury stock, shares	11,328,821	10,091,563

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Oct. 28, 2019
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	0-14690
Entity Registrant Name	WERNER ENTERPRISES, INC.
Entity Central Index Key	0000793074
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Incorporation, State or Country Code	NE
Entity Tax Identification Number	47-0648386
Entity Address, Address Line One	14507 Frontier Road
Entity Address, Address Line Two	Post Office Box 45308
Entity Address, City or Town	Omaha
Entity Address, State or Province	NE
Entity Address, Postal Zip Code	68145-0308
City Area Code	402
Local Phone Number	895-6640
Title of 12(b) Security	Common Stock, $0.01 Par Value
Trading Symbol	WERN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		69,204,715

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Revenue

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

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 September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Truckload Transportation Services	$	480,351		$	484,782		$	1,423,201		$	1,386,615
Werner Logistics	121,331			129,422			369,584			380,854
Inter-segment eliminations	(1		)	(208		)	(240		)	(878		)
Transportation services	601,681			613,996			1,792,545			1,766,591
Other revenues	16,583			15,739			49,369			44,958
Total revenues	$	618,264		$	629,735		$	1,841,914		$	1,811,549

The following table presents our revenues disaggregated by geographic areas in which we conduct business (in thousands). 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.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
United States	$	551,008	$	548,885	$	1,631,861	$	1,577,189
Mexico	49,031		61,028		153,803		177,180
Other	18,225		19,822		56,250		57,180
Total revenues	$	618,264	$	629,735	$	1,841,914	$	1,811,549

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 September 30, 2019 and December 31, 2018, the accounts receivable, net, balance was $323.4 million and $337.9 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 September 30, 2019 and December 31, 2018, the balance of contract assets was $7.9 million and $7.4 million, respectively. The Company has recognized contract assets within the other current assets financial statement caption on the balance sheet. 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 September 30, 2019 and December 31, 2018, the balance of contract liabilities was $1.6 million and $1.7 million, respectively. The amount of revenues recognized in the nine months ended September 30, 2019 that was included in the December 31, 2018 contract liability balance was $1.7 million. The Company has recognized contract liabilities within the accounts payable and other current liabilities financial statement captions on the balance sheet. 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 ASC Topic 606 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 nine months ended September 30, 2019 and September 30, 2018, revenues recognized from performance obligations related to prior periods (for example, due to changes in transaction price) were not material.

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Earnings Per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income 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 stock options and restricted stock awards. There are no differences in the numerators of our computations of basic and diluted earnings per share for any periods presented.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net income	$	39,044	$	47,514	$	118,448	$	113,585
Weighted average common shares outstanding	69,198		71,436		69,684		72,001
Dilutive effect of stock-based awards	402		316		369		299
Shares used in computing diluted earnings per share	69,600		71,752		70,053		72,300
Basic earnings per share	$	0.56	$	0.67	$	1.70	$	1.58
Diluted earnings per share	$	0.56	$	0.66	$	1.69	$	1.57

There were no options to purchase shares of common stock that were outstanding during the periods indicated above that were excluded from the computation of diluted earnings per share because the option purchase price was greater than the average market price of the common shares during the period. Performance awards are excluded from the calculation of dilutive potential common shares until the threshold performance conditions have been satisfied.

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Revenue (Tables)

9 Months Ended

Sep. 30, 2019

Revenue Recognition [Abstract]

Disaggregation of revenue by revenue source

The following table presents our revenues disaggregated by revenue source (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Truckload Transportation Services	$	480,351		$	484,782		$	1,423,201		$	1,386,615
Werner Logistics	121,331			129,422			369,584			380,854
Inter-segment eliminations	(1		)	(208		)	(240		)	(878		)
Transportation services	601,681			613,996			1,792,545			1,766,591
Other revenues	16,583			15,739			49,369			44,958
Total revenues	$	618,264		$	629,735		$	1,841,914		$	1,811,549

Revenue by geographical location

The following table presents our revenues disaggregated by geographic areas in which we conduct business (in thousands). 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.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
United States	$	551,008	$	548,885	$	1,631,861	$	1,577,189
Mexico	49,031		61,028		153,803		177,180
Other	18,225		19,822		56,250		57,180
Total revenues	$	618,264	$	629,735	$	1,841,914	$	1,811,549

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Leases (Schedule of Operating Lease Information) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019
Lessee, Lease, Description [Line Items]
2019 (remaining)	$ 932
2020	3,424
2021	2,554
2022	1,625
2023	688
Thereafter	1,746
Total undiscounted operating lease payments	10,969
Less: Imputed interest	(763)
Present value of operating lease liabilities	10,206	$ 8,700
Right-of-use assets (recorded in other non-current assets)	9,883	$ 8,700
Current lease liabilities (recorded in other current liabilities)	3,251
Long-term lease liabilities (recorded in other long-term liabilities)	$ 6,955
Weighted-average remaining lease term for operating leases	4 years 4 months 2 days
Weighted-average discount rate for operating leases	3.50%

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Credit Facilities (Tables)

9 Months Ended

Sep. 30, 2019

Line of Credit Facility [Line Items]

Schedule of Maturities of Long-term Debt

At September 30, 2019, the aggregate future maturities of long-term debt by year are as follows (in thousands):

2019	$	—
2020	75,000
2021	—
2022	—
2023	—
2024	275,000
Total	$	350,000

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Revenue (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Revenue from Contracts with Customer [Line Items]
Accounts receivable, net	$ 323,375	$ 337,927
Contract assets	7,900	7,400
Contract liabilities	1,600	$ 1,700
Revenue recognized from contract liability during the period	$ 1,700
Average transit time	3 days

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Credit Facilities

9 Months Ended

Sep. 30, 2019

Line of Credit Facility [Abstract]

Credit Facilities

Credit Facilities

As of September 30, 2019, we had unsecured committed credit facilities with three banks. We had with Wells Fargo Bank, N.A. a $300.0 million credit facility which will expire on May 14, 2024. We had a $200.0 million credit facility with BMO Harris Bank N.A. which will expire on May 14, 2024. We also had an unsecured line of credit of $75.0 million with U.S. Bank, N.A., which will expire on July 13, 2020. Borrowings under these credit facilities bear variable interest based on the London Interbank Offered Rate (“LIBOR”). On July 2, 2019, we (i) terminated our previous $75.0 million interest rate swap agreement with Wells Fargo Bank, N.A., (ii) entered into a new $75.0 million interest rate swap agreement with Wells Fargo Bank, N.A., and (iii) entered into a $75.0 million interest rate swap agreement with BMO Harris Bank N.A.

As of September 30, 2019 and December 31, 2018, our outstanding debt totaled $350.0 million and $125.0 million, respectively. We had $200.0 million outstanding under the credit facilities at a weighted average variable interest rate of 2.67% as of September 30, 2019. We had (i) an additional $75.0 million outstanding under the Wells Fargo Bank, N.A. credit facility at a variable rate of 2.72% as of September 30, 2019, which is effectively fixed at 2.32% with an interest rate swap agreement through May 14, 2024 and (ii) an additional $75.0 million outstanding under the BMO Harris Bank N.A. credit facility at a variable rate of 2.79% as of September 30, 2019, which is effectively fixed at 2.36% with an interest rate swap agreement through May 14, 2024. The $575.0 million of borrowing capacity under our credit facilities at September 30, 2019, is further reduced by $32.7 million in stand-by letters of credit under which we are obligated. Each of the debt agreements includes, among other things, financial covenants requiring us (i) to exceed a minimum ratio of earnings before interest, income taxes, depreciation and amortization to interest expense and/or (ii) not to exceed a maximum ratio of total funded debt to earnings before interest, income taxes, depreciation and amortization (as such terms are defined in each credit facility). At September 30, 2019, we were in compliance with these covenants.

At September 30, 2019, the aggregate future maturities of long-term debt by year are as follows (in thousands):

2019	$	—
2020	75,000
2021	—
2022	—
2023	—
2024	275,000
Total	$	350,000

The carrying amounts of our long-term debt approximate fair value due to the duration of the notes and the variable interest rates.

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Segment Information

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Information

Segment Information

We have two reportable segments – Truckload Transportation Services (“TTS”) and Werner Logistics.

The TTS segment consists of two operating units, Dedicated and One-Way Truckload. These units are aggregated because they have similar economic characteristics and meet the other aggregation criteria described in the accounting guidance for segment reporting. 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; and (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.

The Werner Logistics segment generates the majority of our non-trucking revenues through four operating units that provide non-trucking services to our customers. These four Werner Logistics operating units 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”) unit offers rail transportation through alliances with rail and drayage providers as an alternative to truck transportation; (iii) Werner Global Logistics international (“WGL”) provides complete management of global shipments from origin to destination using a combination of air, ocean, truck and rail transportation modes; and (iv) Werner Final Mile (“Final Mile”) offers home and business deliveries of large or heavy items using third-party agents with two associates operating a liftgate straight truck.

We generate other revenues from our driver training schools, transportation-related activities such as third-party equipment maintenance and equipment leasing, and other business activities. None of these operations meets the quantitative reporting thresholds. As a result, these operations are grouped in “Other” in the table below. “Corporate” includes revenues and expenses that are incidental to our activities and are not attributable to any of our operating segments, including gains and losses on sales of assets not attributable to our operating segments. We do not prepare separate balance sheets by segment and, as a result, assets

are not separately identifiable by segment. Inter-segment eliminations in the table below represent transactions between reporting segments that are eliminated in consolidation.

The following table summarizes our segment information (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues
Truckload Transportation Services	$	480,351		$	484,782		$	1,423,201		$	1,386,615
Werner Logistics	121,331			129,422			369,584			380,854
Other	15,896			15,107			47,464			42,788
Corporate	687			632			1,905			2,170
Subtotal	618,265			629,943			1,842,154			1,812,427
Inter-segment eliminations	(1		)	(208		)	(240		)	(878		)
Total	$	618,264		$	629,735		$	1,841,914		$	1,811,549
Operating Income
Truckload Transportation Services	$	48,870		$	58,894		$	143,488		$	135,748
Werner Logistics	3,028			4,776			12,921			13,135
Other	1,709			576			5,181			433
Corporate	(250		)	(860		)	(1,772		)	(32		)
Total	$	53,357		$	63,386		$	159,818		$	149,284

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Equity Compensation (Equity Compensation Expense And Related Income Tax Benefit Recognized) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Restricted Stock
Equity Compensation [Abstract]
Pre-tax compensation expense	$ 1,310	$ 1,028	$ 3,786	$ 3,091
Tax benefit	335	262	966	788
Stock expense, net of tax	975	766	2,820	2,303
Performance Shares
Equity Compensation [Abstract]
Pre-tax compensation expense	680	992	2,577	2,319
Tax benefit	173	253	657	591
Stock expense, net of tax	$ 507	$ 739	$ 1,920	$ 1,728

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Credit Facilities (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Line of Credit Facility [Line Items]
2019	$ 0.0
2020	75.0
2021	0.0
2022	0.0
2023	0.0
2024	275.0
Total	$ 350.0	$ 125.0

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Segment Information (Narratives) (Details)	9 Months Ended
	Sep. 30, 2019 Segments
Segment Reporting [Abstract]
Number of reportable segments	2

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Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
BALANCE at Dec. 31, 2017	$ 1,184,782	$ 805	$ 102,563	$ 1,267,871	$ (15,835)	$ (170,622)
Comprehensive income	30,410	0	0	27,807	2,603	0
Dividends on common stock	(5,071)	0	0	(5,071)	0	0
Equity compensation activity	(438)	0	(1,069)	0	0	631
Non-cash equity compensation expense	1,410	0	1,410	0	0	0
Cumulative effect of accounting change	2,011	0	0	2,011	0	0
BALANCE at Mar. 31, 2018	1,213,104	805	102,904	1,292,618	(13,232)	(169,991)
BALANCE at Dec. 31, 2017	1,184,782	805	102,563	1,267,871	(15,835)	(170,622)
Comprehensive income	115,761
BALANCE at Sep. 30, 2018	1,243,501	805	106,904	1,365,523	(13,659)	(216,072)
BALANCE at Mar. 31, 2018	1,213,104	805	102,904	1,292,618	(13,232)	(169,991)
Comprehensive income	35,821	0	0	38,264	(2,443)	0
Dividends on common stock	(6,466)	0	0	(6,466)	0	0
Purchases of common stock	(22,884)	0	0	0	0	(22,884)
Equity compensation activity	7	0	(84)	0	0	91
Non-cash equity compensation expense	1,979	0	1,979	0	0	0
BALANCE at Jun. 30, 2018	1,221,561	805	104,799	1,324,416	(15,675)	(192,784)
Comprehensive income	49,530	0	0	47,514	2,016	0
Dividends on common stock	(6,407)	0	0	(6,407)	0	0
Purchases of common stock	(23,529)	0	0	0	0	(23,529)
Equity compensation activity	228	0	(13)	0	0	241
Non-cash equity compensation expense	2,118	0	2,118	0	0	0
BALANCE at Sep. 30, 2018	1,243,501	805	106,904	1,365,523	(13,659)	(216,072)
BALANCE at Dec. 31, 2018	1,264,753	805	107,455	1,413,746	(16,073)	(241,180)
Comprehensive income	36,599	0	0	36,086	513	0
Dividends on common stock	(6,290)	0	0	(6,290)	0	0
Purchases of common stock	(20,545)	0	0	0	0	(20,545)
Equity compensation activity	(1,179)	0	(1,578)	0	0	399
Non-cash equity compensation expense	2,051	0	2,051	0	0	0
BALANCE at Mar. 31, 2019	1,275,389	805	107,928	1,443,542	(15,560)	(261,326)
BALANCE at Dec. 31, 2018	1,264,753	805	107,455	1,413,746	(16,073)	(241,180)
Comprehensive income	116,876
BALANCE at Sep. 30, 2019	1,064,804	805	112,064	1,252,344	(17,645)	(282,764)
BALANCE at Mar. 31, 2019	1,275,389	805	107,928	1,443,542	(15,560)	(261,326)
Comprehensive income	43,738	0	0	43,318	420	0
Dividends on common stock	(267,331)	0	0	(267,331)	0	0
Purchases of common stock	(21,756)	0	0	0	0	(21,756)
Equity compensation activity	(10)	0	(140)	0	0	130
Non-cash equity compensation expense	2,314	0	2,314	0	0	0
BALANCE at Jun. 30, 2019	1,032,344	805	110,102	1,219,529	(15,140)	(282,952)
Comprehensive income	36,539	0	0	39,044	(2,505)	0
Dividends on common stock	(6,229)	0	0	(6,229)	0	0
Equity compensation activity	169	0	(19)	0	0	188
Non-cash equity compensation expense	1,981	0	1,981	0	0	0
BALANCE at Sep. 30, 2019	$ 1,064,804	$ 805	$ 112,064	$ 1,252,344	$ (17,645)	$ (282,764)

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Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net income	$ 39,044	$ 47,514	$ 118,448	$ 113,585
Other comprehensive income (loss):
Foreign currency translation adjustments	(1,065)	2,011	79	1,799
Change in fair value of interest rate swap, net of tax	(1,440)	5	(1,651)	377
Other comprehensive income (loss)	(2,505)	2,016	(1,572)	2,176
Comprehensive income	$ 36,539	$ 49,530	$ 116,876	$ 115,761

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

As of September 30, 2019, we have committed to property and equipment purchases of approximately $63.5 million.

We are involved in certain claims and pending litigation, including those 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.

On May 17, 2018, in Harris County District Court in Houston, Texas, a jury rendered an adverse verdict against Werner Enterprises, Inc. (the “Company”) in a lawsuit arising from a December 30, 2014 accident between a Werner tractor-trailer and a passenger vehicle. On July 30, 2018, the court entered a final judgment against Werner for $92 million, including pre-judgment interest.

The Company has premium-based liability insurance to cover the potential outcome from this jury verdict. Under the Company’s insurance policies in effect on the date of this accident, the Company’s maximum liability for this accident is $10.0 million (plus pre-judgment and post-judgment interest) with premium-based coverage that exceeds the jury verdict amount. As a result of this jury verdict, the Company had recorded a liability of $17.7 million as of September 30, 2019, and $15.2 million as of December 31, 2018. Under the terms of the Company’s insurance policies, the Company is the primary obligor of the verdict, and as such, the Company has also recorded a $79.2 million receivable from its third-party insurance providers in other non-current assets and a corresponding liability of the same amount in the long-term portion of insurance and claims accruals in the consolidated balance sheets as of September 30, 2019 and December 31, 2018.

The Company is pursuing an appeal of this verdict. No assurances can be given regarding the outcome of any such appeal.

We are involved in class action litigation in the U.S. District Court for the District of Nebraska, in which the plaintiffs allege that we owe drivers for unpaid wages under the Fair Labor Standards Act (“FLSA”) and the Nebraska Wage Payment and Collection Act and that we failed to pay minimum wage per hour for drivers in our student driver training program, related to short break time and sleeper berth time. The period covered by this class action suit is August 2008 through March 2014. The case was tried to a jury in May 2017, resulting in a verdict of $0.8 million in plaintiffs’ favor on the short break matter and a verdict in our favor on the sleeper berth matter. As a result of various post-trial motions, the court has awarded $0.5 million to the plaintiffs for attorney fees and costs. As of September 30, 2019, we had accrued for the jury’s award, attorney fees and costs in the short break matter and had not accrued for the sleeper berth matter. Plaintiffs have appealed the post-verdict amounts awarded by the trial court for fees, costs and liquidated damages.

We are also involved in certain class action litigation in which the plaintiffs allege claims for failure to provide meal and rest breaks, unpaid wages, unauthorized deductions and other items. Based on the knowledge of the facts, management does not currently believe the outcome of these class actions is likely to have a material adverse effect on our financial position or results of operations. However, the final disposition of these matters and the impact of such final dispositions cannot be determined at this time.

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Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

New Accounting Pronouncements Adopted

New Accounting Pronouncements Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases,” to increase transparency and comparability by recognizing a right-of-use asset and a lease liability on the balance sheet and disclosing key information about leasing arrangements. The Company adopted ASU No. 2016-02 and related amendments as of January 1, 2019, using the optional transition method. See Note 3 - Leases for additional adoption information and disclosures required by Accounting Standards Codification (“ASC”) Topic 842.

In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The Company adopted ASU 2017-12 as of January 1, 2019. Upon adoption, this update had no effect on our financial position, results of operations and cash flows.

In February 2018, the FASB issued ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The Company adopted ASU No. 2018-02 as of January 1, 2019. Upon adoption, this update had no effect on our financial position, results of operations and cash flows.

Accounting Standards Updates Not Yet Effective

Accounting Standards Updates Not Yet Effective

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements,” which requires measurement and recognition of expected versus incurred credit losses for financial assets. The provisions of this update are effective for fiscal years beginning after December 15, 2019. We are evaluating the impact of adopting ASU No. 2016-13 on our financial position, results of operations and cash flows.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which modifies the disclosure requirements on fair value measurements. As part of its disclosure framework project, the FASB has eliminated, amended and added disclosure requirements for fair value measurements in Topic 820, Fair Value Measurement. The provisions of this update are effective for fiscal years beginning after December 15, 2019. Although we are evaluating the impact of adopting ASU No. 2018-13 on our financial position, results of operations and cash flows, we do not expect a material effect upon adoption because we do not currently disclose any fair value measurements subject to the amendments.

In August 2018, the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force),” which updates the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract to align with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The provisions of this update are effective for fiscal years beginning after December 15, 2019. We are evaluating the impact of adopting ASU No. 2018-15 on our financial position, results of operations and cash flows.

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net income	$ 118,448	$ 113,585
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	184,816	170,439
Deferred income taxes	8,413	25,114
Gain on disposal of property and equipment	(14,530)	(15,922)
Non-cash equity compensation	6,346	5,507
Insurance and claims accruals, net of current portion	15,840	21,100
Other	(4,527)	(5,081)
Changes in certain working capital items:
Accounts receivable, net	14,552	(20,737)
Other current assets	5,667	(9,535)
Accounts payable	(532)	11,742
Other current liabilities	(2,308)	6,301
Net cash provided by operating activities	332,185	302,513
Cash flows from investing activities:
Additions to property and equipment	(375,202)	(412,557)
Proceeds from sales of property and equipment	103,543	123,267
Issuance of notes receivable	0	(3,300)
Decrease in notes receivable	9,247	15,846
Net cash used in investing activities	(262,412)	(276,744)
Cash flows from financing activities:
Repayments of short-term debt	0	(40,000)
Proceeds from issuance of short-term debt	0	40,000
Repayments of long-term debt	(50,000)	(20,000)
Proceeds from issuance of long-term debt	275,000	70,000
Change in net checks issued in excess of cash balances	8,902	(18,240)
Dividends on common stock	(279,962)	(16,605)
Repurchases of common stock	(42,301)	(46,413)
Tax withholding related to net share settlements of restricted stock awards	(1,191)	(679)
Stock options exercised	171	476
Net cash used in financing activities	(89,381)	(31,461)
Effect of exchange rate fluctuations on cash	32	211
Net decrease in cash, cash equivalents and restricted cash	(19,576)	(5,481)
Cash, cash equivalents and restricted cash, beginning of period	33,930	15,131
Cash, cash equivalents and restricted cash, end of period	14,354	9,650
Supplemental disclosures of cash flow information:
Interest paid	4,361	1,699
Income taxes paid	41,038	6,332
Supplemental schedule of non-cash investing and financing activities:
Notes receivable issued upon sale of property and equipment	5,542	8,054
Change in fair value of interest rate swap	(1,651)	377
Property and equipment acquired included in accounts payable	8,847	4,797
Property and equipment disposed included in other receivables	1,486	1,007
Dividends accrued but not yet paid at end of period	$ 6,229	$ 6,407

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Equity Compensation (Schedule of Equity Compensation Performance Shares Activity) (Details) - Performance Shares shares in Thousands	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Equity Compensation [Abstract]
Number of shares nonvested at beginning of period | shares	207
Number of shares granted | shares	97
Number of shares vested | shares	(35)
Number of shares forfeited | shares	0
Number of shares nonvested at end of period | shares	269
Weighted average grant date fair value nonvested at beginning of period | $ / shares	$ 27.92
Weighted average grant date fair value shares granted | $ / shares	32.88
Weighted average grant date fair value shares vested | $ / shares	27.07
Weighted average grant date fair value shares forfeited | $ / shares	0
Weighted average grant date fair value nonvested at end of period | $ / shares	$ 30.40

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Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Operating revenues	$ 618,264	$ 629,735	$ 1,841,914	$ 1,811,549
Operating expenses:
Salaries, wages and benefits	209,586	201,606	618,386	580,515
Fuel	59,518	67,072	176,720	191,769
Supplies and maintenance	46,907	47,136	136,963	138,556
Taxes and licenses	24,244	18,463	70,788	63,607
Insurance and claims	21,930	22,011	65,631	73,858
Depreciation	62,620	58,382	184,816	170,439
Rent and purchased transportation	134,797	147,870	413,809	435,225
Communications and utilities	3,892	3,993	11,806	12,028
Other	1,413	(184)	3,177	(3,732)
Total operating expenses	564,907	566,349	1,682,096	1,662,265
Operating income	53,357	63,386	159,818	149,284
Other expense (income):
Interest expense	2,408	870	4,695	1,842
Interest income	(756)	(646)	(2,648)	(2,079)
Other	47	41	(11)	172
Total other expense (income)	1,699	265	2,036	(65)
Income before income taxes	51,658	63,121	157,782	149,349
Income taxes	12,614	15,607	39,334	35,764
Net income	$ 39,044	$ 47,514	$ 118,448	$ 113,585
Earnings per share:
Basic	$ 0.56	$ 0.67	$ 1.70	$ 1.58
Diluted	$ 0.56	$ 0.66	$ 1.69	$ 1.57
Weighted-average common shares outstanding:
Basic	69,198	71,436	69,684	72,001
Diluted	69,600	71,752	70,053	72,300

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Equity Compensation (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Equity Compensation [Abstract]
Maximum shares of common stock	20,000,000
Maximum annual shares awarded to employee	500,000
Shares available for granting additional awards	6,779,440
Unrecognized compensation cost of non-vested equity compensation awards	$ 10,600
Unrecognized compensation cost of non-vested equity compensation awards expected to be recognized over a weighted average period (years)	1 year 9 months 18 days
Number of options granted	0	0
Intrinsic value of stock options exercised	$ 136	$ 484
Stock Options
Equity Compensation [Abstract]
Maximum period for exercisable options (years and days)	10 years 1 day
Stock Options | Minimum
Equity Compensation [Abstract]
Vesting period (months)	24 months
Stock Options | Maximum
Equity Compensation [Abstract]
Vesting period (months)	72 months
Restricted Stock
Equity Compensation [Abstract]
Fair value of awards vested	$ 1,800	800
Restricted Stock | Minimum
Equity Compensation [Abstract]
Vesting period (months)	12 months
Restricted Stock | Maximum
Equity Compensation [Abstract]
Vesting period (months)	60 months
Performance Shares
Equity Compensation [Abstract]
Fair value of awards vested	$ 1,200	$ 1,300
Performance Shares | Minimum
Equity Compensation [Abstract]
Vesting period (months)	12 months
Performance Shares | Maximum
Equity Compensation [Abstract]
Vesting period (months)	60 months

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Credit Facilities (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Line of Credit Facility [Line Items]
Total of committed credit facilities with banks	$ 575.0
Borrowings outstanding	350.0	$ 125.0
Stand-by letters of credit	32.7
Wells Fargo Bank, N.A. Mature May 14, 2024
Line of Credit Facility [Line Items]
Total of committed credit facilities with banks	$ 300.0
Committed credit facilities maturity	May 14, 2024
Borrowings outstanding	$ 75.0
Interest rate swap facility, amount	$ 75.0
Line of credit facility, interest rate	2.72%
Interest rate swap facility, fixed interest	2.32%
Interest rate swap facility, maturity date	May 14, 2024
BMO Harris Bank N.A. Mature May 14, 2024
Line of Credit Facility [Line Items]
Total of committed credit facilities with banks	$ 200.0
Committed credit facilities maturity	May 14, 2024
Borrowings outstanding	$ 75.0
Interest rate swap facility, amount	$ 75.0
Line of credit facility, interest rate	2.79%
Interest rate swap facility, fixed interest	2.36%
Interest rate swap facility, maturity date	May 14, 2024
Mature July 13, 2020
Line of Credit Facility [Line Items]
Total of committed credit facilities with banks	$ 75.0
Committed credit facilities maturity	Jul. 13, 2020
Additional Outstanding Debt Under Credit Facilities
Line of Credit Facility [Line Items]
Borrowings outstanding	$ 200.0
Line of credit facility, interest rate	2.67%

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Segment Information (Summary Of Segment Information) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Reporting Information [Line Items]
Revenues	$ 618,264	$ 629,735	$ 1,841,914	$ 1,811,549
Operating Income	53,357	63,386	159,818	149,284
Truckload Transportation Services
Segment Reporting Information [Line Items]
Revenues	480,351	484,782	1,423,201	1,386,615
Operating Income	48,870	58,894	143,488	135,748
Werner Logistics
Segment Reporting Information [Line Items]
Revenues	121,331	129,422	369,584	380,854
Operating Income	3,028	4,776	12,921	13,135
Other
Segment Reporting Information [Line Items]
Revenues	15,896	15,107	47,464	42,788
Operating Income	1,709	576	5,181	433
Corporate
Segment Reporting Information [Line Items]
Revenues	687	632	1,905	2,170
Operating Income	(250)	(860)	(1,772)	(32)
Subtotal
Segment Reporting Information [Line Items]
Revenues	618,265	629,943	1,842,154	1,812,427
Inter-segment eliminations
Segment Reporting Information [Line Items]
Revenues	$ (1)	$ (208)	$ (240)	$ (878)

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Schedule of Basic And Diluted Earnings Per Share

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net income	$	39,044	$	47,514	$	118,448	$	113,585
Weighted average common shares outstanding	69,198		71,436		69,684		72,001
Dilutive effect of stock-based awards	402		316		369		299
Shares used in computing diluted earnings per share	69,600		71,752		70,053		72,300
Basic earnings per share	$	0.56	$	0.67	$	1.70	$	1.58
Diluted earnings per share	$	0.56	$	0.66	$	1.69	$	1.57

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Revenue (Disaggregation of Revenue by Revenue Source) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of revenue
Revenues	$ 618,264	$ 629,735	$ 1,841,914	$ 1,811,549
Truckload Transportation Services
Disaggregation of revenue
Revenues	480,351	484,782	1,423,201	1,386,615
Werner Logistics
Disaggregation of revenue
Revenues	121,331	129,422	369,584	380,854
Inter-segment eliminations
Disaggregation of revenue
Revenues	(1)	(208)	(240)	(878)
Transportation Services
Disaggregation of revenue
Revenues	601,681	613,996	1,792,545	1,766,591
Other revenues
Disaggregation of revenue
Revenues	$ 16,583	$ 15,739	$ 49,369	$ 44,958

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Leases (Schedule of Lessor Operating Lease Maturities) (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract]
2019 (remaining)	$ 3,169
2020	7,674
2021	248
2022	62
2023	0
Thereafter	0
Total	$ 11,153